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Feb
03

Exempted from the Rule of Law?

I’ve always lived by the motto that rules are needed and that it’s really good if other people follow them – but they don’t really apply to me. Apparently I’m not the only one. President Obama seems to have trouble with the concept of universally applied rules as well. The difference is that if I ignore the rule of law, I pay the consequences, while if President Obama ignores the rule of law, we all pay the consequences.

Economically speaking, the rule of law guarantees an equal playing field (equality of opportunity). All economic actors are subject to the same rules of the game. The game is then played without knowledge of the outcome. If politicians want to rig the outcome, the easiest way to do so is to rig the rules of the game to favor certain economic actors.

Now that GE has snuggled up to the administration they get an exemption from new global warming regulations. Other, less politically connected, companies have to play by different rules.

Hundreds of US employers have been exempted from ObamaCare, including local SEIU unions. Surprise, surprise, the law hurts global competitiveness of firms, so the politically connected firms and unions can get exemptions.

Of course, exemptions to Obama’s rules should come as no surprise. There were exceptions for President Obama’s ethics rules. There were exemptions to the reading of Miranda rules for terror suspects. There were exceptions to President Obama’s embrace of PayGO.

Then there was the arbitrary takeover and management of GM which placed unions ahead of bond holders, clearly going against established rule of law. Such a pattern is difficult to stop.

Now a federal judge in Florida has ruled ObamaCare to be unconstitutional. Will it even matter? Will the US embrace the rule of law or discard it? What does it mean for a law to be found “unconstitutional”? When F.D.R.’s laws were found to be unconstitutional, he threatened to pack the Supreme Court and subvert the rule of law.

In order for an economy to grow, economic actors need the rule of law. Hernando de Soto has made a career preaching the importance of the rule of law for economic growth. The rule of law requires a level playing field. The question is whether Americans want a level playing field or one that is tilted to favor politically connected special interests.

Permanent link to this article: http://wkubbtcenter.com/2011/02/03/exempted-from-the-rule-of-law/