Having had my fun at the European Union’s expense, perhaps it’s time to move past Lufthansa jokes (although I do have a few more) and pay more serious attention to the EU and its federalism. There’s little room for American gloating or Schadenfreude: the ongoing EU disaster is hanging over our economy; and besides, our own federalism isn’t in such terrific shape, either.
The EU’s principal problem has nothing to do with economic policy; it is constitutional. The true and correct analysis appears in Alexander Hamilton’s Federalist 15. You may want a league or alliance among independent states (not Hamilton’s prescription for the United States; but “there is nothing absurd or impracticable in the idea”). Or you may want a federal Constitution and, under it, a government that governs you directly, as individuals, citizens, and taxpayers. What no sentient citizen should want is the “political monster” of a “government over governments” rather than individuals; an “imperium in imperio.”
The EU is quintessentially a government over governments. All its troubles stem from that defect, as explained here.
To America’s good fortune, Hamilton and his pals won the argument back when. Washington may not “commandeer” the states; if it wants to tax and regulate us, it must do so directly. This is what Madison called the “compound republic” and later generations, “dual federalism.”
For better or (mostly) worse, however, the levels of government may bargain around the initial entitlements. Washington may pay the states to do its bidding, and the states may request and accept the bargains. Funding programs of this sort took hold under the New Deal and have since grown steadily; they are the warp and woof of our “cooperative federalism.” Education, health care, infrastructure: it’s hard to think of a state activity that isn’t federally funded.
Principally for this reason, American federalism has come to display “European” debilities: an erosion of democratic government and political accountability; state gambles on federal bailouts; unsustainable public debts at all levels.
The most monstrous embodiment of this pathology is (drumroll!) Obamacaid. Its driving force isn’t federal coercion; it is intergovernmental collusion. What we need is a constitutional theory and a political strategy to contain that force.