The sordid history of crony capitalism in America was highlighted in Hettinga v. United States, a recent opinion by Judge Janice Rogers Brown of the United States Court of Appeals for the District of Columbia Circuit. Contrary to popular belief, that history didn’t begin when big businesses and billionaires began spending fortunes on lobbying and campaign contributions. It began when the New Deal-era Supreme Court stopped protecting fundamental economic liberties guaranteed by the Constitution.
Hettinga arose from a challenge by an enterprising dairyman to the dairy industry’s regulatory stranglehold on milk distribution. As the Washington Post reported in 2006, Hein Hettinga is a Dutch-born immigrant who, by bottling milk from his own cows, was able to work outside the antiquated, industry-backed system of milk regulation. This “loophole” allowed him to charge 20 cents less per gallon than his competition. Unfortunately for him, his competition was “big dairy,” and they didn’t appreciate being undercut in price. According to an economist for the Dairy Farmers of America, Hettinga’s cheaper milk was “damaging to the marketplace,” even though the existing regulatory system raises costs to American consumers by nearly $1.5 billion per year.
Big dairy eliminated their competitor by lobbying Washington, D.C. lawmakers to close the “loophole” that was being “exploited” by Mr. Hettinga. Senators John Kyl (R-Ariz.) and Harry Reid (D-Nev.) compromised on a deal that would exempt milk producers in Nevada from the regulatory framework and make Mr. Hettinga pay dues into the price-controlled pool, effectively subsidizing his competitors.
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