Topic: Constitutional Issues
The Economic and Constitutional Crisis in the United States It seems these days the headlines are full of news related to the Economic Crisis that has engulfed the United States and many parts of the World today. We often hear words like "Wall Street Bail Out", "Financial Melt Down" and "Industry Nationalisation". However, we hear very little about the legality of such things.by Skip Sanders
(libertarian)
Wednesday, April 8, 2009
It seems these days, the headlines are full of news related to the "Economic Crisis" that has engulfed the United States and many parts of the World today. We often hear words like "Wall Street Bail Out", "Financial Melt Down" and "Industry Nationalization". However, we hear very little about the legality of such things.
The simple fact of the matter is the Federal Government has no Constitutional Authority, to tax the citizens of the Several States, in order to buy toxic assets from Fannie Mae. The Federal Government does not have the Constitutional Authority to give generous gifts from the Treasury to Wall Street Bankers called a "Bail Out" or to make good on the insurance contracts on behalf of AIG (American Insurance Group). Sadly, these types of problems are not new, nor were they created in the last 10 years. This assumption of unconstitutional power and the financial fiasco of today, was decades in the making.
When discussing what is Constitutional or not, you do not need to be a scholar. If fact that the framers of the Constitution went to great lengths to write the document in plain language so that everyone could understand it's meaning. The population of the several states in 1781 was not exactly what we would call "well read: by today's standards. The people of the several states still had to debate the merits of the compact and then ratify it. To gain political support from the people, they had to be able to easily understand it.
The entire argument of whether these actions are Constitutional boils down to the 9th and 10th Amendments:
Amendment 9 - The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. Amendment 10-The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Simply put, if the Federal power isn't specifically written in the Constitution, the Federal Government does not have the power to do it. Needless to say, the Constitution was very specific about what types of things Congress could spend the Treasury on. Article 1 - Section 8 - Powers of Congress: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
It then goes on to list the specific 17 powers of that Congress was granted related to access of the Treasury. None of which, included bailing out bankers, insurance companies, Wall Street executives or mortgage companies. I encourage everyone to read these powers for yourself, but I do not have the space here.
This point was made clear we would think, by the US Supreme Court in 1936. The United States v.. Butler, 297 U.S. 1, was a case in which the Supreme Court of the United States ruled that the processing taxes instituted under the 1933 Agricultural Adjustment Act were unconstitutional. Justice Owen Josephus Roberts argued that the tax was "but a means to an unconstitutional end" that violated the 10Th Amendment. The act invades the reserved rights of the Several States. It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the Federal Government. The taxes, the appropriation of the funds raised, and the direction for their disbursement, are but parts of the plan. They are but means to an unconstitutional end. In short, the Congress can't give gifts from the Treasury in an effort to control any aspect of the economy. In this particular case it was an attempt to control or influence the agriculture industry. So we have to ask ourselves, what has changed?
Of course the President at the time Franklin D. Roosevelt was not impressed with the Courts' assertion of power that ultimately restrained the Congress. So FDR suggested that if the Supreme Court couldn't get on board with Congress and his "New Deal", that he would simply appoint more Judges to the Highest Court. These Judges would of course be in line with FDR and his "New Deal" thinking. They would provide the necessary Court votes needed to override the other Judges and thus their Judicial Power was rendered useless. In historical circles this is known as "FDR's' Stacking the Courts". With the Congressional majority being of the same party as the President, they were all too willing to pass whatever legislation was necessary to resolve this little problem with the Constitution and the Supreme Court. So they introduced "Roosevelt's Court Reform Bill". The two branches of Government controlled by FDR's party assaulted the Courts, in an attempt to destroy their power. With this new legislature looming in the Majority Congress of the Presidents' Party, another "New Deal" case was being heard: West Coast Hotel Co. v. Parrish. In an apparent reversal from many previous decisions, including The United States vs. Butler, Supreme Court Justice Owen J. Roberts sided with the "New Deal" Government, reversing all Supreme Court rulings on this issue since the Court had been established under the Constitution.
The "switch," together with the retirement of Justice Willis Van Devanter at the end of the 1937 spring term, is often viewed as having contributed to the demise of Roosevelt's bill, by preempting the purpose of its passage. The bill died in the house. This is known as "the Switch in Time that Saved Nine" and is the essential end of the Supreme Courts' role as the defender of the Constitution.
With all three branches of Federal Government now under the tight grip of President Franklin D. Roosevelt and his party, Fannie Mae was created in 1938. It was created as a way to help bail out the failing banks and the mortgage industry with a grant of $1Billion Dollars from the U.S. Treasury. Sound familiar? From this point forward began, the fleecing of hard working individuals and the transfer of their small wealth, to the Federal Government into massive sums. This "Public/Private Partnership" would soon control sections of our economy for decades to come. Today, we find the bail out of Wall Street in the 1930s' and creation of Fannie Mae at the heart of today's economic crisis. Not only do we have these problems, but we have added, the insurance industry, auto industry and medical industry as just a few examples of the merger Private Corporations and the Government Treasury, mandated taxation and Corporate Profits, which fleeces the working person of his efforts today.
We now see that beginning in the 1930s' and moving forward ever since, the Federal Government has stopped being for the people and began being for the expansion of Federal Powers. With these powers, they reward private corporations gifts from the public treasury. No longer are there winners and losers based upon by the value they provide to the free market place but, rather based on political influence and connection. This is the heart of the problems in the U.S. tcurrently. Today, the Federal Government gives no thought to taxing your time (wages/life), commerce or trade (exchanges of property), or even taxing what you have already earned and paid for (property tax). All these taxes are demanded of you, and are ultimately enforced by the barrel of a Government Gun. In turn those revenues can then be gifted to bankers, insurance companies and mortgage lenders. All of this is for the private profit of these friends of Government Politicians.
It is no wonder that 150 "Tea Parties' have been organized across the Country. It is no wonder that the people are growing increasingly angry. Unfortunately, it is also no surprise that, your Federal Politicians do not care. After all, they have been doing it for 70 years. What makes you think they will stop now?
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The views expressed in this
article are those of Skip Sanders only and do not represent
the views of Nolan Chart, LLC or its affiliates. Skip Sanders is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
I enjoyed your article. At the end you talked about Federal officials not caring and I totally agree. But, the American people are the ones who keep putting them in office year after year. That's the depressing part especially when I hear people talk about how bad Congress is with the exception of their own representatives and senators of course. Talk about divide and conquer.
Excellent article Skip. In my opinion if we could assign a root cause to most of our problems it would be that the American people are ignorant of their own constitution. They not only don't know we are losing our constitutional Republic, but they never knew we had one in the first place.
A former talk show host in the Detroit area used to put it this way:
Sponsored by Rep. John Shadegg, R-Ariz., H.R. 450, or the Enumerated Powers Act, states, "Each Act of Congress shall contain a concise and definite statement of the constitutional authority relied upon for the enactment of each portion of that Act. The failure to comply with this section shall give rise to a point of order in either House of Congress. …"
Shadegg said the act would perform three important functions:
1. It would encourage members of Congress to consider whether their proposed legislation belongs in the federal level in the allocation of powers or whether it belongs with the states or the people.
2. It would force lawmakers to include statements explaining by what authority they are acting.
3. It would give the U.S. Supreme Court the ability to scrutinize constitutional justification for every piece of legislation. If the justification does not hold up, the courts and the people could hold Congress accountable and eliminate acts that reach beyond the scope of the Constitution.
"Nothing short of massive public pressure will force congressmen to take a position on this important bill." Lamb wrote. "Nothing short of a return to the Constitution can save this great nation."
Rep. Louise Slaughter, D-N.Y., chairs the House Rules Committee, and Rep. John Conyers, D-Mich., chairs the House Judiciary Committee – where the act was referred Jan. 9 and remains today.
"Both of these committee chairs should be bombarded with phone calls and e-mails asking that H.R. 450 be brought to the House floor for a recorded vote," Lamb wrote.
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