Wednesday, July 18, 2012

The Supreme Theft of Liberty – Pt. 4

I recall seeing movies in grammar school of crops being burned to increase prices under the AAA. I could not find anything graphic like that when I wrote Part 2. Instead I included a link to a song by The Almanac Singers, Plow Under. Dominant interests always survive better under regulation.  Under the AAA tenant farmers lost everything, while being told, in essence, STFU. I have likened U.S. farm policy that regulates your back yard garden to the Stalinist “plowing under“ of Ukrainians. In the weeks following parts 1, 2 and 3, the folks at NRO talked about how Woodie Guthrie and Pete Seeger, both Almanac Singers, admired Stalin. Now there is also this piece, where John Boehner talks about our “Soviet-style dairy program.”

Take a quick look at our present national milk policy:

“If you want help from the government in terms of this margin insurance, then you have to offer to be part of the solution by trimming your production when conditions are really bad to help bring supply and demand back into balance,” Galen said. “If you’re not willing to do that, then why should you be there accepting help from the government?”

Mr. Galen is a proponent of balancing supply and demand through federal regulation that pays farmers not to farm. Who is Mr. Galen? He is a Senior Vice President of Communications at the National Milk Producers Federation. The people who own and invest in milk farms want regulation to protect them from competition.

Now let us now go back to January 6, 1936, the day the Supreme Court stole our liberty. In U.S. v Butler, the court struck down the use of an agricultural processor license tax to bring supply and demand "into balance" by paying farmers not to farm. In response, Congress enacted the Agricultural Adjustment Act of 1938, which scrapped the license tax and used general funds to pay farmers not to farm. The 1938 AAA is now considered permanent law, so much so that the Speaker of the House has been on a 16 year failed campaign to eliminate milk subsidies. The Great Depression is the national emergency that will never end.  

The rise of the federal regulatory state began when the Supreme Court blessed taxation for general welfare alone, unhitched from the 17 permissible purposes in Article I, Section 8. Just a quick look for “history American regulation 1930's” reveals that in the 1930’s the federal government rushed to regulate railroads, banking, labor, energy, food and drugs, minimum wages, retirement income, motion pictures, radio spectrum, etc. When constitutional concerns arose, federal regulators proudly recall that “I have something up my sleeve.”

We know from NFIB v. Sebelius, we cannot look to the court to restore constitutional federalism. The court is bound by stare decisis to accept its previous decisions as binding. So like with any vertically oriented enterprise, we who believe in federalism can say the king has no clothes, while being forced to tolerate – well, paint your own picture here. The best we can hope for from the court is a sealing off of federal power where it stands now, while regulatory proponents will seek to appoint Justices that view federalism as a quaint idea whose time has come and gone.

To me the rise of the regulatory state has nothing to do with the rule of law. Courts that function properly should fill the gaps that parties did not consider. Gap filling permits an orderly and predictable way to unwind failures. Now, courts are in the enterprise of enforcing the federal regulatory state. 

I do not need to tell RFNJ readers about regulation and the Obama administration.  I believe we have reached the point where our national economy will perform like that of France.  We can change all that with an "and,"  a couple of other words and maybe by selling the air...


Chess said...

Frith..As always well said...The next Prez very well will get 3 appointments...If its BHO then game set match..Ill be waiting for Team BHO --if behind in Sept/Oct to lay out how if Mitt is elected that 3 for repubs will lead to repeal Roe..That very well would scare the shit out of independent women voters..
Agree we will be France at best

ikaika said...

France has just initiated a 20 bps tax on investors purchasing securities. This contrasts to the UK with it's 50 bps Stamp Duty and Ireland's 1% stamp tax.

No other continental European nation imposes a tax on purchases on local exchanges, however - EU and EMU "leaders" have considered a broad adopted "buyer's tax" within EU member states.

This nonsense has been parroted by the usual democrats in America. I'm surprised Obama hasn't stepped it up... but then again, he doesn't have to. Buried in the ACA Law is punishment on capital risk - "investment Tax".

While France believes their use of Tobin Tax will remedy it's budget shortfalls, they must remind themselves that the overall value of their companies are being undermined by the crisis of the shared currency.

The anti-Wall st sentiment will continue to pervade the political scene and this "tax" will be promoted as another liberal attempt at "fairness".

I expect France to be buoyant for another few months, and maybe the next quarter... eventually the revenue stream they gullibly extinguished will bite them on their asses.

On our side of the pond - we'll be too late. Our Investment Tax (along with the other ridiculous taxes in the law) will promote the governmet to create more stop-gaps. Oh goody...