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Kelly Evans: Leviathan's revenge

CNBC's Kelly Evans
CNBC

In case you missed it, we had a great discussion yesterday about the future of the Supreme Court with New Street's Blair Levin, an expert on the communications industry.  

With the GOP poised to fill Ruth Bader Ginsburg's seat, I asked him what the policy impact of a more conservative court could be in the years ahead. Recall that a day before, Larry Kudlow told us he would expect the nominee "to continue a lighter touch on regulation...maybe more sensitivity to jobs in the economy."  

Levin explained how that might work in practice: "What the court could do is reverse both Chevron and the 'delegation doctrine' and essentially eliminate regulatory power from the agencies," he said, referring to the precedents that have given federal agencies wide latitude in recent decades to set rules for their industries.  

This deference to agency power, critics say, "has enabled the agencies of the executive branch to assert power Congress never gave them. In many cases, unelected agency heads and bureaucrats have become America's main lawgivers," issuing 3,000+ new rules a year, as The Wall Street Journal has noted.  

That obviously has major implications for businesses of all types. As it regards the internet in particular, Levin said, there is also the question of whether state and local governments will continue to have any authority over it. If their oversight is curtailed, then you could have the double whammy of both federal agency and local government deregulation.  

But that, he warned, could be a Pyrrhic victory for internet businesses; "If you get rid of all telecom regulation, you are going to have some kind of reaction." Local governments, for instance, could decide to build their own networks based on "neutrality principles" (remember "net neutrality"?).  

Levin also pointed to what's happening in healthcare, where experts from all different sides politically warn that if the new Supreme Court unwinds Obamacare, you could simply end up with Medicare for All; in other words, trying to peel back the regulatory state ends up galvanizing support for an even more comprehensive regulatory state in the future.  

You could call it "Leviathan's Revenge," and the release of a new book on this very topic winds up being perfectly timed. It's not so much the size but the purpose and morality of the administrative state that Sunstein and Vermeule seek to codify in "Law and Leviathan." Given the scrutiny the administrative state is about to face, and the powers it may yet cling onto, this has never been more urgent.  

See you at 1 p.m! 

Kelly 

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Twitter: @KellyCNBC

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