Another way to measure the gross impact of federal regulation is to count the pages in the official publication of all federal regulations, the Federal Register.  This is a bit crude as a measure, because a very long regulation may be fairly innocuous whereas a short one could have a massive cost imprint, but it is a decent rough gauge of the extent of the totality of federal regulation.  The Federal Register for 2010 is over 81,000 pages long, a 19% increase in one year.  We do not have a page count on the regulations to be repealed, perhaps because many of the revisions have yet to actually go into effect, but it is safe to assume that they will come nowhere near to matching the voluminous regulations still to be issued under the new Obamacare and Dodd-Frank laws.  And there are also the numerous ongoing rule-makings by Professor Obama’s hyperactive regulators at the EPA, NLRB and the rest of the seemingly endless alphabet soup of federal regulatory bodies.

However, all this begs a deeper question: why is the national government regulating small businesses in the first place?  To put this question in perspective, the Federal Register was first issued in 1936.  At that time it was 2,600 pages long (and that was after four years of the New Deal).  The Left will argue that growth in federal regulation is inevitable as our Nation grows.  So, let’s look at that.  From 1936 to 2010 the population of the United States grew by 240% (128 million to 308 million).  Over the same time period the Federal Register grew by over 3131%.  That means that the page count of federal regulations has grown at over 13 times the rate of population growth since the middle of the New Deal.  And again, as noted, Professors Sunstein and Obama still have much, much more regulation to come.

One of the reasons the first Federal Register of 1936 was so short was that up until then the Supreme Court had followed the original understanding of the Constitution’s interstate commerce clause, which limited Congress’ authority to commercial activity that actually crossed state lines.  However, the next year in 1937 the Supreme Court began to abandon the previous understanding of the interstate commerce clause.  Under the new interpretation anything that might maybe in any way have any affect on any kind of commerce any where was deemed to come under the federal Congress’ power.  This included any business no matter how small it was and no matter how local its activities were.  The classic case is Wickard v. Filburn, a 1941 case which held that an Ohio farmer could be fined for violating federal agricultural quotas for food grown for use on his own farm! 

This massive re-interpretation of the Constitution’s interstate commerce clause completely overthrew the Constitution’s original allocation of powers between the federal and state governments.  Small businesses were now subject to a double burden of federal as well as state regulation.  With Obamacare it is now even claimed that a private individual citizen can be penalized under the clause regulating interstate commerce for failing to buy something the federal government says they must buy. 

Where did the Supreme Court get the right to make such a massive change to the original meaning of the Constitution?  It certainly is not in the Constitution itself.  There it says that to change the Constitution you have to get various super-majorities of elected legislatures.  There is nothing about courts changing the Constitution.  In fact, the entire edifice of the federal regulatory state rests on an undemocratic and unconstitutional expansion of the interstate commerce clause by a body without constitutional authority to make such an expansion.

Unfortunately that expansion is now locked into 70 years of Supreme Court precedents.  Even if the current Supreme Court declines to further extend the expansion by overturning the Obamacare individual mandate, that will still leave in place the other 81,000 pages of federal regulations, and many more to come which fall just short of the individual mandate.  Republicans in Congress have several legislative proposals to alleviate the federal regulatory burden on small business, but given the morass of special interests behind all of this federal regulation, it is hard to see how Congress will ever make a meaningful dent.

In Timely Renewed: Amendments to Restore the American Constitution, I propose instead that we re-invigorate the constitutional amendment process to restore the original meaning of the interstate commerce clause, along with other much abused clauses.  The specific proposal for restoring the interstate commerce clause’s original scope is in chapter 6.  With this, small business would be regulated only by the states instead of “one-size-fits-all,” Big Business oriented federal regulations.  Only this will really achieve Professors Sunstein and Obama’s purported goal of relieving small business of the regulations which are stifling their ability to produce the new jobs we so desperately need.

This inspired me to write an article entitled Bernie Sanders – Free Marketeer? which was just published online by The American Thinker.   In it, I try to briefly present the extended argument made in chapters 2 and 3 of Timely Renewed, which are both subtitled A Progressive Case for a More Jeffersonian Government.   Power attracts power.  If government regulates, it is inevitable that the regulated economic interests are going to focus all of their resources on controlling that regulator and turning it to their own uses.  The only way for progressives to reduce corporate control of government is to reduce government.  

Now you may argue that the essence of progressivism is government control.  You would be right for many people who style themselves “progressive.”  Much of the modern American Left is profoundly elitist.  However, I believe this argument is worth making, not because I really think Bernie Sanders is going to become a libertarian,  but because for many people  ”progressivism” is not inherently about government control.  There are many who would style themselves progressive who really are motivated by the desire to give the less advantaged a fair shake.  For too long a small elitist minority has convinced these folks that government control was the only way to achieve this.  However, the fact is that government control benefits those who control the government, and that is going to be those with economic power.  My goal in Timely Renewed  is to reach out to the sincere progressives and conservatives who both who despise the crony capitalism that dominates our federal government, and make the case that that freedom (limited government and true free markets) is the real answer to giving the little guy a fair shake.

The now ending NASA run space shuttle program cost about $600M for each flight to the space station. Each of the shuttle craft cost about $2B to build. While they were built by private contractors, this was on a “cost-plus” basis, where the government pays the contractor whatever it says it spent and adds a guaranteed profit margin, a method which obviously disincentivizes cost efficiencies. In contrast the new contract is on a fixed price basis, which means the contractor will be paid a flat amount per flight. The contractor’s profit is the difference between the fixed price and its costs. This obviously rewards cost efficiency, the exact opposite of the “cost-plus” approach.

An article in this month’s Scientific American discusses how SpaceX approached achieving space flight for a fraction of the cost incurred by NASA and its cost-plus contractors:

“SpaceX … has cut the price tag of anodized aluminum bolts from $15 to 30 cents by machining them itself. It has slashed the cost of the carbon-based thermal material used in heat shields by coming up with its own formulation of the stuff, bypassing the industry’s lone supplier. It has eliminated the need to shell out big bucks for custom-formed tapered-diameter tubing used by the space shuttle to create turbulence-free rocket engine exhaust pipes by coming up with a design that smoothes the exhaust flow using cheap, constant-diameter tubing bent into a spiral shape.”

Time and time again, the private free market has shown its ability to achieve amazing efficiencies through economic incentives. However, these efficiencies come from human creativity, and can not be plugged into the quantitative models so beloved of economists, bureaucrats and socialists. Free market economics is usually portrayed as cold and calculating. However, actually it is ultimately based on faith in human creativity and spirit, which is the fundamental impetus for our desire to explore the beyond.