George Leef’s latest Forbes column documents the president’s disregard for a fundamental tenet of our constitutional republic.
A crucial reason why the U.S. used to enjoy robust economic growth was that we had a strong rule of law tradition. People could mostly know what the law was and enforcement was the same for everyone – no favorites.
In that environment, people could invest and plan for the future without worry about having their wealth seized. They could also go about their lives without worrying that a government official might target them for a violation of some vague law or regulation they didn’t know existed.
Sadly, the rule of law has been decaying for many years, and very rapidly under Barack Obama’s presidency.
The decline of the rule of law was one of the topics covered at the Liberty Forum held by the Atlas Economic Research Foundation on November 13 and 14. A panel discussion with Professor Allan Meltzer of Carnegie-Mellon University, Leszek Balcerowicz, the first Minister of Finance in Poland following the fall of the Iron Curtain, and Serena Sileoni, of the Bruno Leoni Institute in Italy. All three speakers identified the decline of the rule of law as a serious contagion that threatens freedom and prosperity.
Professor Meltzer observed that the rule of law is being replaced by a constantly-growing mass of regulation. That mass leads to crony capitalism, as politicians find that the regulations give them authority to pick winners (shower taxpayer money on favored businesses) and punish losers (such as threatening firms that don’t bow down to union demands, as Boeing discovered when it sought to build planes in South Carolina).
It also invites corruption. Contemplating the massive Dodd-Frank Bill and its 398 new regulations, Meltzer said, “How anyone can run a bank without paying bribes is a mystery to me.”
Alas, cronyism infects state government as well, as Jon Sanders documents in his Carolina Cronyism research series.
