The other day, I was chatting with a couple of friends in my favorite coffee shop. We were generalizing on the subject of interventionist, overreaching public policies, and then a fellow from a nearby table chimed in, personalizing the subject. A tyrannical Obama administration policy had taken his life and slammed it to the ground, he said.
He was talking about something called Operation Choke Point, a Justice Department initiative that is a prime example of how our ever-expanding, egregiously excessive regulatory state is redefining America. It tramples on the rule of law, lets bumbling bureaucrats micromanage our lives, despoils justice, stymies our economy and does this not just in the abstract but by means of hurtfulness to flesh-and-bone citizens.
The man at the coffee shop insisted he had done nothing wrong, had broken no law, but that Choke Point had resulted in his losing a pawnshop he owned. Federal action had cost him his bank account, he said, and the ensuing perplexities cost him the business. If it sounds crazy that the government would do something like this to someone who is perfectly innocent of a civil or criminal misdeed, stay tuned, because that’s what this program is all about.
In 2013, the Justice Department decided to enlist agencies including the Federal Deposit Insurance Corporation to dissuade banks and other financial institutions from entering or maintaining transactions with types of businesses at a “high risk” of committing fraud. The FDIC, which regulates some 4,500 of them, then pushed banks to end financial services with such businesses that might or even might not be risky but were surely tagged as disreputable by the bureaucrats, such as payday lenders, shops that sell guns, coin dealers and tobacco shops.
The upshot was businesses often being notified out of the blue one day that their banks were saying goodbye to them, meaning they themselves might have to say goodbye to continued existence. As Rep. Dennis Ross (R-Fla.) has pointed out in an article, the problems of service denial include dealing with credit cards, payroll, leases and purchases.
A liberal defense of all of this, as offered in a congressional hearing, was that it’s a way of dealing with fraud. A conservative answer was that there are endless governmental ways of dealing with fraud when it actually occurs. Among the obvious consequences of this program are fewer businesses, fewer services and fewer jobs, all in the name of an obnoxiously unjust and stupid rationale: that it is permissible to address possible future illegalities by punishing those who possibly might commit them.
Given all of this, you might be pleased to learn that the man in the coffee shop said he has found a way to start up a new pawnshop and that Congress is moving to eliminate Operation Choke Point by denying it funding. But keep watching out because there are about 175,000 pages of federal regulations and the number has been growing by leaps and bounds during the autocratically minded Obama administration. While some regulations are obviously necessary, huge numbers are superfluous infringements on liberty and the victims are pretty much all of us.
Consider, as one more example, the Northwestern University professor whose article in The Chronicle of Higher Education disparaged new regulatory extremities under Title IX, the federal law aimed at squashing gender discrimination on campuses. Some students said their sensibilities had been violated, and the professor underwent a widely noted university probe. Though she was found innocent, what we have here is a fanatical assault on free speech.
To save us from becoming the land of the hounded and home of the wimpy, Congress clearly has to do more to review new and old regulations and whittle them down to what is essential and just.