“Market failure” is a common justification for new government policies. Proponents of interventions love to point to instances of apparently imperfect markets and assume that government taxation, subsidies, and regulation can seamlessly perfect them, thus maximizing social welfare. But according to a new paper by Cato scholar Ryan Bourne, this simplistic approach—predicated on the idea that government can perfect markets—leads to more intervention or higher taxes than what is optimal and has significant unintended consequences.
The word is out: the Supreme Court is poised to roll back the Chevron doctrine. Set out in Chevron v. Natural Resources Defense Council (1984), the opinion states that when Congress has not “spoken directly to the precise question at issue,” a court reviewing an agency action “may not substitute its own construction of a statutory provision for a reasonable interpretation made by … the agency.” That gives agencies more flexibility in making law by issuing regulations. In the new issue of Regulation, law professor David Schoenbrod argues that the Court should ground any modification of Chevron on the constitutional norm that the “lawmakers” elected by the governed—that is, members of Congress—should take responsibility for the laws.