Patterico's Pontifications


The Washington Cartel Has Been Around a Long, Long Time

Filed under: General — Patterico @ 12:05 pm

On September 14, 1787, James Madison proposed to the Philadelphia Convention that Congress be authorized to grant corporate charters. His motion was defeated. He later opposed a Bank of the United States on the grounds that his idea of Congressionally granted corporate charters had been voted down in Philadelphia.

Then, as President, he supported the Second Bank of the United States, nominally on the basis of the “precedent” of the first Bank of the United States — but really because it was convenient to use the Second Bank to repay debts from his hapless conduct of the War of 1812. Even the Founding Fathers became part of the Washington cartel!

John Marshall also displayed hypocrisy on the issue of the Bank of the United States, arguing at the Virginia Ratifying Convention in June 1788 that laws not flowing from the enumerated powers would be struck down by judges:

Has the government of the United States power to make laws on every subject? Does he understand it so? Can they make laws affecting the mode of transferring property, or contracts, or claims, between citizens of the same state? Can they go beyond the delegated powers? If they were to make a law not warranted by any of the powers enumerated, it would be considered by the judges as an infringement of the Constitution which they are to guard. They would not consider such a law as coming under their jurisdiction. They would declare it void.

But this very same fellow, acting as Chief Justice of the United States Supreme Court, penned a decision in McCulloch v. Maryland in 1819 which upheld the establishment of the Second Bank of the United States. Marshall admitted on the one hand that the power to create the bank was not enumerated . . .

Among the enumerated powers, we do not find that of establishing a bank or creating a corporation.

. . . and yet (surprise!) concluded that, hey, you can’t enumerate everything, man!

Among the multitude of means to carry into execution the powers expressly given to the national government, congress is to select, from time to time, such as are most fit for the purpose. It would have been impossible to enumerate them all in the constitution; and a specification of some, omitting others, would have been wholly useless.

So, there was a lot of hand-waving in the course of adopting a Hamiltonian reading of “implied” grants of power — the sort of arguments which, if made at the Virginia Ratifying Convention, would have caused Virginia and many other states to reject the Constitution outright.

All this occurred to me again recently upon seeing that the House of Representatives voted to reauthorize the Export-Import Bank, a corporation with a charter from the national government, illegally created by executive order by FDR, and continually reauthorized to hand out corporate welfare to a handful of large companies with powerful lobbyists.

It all spits in the face of the Constitution. But that has been going on a long, long time.

33 Responses to “The Washington Cartel Has Been Around a Long, Long Time”

  1. And yes, I know he claimed it all was fine because of the Necessary and Proper Clause. This is what scared people about that clause in 1788.

    Patterico (86c8ed)

  2. Americans have been arguing about these principles since the nation was founded. Hopefully people will notice which of candidates is standing for principle now.

    DRJ (15874d)

  3. Necessary and Proper Cause
    License to Mislead, Steal and Jail.

    mg (31009b)

  4. Not to hijack your excellent thread. I swear!

    The officiating consultant on Fox, Mike Pereira, just let another cat out of the bag. he said the new NFL standard for replay is “clear and obvious” visual evidence. In the rulebook, it is “incontrovertible visual evidence.” The change was done by fiat – there was no vote in the rules committee nor by the owners.

    This is classic human behavior! It’s the reason the Founders were so insistent on limiting government.

    Do y’all think if the standard for adjudication of law were Potter Stewart’s “I know it when I see it” that the constitution would have been ratified? Hahahahahahaha.

    Tragically, the joke is on all of us.

    Ed from SFV (3400a5)

  5. I’ve said it before here, but it’s worth saying again.

    You can have all the good laws you want, but if bad people are in charge, you’re still screwed.

    scrubone (c3104f)

  6. Patterico, do you actually disagree with Marshall that the Necessary and Proper clause was necessary because it would have been impossible to enumerate everything Congress and its delegates could do? Can you imagine how the federal government could possibly function if it were literally limited to the explicitly enumerated powers and nothing more? Without the Necessary and Proper clause the Congress couldn’t provide for federal departments and agencies to rent office space, buy stationery, advertise their services, or do pretty much anything that a normal office does, none of which is enumerated in Article 1 section 8, because they’re included in the Necessary and Proper clause at the end.

    The limit on the N&P clause is that anything done in its name must further one or more of the previously enumerated powers. So a Bank of the USA for the sake of having one is not constitutional, and Marshall correctly argued in Philadelphia that it should be struck down, but if Congress decides that the best way to achieve its plans for the regulation of interstate commerce is to establish a bank (and it passes rational basis review) then it should be upheld.

    How else could it possibly be?

    Milhouse (8489b1)

  7. I’m very sad to hear that the House voted for ExIm, though. I don’t think it’s unconstitutional, but it’s definitely bad policy.

    Milhouse (8489b1)

  8. Where’s Icy!?!? Fred Thompson, dead at 73.

    Colonel Haiku (2601c0)

  9. That’s so sad.

    DRJ (15874d)

  10. This point isn’t made often or well enough. Thanks for doing so here.

    We have been fighting these same fights since before the ink was dry on the Constitution.

    While it is generally true that we have steadily gone farther and farther from the Constitution with the passage of time, even in those early years incredibly bad/evil legislation was proposed and some times passed such as the Alien and Sedition Acts in 1798.

    The Founders gave us a good foundation but it has always been up to “we the people” to keep the walls and roof intact.

    Mark Johnson (a64489)

  11. So what do you like better? The Alien and Sedition Acts unreviewable for Constitutionality or Marbury v. Madison (decided in 1803)?

    nk (9faaca)

  12. well one was clearly unconstitutional on it’s face, the other has been abused, by unscrupulous parties,

    narciso (ee1f88)

  13. Wasn’t all of this enshrined in the 9th Amendment, which is ignore daily by most all federal courts

    Neo (d1c681)

  14. A lot of libertarians point to Washington’s reaction to the Whiskey Rebellion as the first place we went off the tracks.

    And remember Jefferson, having helped create the Virginia and Kentucky Resolutions, went on to purchase Louisiana in a manner that even he admitted was unconstitutional, and then the Embargo Acts which, while probably covered by Congress’s power to regulate foreign commerce, allowed Jefferson to micromanage US trade to a degree not seen again until the New Deal.

    kishnevi (9cb6b5)

  15. World Series game tied at 2 runs each, now top of 11th inning. Mets must win tonight or Royals take it all. Don’t miss it.

    ropelight (d93310)

  16. In fairness to them, the issue of whether the Federal government had ONLY the enumerated powers was discussed. The Articles of Confederation had limited the national government to enumerated powers, so the wording was available, and it was explicitly rejected. They considered the issue and made the decision to allow unenumerated powers. Maybe they chose wrongly, but it is not a distortion to interpret the Constitution in the way that they did.

    Articles of Confederation, Article II: “Each state retains its sovereignty, freedom and independence, and every Power, Jurisdiction and right, which is not by this confederation expressly delegated to the United States, in Congress assembled.”

    Constitution, Amendment 10: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

    The difference is the omission of “expressly”. Amendment 10’s text allows for powers that are delegated to the Federal government by the Constitution, but are not stated in the document, and which might not be reserved to the people or to the states.

    After the Constitution was ratified, South Carolina Representative Thomas Tudor Tucker and Massachusetts Representative Elbridge Gerry separately proposed similar amendments limiting the federal government to powers “expressly” delegated, which would have denied implied powers. James Madison opposed the amendments, stating that “it was impossible to confine a Government to the exercise of express powers; there must necessarily be admitted powers by implication, unless the Constitution descended to recount every minutia.” The word “expressly” ultimately did not appear in the Tenth Amendment as ratified, and therefore the Tenth Amendment did not reject the powers implied by the Necessary and Proper Clause.

    When he introduced the Tenth Amendment in Congress, James Madison explained that many states were eager to ratify this amendment, despite critics who deemed the amendment superfluous or unnecessary:

    I find, from looking into the amendments proposed by the State conventions, that several are particularly anxious that it should be declared in the Constitution, that the powers not therein delegated should be reserved to the several States. Perhaps words which may define this more precisely than the whole of the instrument now does, may be considered as superfluous. I admit they may be deemed unnecessary: but there can be no harm in making such a declaration, if gentlemen will allow that the fact is as stated. I am sure I understand it so, and do therefore propose it.

    The states decided to ratify the Tenth Amendment, and thus declined to signal that there are unenumerated powers in addition to unenumerated rights. The amendment rendered unambiguous what had previously been at most a mere suggestion or implication.

    Gabriel Hanna (cf1fb5)

  17. Top of the 12th Kansas City scores, now lead Mets 3-2 with 1 out and man on first. Error on Mets 2nd baseman, now runners on 1st and 2nd, still only 1 out.

    ropelight (d93310)

  18. KC up 4-2, bases loaded, 1 out.

    ropelight (d93310)

  19. Still top of 12th, KC now up 7-2, 1 away, runner on 2nd. Turn out the lights, the party’s over…

    ropelight (d93310)

  20. It’s over. KC Royals win World Series. Mets will have to wait till next year.

    ropelight (d93310)

  21. Mr. Jefferson had to swallow hard and set aside his own sense of strict constructionism regarding the Constitution when the opportunity arose to acquire 828,000 square miles of land–otherwise known as the Louisiana Territory–from France in 1803 for an amount that even after two centuries of inflation is still equivalent to less than a quarter of a billion dollars. Oddly enough, I don’t feel particularly inclined to criticize that decision on his part.

    M. Scott Eiland (9fd59f)

  22. Well argued, Patterico. I hope your essay gets wide reading. But Marshall and Madison are untouchables, so probably nobody will quote you.

    Bob Ellison (fdf01d)

  23. I think we stayed pretty much on course until the 1930s. The 1929 crash was due to excessive speculation with the low interest rates set by Ben Strong, the NY Fed Chair, to deal with the German war debt. However, he died of TB in 1928 and the low interest rates were allowed to continue. Calvin Coolidge was asked about this and he expressed concern. He had advised his own family members to get out of the market. He told the person asking that the NY Stock Exchange was out of his control (There was no federal SEC) and it was the responsibility of the NY Governor, a man named Franklin Roosevelt.

    Had Coolidge run for another term, he would almost certainly have advised keeping the government out of the effort to deal with the crisis, much as he and Harding advised during the short, sharp recession of 1920. Instead, Hoover, a Progressive, ran deficits and passed rules requiring employers to keep wages high. Those mistakes, plus Smoot Hawley, created the high unemployment and led to Roosevelt as president who made more mistakes.

    Our present situation with QE and the sky high stock market resembles 1929.

    Mike K (90dfdc)

  24. R.I.P. Fred Thompson, Senator, actor, presidential candidate, happyfeet pal

    Icy (16eae5)

  25. “I think we stayed pretty much on course until the 1930s.”

    That’s a “think” that many conservatives conveniently choose to believe but its wrong. There was no “big government moment” that can be identified as the instant we collectively went down the rabbit hole. Our movement toward a larger more powerful federal government was an incremental process punctuated with many fits and starts that began almost on Day 1.

    “it was the responsibility of the NY Governor, a man named Franklin Roosevelt.”

    FDR was sworn in as NY Gov on January 1 1929 so I think its a stretch to blame him for the Wall Street crash less than 10 months later. However he certainly did plenty to prolong the agony of the Great Depression.

    mark johnson (0cb261)

  26. there woulld likely have been a cyclical downturn, but it took government policy to turn it into a depression, the Fed was instituted to ‘fine turn’ such corrections, how has that turned out,

    narciso (ee1f88)

  27. I think its a stretch to blame him for the Wall Street crash less than 10 months later

    No, I blame Ben Strong and tuberculosis but the fact that the Wilson flirtation with fascism had been reversed by Harding and Coolidge suggests to me that we were not that far from level. The Civil War destroyed the 10th Amendment.

    The idea that the original government was destined to fail is a copout, I think. There was always going to be some experimentation. The Whigs were commerce and prosperity oriented until slavery created an insoluble problem for them. Jefferson wanted a rural society. Hamilton wanted a prosperous one but it was Jefferson who died in debt.

    I wonder what might have happened if Coolidge had run again but the death of his son had broken his heart.

    Roosevelt was a good war president but a disaster in peacetime.

    Mike K (90dfdc)

  28. Sometimes I wonder how history is changed. I’ve been reading about James Garfield who was assassinated very early in his term. He was an exceptional man.

    He was a born in a log cabin and worked his way through high school and college, graduating from Williams College. He started out as a teacher; then became a lawyer; then rose to the rank of major general in the Civil War. He could write simultaneously with both hands in Greek and Latin. He campaigned in English and German. A president with his brains, guts and ambition, at a turning point in America’s history, when the West had been tamed and the country could now fully develop, and we’ll never know because of an insane twit who got within pistol range.

    nk (9faaca)

  29. Mr. Jefferson and Mr. Hamilton were both crucial figures in the early days of this nation, and the United States of America would be a far lesser place if one had completely prevailed over another.

    If I could pass on one piece of advice to each of these great men through the veil of time:

    “Mr. Jefferson, cheerleading the murderous mob in France is not something you want attached to your legacy,”;

    “Mr. Hamilton–shoot first and shoot straight. You’ll be doing your nation two favors with one simple act.”

    M. Scott Eiland (9fd59f)

  30. Spitting in the face of the constitution is a ways down our list of worries, IMO.

    DNF (1645ed)

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