Public disenchantment with all three branches of federal government (numerous polls show this regularly by a two-to-one margin) raises an important question: What does America do about this problem?

America has prospered mightily with our Constitution as supreme law. There is no clause or implied power in the national or various state constitutions that enable a state to veto federal laws unilaterally. Further, the Constitution authorizes Congress to exercise only those powers enumerated in Section 8, Article I, and nowhere does it authorize the Executive branch to make any law.

Our marvelous Constitution, defined by our founders, cites but five ways our citizenry can change real and perceived problems.

1.  Change political leadership via elections
2.  Defund implementation of laws by vote of Congress
3.  Change or repeal laws by legislative action
4.  Challenge objectionable law and regulation in court(s) to gain resolution
5.  Amend the Constitution.               

As a practical matter, these remedies are cumbersome and time-consuming (purposefully in my view) to inhibit misuse, and they are not always applicable. As one observer put it, “How does government defund Executive-ordered amnesty?” In addition, federal courts have already ruled multiple times that the approach of claiming state sovereignty over enforceable law is unconstitutional (no kidding).

All of this is becoming important as several states are initiating “nullification” laws whereby a state exempts itself from federal laws (and successive outgrowths of regulation) or judicial action not to its liking. A recent such action is Texas House Bill 98, which proposes a bicameral committee charged with reviewing all federal actions to determine if it is unconstitutional or incompatible with state law.

This is not a new approach. Historically, nullification has not proven effective. Efforts to enact nullification have been a failure primarily due to politicians in those states, where attempts and results are still dithering with no resolution. It seems that in the real world the only possible hope for successful use of nullification can derive from a majority of states using the process collectively. We might otherwise call this a Constitutional amendment process. And it is important to remember that our founders did not specifically address the concept of what is now termed nullification, but they did uniformly state that the power to declare laws unconstitutional is delegated to federal courts. The essence of the concept of nullification has plagued us repeatedly, and the to-and-fro on these matters is certainly one of the biggest points of dispute between federal and state governments and the interests of the people.

It is important to understand three things. State officials are not bound to enforce federal law that the state determines to be unconstitutional, and Congress cannot mandate that states enact such laws. Secondly, states may not block federal authorities that attempt to enforce a federal law unless a court with proper jurisdiction has determined that the law is unconstitutional. And, last but not least, individuals are not exempt from prosecution by federal government when their state of residence has legalized an activity or pronounced that a federal law is unconstitutional. 

The impact these matters have on U.S. industry are as obscure and convoluted as you can imagine. Laws and regulations at issue recently included implementation of the Affordable Care Act; the increased cost of gas and electric energy due to EPA emission regulation on suppliers; the costs of emission-control regulations (gas, liquid and solid) on manufacturers; and increased taxes on corporate earnings. A study appearing in Journal of Economic Growth (see March 21, 2013; J.W. Dawson and J.J. Seater) cites “total factor productivity” as composed of traditional governmental influences of spending, taxation, deficit and monetary policy, to which they add regulation. The study indicates a 28% reduction in American GDP as a result of federal intervention since 1949, the inception of our regulatory onslaught.

What can or will be done about these matters? We don’t yet know, but my prediction is that this topic will be at the core of a coming U.S. crisis.