California’s Terrible Wildfires Exposed a Variety of State Policy Failures

by Steven Greenhut, Reason, February 14, 2025.

Excerpts:

Regarding brush clearance, the governor has agreed that we need to step up the process. The California Environmental Quality Act, or CEQA, and other laws require Environmental Impact Reports (EIRs) for clearance projects and two to three approvals for controlled burns. The state prioritizes such boutique “climate” projects over its fundamental responsibilities, and even those projects are plagued by cost overruns and delayed timelines.

The wildfires have also highlighted California’s counterproductive insurance regulations. It can take many months for insurers to wade through the process of hearings, rate reviews, and opposition to such hikes by consumer-attorney “intervenors” who earn large fees for their efforts. This process is so cumbersome that it reduces competition, leading to too few insurers.

The problem goes back to Proposition 103, the 1988 ballot initiative that made the state insurance commissioner an elected position, instituted the prior-approval system for rate increases, and rolled back rates. It created a price-control system. Unable to easily adjust rates to reflect risk, insurers quietly—and then not so quietly—began exiting.

And:

We’ve seen criticisms about an inadequate number of firefighters. Public databases show an abundance of LA firefighters earning total compensation packages above $500,000 a year, with one captain earning more than $900,000. If pay reflected market rates, California governments could afford to hire more of them rather than relying on underpaid prison labor.

DRH comments: In a talk I gave last month to the local Libertarian Party chapter, I highlighted the role of CEQA and commented that it was one of Ronald Reagan’s worst legacies as governor. Also, those pay figures are amazing. Just think how much we could save if the union weren’t so protectionist and if governments could hire former prisoners.

Is There a Constitutional Crisis?

by Editorial Board, Wall Street Journal, February 11, 2025. (February 12 print edition.)

Excerpt:

Well, that was fast. The same people who predicted Donald Trump would be a dictator now say a “constitutional crisis” has already arrived, barely three weeks into his Presidency. They’re overwrought as usual, and readers may appreciate a less apocalyptic breakdown about Mr. Trump’s actions and whether they do or don’t breach the normal checks and balances.

Mr. Trump’s domestic-policy decisions so far strike us as falling into three categories. Most rest on strong legal ground. Some are legally debatable and could go either way in court. In still others Mr. Trump appears to be breaking current law deliberately to tee up cases that will go to the Supreme Court to restore what he considers to be constitutional norms. None of these is a constitutional crisis.

DRH comment: You know what I like best about this editorial, besides the substance? It’s good grammar in the last sentence. “None of these is,” not “None of these are.”

Elizabeth Warren’s Hubris Allowed Trump To Defund the CFPB

by Eric Boehm, Reason, February 13, 2025.

Excerpt:

For a long time after the CFPB was created in 2010, there were serious questions about the constitutionality of that structure. That finally got resolved last year, when the Supreme Court ruled that Congress was within its powers to hand off the purse strings. So, funding the CFPB via the Federal Reserve is not unconstitutional—it’s just unorthodox and foolish.

Here’s where the hubris enters the story. When Warren and Obama created the CFPB, they designed that unorthodox funding structure specifically to prevent a future Republican-led Congress from trying to defund the bureau. Remember, this was in the age when Republicans were running around the country telling voters they intended to repeal Obamacare too. By isolating the CFPB from Congress’ budgetary powers, Warren was trying to make it invulnerable to attack.

Instead, she simply gave it a fatal flaw.

Earlier this week, the Trump administration submitted its CFPB funding request to the Federal Reserve. It asked for…$0.

DRH comment: I LOVE this. But I would have loved even more for the Supreme Court to have made a decision the other way. If Congress has certain powers, it can’t give them up. The Constitution doesn’t say, “Congress has these powers but if it decides it doesn’t want them, it can give them away.”

The 5 Worst Things About the Consumer Financial Protection Bureau

by Veronique de Rugy, Reason, February 14, 2025.

Excerpt:

It’s not as if financial fraud was legal before the CFPB swooped in to save the day. There were already plenty of agencies “policing” financial misconduct. The Securities and Exchange Commission, for example, has long been responsible for protecting investors, big and small, from fraud. The Federal Reserve has a security function. Then there is the Federal Deposit Insurance Corporation, which supervises financial institutions to prevent reckless banking practices. The Commodity Futures Trading Commission oversees the futures, options, and swaps markets; it’s supposed to make sure that trading in commodities like oil, wheat, gold, and financial derivatives isn’t rigged by bad actors or overly destabilized by excessive speculation. The Federal Housing Administration enforces fair lending practices in the mortgage market, while agencies like the Federal Trade Commission and the Office of the Comptroller of the Currency have historically handled deceptive financial practices. And so many more are also on the beat, including common-law actions against fraud.

Yet the CFPB was created under the premise that these agencies and the law were somehow asleep at the wheel as evidenced by the financial crisis, and only a new, unaccountable bureaucracy could finally rescue consumers from their own financial decisions. The reality is that no new protection was created for consumers by the CFPB. Creating the CFPB was merely replication, duplication, centralization, and the employment of thousands of people. What we got was simply more officious harassment of financial actors, all of which raised costs to consumers.