Archive for category Constitution
Shades of George Orwell
Posted by Tom in Centrally Managed Economy, Constitution, Federalism, Government Regulation, Individual Freedom, Law, Morality & Religion in the Public Square, National Character, Statism on December 28, 2010
Hopefully only a bad dream from which we shall awake!
Gaping Hole in Financial Regulation
Posted by Tom in Centrally Managed Economy, Constitution, Financial Policy, Housing, Welfare on December 27, 2010
Tom Cargill has an excellent article in today’s RGJ, Reforming Freddie and Fannie is No. 1 Priority. In it he sets the record straight as to the causes of our current financial mess, “Incredibly easy monetary policy, lax regulatory oversight and flawed government incentives to expand homeownership to moderate- and low-income households based on “junk” mortgages are the source” of the Great Recession.
He correctly points out that the Democrats would rather point fingers elsewhere, Wall Street greed and deregulation. But these same politicians are responsible for the Community Reinvestment Act and the Fannie/Freddie subprime engorgement. Barney Frank famously wanted to roll the dice with F&F, he later admitted his error, after the international financial damage was done!
Tom rightly points out that the recently passes financial regulation failed to touch F&F, the prime cause of the Great Recession and that failure of courage must be remedied. Why? because they will continue down the same blind path if left to their own devices.
Housing has been a major economic driver as the baby boomers aged. It has been a first step toward everything in those new houses from beds to babies! The industry is in the tank now and hasn’t reached botton, again because of federal efforts to keep deadbeats in homes and prevent foreclosures. The overhang of underwater home mortgages is a major drag on home values. And until the secondary market reaches market clearing pricing, no upturn can happen.
Another downer is the maturity of the babyboomers. As that demographic lump passes from house to home to grave, the demand for housing will be less, absent some dramatic increase in immigration or fertility rates. So, the future does not look good.
But for the health of what will be left of the industry, the health of the economy, and the sanity of the financial markets, Fannie and Freddie must be dealt a death blow. The mortgage market must be allowed to operate in the private sector.
I have a basic prejudice toward government interference in free markets. Thus, I wonder what today would be like without the Community Reinvestment Act and without Fannie and Freddie? They forced or incentivised a large build up in the housing industry, misallocating investments and creating the bubble that burst. My gut is that we, all of us, would be much better off if they had not been around. And, where in the Constitution is there an enumerated power to promote home ownership to low income families or high income families for that matter? Truly beyond the scope of those powers. Something to think about!
Christmas Surprise: FCC Expropriation & Internet Control
Posted by Tom in Centrally Managed Economy, Congress, Constitution, FCC, Free Speech, Government Regulation, Statism on December 20, 2010
It’s been long brewing but Obama’s unelected regulators at the FCC will tomorrow issue the order for “net neutrality” and internet regulation. As discussed in a prior post, net neutrality forces carriers to favor bandwidth hogs at no additional costs. Even though those carriers have invested significant dollars in their infrastructure, they will not be allowed to charge an appropriate return on their investment. This is a pure and simple a taking of property without just compensation, a confiscation of invested capital.
Worse, it is a first step to regulatory assertion of the right to regulate the internet without specific statutory authority to do so. It is legally an ultra vires action of government bureaucrats. Commissioner Robert McDowell tells the story in yesterday’s WSJ, The FCC’s Threat to Internet Freedom.
So why the Christmas surprise in this busy season as the infamous 111th Congress draws to a close? The usurpers of power, the Democratic dictators at the FCC know that the congress only has 60 days to review and potentially stop this illegal FCC action. If the holidays occupy 10 of those days, and organization of the new 112th Congress occupies another 10 or so days, then there will only be 40 days left for review. And as we all know there are more pressing national fiscal problems that will command higher congressional priority. Obama’s expropriators are hoping to float this usurpation under the radar.
Indeed it is the regulatory regime that will sustain this lame duck president during the next two years. And it is in this arena that major uncertainty will be created which will further damage the economy, indeed, the republic. The FCC will potentially damage our freedom of speech and freedom of the press, while the EPA can proceed to bankrupt our nation with cap and trade regulation of CO2!
Internet Freedom Coalition posted an excellent article on the subject, Silencing the voices of Internet dissent. It is a call to action to alert congressional representatives to review and reject the threat to free speech and free press. This is a critical effort.
Absent internet criticism of Obama and his ilk, we will become another Russia or China.
Justices Ignoring the Constitution
Posted by Tom in Constitution, Federalism, Individual Freedom, Judiciary, Justice, Law, Morality & Religion in the Public Square, Legal, National Character, Supreme Court on December 19, 2010
What to do about judicial legislation? About justices that ignore the constitution? Doug Bandow posted and excellent article in American Spectator, Does the Constitution Mean Anything? He recites the circumstances of the drafting and ratification of the establishment document, namely the restriction of the type of unlimited powers exercised by the king and parliament against the colonies and the people. It was natural then that the founders drafted a structure dividing government between branches, each with its own domain, and each having a check on the others so that power was in fact divided. Thus a balanced central government was created. But not one of general police powers. No, the federal government was one of limited powers, specifically enumerated limited powers. The general power governments were the states. Thus the states possessed the so-call “police power.” The constitution specifically reserves powers not delegated by it to the federal government, to the states or the people.
Realizing that changes may later be needed, the founding fathers provided for a couple of different processes for amending the constitution. There have been 27 amendments to the document none conferring additional power on the central government.
Bandow goes over the various theories by which judges and justices try to get around this basic governing document which they have foresworn to defend and uphold. Theories of “living constitution,” or “dynamic constitution” or “time is right” for changes that the founders would have drafted if they thought of them, are all part of the judicial tap dance used to deny the validity of the constitution.
He suggests that it is not judicial “activism” that is the sin: ”Originalists” of varying stripes have tended to criticize judicial “activism,” but activism is not the problem. Lack of fidelity to the Constitution is the problem.”
He correctly analyses the current constitutional issues on the Obamacare insurance mandate and then posits the real value of his post, a potential solution to recalcitrant judges short of impeachment, itself a non-remedy.
“GIVEN THE TENDENCY of judges to ignore law and constitution, one helpful fix would be to end life tenure for justices. Intended to protect judicial independence, this provision creates a dangerous and disconnected elite that will always be tempted to overstep its role. Better to appoint judges for a term, perhaps ten years. Rotation in office would still insulate jurists from political passions while limiting the concentration and abuse of power by the judiciary. Errant jurists would naturally leave the bench rather than forever wield unconstrained power — becoming liberal saints along the way.”
While this is perhaps not the only solution to the problem, it seems a sensible one. Perhaps others will be constructed, but this at least causes us to ponder the problem and think about potential solutions.
The issue is important for, “If constitutional protections are but formless inkblots, then no American is truly safe from his or her government.”
Federal-State Downward Spiral is Intractable
Posted by Tom in Centrally Managed Economy, Constitution, Economics, Federalism, Government Regulation, Nevada, State Finances, Taxation on December 8, 2010
In theory, the depression-vintage, federal-state unemployment insurance program was supposed to build reserves in good years so those reserves could be paid out in years of high unemployment. Like other federal government programs it doesn’t work that way.
Randy York called our attention this morning to a Reno Gazette Journal item announcing a 50% increase in the unemployment insurance rates paid by Nevada employers for each employee, $180 on average. On top of that the federal tax will increase by $21 to $77 per average employee; this to cover interest on Nevada’s debt to the federal government with the current balance at $579 million but growing by $300 million in 2011! So Cindy Jones the administrator of the Nevada Employment Security Division argues the necessity, though strangely she is supported by people in the Chamber of Commerce.
Randy analogizes this to “spending our way out of debt,” arguing that the new mantra is that “we can tax our way back to a healthy business environment and lower unemployment.” What are they thinking! Jerry O’Driscoll says the “unemployment benefits have turned into long-term welfare.” Joe Morabito points out that even Denmark cut the benefit duration down to two years and only then did people find work! Indeed, there is a significant amount of economic thought that maintains the unemployment benefits have the unintended effect of extending the duration of unemployment.
The consequences, unintended or otherwise, here in Nevada will be to increase unemployment, close businesses, and frighten California businesses that would have otherwise settled here upon their left coast exits. Note too, this is at a time when Nevada has the highest unemployment rate in the nation.
Now this is only one federal-state tie. There are others in education, medicaid, environment, highways, airports, federal land management, energy, you name it. The relationships involve grants with strings, funding with local tax requirements, joint funding, and unfunded mandates. The major state budget deficits center on medicaid and education both involve federal programs.
I wonder how well off the states would be without all this federal “help?” Missouri, my home state, for instance, has no illegal immigration problem to speak of because the voters designated English as the official language and in another action required law enforcement officers to verify immigration status. Illegals have no mandated access to welfare like food stamps or healthcare. State action. Problem avoided or solved! Now I don’t want to seem flippant, but I wonder how the economy would improve if states took over unemployment insurance and severely limited its scope and duration?
Now consider the federal-state partnership in this downward spiral. That lopsided, unconstitutionally intended relationship is at the heart of the problems. The states have ceded control of problems that they should more appropriately handle. And the federal government has too much control of things it has no business being in in the first place. Our federal system is upside-down and likely to remain so until we restore some sense in the citizenry that we are a republic composed of sovereign state and the citizens thereof, from whence all political power and responsibility derive.
So my take: return election of the senators to the states, preclude federal bailout of spendthrift states, and provide a bankruptcy mechanism for states to legally and politically extricate themselves from their prior unsustainable excesses. Some of them in fact owed to the federal government!
Just a thought!
Stalin’s Ghost is Alive and Well in the FCC’s Michael Copps
Posted by Tom in Constitution, Government Regulation, Individual Freedom, Press, Statism on December 8, 2010
Democrat Michael Copps of the FCC wants to impose a “public welfare test” on broadcasters forcing upon them “a renewed commitment to serious news and journalism,” according to today’s IBD editorial, A Tyrant’s Thinking!
Recall that the Communists to complete the takeover of a country needed to control the media and the universities. Copps, a good student, has learned the Communist lesson. Here’s a guy that has sucked at the public teat all his life, never known a real job, and in a brief foray into private life worked in government relations.
He is the perfect leftist liberal, a member of the governing elite that fits in the Obama, Reid, Pelosi cabal. Besides wanting to control news content, he is a strong advocate of “net-neutrality.” That is the concept where content providers can expropriate bandwidth from carriers who have invested heavily in it.
This guy’s positions are right in line with this leftist administration. He opposes the First Amendment’s freedom of speech and the Fifth/Fourteenth Amendments’ freedom from unjust takings.
We need to fear for our nation when unelected bureaucrats like this have the power they have.
Government of Laws or Men?
Posted by Tom in Bankruptcy, Constitution, Federalism, Government Regulation, Individual Freedom, National Character on December 7, 2010
Lincoln Caplan in the December 1st New York Times attempts to explore the …Meaning of ‘Constitutional Conservatism.’ He points out that the phrase is used mainly in opposition to Obamacare, the GM takeover and Obama’s policies. That incoming speaker John Boehner like 80% of Republicans wants to “return to the constitution,” and Boehner wants every bill in Congress to identify the specific part of the Constitution it rests on. Caplan then points to the “radical vision” of Utah senator-elect Mike Lee who “views much of what the federal government does as unconstitutional.” In short, Lincoln Caplan doesn’t like constitutional conservatism, whatever it is, nor does he understand the Constitution.
Well James Antle of the American Spectator does understand the Constitution and proceeds to educate Caplan in yesterday’s post, Caplan’s Constitution. But before getting down to basics, he explains why the voters may be upset at what Caplan calls the “solutions.” Solutions like expropriating GM to favor the UAW and penalize the bondholders or forcing people to buy Obamacare approved insurance policies that they don’t want or need. He speculates that indeed these solutions may indeed be unconstitutional. In fact the voters may have perceived that the solutions are a cause of our dire economic problems.
But it is the basics that are important. The Article I of the Constitution forms a federal government of limited powers, limited and specifically enumerated. To avoid any doubt as to the meaning of that limitation, the Tenth Amendment, specifically reserves all powere not delegated to the federal government, to the states or the people.
Antle shows that our great-grandparents generations understood the Constitution and the limited government it created. They considered it necessary to amend it to prohibit the sale of alcoholic beverages (Prohibition–18th Amendment) and amend it again to repeal the prohibition (21st Amendment).
In fact it is in the amendment mechanism, Article V, that the framers recognized that they could not anticipate all future circumstances. Granted the amendment process is difficult, but it should be so with a basic governing document. It is not like there are no other governments, the states and the people have the reserved powers to govern themselves. This fits beautifully with the principle of subsidiarity, that the lowest cognizant part of society should be responsible to handle the problems it is capable of handling.
I would be remiss if I did not try to explain my call for a constitutional amendment precluding the federal bailout of bankrupt states. Bailing out states is not an enumerated power, so an amendment is not legally necessary. But in this age of leftists elites dictating laws and governmental actions, we need a bootstrap amendment emphasizing that this in fact is not a legitimate power of government. Belts and suspenders do work well together.
So, to the title question, government of laws or men? We have allowed ourselves to become a government of men, and have forgotten our basic law. We need to return to that basic law.
Restore Federalism–It’s Imperative
Posted by Tom in Constitution, Democrats, Federalism, Government Regulation, State Finances on December 5, 2010
This news item caught my eye, the DOT is billing Chris Christie the governor of New Jersey $271 million for refusing to subject the New Jersey taxpayers to the costs of overruns for the phantom Hudson River tunnel. The bureaucrats are pissed! Not “hell hath no furry like a woman scorned” but, ‘hell hath no furry like the DOT leftist bureaucrats scorned!’
“It’s not surprising that the same federal transit agency that had no clear way to pay for cost overruns of a project already hurt by poor planning and inequitable cost-sharing is relying on bureaucratic power plays to wring even more money out of New Jerseyans,” he said.
Christie notes that other states that have similarly pulled the plug on federally funded transportation projects have not been forced to repay money that’s already been spent.
The strict 30-day deadline reeks of petty vindictiveness aimed at a governor who’s increasingly being spoken of as a 2012 GOP presidential candidate.
The big shot federal spenders transfer all kinds of mandates and hooks to the states, this and Medicaid being examples that come to mind.
We need to stop this silliness and return the roles of government to their proper spheres. Feds handle national concerns, defense, disputes between states and their citizens, interstate and foreign commerce, foreign relations and little else. (No education, energy, labor, housing, just to name a few.) States handle judicial matters between citizen litigants, education, and public infrastructure. All else is left to the individual, family, community organization, local charity, synagog, church, or mosque. This is known as the principle of subsidiarity: let the lowest cognizant part of society handle what it should be capable of handling.
In a recent post I echoed the call for repeal of the 17th Amendment resulting in the states’ election of senators. This for the additional check and balance on the power of special interests in direct elections and the reinforcement of states rights and responsibilities. That is important in this runaway federal spending and taxing orgy foisted upon us by Obama, Pelosi, Reid and the leftist Democrats.
We really need to return governing power and responsibility to the states and to the individuals. It is the only way we can reign in the overreaching federal government. Our Tenth Amendment reads: “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.” Let’s return to the time when we lived by that sage amendment to our founding document!
A Stitch In Time! Particularly With Financial Catastrophe!
Posted by Tom in Bankruptcy, California, Constitution, Deficit, Federalism, State Finances on December 4, 2010
You heard it here first, or at least part of it: we need to prepare for a state finance catastrophe. The current issue of the Weekly Standard features a cover article by David Skeel, a law professor at the University of Pennsylvania, Give States a Way to Go Bankrupt, It’s the best option for avoiding a massive federal bailout. In it he points up the well-known problems like CA and IL, refutes the constitutionality objections, then argues the benefits of the deus ex machina that such a bankruptcy provision would provide politically!
Skeel first dispels the notion that because states are constitutionally “sovereign” in our federal system, they cannot go bankrupt. The objection here is the “sovereign immunity” enjoyed by sovereign governments at common law, namely that the sovereign cannot be sued unless it consents to be sued. In modern parlance this is accomplished by statute, such as the Federal Tort Claims Act for suits against the U.S. Skeel grants that immunity by providing that the bankruptcy of states can only be a voluntary bankruptcy, not an involuntary one. Thus, a state creditor cannot force a state into bankruptcy as a private creditor can with a private debtor. He views it as a tool for a recasting, reformation or avoidance of state obligations. He dismisses the private bankruptcy liquidation of assets analogy by analogizing his suggested state bankruptcy provision to the existing municipal bankruptcy provision. Indeed, municipalities like Orange County CA have successfully gone through bankruptcy.
In a well stated political argument Skeel then points out that a statutory voluntary bankruptcy provision for the states would give not only presidents cover but also provide cover to governors who would merely pass the tough decisions to the bankruptcy judge. Can you imagine Obama turning down an IL bail out request, or Governor Moonbeam turning the teachers union down! Suffice it to say that the proposition presents a very practical, legal solution to a looming catastrophe that we all know is about to occur.
This should be a priority with the 112th Congress in January. It should be a no brainer for both sides of the asile to pass.
I confess a bit of disappointment that Skeel didn’t advocate my second step, namely a constitutional amendment making it impossible or at least extremely difficult for the federal government to bail out spendthrift states. This though is more cumbersome and time consuming in passage, however, just as popular politically. It should be undertaken as soon as the bankruptcy provision is passed.
Enjoying Skeel’s article as I did, I would be remiss if I didn’t mention his new book: “Understanding the Dood-Frank Act and its (Unintended) Consequences.”
Richard Epstein’s Obama Review
Posted by Tom in Centrally Managed Economy, Constitution, Economics, Entitlements, Government Regulation, Legal, Nationalized Health Care, Stimulus/Bailout, Welfare on December 2, 2010
Richard Epstein is a prominent law professor at NYU and Chicago and there a former colleague of Barack Obama. He’s a brilliant economist as well and author of Takings: Private Property and the Power of Eminent Domain. This Reason.tv interview illustrates his sharp mind and growth oriented outlook: