It’s not news that regulators in Utah are often uncomfortable allowing residents to make their own decisions about how, when, or if they engage in morally questionable behavior. The Beehive State has a well-known bee in its bonnet when it comes to alcohol, but what many non-Utahans may not know is that it is just as strict, if not more so, when it comes to preventing residents from gambling — even if they are in their own home. As federal lawmakers and many states edge toward legalizing, regulating, and taxing online wagering, some Utah legislators want to clarify the letter of their state law to make it absolutely clear that their residents don’t have a choice: gambling in Utah is illegal, whether it’s at a business, in your home, or on your smart phone.

As Eric Bianchi over at CalvinAyre.com reported last week, Utah state Rep. Stephen Sandstrom introduced legislation (HB 108) that would make it illegal for residents of the state to gambling over the Internet and on handheld devices. This is the second measure meant to address the increasing ease with which Utah residents are skirting the state’s strict gambling laws. Last month, the Utah House passed a bill (HB 40) that eliminated “vague working in the state law” that Internet cafes had reportedly been exploiting to allow online gaming — or as the bill’s sponsor Rep. Don Ipson charmingly put it, made them “havens for criminal activity.”

Utah is only one of two states in the nation that doesn’t have any form of legalized gambling, such as a casino or lottery (Hawaii is the other). But that doesn’t mean that residents aren’t doing plenty of gambling anyway.

Of course, that’s always the problem with prohibition, isn’t it? Bans never actually stop people from engaging in a behavior, it simply makes them a criminal if they do. If Utah’s Internet gambling ban is approved, especially as other states move toward legalizing the activity, Utahans will continue to gambling on and offline. Utah will lose tax revenue to neighboring states and residents will not have the protections of their government if their rights are violated while engaging in online gambling. Apparently, Utah regulators would rather try to protect the purity of the souls of their constituents rather than doing the job they are charged with which is to protect their right to life, liberty, and the pursuit of happiness.

In one important way, another section of the IPO already does so in communicating the incredible burdens on companies attempting to go public — burdens that create difficulties even for companies as big as Facebook and almost insurmountable for smaller firms. On page 30 of the S-1 (page 37  if counting the total number of pages), Facebook specifically singles out the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 as “risk factors” that will impose substantial costs to the company and its shareholders and divert resources from the firm’s core mission of innovation.

In bold lettering, Facebook announces, “The requirements of being a public company may strain our resources  and divert management’s attention.” The prospectus goes on to explain:

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act), the Sarbanes-Oxley Act, the Dodd-Frank Act, … and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources.

Regarding Sarbox, Facebook registers a complaint similar to that of many entrepreneurs, investors, and scholars of the economy about the law’s burden. The filing notes that the company is “in the process of designing, implementing, and testing the internal control over financial reporting required to comply with” Sarbox’s infamous Section 404,”which process is time consuming, costly, and complicated.”

Facebook is far from the only firm — big or small — that has found Sarbox to be “time consuming, costly, and complicated.” According to John Battelle’s book The Search, considered a definitive history of Google, Sarbox was “hell for a company like Google, which made its money literally pennies at a time, from millions upon millions of micro-transactions.”

Battelle reports that Sarbox compliance significantly delayed Google’s 2004 IPO. “According to engineers involved in the work, Google had to significantly restructure its advertising report system from the ground up.”

And if Sarbox makes life difficult for humongous firms such as Facebook and Google, we can only imagine the toll it takes on smaller firm seeking to raise capital by going public. And these are the very firms that could be the next Facebook or Google or start the next retailing wave like Home Depot.

And with specific regard to Home Deport, the firm’s co-founder Bernie Marcus has said many time the company likely never could have gotten off the ground if Sarbox and other of today’s regulations had been in effect. “We could never succeed today,” Marcus bluntly told radio host Hugh Hewitt in June.

In contrast to Facebook and other IPOs this year that launched when the firms already had billion-dollar market valuations, Marcus explained that when Home Depot went public, it was nowhere near a billion-dollar company. In fact, it had just four stores to its name.

IPOs of this size were fairly typical in the pre-Sarbox world. AOL founder Steve Case, a member of President Obama’s Council on Jobs and Competitiveness,  recently noted in a Washington Post op-ed, “Initial public offerings of less than $50 million were 80 percent of IPOs in the 1990s but just 20 percent in the 2000s.”

Another key difference between the pre-and post-Sarbox era, is that when small firms went public, they did so to raise the capital they needed to grow. Today, when companies the size of Facebook, Groupon, and LinkedIn launch IPOs, they do so mainly so their limited number of wealthy investors can realize the value of the growth that has already occurred. As Zuckerberg wrote in his letter in the S-1, the primary purpose of the IPO is to make the stock “worth a lot and make it liquid” for existing investors and employees.

Nothing wrong with that, but because Sarbox and Dodd-Frank prevent smaller firms from having the same access to the public markets, job creation suffers. As Case notes in his op-ed: “90 percent of job creation typically happens after a company goes public — and all too often, the alternative is for a company to be sold. While job growth accelerates after an IPO, it decelerates when a firm merges or is acquired.”

The good news is a package of bills passed the House overwhelmingly – with more than 400 votes and, in some cases, the Obama administration’s endorsement – in November to allow Facebook-like innovations such as “crowdfunding,” in which smaller firms can raise some seed capital free of much of the red tape from Sarbox and Dodd-Frank. The bad news is, as House Speaker John Boehner noted in a statement today, these bills have stalled in Harry Reid’s Senate. It’s time to “friend” solutions that allow small entrepreneurs and investors to take full advantage of the Facebook age.

Trey Kovacs assisted with the post.

A federal judge last month barred New York City’s “Taxi and Limousine Commission from issuing permits for taxicabs unless they’re accessible to people who use wheelchairs,” citing the Americans with Disabilities Act (ADA).  The judge effectively rewrote the ADA to cover taxi cabs, even though “the ADA specifically exempts automobile-type vehicles, including most taxicabs, from the requirement to be wheelchair accessible.”

The judge’s ruling will harm public safety and the environment, and cost hundreds of millions of dollars in New York City alone: “the relief demanded ‘would require, over the next five years, that all 13,000 New York City medallion cabs be replaced by cabs that cost about $15,000 more – basically to have their frames cut and then stretched to accommodate a ramp and room inside for a person in a wheelchair. …The larger taxis are generally about 800 pounds heavier and use about 20% more fuel – raising costs and polluting the air. Stretched taxis have harsher suspensions, and are therefore less comfortable for most users, as well as more dangerous (because they are less maneuverable and harder to stop).’”

The court’s unduly expansive interpretation of the Americans with Disabilities Act (ADA) is backed by the Obama Justice Department, which filed a brief supporting the lawsuit. The Obama administration is busy reinterpreting federal labor, employment, disabilities-rights, and discrimination laws in ways that impose costly new burdens on businesses and consumers. The Obama EEOC recently sued Pepsi for doing criminal background checks on job applicants, forcing it to pay $3.1 million to settle the lawsuit. The EEOC is also threatening employers who require high-school diplomas with lawsuits under the ADA.

Employers’ ability to hire and fire based on merit has increasingly come under assault by the EEOC, which has ordered employers to discard useful employment tests and accommodate incompetent employees. For example, a hotel chain was recently compelled to pay $132,500 for dismissing an autistic desk clerk who did not do his job properly, in order for it avoid a lawsuit by the EEOC that would have cost it much more than that to defend. “The EEOC says Comfort Suites dismissed the clerk when it should instead have accepted the services of a state-paid ‘job coach’ who might have ‘helped the clerk learn to master his job by using autism-specific training techniques.’” The EEOC’s demand is hard to square with a 1979 Supreme Court decision that ruled that institutions do not have to alter essential job requirements to accommodate the disabled, and other court rulings that say that an employee must be “qualified” to begin with before any accommodation of a disability is required.

Relying on a strained interpretation of the ADA, the EEOC has sued companies that sensibly refuse to employ truck drivers with a history of heavy drinking, even though companies that hire them will be sued under state personal-injury laws when they have an accident. It has previously sued other employers who take serious criminal records into account, or use criminal background checks, even though employers who hire criminals end up getting sued when those employees commit crimes. The EEOC’s demands thus place employers in an impossible dilemma where they can be sued no matter what they do. The EEOC is also suing employers who take into account bad credit and financial histories in hiring, even though failure to take that into account can lead to lawsuits against banks and property managers by customers. The EEOC’s aggressive new stance reflects its new left-wing majority under the Obama administration, which has appointed anti-business extremists to the EEOC.

A prominent federal judge has added to the growing chorus of criticism for American law schools and their failure to provide practical training for their students despite charging exorbitant tuition:

Judge José Cabranes of the U.S. Court of Appeals for the 2d Circuit . . .noted that law schools are in “something of a crisis,” given the skyrocketing cost of tuition, ever-higher graduate debts and a growing feeling that legal scholarship is of little use to the bench or practitioners. …

To get back on track, law schools should shift their curricula back to core courses and away from the interdisciplinary classes that have grown in popularity, he said; they should introduce a two-year core law program followed by a yearlong apprenticeship, and increase transparency regarding costs, job prospects and financial aid information. …

Cabranes lamented the move by law schools toward specialized, often interdisciplinary courses that can displace “black-letter” law courses — criminal and civil procedure, evidence and federal courts. He related a story about a friend’s child who enrolled in a law school clinic focusing on housing court — but who had never taken a property law course. Core law courses should come before clinics and interdisciplinary work, even if the latter are more popular with students and faculty, he said. …

Cabranas also offered a harsh assessment of the scholarship that legal educators are producing. He recalled recent criticism from several Supreme Court justices that the scholarship has left “terra firma” in favor of outer space. “Legal scholarship is a conversation among members of the academy with the rest of us reading — maybe,” he said.

Cabranes also “condemned a growing ‘cult of globalization,” in which law schools focus on trendy international concerns, rather than give their students a “solid foundation in the law.” An earlier news story in The New York Times described what a costly white elephant  law schools have become. Law school is expensive because of government-enforced accreditation standards that prevent law schools from containing costs even if they wanted to: “the lack of affordable law school options, scholars say, helps explain why so many Americans don’t hire lawyers” when they genuinely need legal assistance or advice. Lawyers need to bring or work on big-ticket lawsuits — even socially destructive lawsuits — to pay off their student loans, instead of providing badly needed legal advice and assistance to people of modest means, who can pay less. (Certain types of lawsuits are favored by one-way fee-shifting statutes that encourage trial lawyers to bring those particular types of lawsuits, even when the entity being sued is probably innocent.)

It’s not every day that the front page of The New York Times has two articles that highlight the importance of limited government, but today’s edition does exactly that. The first article describes how the Citizens United Supreme Court decision to allow corporations and unions to spend unlimited amounts on political causes has actually benefited free-speech and the political process.

Under the old political rules, Mitt Romney arrived in South Carolina this week the prohibitive Republican front-runner: flush with cash, awash in endorsements from a party establishment starting to coalesce behind him and buoyed by victories in Iowa and New Hampshire.

But as Mr. Romney is quickly learning, those rules no longer apply. Mr. Romney’s carefully tended network of Republican donors has been rendered functionally less important by “super PACs,” through which a handful of wealthy individuals are financing a multimillion-dollar advertising barrage to assail his record and prop up his opponents….

As a result, Mr. Romney’s remaining opponents have little incentive to drop out, knowing that their support from super PACs and Internet contributions from grass-roots supporters can keep them in the race long after they would have remained viable in earlier eras…

In other words, Republicans are actually getting more time to make a decision, more information about the candidates, and more debate about the issues as a result of the Citizens United decision. As John Samples shows in his book The Fallacy of Campaign Finance Reform, the motto “more money = more speech” does, in reality, hold true.

The second NYT article documented the ludicrous goings on at the Federal Reserve prior the housing market collapse in 2007 and 2008. If ever there was an argument against central planning, the wisdom of bureaucrats, or a case for greater transparency, this is it:

As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers. The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast. “We think the fundamentals of the expansion going forward still look good,” Timothy Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006….

This pathetic display was finally released this week after the Fed suppressed the records for the past five years. These same people who joked about the absurd economy they helped create, who failed to see that it couldn’t last, used the collapse to get even more power than ever before. As Obama’s former-Chief of Staff has said, Let no serious crisis go to waste.

One of the few virtues of the federal government has been its inefficiency. With functions spread out across different agencies and duplicated powers and responsibilities, it has often proved unable to harm the economy as much as it could owing to power games and competition among agencies. Now the president wants to change all that. He wants a ruthlessly efficient government to intrude in all aspects of our lives without internal checks and balances. An efficient government might have been a good thing 30 years ago, when the government was spending much less per person. Now that it’s spending over $30,000 per household, the prospect is terrifying.

Take, for example, the proposal to transfer the National Oceanic and Atmospheric Administration from the Department of Commerce to the Interior Department. It’s clear that President Obama wants to create a European-style Department of the Environment. The merger gives the environmental lobby a one-stop shop for everything outside the EPA. It also creates a powerful behemoth that will be all-too-ready to trample property rights in the name of the environment. The Interior secretary and the EPA administrator will form a powerful alliance in the president’s cabinet, and the chances of protecting the environment through responsible stewardship and free market methods will be significantly diminished as this new bureaucracy expands its power.

Meanwhile, the proposed merger of the subsidies arm of the Commerce Department with such entities as the U.S. Trade Representative, the Small Business Administration, the Export-Import Bank, and other market-complicating agencies creates what one commentator called “a corporate welfare Voltron.” The whole purpose of this department will be to interfere with the free enterprise system to the benefit of the political flavors of the month. Rent-seekers across the country will delight that the process of diverting taxpayer money into their pockets will become simpler and easier. That may be efficient, but is is not responsible government.

How will the president achieve this radical transformation of his power base? The truth is that he can’t do it himself. The Congress removed reorganizational power from the president in 1984. The authority to create his own departments, secretaries, and agencies without congressional approval is how we ended up with the separate Departments of Education and Health and Human Services under Carter, and Veterans Affairs under Reagan. People often forget that there was no congressional action to create the EPA. It was created by a reorganization under President Nixon. In fact, during the period in which the president had the authority to create (or consolidate) departments and agencies, their numbers increased in greater amounts than in any other period in American history, including the Progressive era.

The one saving grace is that the power is self-defeating. The more authority the president has over executive branch organization the greater the likelihood duplicate or unnecessary agencies will ultimately be created since every president wants to appear like he’s done something dramatic to help the economy. This president has already shown he’s no different than the rest. Congress should reject his request.

People who really want to reform the federal bureaucracy can examine the presentations at this years’ Hillsdale Free Market Forum, where Charles Murray told us why we didn’t need an Education Department, Jerry Taylor blew away the rationale for an Energy Department, and I examined just how we could abolish the Commerce Department.

Out with the old year and out with the old alcohol laws! 2012 is off to a great start with several states reducing the regulatory burdens on the producers and consumers of alcoholic beverages. Here’s to a new year!

Colorado: The movement to get full strength beer grocery stores seems to be losing steam. After four years of concerted but failed efforts and a governor expressly against the idea, the legislature apparently has no plans to push for sales of beer with more than 3.2 alcohol by weight in outlets other than liquor stores.

Connecticut: Apparently, I was not the only person curious about where one wouldn’t be able to buy liquor on or around Christmas/New Year’s Eve. Consumer Protection Commissioner William M. Rubenstein was kind enough to clarify Connecticut’s law: unless you’re in a bar or restaurant, the state’s anachronistic blue laws do prohibit the sale of alcohol on Christmas and New Years, and if those happen to fall on Sundays, it prohibits off-premise sales on the following Monday as well.

Idaho: The push is on to collect enough signatures to get the question of privatizing the state-run liquor business before voters. Optimistic after the success of a similar privatization ballot initiative in Washington State, Idaho grocers need to collect 47,432 signatures by April 30. Even if the measure is successful, they will have to face-off with the current governor, a Republican who has stated his belief that it’s the government’s duty to promote “temperance.”

Indiana: Lawmakers are reportedly drafting a bill that would allow carry-out sales of alcohol on Sundays as well as cold beer sales in convenient, grocery, and drug stores. Opponents of the plan, as usual, claim it would hurt mom-and-pop liquor stores. Oddly enough, Indianapolis does have one exception to the Sunday sales ban – a recent change in the law allows retailers to sell alcohol on Super Bowl Sunday and the previous Sunday, but only in the “downtown Super Bowl zone.”

Maryland: Some officials in Bowie think easing some of the convoluted county-by-county alcohol laws in the state might draw in new businesses (go figure). In Maryland, alcohol may only be purchased at state-licensed liquor stores, with some exceptions. However, some lawmakers in Prince George’s County want to allow grocery stores to sell wine and beer in an attempt to attract a new “specialty” grocery store and hopefully increase tax revenue.

New Jersey: On Monday, lawmakers passed a bill that will open the door to direct wine shipping to residents of the Garden State. The law, which will allow wineries producing up to 250,000 gallons of wine to ship 12 cases of wine per year per customer, will go into effect in May if Governor Chris Christie signs it.

New York: While Mayor Bloomberg has tucked his tail between his legs and run away from his proposed plan to limit alcohol consumption by severely limiting the number of booze-related businesses, other New York lawmakers are coming to the defense of alcohol’s merits. Senator Schumer launched a campaigned called “I Love NY Brew,” in an effort to support the state’s most excellent craft breweries.

Ohio: Just prior to the New Year, the governor of the Buckeye State signed a bill into law that will allow production breweries to open tasting rooms without an additional permit — which would have cost almost $4,000 a year. This is great news for the start-up craft breweries as well as the state, as it will draw in beer tourists, bolster the breweries profits, and increase money flow in the state.

Along with beer, the bill also does away with a prohibition-era law on small distilleries. Prior to H.B. 243, only one micro-distiller in each county of 800,000 or more residents was allowed to sell liquor on-site. The bill allows any small distiller (producing less than 10,000 gallons of liquor a year) to apply for a licenses to  sell up to two-fifths of product per day per customer and conduct liquor tastings on site. Of course, some archaic laws remain – like the rule that forces distillers to sell their product to the state and buy it back before they can sell it on-site to their customers. I guess this is a step in the right direction.

Pennsylvania: A bill awaiting a vote in the General Assembly would allow beer distributor stores to remain open on Sundays from 9 a.m. to 9 p.m. and allow them to sell 16-ounce six packs, 16-ounce 12 packs, and sell wine. Currently, distributors may only sell beer in cases of 24. Furthermore, the bill would allow the sale of cases of beer in any other establishment with a liquor license (i.e., supermarkets, delis, and bars).

Texas: The Lone Star State wins the prize for most exciting story: A district court judge ruled in favor of the brewery Jester King, which alleged that several laws of the Texas Alcoholic Beverage Commission (TABC) violated their constitutional rights. The judge said that the TABC would no longer be allowed to prohibit brewers from telling customers where their products are sold, may not require brewers to label products by their definition of “beer” and “ale,” and may not prohibit the advertisement of the strength of the drink by prohibiting descriptive words like “strong” as in “strong ale.” Congrats and thanks to Jester King! As we’ve seen all through 2011, it takes a few brave and driven folks to change the laws and benefit many.

image via thrillist.com

Economic Freedom in the United States declined over the past year, according to the newly released 2012 edition of the Heritage Foundation/Wall Street Journal global Index of Economic Freedom. It’s not hard to find the culprit.

As Nick Schulz points out at the Enterprise Blog, “regulation is a growing problem for small companies.” He cites the Dismal Scientist (at Moody’s), which point out, “The most small firms since the late 1990s have begun citing regulation as their biggest problem. Regulation is poised to surpass taxes in the survey, which is rare.”

One major source of regulatory anxiety for businesses is the Affordable Care Act (ACA), better known as Obamacare. Implementation of Obamacare will entail a major regulatory enterprise, and it’s being done badly, according to new Mercatus Center study. The study’s authors, Christopher Conver Jerry Ellig, studied eight key Obamacare rules. They found “that the regulatory impact analyses (RIAs) for these regulations were seriously incomplete, often omitting significant benefits, costs, or regulatory alternatives. Analysis of equity was cursory at best.”

While distressing, that shouldn’t be surprising. As CEI’s Wayne Crews notes in his annual survey of the federal regulatory state, Ten Thousand Commandments: “[A] problem with cost-benefit analysis is that it largely amounts to agency self-policing. Agencies that perform ‘audits’ of their own rules would rarely admit that a rule’s benefits do not justify the costs involved.”

We are stuck in a regulatory recession. Getting out of it will require pushing up our economic freedom ranking. Unfortunately, the current administration shows no intention of doing that. As Wayne also likes to say, you don’t need to teach the grass to grow; you just need to take the rocks off of it. (Thanks to Iain Murray for the Heritage and Enterprise Blog links.)

Faced with a $9.2 billion budgetary shortfall next year, California Gov. Jerry Brown has not surprisingly reached for the only tool in the Democratic shed — more taxes. Via The New York Times:

Gov. Jerry Brown called on California voters Thursday to approve $6.9 billion in temporary new taxes, including a surcharge on big earners, as part of yet another bad-news budget proposal, this one for 2012. He warned that without those tax increases, California would be forced to impose severe cuts in public schools that could reduce the school year by three weeks.

There is another way to address budgetary woes, of course, the one taken by Wisconsin’s Scott Walker — structural reform.  On January 5, Gov. Walker explained the success of his collective bargaining reform law passed last year to a gathering of journalists and academics at the American Enterprise Institute in Washington, D.C. As a result of these reforms, claimed Walker, Wisconsin is in far healthier fiscal condition than it was last year.

And it’s not just Walker touting the reform’s success. Even the editors of the Milwaukee Journal-Sentinel, who had opposed the law, on December 31 were forced to admit:

The governor did balance the budget with fewer gimmicks than in the past; he did reduce the structural deficit significantly; he did put a lid on property tax increases; he did give schools and municipalities more control over their budgets than they’ve had in years. And his efforts at economic development through corporate tax breaks and a revamped Commerce Department (now the public-private Wisconsin Economic Development Corp.) look promising.

And what has been Walker’s reward for righting his state’s fiscal ship without drastic cuts to government services or draconian tax hikes? Unions, furious over being asked to contribute more to their pension and health care plans, have vowed electoral vengeance, and are gathering signatures to force a  recall election. Walker seemed calmly resigned to the fact that such an election will happen this summer. He did not give odds on his chances, but seems prepared for another tough fight.

The danger if Walker is recalled and his reforms overturned is this:  Many local politicians may well conclude that the union grip on political power in this country is simply too strong to contest. They will look at Jerry Brown, who keeps getting reelected in spite of favoring policies that have transformed the once-great Golden State into a banana republic, and then look at Scott Walker, brutally punished for pursuing a reasonable, prudent course that resulted in a resounding success. Then they will look at the federal government’s $15 trillion worth of red ink, and ask themselves:

Why bother being brave?

News is just breaking that President Obama will today make a “recess” appointment of Richard Cordray to head the Consumer Financial Protection Bureau, a powerful and largely unaccountable regulatory bureaucracy created by the Dodd-Frank financial “reform” law rammed through Congress in 2010.

Such a move would be a horrific precedent on many levels for government accountability. It would be an appointment made by broadly defining “recess” to an entity over which Congress has no effective oversight of a nominee with a checkered history as Ohio AG’s of directing state money to confrontational “community organizers” as well as his trial lawyer supporters.

Let’s take these one at a time. The Senate is now in “pro forma” session, in which a handful of senators meet in the Senate every three days, as part of the agreement with the Republican-controlled House to adjourn Congress. The Democrat-controlled House and Senate did the same thing during the last year of the George W. Bush administration. During the 2007-08 pro forma session, as noted by the nonpartisan Congressional Research Service and reported by Politico, President Bush “made no recess appointments between [Democrats’] initial pro forma sessions in November 2007 and the end of his presidency.”

President Obama arguably had a window yesterday in the few seconds between the first and second session of Congress, but didn’t exercise this opportunity. If he appoints Cordray now, he sets a precedent that Democrats and critics of the “Imperial Presidency” will likely regret the next time  there is a Republican president and Democrats control one or both houses of Congress. If any adjournment or break the Senate takes can be defined as “recess,” can the president make appointments when the Senate is in formal session and gavels out for the evening? Our long-held tradition of checks and balances advises strongly against going down this road.

And, in this case, the CFPB itself shatters precedents, as well as specific Constitutional provisions, on checks and balances in regulatory agencies. Once a director is appointed, Congress has no effective oversight of the bureau through the appropriations process, as it does with other agencies.

As C. Boyden Gray, White House Counsel under George H.W. Bush and respected legal scholar, has written in the Cincinnati Enquirer: “Congress nullified its own primary oversight power by immunizing CFPB against Congress’s power to control agency budgets. CFPB can simply take up to 12 percent of the Federal Reserve’s operating expenses — roughly $400 million — no questions asked. Dodd-Frank prohibits Congress from even attempting to ‘review’ that budget.”

More shocking, Dodd-Frank even restricts the judicial branch, which liberals rhetorically champion as a bulwark of “independence,” in reviewing the CFPB’s actions. Gray writes that “rather than allowing the courts to fully review the CFPB’s actions, Dodd-Frank requires the courts to defer to CFPB’s legal interpretations.”

Then there is the nominee’s troubled history as an Ohio politico, a history that Buckeye state voters took into account when they removed him from office in favor of Republican Mike Dewine in 2010. Senate Republicans have focused more on the structural defects of the CFPB, but Cordray’s nomination would be troubling even if those weren’t at issue.

Last month in The American Spectator, I wrote about Cordray’s longtime support of the East Side Organizing Project or ESOP, an Ohio “housing” group that has distinguished itself storming banks and throwing plastic sharks on the lawns of private homes. ESOP’s executive director is on record telling Bloomberg that Cordray specifically approved of these tactics when he met with the group.

Cordray has praised ESOP as “the real heroes” and directed state funding the group’s way when he was AG and, before that, as state treasurer. And in a highly unusual move for a nominee awaiting confirmation, Cordray returned to Ohio in October to be the keynote speaker at the group’s gala dinner, in a somewhat secretive speech that does not appear on the ESOP or CFPB web site.

In addition, BigGovernment.com and others exposed a pattern of trial lawyer contributors to Cordray suddenly getting lucrative business from his office in helping the state with lawsuits against financial firms. The Capitol Confidential column at Big Government notes: “Cordray has a scandalous record of ‘taking money from lawyers who profit from private litigation that often follows closely on the heels of government investigations…’So, the reality is that President Obama’s liberal white-hatted regulator appears to be neck deep in a pay to play scandal with trial lawyers.”

On top of this there is the broad powers the CFPB would have over Main Street businesses that have nothing to do with the crisis. As was warned before Dodd-Frank passed, its power to ban “financial products” of “nonbanks” could extend to any form of credit extended to consumes, including a layaway plan by a small store. There can be no transparency and accountability in the financial system without transparency and accountability in the bureaucracies that control it.