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Which Side Are You On?
Richard Esptein on the FAST Recovery Act
It’s said that the way to a man’s heart is through his stomach.
The State of California has repurposed this adage lately, finding ways to remake the country in its own progressive image through the food industry.
The last time Professor Richard Epstein joined the show, we took up the “pig case” aka NPPC v. Ross. The Supreme Court is now deciding whether California can foist its values on the rest of the country through regulations that would impact pork producers nationwide. Based on oral arguments in October, it looks like it will be a close call.
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Meanwhile, a new battle has been brewing over fast food restaurants and other franchises in the Golden State. Governor Newsom signed the FAST Recovery Act (AB 257) into law on Labor Day, celebrating the bill’s dramatic minimum increase from $15 to $22 for fast food and other franchise workers.
Organized labor cheered, but the bill has now been put on hold until voters can weigh in by referendum in 2024. We can hope that voters will see through the bill’s lofty promises for workers to the harms of minimum wage increases for workers, employers, and consumers alike. Even the Washington Post called the bill “ham-handed.”
This morning Professor Epstein joins me to review the economic case against the minimum wage. However, this is not like normal minimum wage legislation. The FAST Recovery Act also gives sweeping new powers to the state – and “Emperor Newsom” in particular – to regulate every aspect of thousands of businesses in California that qualify as large franchises. Such powers were unthinkable for the Founders, but Epstein points out that the courts have increasingly deferred to state authority since the New Deal Era.
The FAST Act takes the administrative overreach that has become common and goes a step further – consolidating that power into the governor’s hand. Beyond the possibility of overturning the law by citizen vote, Epstein sees a larger opportunity to challenge its constitutionality on equal protection grounds – setting a precedent for similar cases of power grabs by state executives.
The battle lines have been drawn. To quote an old union hymn, Which Side Are You On? Team Liberty or Team Newsom?
ICYMI… The Weaponization of Consumer Finance
Bob Zadek: All of that, Todd, is an introduction to Operation Choke Point, which we thought had gone away, but it has not.
Todd Zywicki: We live in a different world here. Those of us who consider ourselves libertarians have always thought in terms of this binary that goes back for centuries, which is that you've got private business on one hand, you've got public government on the other, and that the threat to liberty in some sense comes from the government and not from the private sector.
But now, in the world of the administrative state, that binary distinction doesn't really hold anymore. Banking is in many ways the apotheosis of the regulatory state. Banking is so intertwined with the government – starting with deposit insurance and that becomes the lever for everything that comes after – that it gives the government the ability to exercise all these informal tools over the government.