Is Federalism Dead?


by Karl Denninger, Market Ticker:

One wonders.

Here and there a bit of it peeks out, yet for the most part it appears to be missing, a relic of a bygone era.

A relic that prevented all manner of mischief while it was strong, and indeed is one of the first and best checks against both tyranny and stupidity, the latter being distinguishable from the former in many cases only on the basis of intent.

Harken back to the national 55mph speed limit, a policy that had no means of actual enforcement as the federal government had no power to set speed limits on highways.  The States did, but not the federal government.


So what did they do?  The Federal Government conditioned federal highway funding on the imposition of the speed limit they wanted.  Some states “complied” but only in name; a few enacted the law but made the penalty a $5 fine, payable on the spot, with no records transmitted or kept.  This likely resulted in more than a bit of local corruption, as you might imagine, but the fact remains that the “enabling act” was vague enough that technical compliance was indeed reached.

Roughly ten years later the same cudgel was used to enact a national drinking age of 21 — in 1984.

I bring this up because much has been made of the CMS mandate ruling.  The law is not only bad, its catastrophically bad and yet exactly nobody thought it was a “bad idea” as the creeping incrementalism was put into law.  Specifically, the enabling Medicare and Medicaid law permits a single individual to have plenary authority over an utterly enormous amount of federal spending!

Last year the Treasury spent $6.8 trillion, a crazy record-high amount driven by the pandemic.  Of that CMS, that is Medicare and Medicaid services, spent $1.859 trillion, or 27.3% of the total.

Of course this insane level of spending was riven through with a plethora of grab-bag goodies for everyone who was willing to bend to a federal knee.  Congress, and the States learn, you see, that the teat is there provided you do what Congress wants and thus Congress effectively compels the States without actually pulling a gun.  They instead pull a wad of $100 bills.

But the fact remains that the CMS ******* mandate was upheld by the Supremes on the basis of one line in the statutes, which gives the director an unchecked capacity to set standards by mere assertion upon which nearly one dollar in three spent by the Federal Government is disbursed!

There are supposed to be 435 People’s representatives and 100 State’s representatives who make those decisions, along with one President who must either concur or be overridden by 2/3rds of both of the other bodies.

That was the original design of the Federal Government by the Founders, who recognized that plenary authority vested in anyone for any reason other than immediate and exigent circumstances, such as during an actual battle of a war, was a very bad thing and, if allowed to take root, would inevitably devolve into an effective Monarchy whether named such or not.

Well here we are folks.

This is not in fact about “bodily autonomy” as the narrow issue presents itself in the media and the various screaming from factions on both sides of the aisle.  In fact it is about the structural defect we coded into our federal Statutes and which we have allowed the States to continue to tolerate.

For those who think the answer is to change Biden out for, as an example, DeSantis come 2024 may I point out that changing one dictator for another simply changes who gets screwed!  It does not prevent the screwing, just as we now have Becerra at HHS who holds plenary spending authority over a third of the federal budget but the previous person in that position, Alex Azar did the same screwing when it came to treatments and “bonuses” under President Trump with exactly the same level of national control over what was used and when!

Indeed where was DeSantis or any other governor since, I may remind you, health licensing in all respects are typically state-regulated things.  There is no national doctors license but there sure are 50 state ones.  Likewise there is no national business license but there sure as Hell are state, county and local business licenses.  Where was “Mr. Conservative” and the State Legislatures in telling these firms to cut that crap out or be shut down immediately under long-standing powers that every State has?

Does it matter that Becerra is screwing both patients and employees of various institutions where Azar just screwed your grandmother?  No.  The problem isn’t found in the person, its in the Statute which nobody in the press — or the States — wants to take on.

Indeed if you listened to the oral arguments that exact point was raised by the justices — did you not consent?  Why yes, they did, although they barked that the imposition was unreasonable because it could not be foreseen.

Oh, so the language was unclear in the Statute?  Nope; it is exceedingly clear.  It is also tyrannical and outrageous, but it is clear, so why is it that over the last 30+ years the States and so-called “conservatives”, including DeSantis, haven’t done anything about it?

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