In yesterday’s WSJ, the editors agreed with what Michael Cannon, myself and others have said repeatedly here on the Corner, namely that states should absolutely refuse to create the optional state exchanges under Obamacare and should instead let the feds come in and do it themselves. In responding specifically to Douglas Holtz-Eakin (who created a bit of a stir on the Corner recently when he argued in favor of the state exchanges) the editors offer a crucial insight, one with sweeping implications far beyond the healthcare context:

The “federalism” ruse is a special instance of bad faith. If federal-state cooperation means anything, then it requires some element of genuine state control and the freedom to innovate. The Health and Human Services Department is abusing the laboratories-of-democracy line as cover even as it prohibits states from doing experiments. And it’s dictating details down to the lab coats and microscopes.

The folks at HHS envision the exchanges as centralized, interventionist, hyper-regulatory bodies. HHS’s idea of flexibility is telling the states they can make the exchanges even more centralized and interventionist. But if they don’t agree to that model, then Washington will impose it anyway.

The “cooperative” regulatory arrangement contemplated in Obamacare’s state exchange provisions is actually pervasive in the Federal government’s basic scheme for controlling state governments. In fact, because it allows the feds to deputize state officials, which is supposed to be unconstitutional, it is a huge part of the operations of Congress. The arrangement is essential, for example, in the Clean Air Act, under which the Environmental Protection Agency “approves” State Implementation Plans, threatening all the while to impose a Federal Implementation Plan. And we know, because we’ve been told by EPA officials, that EPA will “crucify” local businesses to make examples of them, when given the chance. Hence, the immediate incentive for states to comply with federal conditions for “permission” to implement the plans themselves