Note: a version of this commentary originally appeared at National Review Online.
Boeing may have won the battle against the National Labor Relations Board for now. But unfortunately the war against federal overreach continues, and as the Boeing/NLRB fiasco shows, it remains very much an uphill struggle. The impunity with which the Obama administration persecutes private businesses even when it knows that its actions are probably illegal and stand a good chance of being tossed out of court is one of the gravest and least understood areas of concern. The problem is not particular to any administration, but is instead systemic. We should indeed thank the Obama administration for demonstrating just how little protection private businesses have from federal abuse under current law.
NLRB’s move against Boeing was among the clearest examples yet – a demonstrably illegal action justified to the media with demonstrable falsehoods. Boeing was not transferring production of Dreamliners from pro-union Washington State to right-to-work South Carolina, as NLRB claimed: It was expanding production of Dreamliners in both locations because of soaring demand. And it was the administration, not Boeing, that gave the impression that Boeing was punishing its unions in Washington for previous strikes. The outrage is in the details: Please read Boeing’s letter of complaint to NLRB from back in May. Boeing CEO Jim McNerney‘s subsequent op-ed in the Wall Street Journal was a classic of politeness and restraint, given the NLRB action.
Under the terms of the agreement Boeing reached with its union this week, the company will be allowed to build additional Dreamliners at its new South Carolina plant, so long as it builds future 737 MAX planes in Washington. I can understand why reasonable people are happy about that, but it’s hard to believe that the federal government even had the power to prevent Boeing from opening its new plant there in the first place.
It’s too bad that the NLRB action was never fully adjudicated in federal court because the Obama administration would almost certainly have lost. But the bigger picture is this: The administration doesn’t care if most its actions are tossed out by federal courts. As long as some of them are upheld it can claim success. What businesspeople and lawyers call “litigation risk” – the risk that you will be sued for something – doesn’t enter into the Obama administration’s calculations, because it can always hire more lawyers to defend it at the Department of Justice, and sovereign immunity typically protects it from compensating people for the losses it causes.
In this sense, the ultimate problem is not the Obama administration. Sovereign immunity and limitless litigation resources create an incentive for unscrupulous officials to persecute individual companies and whole sectors of industry at no risk or cost to themselves or to the government. That is a structural problem and it needs a structural solution, one which should be a matter of priority for the next Congress. Regulatory excess has become perhaps an even greater danger to the economy than taxes.
The EPA is facing hundreds of lawsuits for rules and enforcement actions of dubious legality; its persecution of Range Resources Corp. should have been a national scandal. The Dept. of Interior’s moratorium on offshore drilling in the Gulf was thrown out of federal court multiple times, but the administration found a way to make the drilling rigs leave the Gulf anyway, by refusing to process permits. The administration has heartlessly eliminated tens of thousands ofjobs along the Gulf Coast through its barely legal moves to constrain oil production in the Gulf. Now it’s preventing the completion of a major pipeline from Canada.
Across the country you can see evidence of Obama’s war on the American economy – a senseless ideological campaign that will hopefully serve America as an example of how not to do things for a long time to come.
Mario Loyola is director of the Center for Tenth Amendment Studies at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.