Do federal regulations increase economic inequality?

May 4, 2023

Economic inequality presents a new reason to favor the Write the Laws Act.

The Left claims we need government intervention to reverse ever-growing economic inequality. They also blame this supposed problem on libertarian, free-market policies. However…

  1. Libertarians have no power to enact anything, so we can’t be held responsible for alleged free-market policies
  2. It’s been a long time since elected Republican politicians passed any significant pro-market reforms

These two facts strongly suggest the anti-market policies, favored by the Democrats, bear the responsibility for the growth in economic inequality.

For Example

  • Social Security taxes are regressive. They rob lower-income Americans of the opportunity to accumulate capital, pushing them instead to assume high-interest credit card debt in emergencies.
  • The huge government contracts necessitated by leftist policies confer vast wealth on the large corporations and their affluent stockholders. For instance, did you know that Ross Perot became a billionaire by processing welfare payments for the government?
  • Government subsidies drive up education, healthcare, energy, and housing costs. This is because prices always rise to consume not only the subsidy but also whatever the market will bear.
  • Minimum wage laws make it harder for low-skilled workers to gain the experience needed to earn higher wages.
  • Licensing requirements create cartels that reduce the number of good-paying jobs while driving up the cost of living.

And these are just a few examples. Now here comes another one…

Regulation Blocking Investment Opportunities

Did you know that an SEC regulation prohibits lower-income people from taking advantage of the most lucrative investment opportunities?

Here’s how it works…

The stock exchanges offer investments in established companies that have already gone through their most rapid growth phase. In other words, the best earning opportunities are already gone by the time a stock becomes publicly traded. Meanwhile…

The SEC (Securities and Exchange Commission) prohibits low-wealth people from investing in companies during their start-up phase – that is, before they go public.

This means the most lucrative investments are reserved for a private club only the rich can join. This is yet another example of a left-wing policy that makes the rich richer while lower-income people lag behind.

No Regulation Without Representation

This regulation came about because Congress charged the SEC with the task of protecting people from risky or fraudulent investments. The SEC tries to do this by reserving the riskiest investments to those with the most investing experience and the most ability to endure losses. This may sound noble on the surface, yet it prohibits most Americans from getting in on the ground floor of companies like Amazon, Google, Facebook, and Apple.

Did your elected reps design this specific prohibition and vote for it? Or, instead, did they simply delegate their legislative power to the SEC, who designed the policy and imposed it?

The SEC took a vague instruction from Congress and created this measure that increases wealth inequality.

Is this what you want?

Only Congress should Write the Law. This delegation of powers, from elected Congress to unelected bureaucrats, ought to be considered unconstitutional. It destroys the separation of powers that is necessary to a properly functioning system of checks and balances.

Fortunately, we have recently reported on several examples of cases where the courts seem to be moving closer to this view. But…

We shouldn’t hold our breath and wait for the courts to completely solve the problem anytime soon. That’s why we created the Write the Laws Act (WTLA), which has been introduced in the Senate by Senator Rand Paul.

WTLA will force Congress to read, debate, and vote on any rule that Executive Branch agencies like the aforementioned SEC regulation. If you want to help make that happen push this button…


Also, contribute or start a monthly pledge.

Set your own agenda,

Jim Babka, President
Agenda Setters by Downsize DC

Today’s Action: Pass the Write the Laws Act


Help build The 300 with a one-time or monthly contribution.

Coming soon!

See the "300" Agenda Setters in your district

Don't subscribe ... a boring, inbox-stuffing newsletter. Get more!

See our Privacy Policy