Starting with the George W. Bush administration, and certainly put on steroids by the Obama administration's second term thinking, individuals in state government, private sector management, and those of us specializing in corporate governance have had a growing concern about the not too subtle attempts of the White House to control all important areas of regulating the capitalistic system in the United States.
There is a growing open discussion in many sectors of the American economy and political system about the goals and methods of the executive branch, supported by Congressional majorities. Assuming both Congressional Houses agree to pass both the Affordable Care and Dodd-Frank Wall Street Reform Acts -- did members of Congress ignore what many feel was needed legislation to clearly state how these new laws registered in the Federal Register impact the corporation laws of the fifty states and are based on sound legal principles?
Many corporations, especially financial institutions, are not accepting the centralizing moves or the legal rights stated by the executive branch for the two major acts. Supporters of the corporate point of view are suing the federal government positions on both ObamaCare and Dodd-Frank. The bases for the law suits may appear vague, especially those arguing the meaning of verbs and nouns. However, they are delaying the implementation of the first waves of both major bills. These delaying tactics, while creating even greater confusion and uncertainty, are giving companies time to study the real impact of these laws and prepare to fight in the courts or in Congressional committees for their revisions.
The decision of the United States Court of Appeals on both the National Labor Relations Board and Consumer Financial Protection Bureau to rule the President’s Executive Order appointments unconstitutional has been a great break for those seeking less federal over-rule and for states' rights and Federalist advocates. The lack of clarity serves the delay strategies.
In the meantime, uncertainty in both business and financial markets will probably continue or even increase. A lack of resolution could extend the current economic malaise for so long that our ability to avoid the fate of Japan or Greece or Spain may pass the point of no return.
James is executive director of the Center for Global Governance, Reporting and Regulation at Pace University’s Lubin School of Business in New York City with a long career in management consulting in the labor relations area. James is also program director of Pace University’s new Certified Compliance and Regulatory Professional certificate program. He is the author of the first texts in English on labor and industrial law and practice in key countries of Europe. He began his management consulting career with Hewitt Associates in Chicago and McKinsey & Co. in New York City.