Clause 61: The Pushback Blog

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Archive for September 2013

Anarchy in the USA

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Senate Majority Leader Harry Reid (D-NV) says that anarchists are in control of Congress. Anyone who objects to the way the government spends its our money is obviously an anarchist, right?

Let’s review. The ability of the legislature — the House of Commons, in this case — to deny funding to royal projects with which they did not agree on either purpose or implementation was a fundamental cause of the English Civil War. Parliament withheld funding over issues such as the king’s choice of a military commander (the disastrous Duke of Buckingham) Charles I attempted to obtain revenue without Parliament during the period 1629-40, which is known to history as the period of Personal Rule. Charles failed, because his policies raised resistance in the gentry and his need for money continually expanded. When Charles finally did summon parliament, it took less than two years for political relations to break down into military conflict.

Parliament won this military conflict, and the ultimate result of the violence and bloodshed of the succeeding 50 years was the English Bill of Rights (1689), which specifically required the king to come to Parliament for funding:

That levying money for or to the use of the Crown by pretence of prerogative, without grant of Parliament, for longer time, or in other manner than the same is or shall be granted, is illegal;

It further protects the proceedings of the legislature:

That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament;
http://avalon.law.yale.edu/17th_century/england.asp

British subjects who came to the new world expected to have their rights protected by their local legislatures. The attempt to raise income from the colonies without the consent of their legislatures was one of the causes of the American Revolution. The framers of the Constitution may have vested executive power in a president rather than a king, but they clearly intended for that executive power to be checked by funding controlled by the legislature in the manner in which they were familiar. This is why the Constitution requires funding to originate in the House of Representatives.

Rep. Mark Meadows (R-NC) cited the writings of James Madison:

The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse[:] that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.
Federalist 58, http://avalon.law.yale.edu/18th_century/fed58.asp

The ability of Congress to deny funding to an administration whose policies do not enjoy the confidence of Congress is not anarchy, but a foundation of the Anglo-Saxon constitutional heritage for which our political ancestors fought and died in the 1640s and 1770s. If this is anarchy, what is the proper operation of government? Are we vesting our President with a royal prerogative?

The Republicans in the House may or may not command the assent of the country in their choice to make a political stand on the issue of health care. It remains to be seen whether or not this is the politically astute hill on which to take a position. However, that can be sorted out when the Representatives run for re-election. What is beyond question is the political legitimacy of the legislature to withhold funding for executive policies that the legislature does not support.

Written by srojak

September 30, 2013 at 1:28 pm

Posted in History, Politics

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Questions for Ben Bernanke

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The American Enterprise Institute published a list of ten questions that they believe Congress should ask Ben Bernanke: http://www.aei-ideas.org/2013/07/10-questions-congress-should-ask-bernanke/. The questions center on whether the Federal Reserve should adjust its rate of quantitative easing (QE), which is less euphemistically known as inflating the monetary base.

An interesting entry among the questions is:

Mr. Chairman, what does success for QE look like? First quarter GDP growth was revised downward to 1.8%. Only modest growth is expected for the next half of the year. What is your proof that QE continues to work?

This begs the question: What is QE meant to do? What is the definition of “continues to work”?

If QE is meant to stimulate the economy, it hasn’t succeeded. There has been growth in the monetary base, but because lending is constrained, there has not been the multiplier effect that would have resulted in economic expansion. This is a mixed result, as the resulting inflation would have choked off any recovery in its crib.

If QE is meant to clear the books of US lenders of toxic assets, it is a tremendous backdoor transfer of wealth from the public to the banks.

If QE is meant to monetize the public debt, it appears to be losing a race with the creation of public debt.

What is the success model here?

Written by srojak

September 30, 2013 at 12:09 pm

Posted in Economics

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