Chevron Deference Is Gone. Where Is Kagan’s ‘Massive Shock’?

Loper Bright isn’t without costs, but it has benefits too—and it hasn’t proved particularly disruptive.

By John Chisholm. He is a trustee of the Santa Fe Institute and of the Foundation for Economic Education. Excerpts:

"When the Supreme Court ended Chevron deference, one of the most consequential doctrines in American law, Justice Elena Kagan warned in dissent that it would “cause a massive shock to the legal system.” Two years later, that hasn’t happened.

In Loper Bright Enterprises v. Raimondo (2024), a 6-3 majority discarded a 40-year-old rule for interpreting “ambiguous” statutes. Under Chevron v. Natural Resources Defense Council (1984), judges were obligated to defer any time a federal agency made a “reasonable” interpretation of the law. Loper Bright was the last in a series of cases in recent years narrowing Chevron. Now courts, not agencies, must determine the best reading of the law."

"Two economic lenses bring those benefits into focus, revealing why Loper Bright is the sounder doctrine in the long run."

"The first lens is regulatory stability."

"The second lens is cognitive diversity. Social scientist Scott Page has shown that for hard problems, a diverse group of decision-makers tends to outperform a homogeneous group of higher-ability experts."

"public debate and cost-benefit analyses systematically overweight Loper Bright’s costs—the same bias that drove Chevron’s centralization in the first place."

"Two years on, no “massive shock” has materialized. Agencies still prevail in most challenges. Empirical studies put their win rate at roughly 75% when courts applied Chevron and near 60% on established rules since Loper Bright." 

One City Might Have Just Cracked the Housing Crisis

By Binyamin Appelbaum of The New York Times. Excerpts:

"The Canadian government has returned 10 acres in the middle of Vancouver to the Squamish, the First Nation whose ancestors lived there. On that land, the Squamish are building the densest residential neighborhood in the country."

"Cities have largely lost the power to say yes to construction. To prevent officials from acting against the public interest, we have drained them of the power to act in the public interest. Every decision can be appealed, every complaint must be heard, every objection weighed. We are so committed to fairness that we have lost sight of the unfairness of doing nothing."

"Freed from Vancouver’s rules, the Squamish are providing the city’s residents with a chunk of the housing they so desperately need."

"Vancouver, like most cities, prioritized the interests of homeowners at the expense of everyone else"

"It works hard to prevent the replacement of houses with apartment buildings. Sometimes it even replaces apartment buildings with houses. There is an eight-unit apartment building a few blocks from Senakw on the verge of falling down. Under the city’s land-use laws, however, it cannot be replaced by a new eight-unit apartment building. A developer has proposed building three mansions instead." 

"The current generation of Squamish, raised on stories of the old Senakw village, now had the chance to build anew. They could have built single-family homes. They could have built office towers or a shopping mall. They ultimately decided to build a better version of Vancouver."

"The result was a project with more than 6,000 housing units in towers as high as 58 stories"

"Senakw “is literally what the market wants,” said Thomas Davidoff, a professor of real estate finance at the University of British Columbia who supports the project."

"The nation’s leaders frankly acknowledge that money was their most important motivation. The project was a chance for the nation to participate in Vancouver’s pre-eminent industry: real estate development. That is exactly how the economy is supposed to work. To paraphrase Adam Smith, it is not from the benevolence of real estate developers that we expect our housing, but from their regard for their own self-interest. The Squamish are going to make a lot of money, and Vancouver is going to get a lot of new housing."

"Vancouver has moved to reduce its parking requirements and to allow larger buildings in some areas."

"“Restrictive zoning has been pushing people farther and farther away from the communities that they love,” said Christine Boyle, a former Vancouver city councilor who is now housing minister for British Columbia." 

A Roundup Supreme Court Victory

A 7-2 majority stops a mass tort attempt to evade federal law on regulating a Monsanto pesticide

WSJ editorial. Excerpts:

"the Federal Insecticide, Fungicide, and Rodenticide Act (Fifra) . . . establishes a regulatory scheme for the Environmental Protection Agency to review and approve pesticides. It also expressly bars states from imposing requirements “for labeling or packaging in addition to or different from those required” by the agency."

"“For the more than three decades since, EPA has repeatedly re-evaluated glyphosate and has repeatedly concluded that glyphosate is not likely to cause cancer,” Justice Kavanaugh writes. “As a matter of federal law, Monsanto legally must use a label without a cancer warning unless and until EPA approves or requires a change.”"

"Only “if EPA determines that a given warning is necessary for a pesticide’s label and the manufacturer then proceeds to sell the pesticide without that warning, the manufacturer might face liability for misbranding,” Justice Kavanaugh explains." 

 Also see Bayer Wins Supreme Court Challenge Over Roundup Litigation: The 7-2 decision will help the company in its battle to resolve thousands of claims that the popular weedkiller caused cancer by Lydia Wheeler and Patrick Thomas of The WSJ. Excerpts:

"a federal regulator—the Environmental Protection Agency—didn’t require the product to carry a warning label"

"federal law requires it to use the EPA-approved label without a cancer warning, Justice Brett Kavanaugh wrote for the court. The goal of the federal law—to create a uniform labeling system—“would otherwise be impossible to achieve,” he said."

"The EPA has repeatedly determined that it isn’t likely to be carcinogenic in humans and doesn’t need a label that includes a cancer warning."

The Myth of Alan Greenspan as the ‘Maestro’

The longtime Fed Chairman had many successes but he fed the credit mania that led to the 2008 financial panic

WSJ editorial. Excerpts:

"The bad turn came in the 2000s after 9/11 and the dot-com bust. Influenced by then Fed Governor Ben Bernanke, Greenspan became preoccupied with the risk of deflation. In June 2003 Greenspan cut the fed funds rate to 1% and kept it there for a year, though the second Bush tax cut had passed Congress in May and the economy had begun to surge.

Greenspan tightened money slowly after that, despite rising oil and other commodity prices. Thus was born the great credit mania of the mid-2000s. These columns warned consistently in that era that the Fed was too easy for too long, and Greenspan let us know in often contentious phone calls that he didn’t like our then-lonely warnings.

Only in 2005 did Greenspan finally say publicly that housing prices had become “frothy.” But by then the credit mania and housing bubble were already long building."

"Congress pressed Fannie Mae and Freddie Mac to guarantee subprime mortgages and “liar loans.” To his credit, Greenspan in the 2000s was an ally of the George W. Bush White House in pressing Congress to shore up the capital standards of Fannie and Freddie."

"Greenspan never admitted the failure of monetary policy or of the regulators at the time who had allowed Citigroup and other banks to create the off-balance-sheet vehicles that failed." 

Chuck Schumer’s Chip Shortage

A Micron plant in New York is years behind schedule for all the reasons you’d expect

WSJ editorial. Excerpt:

"Consider Micron’s massive fabricator project in upstate New York, which it announced in October 2022. “With the CHIPS and Science bill I wrote and championed as the fuse, Micron’s $100 billion investment in Upstate New York will fundamentally transform the region into a global hub for manufacturing,” New York Sen. Chuck Schumer boasted."

"The 2022 Chips Act provided some $53 billion, plus a 25% investment tax credit, to subsidize U.S. chip-making."

"Congress in 2024 passed a law exempting some semiconductor projects from the National Environmental Policy Act’s stringent environmental reviews. But the exemptions don’t apply to Micron’s project."

"it includes hundreds of acres of wetlands and forestland that are nesting areas for endangered bats. This makes permitting and building more complicated. Trees can only be chopped down when bats aren’t nesting—i.e., from November to March."

"Construction was supposed to start two years ago, but tree clearing didn’t begin until this past January"

"environmental impact statement numbered more than 700 pages" 

The Trump Administration Gets Civil Rights Back on Track

With ‘disparate impact’ theory, the EEOC long ago departed from its mission to prevent discrimination

By Jason L. Riley. Excerpts:

"Hubert Humphrey, the liberal Democrat from Minnesota who shepherded the bill through the Senate, insisted the act didn’t “provide that any preferential treatment in employment shall be given to Negroes or to any other persons or groups.” If anyone can find “any language which provides that an employer will have to hire on the basis of percentage or quota related to color, race, religion, or national origin,” he said, “I will start eating the pages one after another, because it is not in there.”"

"Supporters noted repeatedly that Title VII’s language was unambiguous. Racial discrimination on the part of the employer had to be intentional and couldn’t be inferred from disproportionate outcomes in the hiring and promotion of minorities."

"within three years EEOC staffers began redefining “discrimination,” sidestepping the statutory language of the bill and ignoring the legislative history. They determined that statistical disparities could be used as evidence of hiring bias and that employers could be held liable for racial imbalance in the workplace, even if it was unintentional. Alfred Blumrosen, the EEOC’s first compliance chief and one of the people who drafted its initial disparate-impact guidance, later admitted that the agency’s power didn’t “flow from any clear congressional grant of authority” and that it “required a reading of the statute contrary to the plain meaning.”" 

"the EEOC’s rogue actions were endorsed by an activist judiciary. In Griggs v. Duke Power Co. (1971), the Supreme Court said hiring practices that were “neutral on their face, and even neutral in terms of intent” could be unlawful if they resulted in racial imbalances. The decision gave employers an incentive to use racial preferences in hiring to avoid being sued for discrimination." 

Zohran Mamdani, Slumlord

He wants to build more public housing when there’s no natural gas in many current buildings

WSJ editorial. Excerpts:

"New York Attorney General Letitia James, Brooklyn Borough President Antonio Reynoso and New York City Council member Crystal Hudson on Monday issued a press release condemning a months-long natural gas outage at a New York City Housing Authority (Nycha) complex in Brooklyn." 

"Perhaps the Democratic leaders could file a complaint with the city about this slumlord."

"Nycha says it needs $78 billion to bring every apartment up to standard. That’s $439,275 per unit"

"Mr. Mamdani last month proposed that the agency finance new housing projects"

"His plan would require construction workers on these projects to be paid at least $40 an hour in wages and benefits. Such wage mandates are why it cost Nycha $1,973 per apartment to install LED lights"

"Washington already covers two-thirds of Nycha’s operating budget"