Monthly Archives: July 2012

St. George Tucker – Views on the Constitution

If you ask those that claim to understand the Constitution if they’ve heard of either Justice Joseph Story’s Commentaries on the Constitution or St. George Tucker’s Views on the Constitution you’ll most likely find many are familiar with or at least heard of the former’s writing.  That is unfortunate.  Joseph Story’s Commentaries was based upon a simple textual analysis of the Constitution and is used by commercial New England style republicanism (i.e. Lincoln) to advocate for a centralized, powerful government.

St. George Tucker’s Views on the Constitution was written shortly after the Constitution and Bill of Rights were ratified.  Tucker’s writing was an Americanized version of Blackstone’s Commentaries on the Laws of England.  Today, Tucker’s Views are rarely discussed if at all.  His works were the definitive reference in the first half of the 19th century.  After Lincoln and the Civil War however, it was Justice Story’s Commentaries that were used to provide support to expansive government.

Clyde Wilson, Professor of History and paleoconservative political writer and commentator wrote this Foreward on Tucker’s Views.  Note, you can find this and Tucker’s view at the Online Library of Liberty.  Professor Wilson’s writing encapsulates and epitomizes the importance of St. George Tucker’s Views on the Constitution.

FOREWARD

St. George Tucker’s View of the Constitution of the United States was the first extended, systematic commentary on the Constitution after it had been ratified by the people of the several states and amended by the Bill of Rights. Published in 1803 by a distinguished patriot and jurist, it was for much of the first half of the nineteenth century an important handbook for American law students, lawyers, judges, and statesmen. Though nearly forgotten since, Tucker’s work remains an important piece of constitutional history and a key document of Jeffersonian republicanism.

Two reasons may account for the neglect of Tucker’s work and of related, supportive writings. First, his view of the federal government as an agent of the sovereign people of the several states, and not as the judge of the extent of its own powers, was buried by the outcome of the Civil War, the ground for the triumphant views of Abraham Lincoln having been well prepared by Justice Joseph Story of the Supreme Court and lawyer, orator, and Senator Daniel Webster. Second, Tucker’s constitutional writings were appended as essays to a multivolume densely annotated edition of Sir William Blackstone’s Commentaries on the Laws of England that was never reprinted.

St. George Tucker was born in 1752 in the British colony of Bermuda. The Tuckers were a numerous and talented family, many of whom emigrated to the mainland colonies in North America, where several made their fortunes. For example, St. George’s brother, Thomas Tudor Tucker, made his way to South Carolina, represented that state in the first two Congresses, and was treasurer of the United States from 1801 until 1828, on appointment of President Thomas Jefferson.

St. George Tucker reached Virginia in 1771. For a year he studied law at the College of William and Mary (as did Thomas Jefferson and John Marshall) under George Wythe, who shortly thereafter became a signer of the Declaration of Independence and chief justice of Virginia. Talented, urbane, and sociable, Tucker had no trouble making his way in the best society. In 1775, at the age of twenty-three, he was admitted to the bar. In that same year he was present in Richmond when Patrick Henry made his stirring appeal to “liberty or death!” Tucker then took part in an expedition to Bermuda that gained possession for the colonists of a large quantity of military stores that were of great use to the army of George Washington.

St. George married well, in 1778, to a wealthy widow, Frances Bland Randolph, and acquired large estates in Chesterfield County. He also acquired three stepsons, one of them the five-year-old John Randolph, later to be famous as “Randolph of Roanoke.” The relationship between Tucker and Randolph was often tense.

Tucker took an active part in the Revolutionary War. In addition to the expedition to Bermuda, he was elected colonel of the Chesterfield County militia and led them to Nathaniel Greene’s army in North Carolina, and is said to have distinguished himself at the Battle of Guilford Court House. During the Yorktown campaign, serving as a lieutenant colonel of horse and an aide to Governor and General Thomas Nelson, he was wounded.

Tucker’s letters to his wife during his military service were published in the Magazine of American History in July and September of 1881, and, in addition to exhibiting marital felicity, are a valuable source of historical information on the Revolution’s last Southern campaign.

After the war, Tucker’s law practice flourished. He was appointed one of the committee to revise the laws of Virginia, and he served with James Madison and Edmund Randolph as Virginia commissioners to the Annapolis Convention. Tucker’s career as an expounder of the new constitutions of Virginia and of the United States began in 1790 when he succeeded Wythe as professor of law at William and Mary.

Contemplating the necessities of instruction, Tucker decided to use as a text Blackstone’s famous Commentaries on the Laws of England. Blackstone (1723–80) had for the first time brought the great chaotic mass of statutory and common law into a system that could be approached by students. Published in four volumes, from 1765 to 1769, his work largely supplanted the Institutes of Sir Edward Coke (1552–1634) as the premier legal text of the English-speaking world.

Though Blackstone’s work was indispensable, for Americans it was problematic because it was suffused with the principles of a monarchial and aristocratic state that Americans had only recently repudiated. Americans had exhibited to the world constitutions in which the people exercised their sovereign authority to create governments that rested specifically on the people’s consent at an identifiable moment of history and not on a long growth of authority and precedent. Such governments were delegates rather than masters of the people and were limited to those specific powers which the people had granted them. And, through regular elections—or if necessary a drastic reassertion of sovereignty—the American people could change their government and their governors.

It was necessary, then, to republicanize Blackstone. This task Tucker accomplished by extensive notes to the body of Blackstone’s work, and by writing several dozen essays, the longest of which were View of the Constitution of the United States and “Of the Constitution of Virginia.” These essays appeared as appendices in the various volumes of Blackstone’s work, and expanded Blackstone’s four volumes to five. Tucker’s revised, Americanized Blackstone was published in Philadelphia in 1803 and was widely used thereafter.

While the use of Tucker’s work cannot be quantified, all authorities agree that it was influential. Later American editions of Blackstone followed Tucker’s method, and there is evidence of the extensive use of Tucker’s work in Pennsylvania, South Carolina, and Virginia. Doubtless it was taken westward by young Virginians who emigrated to every state in the nineteenth century.

In addition to View of the Constitution of the United States, this book includes seven other essays lifted from Tucker’s edition of Blackstone. These are the most important writings in regard to Tucker’s political and constitutional thought. A great deal that was more narrowly legal has not been selected.

In addition to his edition of Blackstone, Tucker published several political pamphlets and articles, sometimes under pseudonyms, as was customary at the time. These included “Reflections on the Policy and Necessity of Encouraging the Commerce of the Citizens of the United States,” in American Museum (September 1787): 267–74; Remarks on the Treaty of Amity … Between Lord Grenville and Mr. Jay (Philadelphia: M. Carey, 1796); Cautionary Hints to Congress, Respecting the Sale of Western Lands, by “Columbus” (Philadelphia: M. Carey, 1796); Letter to a Member of Congress, Respecting the Alien and Sedition Laws, by “Columbus” (Richmond: 1799); Reflections on the Cession of Louisiana to the United States, by “Sylvester” (Washington, D.C.: printed by Samuel Harrison Smith, 1803); and possibly others. The essays on the common law and on slavery that are published here had been printed as pamphlets before they were included by Tucker in his Blackstone.

St. George Tucker was also by avocation a writer of moderately good verse, both patriotic and humorous. These have been collected, with an interesting introduction, in William S. Prince, ed., The Poems of St. George Tucker of Williamsburg, Virginia, 1752–1827 (New York: Vantage Press, 1977).

In 1803 Tucker became a judge of the highest court in Virginia. In 1813 he was appointed by President James Madison to be the United States district judge for Virginia, an important post in which he had a distinguished career, resigning shortly before his death in 1827. As a jurist Tucker never wavered from the principles he had set forth as a professor of law.

Tucker established a virtual dynasty of legal and constitutional talent that carried on Jeffersonian principles through successive generations. A son, Henry St. George Tucker (1780–1848), served in the state legislature and the U.S. House of Representatives, was chief justice of Virginia, conducted a successful private law school at Winchester, Virginia, declined President Andrew Jackson’s appointment as attorney general of the United States, became professor of law at the University of Virginia, and published books on natural law, constitutional law, and the laws of Virginia.

Another of Tucker’s sons, Nathaniel Beverley Tucker (1784–1851), became professor of law at William and Mary and published three novels and a number of works on political economy and public issues. He is a major figure in the intellectual history of the Old South.

In the next generation, St. George Tucker’s grandsons were equally distinguished. John Randolph Tucker (1823–97), son of Henry St. George Tucker, was attorney general of Virginia, professor of law at Washington and Lee University, counsel in numerous major cases before the United States Supreme Court, served in the U.S. House of Representatives from 1875 to 1887, and published, among other works, The Constitution of the United States (2 vols., 1899). Another son of Henry St. George was Nathaniel Beverley Tucker (1820–90). He edited an antebellum newspaper in Washington, D.C., was U.S. consul at Liverpool, and served the Confederate States as an economic agent abroad.

St. George Tucker’s great-grandson, Henry St. George Tucker (1853–1932), son of John Randolph Tucker, represented Virginia in the U.S. House of Representatives from 1876 to 1889 and again from 1922 to 1932, carrying on the states’ rights, populist, anti–big business tradition of his family and state. He was also professor of law at Washington and Lee University, and published Limitations on the Treaty-Making Power Under the Constitution of the United States and Woman’s Suffrage by Constitutional Amendment.

Given the massive changes in the extent and distribution of political power since the Civil War, and the resulting adjustments in accepted understandings of the Constitution, Tucker’s principles of states’ rights and limited government are likely to seem strange to Americans today, unless it is remembered that these principles were the prevailing ideas not only during Tucker’s time but also for several generations after.

The Constitution that Tucker explicates is the Constitution that was ratified by the people of the several states. It is to be understood as explicated by the ratifiers, including their reservations, some of which were embodied in the first ten amendments, which were a further limitation on the delegated powers of the new general government. For the assumption that the meaning and authority of the Constitution is to be found in its ratifiers, and not in the learned discussions of the Framers at Philadelphia, who were, after all, only drafting a proposal for the people’s consideration, Tucker has the support of Madison himself. (See Madison’s letter to Thomas Ritchie, September 15, 1821.)

Tucker, then, does not stand in awe of the Federalist Papers. He recognizes them as special pleadings for the Constitution before ratification and amendment. He finds some things in them admirable, particularly the defense of an independent judiciary, but he quotes them most often in support of the limited nature of the new federal government. Though Tucker is well read in political philosophy, he does not need a long historical exposition of ideas to explain the Constitution. The document is for him generally clear and specific, self-evident to those who ratified it. This is not to suggest, however, that Tucker cannot when necessary call upon Justinian, Grotius, Pufendorf, Vattel, Montesquieu, Locke, Rousseau, or other more nearly contemporaneous writers.

Tucker is the exponent of Jeffersonian republicanism, or what has been called “South Atlantic republicanism,” in contrast to the commercial republicanism of New England that has since the Civil War been taken to be the only true form of American philosophy. The political background of Tucker’s work is significant. The Constitution had been ratified reluctantly and with reservations by Virginia and New York (and not at all by North Carolina and Rhode Island) only on the understanding that amendments would be made. Twelve such amendments were proposed by the First Congress, and ten of them swiftly were ratified. This “Bill of Rights” was to reassert the limited nature of the new government’s powers and their dependence solely on the delegation of the people of the several sovereign states.

Hardly had the federal government gotten under way, however, than the largely Northern political faction gathered under Hamilton and Adams launched an initiative to stretch those powers as far as they would go, and to make light of the limits. Much of this expansion represented a desire to use the government in mercantilist ways—for example, a national bank, a funded national debt, a commercial treaty with Great Britain. All were policies that profited the commercial classes of the North and were burdensome to the free-trade agricultural empire of the South.

Into this domestic conflict burst the French Revolution. The great ideas of revolution and reaction that tore apart Europe could not go unnoticed in the New World, which had just experienced its own revolution and whose leaders were well aware of the power of ideas. The relation of American neutral commerce to the belligerent powers in Europe was a vexing practical issue, and the ideological heat from Europe intensified the intra-American conflict over the nature and powers of the general government.

Thus, for example, the Puritan clergy of New England during the presidential election of 1800 denounced Jefferson as a Jacobin atheist who would set up the guillotine and undermine the moral foundations of American society. Probably the conflict was really cultural, contrasting the highly ordered, communal society of New England—where most of life was regimented under leaders of proper principle—and the easygoing laissez-faire life of the South. It is a curious fact that the bourgeois leaders of the North had visions of imminent uprisings of Jacobin mobs and supported such policies to stifle dissent as the Alien and Sedition acts, whereas the aristocratic leaders of the South declared for the people and for policies of liberality. While Jefferson in Virginia rested among his two hundred slaves, John Adams was barricaded in his Philadelphia mansion against an expected attack of the revolutionary mob.

These differences of culture were also evident in political styles. Plain John Adams rode to his inauguration in a coach drawn by white horses, insisted on being addressed as “His Excellency,” and demanded the strictest social protocol. By contrast, the genuinely aristocratic Jefferson walked to his inauguration with the Virginia militia, established the order of pell-mell at leisurely functions in the White House, and sent his messages unostentatiously to Congress in writing rather than appearing in person.

If the Federalists called their opponents Jacobins, the Jeffersonians could reply that the Federalists were dangerously imbued with “monarchical” tendencies. To Jeffersonians, the Federalists did not actually trust the people, gave only lip service to republicanism, and wanted a government of large, even unlimited, authority. Both Hamilton and Adams were declared admirers of the British constitution, to which they attributed most of what was valuable in American constitutions. By comparison, in View of the Constitution of the United States, Tucker carefully contrasts the British and American constitutions, to the credit of the latter.

Most of what Federalists admired in British principles Tucker considers to be imaginary rationalizations for quite different realities. This is his response to those who he believed over-emphasized the British inheritance. What Americans had deliberately created was superior to what had merely evolved in a system that did not honor the sovereignty of the people.

In 1798 the Federalist Congress passed and Adams signed the Alien and Sedition acts. The Alien Act allowed the president to deport any noncitizen he deemed undesirable. No judicial proceeding was involved. For Tucker and other Jeffersonians this was an assumption by the federal legislature and executive of powers not delegated and also a violation of the separation of powers since it gave the president authority that belonged properly to the judiciary.

Even worse, in Tucker’s judgment, was the Sedition Act, which provided for criminal prosecution in federal courts of persons deemed to have made publications that tended to bring the officers of the federal government into disrepute. Several conspicuous prosecutions were made. Tellingly, the Congress that passed the act designed it to expire on the date they would leave office, in case their opponents gained control. For Jeffersonians such as Tucker, the Sedition Act was a violation of individual liberties, an assumption of power that never had been delegated to any part of the government (after all, the states had just ratified the Tenth Amendment), a subversion of state rights, and obviously an attempt to suppress political opposition and criticism of those in power.

The Jeffersonian response was the series of reports and resolutions that came out of the legislatures of Kentucky and Virginia from 1798 to 1800 and which were written by Jefferson and Madison. These resolutions reasserted that the federal government was of specific, limited, and delegated powers, and that the federal government was the agent of the sovereign people of the states and not the judge of its own limits. The resolutions also declared that, when the federal government egregiously overstepped its limits, the states possessed both the right and the duty to interpose their authority and render such usurpations null and void.

The conflict between federal and state power remained theoretical and potential as long as its issues were settled by normal political processes. Jefferson and his party triumphed in 1800 and remained in power for a quarter of a century (during which New England states asserted similar rights in protest of federal commercial and military policies). There was no showdown, but for Tucker and many others, for several generations, the “Principles of 1798” remained a primary text of constitutional discourse.

Tucker takes for granted the option of secession. If the Constitution draws its authority from the consent of the sovereign—which is the people of the several states—then the sovereign may withdraw that consent (not, of course, something to be done lightly). The people’s consent to the Constitution is not a one-time event that forever after binds them to be obedient to the federal government. A state’s right of withdrawal remains always an open option against a government overstepping its bounds, and is affirmed in the nature of the Constitution itself and in the right of revolution propounded by the Declaration of Independence.

One of Tucker’s principal concerns as a legal and political thinker is to affirm the standing of the judiciary as an independent and coequal power with the legislature and executive. This is an American accomplishment, to be supported in state and federal governments both. For him the judiciary is the realm in which individuals may seek relief from the oppressions of government. The judiciary’s power and independence are therefore essential.

But by no means does this principle encroach upon the even more fundamental federal principle. Tucker insists that it is the duty of the federal courts to restrain the other branches of the federal government, not to make policy and certainly not to invade the rights of the states. The jurisdiction of the federal courts is rightly limited to the delegated sphere of federal power, and carries no imprimatur of supremacy over the state courts and their jurisdictions.

But Tucker sensed the potential for just such extensions of power, something that he and other Jeffersonian jurists were committed to resist. This is reflected in his serious attention to the question of the common law and its application to federal jurisprudence. To infuse the common law into federal jurisprudence would, in his view, give the federal courts power over every question in society. This was the path taken, successfully, by Justice Joseph Story in both teaching and decree, and it is the path that led eventually to the judicial supremacy of the twentieth century. For Tucker there was a clear defense against this possibility: the common law was infused into American law because each of the colonies had adopted such parts of it as were relevant or expedient. Each state was different in this respect, and each state was the judge of its own business. The federal judiciary was created by the people with specific, limited, delegated powers. It was not among those powers to evolve or assume legal principles from some other source. The Constitution and the laws themselves were plain enough, and, unlike the common law, rested upon the consent of the people.

This conviction of states’ rights is dismissed conventionally as a rationalized defense of minority interests, particularly in regard to slavery in the antebellum South. Accordingly, Tucker’s writings on slavery are especially interesting. In 1796 he published a pamphlet that proposed for Virginia a plan of gradual emancipation, and he included this plan as an appendix to his edition of Blackstone. His reasoning and proposals came to naught, but they show what it was still possible to consider and to discuss in the South of Tucker’s time. His time was, of course, before the rise of militant abolitionism in the North, and when the question was for Virginians alone to decide.

Tucker can be seen as prophetic in a number of ways. For instance, one of the chief defects or dangers he finds in the Constitution has to do with the president, and especially with the president’s powers in foreign affairs and the military. Tucker would have preferred to have the House of Representatives as well as the president and the Senate to approve treaties. He understands that it would be potentially in the power of a president to bring on war by creating a situation in which the required declaration by Congress would be no more than an after-the-fact recognition.

Tucker remains a valuable expositor of early American republicanism, well worth the attention of any who wish to understand the origins of our system, both in regard to the Constitution and in regard to the larger conception of republican government that underlies it. Scattered through his disquisitions are many gems of quotable aphorism, as when he comments that a prosperous government and a prosperous people are not necessarily the same thing. Perhaps his thinking is most concisely distilled in this statement: “It is the due [external] restraint and not the moderation of rulers that constitutes a state of liberty; as the power to oppress, though never exercised, does a state of slavery.”

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Our Common Ground

Are citizens capable of honest and open discourse without denigrating one another because of personal beliefs, choices, and differences?  The answer contains good and bad news.  The political environment diminishes and degrades people of all walks by dividing and compartmentalizing everything.  The ruling class pits one side against the other, brother against brother, parent against child, friend against friend, and neighbor against neighbor.

The prize for the winner is power, control, and dominion over the loser.  This is the reality of our government and political system.  Republicans and Democrats alike participate in this steel-cage match where the winner takes all and does whatever is necessary to punish their opponent.  Good, decent people suffer under the thumb of central planners and an authoritarian, centralized state.

What concerns me is so many people are inextricably joined, like Siamese twins, to party and ideology knowing the side in power will exercise dominion over half the citizens?  Is that the outcome both sides desire?  To win an election, gain power, and exercise dominion of your will over others.  Remarkably, this is precisely what happens with in the political environment.

Why?

Why must roughly half the people dictate how the other half lives?  Why do both sides thirst for power just to dominate the other side?  Is your thirst quenched when your team is in power and through the use of the law and brute political force require other people to submit to your team’s will?

This is what passes as civil society.

The challenge for everyone across the political spectrum is this:

  • Would you be happy and content to live life according to your beliefs and let others live their lives according to their beliefs?
  • Would you concede that people should be able to freely choose how and where to live?
  • Would you concede that you don’t want to force people to live under your rules and laws as long as you could live under your own rules and laws?
  • Would you willingly force a person to live under rules and laws against their wishes?
  • Are you willing to imprison or kill another person for not submitting to your rules and laws, or your beliefs?

If any two people, any two groups of people, any two political parties can answer yes to the first three questions and no to the last two questions than their differences are not so great that they cannot be overcome.  There is common ground.  In fact, a substantial amount of common ground.

What I described is attainable.  In fact, it’s been at our disposal ever since the Union was founded.  The problem is a very small percentage of people want us fighting with each other over taxes, and spending, and entitlement programs, and monetary policy, and foreign policy.  The ruling class requires this division amongst the people to retain power, to ensure the status quo, to get re-elected to office.

Let’s examine some practical examples:

  • What if two million atheists want to live without religion.  Should religious people compel them to learn religion in schools and live according to a religious set of beliefs?
  • Likewise, what if two million Christians, Jews, Muslims, Hindu, or Buddhists want to live with religion.  Should Christians be compelled to learn evolution in schools and live according to atheists beliefs?
  • What if ten million people wanted to provide health care for all.  Should these people compel others to pay for their health care?
  • What if ten million people wanted to live without having to pay for the health care of others.  Should these people compel others to live under that system?
  • What if two hundred thousand people wanted to share all their property and belongings with others.  Should they compel others to share their property with others against their will?
  • What if two hundred thousand people wanted absolute property rights.  Should they compel others to accept that system?
  • What if ten million people want to wear only white or blue shirts.  Should they compel others to wear the same clothing?
  • What if ten million people wanted to ban white or blue shirts.  Should they compel others to not wear white or blue shirts?
  • What if twenty million people wanted to use only solar, wind, and geothermal energy.  Should they compel others to also use the same energy?
  • What if twenty million people wanted to use nuclear energy.  Should they compel others to use the same energy?

The list is indefinite.

The problem is exacerbated by the size and scale of the country and the diverse interests of three hundred and ten million people.  One answer, one solution simply cannot work due to the size and scale of people as well as the diversity of interests.

Our Union is comprised of fifty states.  It wasn’t always that way.  It started with thirteen states.  Why stop at fifty states.  Why not one hundred, or five hundred, or two thousand states?  States can be repositories which allow for diverse interests to coalesce.  People could freely choose to live in a state that more closely reflects their beliefs and interests.

While I have a certain set of beliefs and interests I don’t want to compel my fellow man to submit to my will.  Likewise, I do not wish to submit to another person’s will.   The one size fits all solution simply doesn’t work in a country with hundreds of millions of people with very diverse interests and beliefs.

Can you live your life according to your beliefs and interests without compelling others to conform to your beliefs?  Can you also concede the same to your fellow man?

The good news is I don’t believe most people want to dominate others and force them to submit to their will.  Most of us simply want to live freely according to our beliefs and interests.  For those that cannot live without compelling others to live according to a specific set of beliefs I simply wish you farewell. We have nothing further to discuss.  But I have faith in the majority of mankind.  And, as I wrote earlier the solution has been at our disposal for over two hundred years.

Instead of a single top-down, authoritative government we could live freely in hundreds or thousands of states.  The solution is federalism.  The precise solution provided for under the Constitution.  If these ideas appeal to your sensibilities then I implore you to stop taking sides against your brother, your friend, and your neighbor.   Support a solution that affords all of us the opportunity to live a life according to our desires and beliefs without imposing them on others.

Support Federalism.  It is our common ground.

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Mutually Assured Destruction

Whenever you hear the term “mutually assured destruction” it conjures up memories of the cold war between the U.S. and the U.S.S.R.; when both sides nuclear arsenal assured both countries would be destroyed regardless of who fired first.  The firepower on both sides served as a deterrent to start a nuclear war.  Survival depended upon a certain level of respect and understanding from both sides.

The United States finds itself in a similar situation today.  The country is being lead down the path of destruction by the Republican and the Democrat parties.  The two parties collude with one another resulting in mutually assured destruction.  Inevitably, both parties are more concerned with keeping power, getting re-elected, advancing an ideology, and furthering their own ambition and avarice.

For the most part there are minor differences between the Red and Blue teams.  Ultimately, those differences results in the growth, size, and power of government.  Both teams deficit spend.  Both teams increase the national debt.  Both teams expand entitlements.  There is a quid pro quo between the two teams where they agree not to touch the sacred cows of the other team.  Don’t go after welfare programs and we won’t go after defense programs.

The path to mutually assured destruction is littered with pieces of the Constitution and our debased fiat currency.  Unlike the respect between the U.S. and U.S.S.R. during the cold war, we live in an era were the ruling class from both parties has absolutely no respect for the Constitution or sound money.  When government disobeys the Constitution then those in power reject the Rule of Law and embrace lawlessness.  The ruling class has the audacity to believe citizens should respect the law while the ruling class repeatedly violates the law.  Moreover, the ruling class uses the law against the people to plunder property and demand compliance.

Obamacare is a perfect example of the ruling class acting lawlessly.  And, lawlessness begets lawlessness.  Why should the citizens respect and obey the law when the ruling class acts lawlessly?  After the Obamacare ruling I thought about what the Constitution should say if we could turn the clocks back to 1789 knowing what we know today:

We the People of the United States, in Order to form a more perfect Union, establish Justice, ensure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Ha, you were punked!  Anything goes.

If mankind is to respect the law then only respectable laws must be enacted.  Both parties are guilty of acting lawlessly, violating the Constitution, and participating in a monetary system that is destroying the currency.  We can debate policy issues like how much to spend or how much to tax, but ultimately these are mere distractions and sideshows to the kabuki theater going on in Washington, D.C.

Government has become a leviathan.  An enormous entity bereft of principled leaders bought and paid for by special interests and those seeking some advantage through the power of government.  Lobbyists, industries, associations, corporations, and unions flood the coffers of the ruling class in order to advance some piece of legislation, secure a tax break or subsidy, gain a competitive advantage over others, etc.

People erroneously believe there is too much money in politics.  The problem isn’t money in politics.  There will always be money in politics regardless of the laws enacted to prohibit it.  The problem is the size of government.  Naturally, if you reduce the size of government you reduce the power of government which means less influence can be bought by special interests and wielded by the ruling class.

One of our founding principles is the consent of the governed.  Obviously the governed are the people. Today the government is not of the people, by the people, and for the people.  Instead, we have government of the special interests, by the special interests, and for the special interests.  Perhaps I missed history class the day the Declaration was discussed where all governments are instituted by the consent of the special interests.

It is in the best interest of the ruling class to divide the people and pit one political party against the other, to pit friend against friend, neighbor against neighbor, and family member against family member.  Consequently, the party in power rules in a manner disagreeable with half the country.  When the losing party regains power it becomes their mandate to rule in a disagreeable manner as well.  Meanwhile, government continues to exercise unlimited power and is aided and abetted by nine politically connected lawyers in black robes.

Because the ruling class disobeys the Constitution the people act accordingly.  Most people don’t care what is or is not constitutional.  Instead they care whether their party wins, their issue wins, and whether they can get enough lawyers appointed to the Supreme Court to establish legality.

There is a divide in the country.  That divide is between the ruling class and the people.  It is not between the left and right, liberals and conservatives, or Republicans and Democrats.  It is the ruling class pitting the people against one another to ensure they retain power, are re-elected, and advance their agenda.  As Dr. Tom Woods says, “the two parties are a different wing of the same bird of prey”.  If the ruling class is the predator, guess who is the prey?

People need to recognize government for what it is – raw power.  The answers are not found in D.C.  Neither Romney nor Obama are the solutions.  The solutions lie with the states.  To reverse course and alter the path of history we must focus on state based solutions.

The people do not have to participate in the game of mutually assured destruction. If you recall the movie War Games, the computer finishes playing a game of global thermonuclear war and says, “the only winning move is not to play”.  That’s my advice, don’t participate in the mutually assured destruction game.

 

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Until Debt Do Us Part

For all intents and purposes the Constitution is a dead letter; meaningless words rendered useless on two hundred year old parchment paper.  The federal government was meant to be one of enumerated and limited powers.  Over the past 150 years, the words and meaning have been struck out, covered over with white out, reducing it to nothing more than mere parchment.

The people are guilty of aiding and abetting the demise of the Constitution, and the ideal of limited government and federalism.  The people have willingly reduced themselves from citizens to subjects, dependent upon government for their very subsistence.  The peoples’ lives, liberty, and property are no longer treasured freedoms worth protecting.  These things have been traded for government benefits to be named later.

Government is a reflection of the people.  People have turned to government to solve problems.  When government is seen as the ultimate solution provider to problems is it any wonder why liberty and rights are abridged or denied, all things economic are controlled by the central planners, and why the Supreme Court is viewed as the ultimate arbiter of all things constitutional.

The stark reality is too few people care about these things.  People have traded liberty for oppression and freedom for slavery.   Liberty and freedom requires civic duty and personal responsibility.  Civic duty is shunned and government action takes its place.  Personal responsibility is too daunting a task that leaves the individual with no one to blame for life’s successes and failures.  Government responsibility eliminates the burden of personal responsibility.

Civil society has failed because the people are unwilling to take personal responsibility for their own lives and prosperity.  If people cannot function without government intervention forcing social programs such as social security, Medicare, welfare, and now universal health care on society; then the people must admit they no longer treasure or want liberty and freedom.  The fallacy is the people believe trading liberty and freedom for social welfare programs and security is attainable through government force.   If civil society can’t provide and assist others in need, how can anyone believe government is capable of doing this successfully?

The truth can be reduced to a simple statement.  If people are not capable of self-governance and self-direction what makes anyone believe people are capable of governing or directing others.

Personally, I concede most people will not resume their civic duty and personal responsibilities until circumstances force it upon them.  Government intervention and power will continue to expand until the system collapses under its own weight.

Certain events will force people, willingly or not, to resume these responsibilities.  Those events are the economy, the national debt, the currency, fiscal policy, and the central planners’ control of the money supply and interest rates.  More people are attentive to this aspect of life compared to their own freedom, liberty, and constitutionally limited government.

Until Debt Do Us Part

The United States is broke.  Bankrupt.  The federal government’s debt is nearly $16 trillion.  The true debt including unfunded liabilities is closer to $120 trillion.  Because of people’s normalcy bias they simply cannot believe the unthinkable could happen.  People refuse to look at the facts and data candidly and reach an unbiased conclusion.

There are numerous debt related factors; monetary and fiscal policy, tax policy, currency, and money creation.  These items are tightly coupled with debt.  However, these items create conflicts between the government’s interests and the peoples’ interest.  In fact these interests are often diametrically opposed to one another.

Money is misunderstood by nearly everyone.  What is money?  More importantly what is a dollar?  Ask people these questions and you will hear a variety of answers.  Most of them will be wrong.  Today, people believe money is Federal Reserve notes (a.k.a. dollars).  But how does paper money that has no intrinsic value function in society.  How do paper dollars represent value?  Who defines that value?  Money is the intractable link between government interests and our interests.

Personally, I could care less what money medium is used to exchange goods and services in the marketplace.  Seashells would work.  So could pebbles.  So could bronze or brass.  Any of those could work, however the question is how is value established with any money medium?

Because central planners (government and the central banks) control the money medium, the volume of money, and the cost of money (i.e. interest rates) they control the marketplace.  In free markets real good and services are produced based on demand and price signals.  Supply meets demands at a price level that establishes equilibrium between the two.  Too much supply and prices must drop.  Too little supply and prices must rise.  Prices and price signals are a result of supply and demand for real goods and services.

Central planners control the allocation of a scarce resource called capital.  This is true from the very creation of money itself, to interest rates, to the allocation of capital toward government centric preferences.  Subsidies, grants, tax policy, and spending policy all impact how capital is allocated in the economy.  Government subsidizes one good or industry to the determinant of another good or industry.  Tax breaks for the rich or the poor or for favored businesses negatively impacts other taxpayers and businesses.  These policies are nothing more than government preferences and government interference in the economy.  These policies are often ideologically driven.  The results are disastrous.  Demand is propped up by the government.  Price signals are distorted.  Capital is mal-invested.

The central planners are also responsible for fiscal policy.  In the 78 years since Franklin D. Roosevelt removed the U.S. from the domestic gold standard in 1933, the U.S. has run a budget deficit 70 of 78 years.  This means the U.S. had to borrow and/or print money to fund government.  In many cases government simply borrowed the money.  Meanwhile, from 1940 to 2011 the gross federal debt has increased from $50 billion in 1940 to $15.5 trillion at the end of fiscal year 2011.  That is a 29,900% increase in the federal debt. The base money supply has increased from $7 billion in 1933 to $2.7 trillion at the end of 2011.  That is a 38,471% increase in the base money supply.

What does this mean to you?  First, since the central planners control the money supply they control the value of money.  From 1800 to 1913 a dollar increased its purchasing power.  What cost $1 in 1800 cost just 65 cents in 1913.  From 1913 to 2011 the dollar’s purchasing power has fallen almost 96%.  What cost you $1 in 1913 costs just over $22 in 2011.

Imagine if you were baking bread.  If the recipe called for baking the bread for 45 minutes at a certain temperature you would understand what that meant.  Imagine now if the definition of a minute was always changing.  What use to be a minute is 30 seconds and then a couple years later it is 10 seconds.  If the unit of measure is constantly changing how would a baker know how long to bake his bread?  If a minute is now 10 seconds then the same bread would take 270 minutes.

The value of money works the same way.  It is the central planners that are changing the unit of measure or in this case the unit of valuation.  There is a significant difference between the central planners controlling the money supply with a fiat currency than there is when the money is backed by something like gold.  With a gold standard the people control the purchasing power of money not the central planners.  That is a key distinction between the two.  You should consider who you want controlling the money supply.

As Ludwig Von Mises wrote in The Theory of Money and Credit, “The excellence of the gold standard is to be seen in the fact that it renders the determination of the monetary unit’s purchasing power independent of the policies of governments and political parties.”  In 1817, British economist David Ricardo wrote, “Experience shows that neither a state nor a bank ever has had the unrestricted power of issuing paper money without abusing that power; in all states, therefore, the issue of paper money ought to be under some check and control; and none seems to proper for that purpose as that of subjecting the issuers of paper money to the obligation of paying their notes either in gold coin or bullion.”

Mises and Ricardo illustrate the difference between governments issuing paper money backed by nothing of value versus a currency backed by something of value.  This fact is quite obvious based on the aforementioned dollar value comparison between 1800 and 1913, and 1913 to 2011.

Because the central planners constantly debase the currency it diminishes purchasing power.  The people are intractably linked to the central planners for two reasons.  First, they control the money supply and the cost of money.  Secondly, because through legal tender cases in the 1870s, the Supreme Court ruled that paper money could be used as legal tender for private and public debts.  This became more problematic in 1913 when the Federal Reserve Act was passed and the 16th amendment to the Constitution was ratified.  I cannot stress enough the debasement of the purchasing power from 1913 through 2011.

This becomes even more problematic for the people.  The government’s interests and the peoples’ interest conflict.  Government operates on what is called the monetary plane.  In other words they are dealing with things like the debt and money supply on a nominal basis.  The government only needs $1 to pay down $1 of debt regardless of the purchasing power of the monetary unit.  Likewise, banks only need $1 returned on their $1 loan in nominal terms.

The people operate on the physical plane.  In other words the people deal with things like debt, money, good and services on a real basis.  That is $1 today may purchase a loaf of bread, but in a year it make take $10 to purchase a loaf of bread.   This occurs through no fault of the people.  It occurs because of the central planners.

The rise in prices is the result of the government’s actions.  This occurs primarily due to deficit spending which results in government borrowing.  Government borrows money by selling U.S. securities.  In return, the debt is increased and some amount of interest must be paid in the future on the securities sold.  Moreover, if not enough buyers exist in the market for U.S. Securities the central bankers act as the buyer of last resort.  In other words, the government buys its own debt to borrow money and fund deficit spending.

Government debt has grown from $50 billion in 1940 to $15.5 trillion in 2011.  Because interest is due on the debt government must make interest payments.  We have another case where government’s interests conflict with the peoples’ interest (for the most part).  Government benefits from low interest rates because that reduces the interest payments on the outstanding debt.  As of 2011 the government pays approximately $250 billion per year in interest.  That is astonishingly low considering the outstanding debt.  This happens because the central planners keep interest rates artificially low.   This serves the government’s needs. If interest rates returned to their 30 year average the rates would be roughly 5%.  The interest payments on the debt would quadruple to $1 trillion per year.

However this contradicts the needs of the people.  To be precise it contradicts a certain subset of the peoples’ needs.  In society there are two groups of people; the debtors and the savers.  In other words, these are net producers (savers) and net consumers (debtors).  A net producer is someone who produces more than they consume.  Their excess production is their savings.  Likewise, a net consumer is someone who consumes more than they produce.  To consume more than you produce a person must fill that void with government assistance or with debt.

Anyone that has a bank account, certificate of deposit, money market account, or retirement account is a saver to some degree or another.  Assume a saver is risk intolerant and wants a safe place to keep his money.  The saver opens a bank savings account.  Over a period of time the savings account has $100,000.  The bank pays the saver interest.  The bank also loans some portion of this money and receives interest in return.  The inherent conflict comes from the central planners controlling the interest rates.  Because interests rates are kept artificially low to keep government interest payments on the debt lower the saver earns a pittance in interest.  Today, that rate is below 1%.   There is little incentive for the saver to deposit money with a bank.  This is also a nominal interest rate as it doesn’t reflect the realities of inflation.

To further exacerbate the situation the central planners print money.  When the money supply increases and the real goods and services don’t rise accordingly inflation occurs.  Because savers operate on a real basis (vs. a nominal basis) the monetary unit’s purchasing power is decreased.  The real interest rate is the nominal interest rate less the real inflation rate.  From 2000 to 2011 the real inflation rate has been bounded between 5 and 11%.  Assuming a 6% inflation rate, the real interest rate for the saver is negative 5% (1% nominal interest rate minus 6% inflation rate).  So, the saver is losing purchasing power by keeping his savings in a traditional bank account.  The saver is dis-incentivized.  To earn a real return on his savings the saver is forced to consider other opportunities such as the stock market, bond market, commodities, futures, precious metals, land or real estate, etc.  Of course, each alternative has its own risk/reward characteristics.

Again, this is due to government action and has nothing to do with the people.  The central planners set the interest rate.  The central planners control the money supply.  Politicians constantly and continuously deficit spend.  These things are the reason why the savers are punished and there is no incentive to save.

Likewise net consumers depend upon the central planners, in part or in whole, for their subsistence and/or they increase their debt.  When interest rates are kept artificially low it makes bank credit cheaper for everyone including the net consumers.  Total debt has grown to nearly $52 trillion.  The creditors have $52 trillion in rightful claims to money.  The base money supply is $2.7 trillion.   Likewise, those reliant upon the central planners’ social programs support government power to take property from the rightful owners of the property they produced and redistribute it to those that have absolutely no rightful claim to it.  Central planners are merely an agent of the net consumer to plunder property from net producers (savers) to give to net consumers (debtors).  Instead of the net consumer personally taking the property of another – which would be a crime – they turn to the central planners to commit the crime.  That crime is plunder.  Government institutes laws to empower themselves and use the law against the net producers to plunder their property.  Under the veil of legitimacy, government acts immorally by plundering property.

The central planners have three methods to raise revenue; tax, borrow, or inflate (print money).  We know the central planners cannot continue borrowing money.  First, this increases the national debt and secondly increases the interest payments due to the buyers of U.S. Securities.  Secondly, as debt increases the risk to buyers increase.  Buyers will demand more attractive interest rates to offset the risk.  The central planners’ zero-interest rate policy (ZIRP) is a self-induced trap as they must either raise interest rates to attract buyers to fund deficit spending or they may not be able to sell securities to raise funds.  (Note, don’t be surprised to see the central planners institute a negative interest rate policy where you will pay the bank money to hold your money.)  If interest rates are raised, the interest payments on the current debt increase.  If interest rates are not raised the central planners cannot sell securities.  In this case, the central planners will act as buyer of last resort.  Meaning, the Federal Reserve will print money to buy securities from the government.  This increases the Feds balance sheet while bringing in funds to the U.S. Treasury.  The result is inflation.

The central planners cannot tax the people at a rate to support deficit spending.  Over the past four years annual deficits have been running between $1 and $1.5 trillion.  The top 3.2% of income tax returns filed in 2008 represent 52% of all individual income taxes paid.  Assuming everything remains equal, if the top income tax rates were increased by 25% that would bring in an additional $481 billion per year.  That still leaves a deficit between $600 billion and $1.1 trillion.

Moreover, the central planners must tax the people for two primary reasons.  First, the people must be forced to pay taxes in the currency dictated by the central planners to force people to accept the currency.  Think about that for a moment.  The central planners must force compliance and acceptance of their currency on the people.  Again, this goes back to a key distinction between the central planners controlling the purchasing power of the monetary unit versus the people controlling it.  Secondly, the central planners need a mechanism to remove currency from circulation as a means to minimize inflation.

 Conclusion

The entire global monetary system is debt based.  All currencies are fiat.  The central planners’ interests conflicts with the peoples’ interests.  All private and public debt in the U.S. is denominated in the very currency in which most of the private savings/wealth is denominated in.  The central planners cannot raise sufficient revenue through taxation nor can government continue to borrow to fund deficit spending.

This leaves the central planners with one option: to print money.  As more money is printed and put into circulation it decreases the purchasing power of the currency.  Any savings will be debased or completely eliminated through inflation.  Those people relinquishing their liberty and freedom in exchange for government social programs and security are facing a rude awakening.  The central planners care about keeping power and winning elections.  The central planners will destroy the currency to save the system.  Most, if not all, of the savings/wealth in the country will be confiscated through inflation.  As a result people will be forced to take personal responsibility for their lives once again.  Those dependent upon government for their subsistence will be sacrificed upon government’s altar.  Civil society may not be so civil once the reality sets in.

It’s really a question of self-preservation.  Do you want to preserve your own life or be dependent on government to preserve your life?  As Ayn Rand said, “you can ignore reality, but you can’t ignore the consequences of ignoring reality.”  Eventually, the destructive Keynesian end game must come to an end.  It always does.

Meaningful change will not happen until debt does us part.

P.S. – I read an article a week or so ago that had a caption in it labeled Until Debt Do Us Part.  I want to acknowledge the use of it though I don’t specifically recall the article to give proper attribution.

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