I've known Eric Lipman for about 30 years now, so it didn't surprise me when he announced that he was leaving the Administrative Law bench to become an activist on behalf of consumers.
I thought he was a bit nuts to do so, but then again, he's always been a little nuts, always fighting for the little guy against government overreach, whether he was a staffer at the Minnesota State Legislature, a member of the Minnesota House of Representatives, an official in the Pawlenty administration, or an administrative law judge.
As an administrative law judge, one of the things he found most frustrating was how the deck was stacked in favor of the bureaucracy, and how indifferent the bureaucrats were to the challenges of ordinary citizens trying to navigate the byzantine laws and rules that have accumulated over the decades, usually in the name of consumer protection.
So when he ran across a case of a tiny natural gas cooperative that was having a hell of a time with the Public Utilities Commission here in Minnesota, he couldn't help himself: he started an activist group to help small businesses and consumers fight the bureaucracy.
What outraged him so much was that this gas cooperative, which was started because no large statewide company would provide service in this rural area, was being put through the exact same regulatory process as companies serving hundreds of thousands of customers.
It was going to bankrupt the cooperative. The problem wasn't that the rates they were charging were outrageous—they were set in meetings by people who are actually ratepayers, and they didn't rise as fast as the bigger companies. It was that the company had slowly accumulated enough customers that they crossed a regulatory threshold, and thus had to go from spending almost nothing on compliance to spending hundreds of thousands of dollars and months or even years convincing the PUC they weren't gouging customers.
Eric thought this was insane. A company that serves 1,000 customers who banded together to obtain natural gas service shouldn't be regulated by the same standards and subject to the same fixed costs as a company serving 1 million customers.
Eric had seen countless cases of bureaucracies incapable of using common sense, and such cases always benefit the big guys. Big business can hire lawyers by the dozen to wrangle with bureaucracies. Smaller companies and individuals? The cost of complying with the regulations can either put them out of business or cause service rates to skyrocket.
Eric, being Eric, is doing all this for free. Not so much out of charity, but because the bureaucracy has annoyed him so much as a judge over the years that he has fun sticking it to them now that he has the opportunity.
The problem is not that what they are doing is illegal; the problem is that it is all perfectly legal. It's that the system is designed to work this way. The big utilities don't care, because they just pass on the costs to their customers. The government bureaucracy loves it because they get to pass on the costs to the ratepayers and taxpayers. The lawyers and consultants love it because they get to make bank off the rules and regulations.
Everybody wins, except you and me, and the smaller companies who can't afford to fight the government, even when they have done nothing wrong.
When government regulates too much, it generates what political science geeks call the "Iron Triangle:" Politicians pass laws friendly to business and regulators, regulators, who often travel back and forth between working for the government and the regulated industries, implement regulations to benefit big businesses, and the big businesses return the favor by contributing to politicians and hiring bureaucrats when they get out of government.
In my experience, an awful lot of government reform comes from people like Eric, who get angry at seeing government gone awry. Moms for Liberty is a great example, but there are countless others.
To many, people like Eric look like Don Quixote, tilting at windmills. But that's not true at all. Unlike Don Quixote, the activists are fighting real monsters.
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