REGULATION AND AN ARCHIMEDES' MOMENT

Shortly before this month's presidential election, a Wall Street Journal article discussed impacts of excessive regulation upon economic growth.* Citing Brexit and G-20 leaders, it stated "Recent developments suggest a new recognition by voters and governments that excessive regulation is responsible for the slow economic growth of the past eight years." The article concluded "There is solid evidence that excessive regulation since the financial crisis has kept the U.S. and other developed economies from growing faster."

Since the dramatic results of the election, media sources have hastened to speculate over actions the new federal administration may take to mitigate or rescind perceived excessive regulation , not only in the financial arena but also particularly in environmental and energy related matters. Rulemaking in such areas obviously can have impacts on manufacturing, job loss and creation, wage growth, etc.

Moreover, aside from economic impacts, recent regulatory developments have extended federal reach to minutia of daily personal living. For example, there now are rules governing who can use what gender of public bathroom, the type of toilet one can have in a home, the kind of faucets and shower heads one can have, the kind of light bulbs to turn on in a bathroom, the amount of water a toilet can flush, etc. One can expect that a federal rule may be proposed governing the type and amount of toilet paper that can be used.

In addition to potential negative impacts on the economy, excessive regulation can distort the federalism structure inherent in the U.S. Constitution. As a reminder, the 10th Amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved by it to the States respectively, or to the people." So, for example, should any regulation of bathroom usage be a federal or state issue?

Regulation can also become "excessive" when, under the guise of legitimate rule making it has a hidden agenda such as wealth redistribution or other social engineering. Or, it may become abusive when enacted by fiat without due process benefits of notice, opportunity to be heard, and balancing of costs and benefits.

The result of the recent election, to reference Archimedes' discovery, is a "Eureka!" moment. It has created a timely opportunity to review the current regulatory patterns and to modify rules which may be suffocating economic growth on both national and personal levels. One of the drivers of this country's exceptionalism in the past has been the freedom of ingenuity and hard work to rise above the common denominator. Excessive regulation can be a damper and limiting factor which create only negative inertia. Some positive inertia now is in order and welcomed.

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*Wallison, "The Regulatory Tide Recedes",
Wall Street Journal, October 10, 2016,
Page A15

© Daniel J. Kucera 2016