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Congress & The Regulation Of Commerce
Return Of The Gods Web Site ^
| October 16, 2008
| William Flax
Posted on 10/17/2008 10:33:24 AM PDT by Ohioan
With renewed controversy over the nature & extent of any proper Governmental role in the regulation of economic decisions that influence or control commercial activity, some comments are in order. Unfortunately, a background in which America may be on the cusp of economic chaos, is not a time when sober & reflective analysis is the "order of the day." The recent panic in Washington has set a tone both here and abroad; and while the focus there, notwithstanding the imposition of new "regulations" in financial markets, has been primarily on creating more liquidity by "appropriating" new funds out of fiat money; our focus here will be confined to the question of regulation. The consequence of purchasing assets with funds that do not exist, needs little additional comment.
The question, of course, is not one of regulation or no regulation. But the subject requires a recognition of both psychological and economic reality among human types in general, and, in the specific context of the United States of America, an understanding of the functional intent of our written Constitution.
The market economy works best in all advanced human societies, because--correctly understood--it puts every individual on his mettle, both to be personally responsible and to find what he can do best, with whatever talents he may have that others value, if he would enjoy material success. The issue, then, is not necessarily between the market and regulation, but between the "market" and regulations that impair rather than facilitate the free, voluntary and dynamic interaction of law-abiding individuals. The issue is between proper and improper regulation
(Excerpt) Read more at pages.prodigy.net ...
TOPICS: Business/Economy; Constitution/Conservatism; Government
KEYWORDS: commerce; congress; markets; regulation
To those who really understand the brilliant symmetry of our Constitutional structure, and the Framers understanding of economics and free markets, it is patently obvious that Congress is virtually clueless today, as to what it should and what it should not be doing with respect to the regulation of Commerce. It also shows little or no understanding of the Constitutional intent, which could clearly have headed off the present crisis.
posted on 10/17/2008 10:33:24 AM PDT
posted on 10/17/2008 10:48:32 AM PDT
The article is based on a lie. The "new appropriations" are not being "made out of fiat money". The treasury is selling bonds to willing buyers in the public for cash, and that cash is being used to purchase other securities from other members of the public.
The public holds debts of the UST instead of bank preferred stocks or mortgages, and the treasury carries those higher yielding securities at very low rates of interest. And there isn't a drop of fiat anything in any of that.
The Fed's actions supporting asset backed commercial paper with new loans might be called fiat something, but aren't appropriations and have nothing to do with the congressional bill or its treasury implementation.
Reckless slander is no basis to be heard. The writer discredits everything he says by engaging in blatantly false smears.
posted on 10/17/2008 11:06:08 AM PDT
James Madison explained the original understanding of the power to regulate interstate commerce:
For a like reason, I made no reference to the "power to regulate commerce among the several States." I always foresaw that difficulties might be started in relation to that power which could not be fully explained without recurring to views of it, which, however just, might give birth to specious though unsound objections. Being in the same terms with the power over foreign commerce, the same extent, if taken literally, would belong to it.
Yet it is very certain that it grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged.
13 Feb. 1829Letters 4:14--15
posted on 10/17/2008 11:23:41 AM PDT
by Ken H
"The constitution is one of limited and enumerated powers; and none of them can be rightfully exercised beyond the scope of the objects, specified in those powers. It is not disputed, that, when the power is given, all the appropriate means to carry it into effect are included. Neither is it disputed, that the laying of duties is, or may be an appropriate means of regulating commerce. But the question is a very different one, whether, under pretence of an exercise of the power to regulate commerce, congress may in fact impose duties for objects wholly distinct from commerce. The question comes to this, whether a power, exclusively for the regulation of commerce, is a power for the regulation of manufactures? The statement of such a question would seem to involve its own answer. Can a power, granted for one purpose, be transferred to another? If it can, where is the limitation in the constitution? Are not commerce and manufactures as distinct, as commerce and agriculture? If they are, how can a power to regulate one arise from a power to regulate the other? It is true, that commerce and manufactures are, or may be, intimately connected with each other. A regulation of one may injuriously or beneficially affect the other. But that is not the point in controversy. It is, whether congress has a right to regulate that, which is not committed to it, under a power, which is committed to it, simply because there is, or may be an intimate connexion between the powers. If this were admitted, the enumeration of the powers of congress would be wholly unnecessary and nugatory. Agriculture, colonies, capital, machinery, the wages of labour, the profits of stock, the rents of land, the punctual performance of contracts, and the diffusion of knowledge would all be within the scope of the power; for all of them bear an intimate relation to commerce. The result would be, that the powers of congress would embrace the widest extent of legislative functions, to the utter demolition of all constitutional boundaries between the state and national governments.
Joseph Story, Commentaries on the Constitution
posted on 10/17/2008 11:31:06 AM PDT
("Oh bother!" said Pooh, as he chambered his last round.)
Comprehensive as the word "among" is, it may very properly be restricted to that commerce which concerns more States than one. The phrase is not one which would probably have been selected to indicate the completely interior traffic of a State, because it is not an apt phrase for that purpose; and the enumeration of the particular classes of commerce, to which the power was to be extended, would not have been made, had the intention been to extend the power to every description. The enumeration presupposes something not enumerated; and that something, if we regard the language or the subject of the sentence, must be the exclusively internal commerce of a State. The genius and character of the whole government seem to be, that its action is to be applied to all the external concerns of the nation, and to those internal concerns which affect the States generally; but not to those which are completely within a particular State, which do not affect other States, and with which it is not necessary to interfere, for the purpose of executing some of the general powers of the government. The completely internal commerce of a State, then, may be considered as reserved for the State itself.
This principle is, if possible, still more clear, when applied to commerce "among the several States." They either join each other, in which case they are separated by a mathematical line, or they are remote from each other, in which case other States lie between them. What is commerce "among" them; and how is it to be conducted? Can a trading expedition between two adjoining States, commence and terminate outside of each? And if the trading intercourse be between two States remote from each other, must it not commence in one, terminate in the other, and probably pass through a third? Commerce among the States must, of necessity, be commerce with the States.
Gibbons v. Ogden Chief Justice Marshall
The commerce clause is a simple power:
It gives the entity of the general government the ability to do business with the entities of the States.
It has nothing to do with the physical movement of goods or business in general.
That was what made it a 'free' market.
posted on 10/17/2008 11:48:49 AM PDT
(* I am not an administrative, political, legal, corporate or collective entity *)
The monetization of debt creates new fiat money or money substitutes. The selling of bonds is not against hard money, but against fiat money. Moreover, those new bonds will be used to expand the reserves of the banks that purchase them, all without actually drawing on anything but more inflationary promises.
To understand the long term effect, you need to understand that money is a lot like water, in that it can be artificially dammed up, but when it breaks its bounds, if rushes to find its level. The locked up fiat moeny reserves of major financial institutions, which the Fed and Government would like to free to make credit more available, are actually restraining the price effect of the inflation we already have in place. The eventual dam break, as Jimmie Rogers has discussed, will create an Inflationary Holocaust.
posted on 10/17/2008 12:46:32 PM PDT
To: Ken H
Is your comment intended to agree with my point? For there is certainly no disagreement on my part with Madison.
As I opined in the article, it would be absurd to think that the Founders intended the general language of the commerce clasue to defeat the clear specific intent of the enumerated powers and limitations.
posted on 10/17/2008 12:49:40 PM PDT
States under the concept of Republican Government are the people acting as a body politic. Commerce among the States is commerce between the citizens of different States across State lines. The concept has been corrupted to meet Leftist social agendas over the past two generations or more.
Other than that point, we are in agreement.
But why, is all the interest on the Commerce Clause, rather than the specific enumerated powers that have been ignored, as has the purpose of providing sound money?
posted on 10/17/2008 12:57:51 PM PDT
Is your comment intended to agree with my point?
Yes. It was the following sentence that I thought dovetailed nicely with Madison's quote:
The issue, then, is not necessarily between the market and regulation, but between the "market" and regulations that impair rather than facilitate the free, voluntary and dynamic interaction of law-abiding individuals.
posted on 10/17/2008 2:23:13 PM PDT
by Ken H
To: Ken H
Actually, with respect to Madison, I am enough of a long-time admirer, that I bought a few rolls of the Madison $s, when they came out, to give to family members and close friends as a memento.
posted on 10/17/2008 3:27:04 PM PDT
Worrying about inflation in the greatest deflationary crisis since 1932 is illiterate. There is no imaginary inflationary holocaust, and the end of the world trade commodity bubble blowers peddling that crazy idea are exactly the people whose world just ended. They created all these reckless bubbles with their nonsense bets that dollars would be worthless, but it is their bubbles that are worthless, and dollars that are bid.
I know more about how the monetary system works than you ever will, I don't need a lecture.
posted on 10/17/2008 4:15:45 PM PDT
Your bragadocio does not an argument make. We are hardly in a "deflationary crisis." That is absurd. Price falls can be a symptom of deflation, but they do not mean that the dollar based accounts around the world have actually deflated--just that prices have temporarily come down. We have price falls because of a panic that has driven money into hiding. That is not the same thing as eliminating it, which would be deflationary.
Because of the inflation in money, the value of the Dollar has fallen over 97% over the past century--and that is even after the recent fall in commodity prices.
But most of my argument was on what Congress should have done under the Constitution, and what they should have avoided. You are hung up--with a gross misunderstanding of the economic dynamics--on trying to talk up the dollar. You do not even address the Constitutional issues, which are the gist of my essay. Put another way, the Framers were not Keynesians!
posted on 10/17/2008 4:38:11 PM PDT
Bump for Constitutional policies for economic recovery.
posted on 10/18/2008 10:52:32 AM PDT
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