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What if Financial Rules are Unconstitutional?

Is regulation as we know it unconstitutional?

It's not inconceivable that, sometime soon, the U.S. Supreme Court could reach such a conclusion, invalidating much of the vast administrative apparatus created to promote such public goods as clean air, workplace safety and financial stability.

The court is right to worry about America's dozens of regulatory agencies abusing their power or becoming an unaccountable fourth branch of government. But if that's the concern, there are much better, more prudent and less disruptive ways to proceed.

Much of the administrative state rests on a time-honored convention: As long as Congress provides some 'intelligible principle' to guide an agency, courts usually defer to its expertise in interpreting statutes and making rules.

This deference has allowed the ambitious application of some very broad mandates.

To promote public health, the Environmental Protection Agency imposes myriad emissions standards and extracts hundreds of millions of dollars in fines from violators. To protect investors, the Securities and Exchange Commission mandates extensive corporate disclosure, prosecutes financial fraud and much more.

Now, though, several members of the court ' led by Justice Neil Gorsuch ' are challenging this paradigm, arguing that the Constitution's authors never intended Congress to delegate so much authority.
https://www.ncnewsonline.com/opinion/editorials/ed...

[The link is to 'NewCastle News OnLine', because trying to access it at Bloomberg directly they demand a subscription, even though I buy the magazine. Go figure.]

'The administrative state' has long been a target for Conservatives, who just want that big fat government off their back. Given the experience with unregulated crypto you might assume they would re-think, but no. Their real targets are things like environmental regulations and workplace safety and oh, I don't know, freeeeedum, but with the current makeup of the USSC I can foresee a real attack against the administrative departments that make government work.

As if Congress could write laws to cover everything conceivable possibility in the outcomes of their efforts.

It's impossible to not delve into politics with this topic but I'll attempt to keep this as dry as possible. The core strategy behind originalism is obtain immediate reversals of unwanted policy by claiming conflicts with "strict" interpretations of decades / centuries old language then relying on corrupted legislative processes to prevent those overturned precedents from being legislated back into law. All while claiming the intellectual and historical high ground while doing it. Historians and legal scholars analyzing court decisions over the past twenty or so years have identified numerous citations of old court cases or old speeches / correspondence of yesteryear politicians where the original language either appeared in a DISSENTING opinion that was rejected by a court majority or the original reference was completely misinterpreted because of changes in language usage over time for which these judges have no background or expertise.

From https://watchingtheherd.blogspot.com/2022/07/abort...

The true goal of this originalist claptrap is to provide a rationale for rejecting over a century of progress in civil rights, antitrust regulation, labor rights and criminal justice protections knowing that the special interests that will benefit from those rollbacks have perfected the art of paralyzing the existing gerrymandered, un-democratic legislative processes to ensure such protections cannot be re-enacted with explicit legislation -- quickly or perhaps ever.

And that's not the worst of the situation we are in.

The real problem with this originalist utopia we are entering is that in it, the enforcement of laws will inevitably revert to a mode in which the written word has no consistent meaning at all. Imagine a state enacting a law stating "Abortion is prohibited under criminal penalty for all cases." If subsequent cases arise in which a judge simply redefines the term "abortion" when ruling in case A involving the rape of a ten year old because that circumstance is horrid in the judge's mind but NOT redefining the term "abortion" when ruling in case B involving a twenty seven year old woman, then we are no longer operating under the rule of law. We are operating at the whim of whichever judge a plaintiff or defendant draws at trial and the whims of that judge from case to case which is a violation of the equal protections clause.

The same violence to reason and logic required to justify rejecting decades and centuries of precedent renders it impossible to put any faith in the subsequent interpretation of remaining laws, especially when the consequences of the "desired" original interpretations create bad outcomes for those in power who have no problem arbitrarily changing their interpretation of laws to avoid personal consequences for themselves.


WTH

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