WEBVTT NOTE The Bailout and the Myth of Limited Government 1 00:00:00.000 --> 00:00:06.000 Well, Randy and Marshall made all the points that I had written down here to say, so I'm going to be kind of short. 2 00:00:06.000 --> 00:00:10.500 One sign of hope is that there are these t-shirts around you. 3 00:00:10.500 --> 00:00:16.500 You probably see, if you go up into town, you see these t-shirts with big, mouthy, tongue-style pictures of Obama on them. 4 00:00:16.500 --> 00:00:18.000 It's a lot of college kids. 5 00:00:18.000 --> 00:00:22.000 But I saw another one, and it says, Hope, on the t-shirt. 6 00:00:22.000 --> 00:00:29.000 But I saw another one that a young guy was wearing, and it said, Hope, and there's a picture of Bob Hope on there. 7 00:00:29.000 --> 00:00:40.580 So ridicule can be very very effective in these things. I'm sort of a late 8 00:00:40.580 --> 00:00:44.840 addition to the panel and so they gave me that my topic is I think as Jeff Tucker 9 00:00:44.840 --> 00:00:48.720 assigned me the topic of the name of the panel of the bailout in the myth of 10 00:00:48.720 --> 00:00:53.560 limited government and one thing I'll mention about since I have the time about 11 00:00:53.560 --> 00:00:57.900 Marshall's talk it reminded me of there's a famous Supreme Court decision in 12 00:00:57.900 --> 00:01:27.900 1866, Ex parte Milligan, where the Supreme Court made two points, and it addressed the illegal suspension of habeas corpus by Lincoln, and the point number one was the Constitution applies to everyone, even the President, and point number two was it is most important to enforce the Constitution in times of emergency, because that's when we lose our rights. We don't lose our rights normally when there's no emergency, and so things have changed. 13 00:01:27.900 --> 00:01:32.980 When the future Supreme Courts invent these myths that the Constitution itself somehow 14 00:01:32.980 --> 00:01:38.820 provides emergency powers, that's all a part of what's called constitutional law, which 15 00:01:38.820 --> 00:01:43.740 is very different from the Constitution itself. 16 00:01:43.740 --> 00:01:51.580 Another point I want to make about the discussion that just went on is with regard to what's 17 00:01:51.580 --> 00:01:56.500 likely to happen with regard to the central planning of the economy in the total ignoring 18 00:01:56.500 --> 00:02:01.940 of Constitutional Authority, which of course has been going on for a long time, is Bernanke 19 00:02:01.940 --> 00:02:07.140 made a speech a few days ago advocating, it was a sales pitch for something called, a 20 00:02:07.140 --> 00:02:13.280 new government agency called the Systemic Risk Authority, where a new government agency funded 21 00:02:13.280 --> 00:02:20.460 by Congress and controlled by Congress will supposedly regulate all risk taking by financial 22 00:02:20.460 --> 00:02:21.460 institutions. 23 00:02:21.460 --> 00:02:33.460 And so you can imagine this will be controlled by politics, of course, and so every corporation in America will be lobbying Congress to prohibit the risk-taking of its competitors and to allow its own risk-taking. 24 00:02:33.460 --> 00:02:42.460 It will be one gigantic rent-seeking carnival, and it will be totally destructive, and add on top of that the de facto nationalization of banks. 25 00:02:42.460 --> 00:02:48.380 and we got what a radio talk show host in Charleston that I was on his show a 26 00:02:48.380 --> 00:02:52.500 couple weeks ago called Obamianism that's what he's got so he's calling 27 00:02:52.500 --> 00:02:58.700 this whole system and I couldn't resist making these comments about 28 00:02:58.700 --> 00:03:05.180 these two speakers but what I prepared to say shortly is since since I've been 29 00:03:05.180 --> 00:03:10.860 writing these books about the history and economic history is one thing that's 30 00:03:10.860 --> 00:03:21.860 The thing that's going to happen as a result of all of this, I hope, is that conservatives will give up this crazy idea that the Constitution can somehow be used as a break on government power. 31 00:03:21.860 --> 00:03:35.860 It should be apparent to everybody by now that the Constitution has been long dead as a check on governmental power, and certainly the nail was in the coffin, the final nail was pounded in the coffin a long time ago, but a lot of people don't seem to understand that. 32 00:03:35.860 --> 00:03:46.860 And historically, I think what Americans need to understand also is that at the time of the founding, when this idea of limited constitutional government came about with the Constitution, 33 00:03:46.860 --> 00:03:55.860 the two big adversaries, Hamilton and Jefferson, had diametrically opposed views of what this Constitution should do. 34 00:03:55.860 --> 00:04:04.860 Hamilton, or Jefferson, famously said the government should be bound by the chains of the Constitution, a check on governmental power. 35 00:04:04.860 --> 00:04:11.600 Hamilton, the opposite. Hamilton, like Jefferson, was a lawyer, and he thought that properly 36 00:04:11.600 --> 00:04:17.660 interpreted the Constitution could be a rubber stamp on unlimited governmental power, if 37 00:04:17.660 --> 00:04:22.160 properly interpreted. After all, he was the one who invented the idea of implied powers 38 00:04:22.160 --> 00:04:28.900 of the Constitution, war powers, he invented this. And so, and he was a very clever lawyer, 39 00:04:28.900 --> 00:04:35.140 And he literally wrote the book on how to subvert the Constitution to create bigger government. 40 00:04:35.140 --> 00:04:41.500 And in my book on Hamilton, I have a chapter called Hamilton's Disciple, How John Marshall 41 00:04:41.500 --> 00:04:43.100 Subverted the Constitution. 42 00:04:43.100 --> 00:04:48.940 And Marshall worshiped Hamilton's intellect and quoted him verbatim in some of his most 43 00:04:48.940 --> 00:04:55.700 important decisions with regard to the constitutionality of the central bank, for example. 44 00:04:55.700 --> 00:04:58.620 And so this has been going on a long time. 45 00:04:58.620 --> 00:05:03.220 This battle over how to interpret the Constitution, I don't think very many people in America 46 00:05:03.220 --> 00:05:10.140 understand that Hamilton's view was that this Constitution could be used as a rubber stamp 47 00:05:10.140 --> 00:05:15.420 for unlimited government. That's why Jefferson hated him so much. He didn't just disagree 48 00:05:15.420 --> 00:05:20.660 with him. These men really disliked each other. When Jefferson gave his first and all girl 49 00:05:20.660 --> 00:05:26.660 The Federal Address I mentioned yesterday, Hamilton condemned it as the symptom of a pygmy mind. 50 00:05:26.660 --> 00:05:36.660 And then Hamilton created the New York Post newspaper as a way of smearing Thomas Jefferson. 51 00:05:36.660 --> 00:05:40.660 So this was a pretty nasty political battle. 52 00:05:40.660 --> 00:05:47.660 So this political battle commenced at the time of the American founding and it went on and on for a long time. 53 00:05:47.660 --> 00:05:54.700 By the time you get to 1850, I want to read something from John C. Calhoun, his famous 54 00:05:54.700 --> 00:06:00.860 Disquisition on Government. Calhoun was a former vice president of the United States, a U.S. senator 55 00:06:00.860 --> 00:06:07.020 from South Carolina, among other things, and a lot of you are familiar with Calhoun's work. Murray 56 00:06:07.020 --> 00:06:13.660 Rothbard thought Calhoun was one of the preeminent political philosophers in American history, 57 00:06:13.660 --> 00:06:23.660 up to Murray's time, and Calhoun is famous for understanding what we know as the libertarian 58 00:06:23.660 --> 00:06:31.740 class analysis. It's not a class struggle analysis in the Marxian sense, but the classes 59 00:06:31.740 --> 00:06:38.320 are the net taxpayers and the net tax consumers. The net tax consumers essentially plunder 60 00:06:38.320 --> 00:06:49.480 And here's one of the things that Calhoun said about this system of this political battle 61 00:06:49.480 --> 00:06:54.520 in a democracy between net taxpayers, net tax consumers, where there are no means by 62 00:06:54.520 --> 00:07:01.080 which they, the constitutionalists that is, could compel the major party that controls 63 00:07:01.080 --> 00:07:07.600 the government to observe the restrictions on government that the constitution has. 64 00:07:07.600 --> 00:07:11.660 The only resort left to them would be a strict construction of the Constitution. 65 00:07:11.660 --> 00:07:15.480 To this, the major party would oppose a liberal construction. 66 00:07:15.480 --> 00:07:20.300 It would be construction against construction, the one to contract and the other to enlarge 67 00:07:20.300 --> 00:07:23.320 the powers of the government to the utmost. 68 00:07:23.320 --> 00:07:29.380 But of what possible avail could the strict construction of the minor party be against 69 00:07:29.380 --> 00:07:32.880 the liberal construction of the major? 70 00:07:32.880 --> 00:07:37.240 The major party is the Hamiltonians, who want to rewrite the Constitution, the minor party 71 00:07:37.240 --> 00:07:40.680 by the Jeffersonians. 72 00:07:40.680 --> 00:07:45.480 When one would have all the power of the government to carry its construction into the effect 73 00:07:45.480 --> 00:07:51.400 and the other be deprived of all means of enforcing its construction, the Jeffersonians, 74 00:07:51.400 --> 00:07:55.060 in a contest so unequal, the result would not be doubtful. 75 00:07:55.060 --> 00:07:58.740 The party in favor of the restrictions would be overpowered. 76 00:07:58.740 --> 00:08:02.360 The end of the contest would be the subversion of the Constitution. 77 00:08:02.360 --> 00:08:06.340 The restrictions would be ultimately annulled and the government would be converted into 78 00:08:06.340 --> 00:08:11.820 to One of Unlimited Powers, end quote. That was in 1850 that Calhoun wrote that. And of 79 00:08:11.820 --> 00:08:18.660 course that, and he was, he was addressing himself directly to this, the Hamilton-Jefferson 80 00:08:18.660 --> 00:08:23.140 debate over the Constitution here. He understood what was going on. That's why Calhoun thought 81 00:08:23.140 --> 00:08:28.260 we needed more than just this written Constitution if the citizens were to really control their 82 00:08:28.260 --> 00:08:35.620 government. We needed more than that. We needed his famous concurrent majority. And I would 83 00:08:35.620 --> 00:09:05.620 and also the rights of nullification and secession and the threat of secession and so but by the time you get to the end of the civil war in one of my books I quote Woodrow Wilson president Woodrow Wilson who was a political science professor at Princeton before of course before becoming president in one of his books on the US government he praised the fact that was a good thing that by the by the end of the Civil War by 1866 we have finally established the president where the Supreme 84 00:09:05.620 --> 00:09:10.620 The U.S. Supreme Court was the ultimate decider of constitutionality. 85 00:09:10.620 --> 00:09:13.620 So it wasn't George W. Bush who became the decider. 86 00:09:13.620 --> 00:09:16.620 It was the U.S. Supreme Court in the 1860s. 87 00:09:16.620 --> 00:09:21.620 And the Jeffersonians, again, thought that this was a catastrophe. 88 00:09:21.620 --> 00:09:25.620 Because what this meant, finally, by the time we get to 1866, 89 00:09:25.620 --> 00:09:29.620 that the federal government, at that point, became the sole decision-maker 90 00:09:29.620 --> 00:09:32.620 with regard to what the limits on government power should be. 91 00:09:32.620 --> 00:09:38.020 and the Jeffersonians had always argued of course that well if that day ever comes the 92 00:09:38.020 --> 00:09:43.380 government will decide there are no limits to to powers and that's that's what's happened and so 93 00:09:43.380 --> 00:09:48.340 once that was established you know what did we have in the late 19th century one of the things 94 00:09:48.340 --> 00:09:54.860 we had was the beginnings of corporate welfare run amok beginning with the the the subsidies to 95 00:09:54.860 --> 00:10:01.340 the transcontinental railroads in one of the books I cite in my writings it's by a man named Leonard 96 00:10:01.340 --> 00:10:06.540 Curry, and the book is called Blueprint for Modern America, and he writes of how once 97 00:10:06.540 --> 00:10:13.500 these constitutional limits on corporate welfare were wiped away during the Civil War, the 98 00:10:13.500 --> 00:10:14.740 floodgates were open. 99 00:10:14.740 --> 00:10:19.780 Every corporation in America went to Washington looking for some sort of transfer, subsidy, 100 00:10:19.780 --> 00:10:24.780 protectionism, handout, and it was Grant, it was President Grant who invented the word 101 00:10:24.780 --> 00:10:31.300 lobbyist during his time to refer to all these lobbyists who were hanging out in the lobby 102 00:10:31.300 --> 00:10:38.300 and the lobbies of the Willard Hotel waiting their turn to bribe Congress for some goody for their company. 103 00:10:38.300 --> 00:10:46.300 And so what we had was really the American economy was transformed at that time, beginning in the 19th century, the late 19th century, 104 00:10:46.300 --> 00:10:56.300 into a system of sort of economic fascism and not capitalism, not real capitalism, but economic fascism as we later would know it in Europe. 105 00:10:56.300 --> 00:11:09.300 You know, ostensible private property, but government that was controlled in many ways by private property and businesses that were controlled in many ways by government because with government money always comes government control. 106 00:11:09.300 --> 00:11:15.300 There was just an article yesterday about all the restrictions the government is making on these banks that have taken bailout money now. 107 00:11:15.300 --> 00:11:23.300 All sorts of affirmative action restrictions and who you can hire, what you can pay people, so that's been going on forever. 108 00:11:23.300 --> 00:11:28.540 going on forever. This is certainly nothing new. And so this built and built, this system 109 00:11:28.540 --> 00:11:34.500 of what I would call economic fascism. Read Bob Higgs' book, War, Depression and Cold 110 00:11:34.500 --> 00:11:40.220 War to see what happened during World War I and World War II with regard to the ratcheting 111 00:11:40.220 --> 00:11:45.780 up of governmental restrictions that are accompanying all these governmental subsidies. And really 112 00:11:45.780 --> 00:11:53.220 to show how the Constitution really was dead a long time ago, I cite Andrew Napolitano 113 00:11:53.220 --> 00:12:01.220 The Constitution in Exile, and I also cite the book by Bernard Sagan, Economic Liberties in the Constitution. 114 00:12:01.220 --> 00:12:08.220 I didn't really realize this, but they both said, and maybe you legal beagles out there like Marshall can correct me on this, 115 00:12:08.220 --> 00:12:15.220 but both of these men who I have a lot of respect for as writers and researchers said that between 1937 and 1995, 116 00:12:15.220 --> 00:12:20.220 the Supreme Court did not strike down any federal laws as unconstitutional. 117 00:12:20.220 --> 00:12:50.220 and maybe Marshall can correct me on that, but Napolitano and Sagan both say that, and so if the Supreme Court is supposed to be a check on governmental power, that's not much of a check, but I see the ending of true federalism or states' rights during the Civil War era as being the real cause of that, and so in light of this bailout, I guess what I'm saying is of course nothing new, but the origins, the origins of it, 118 00:12:50.220 --> 00:12:57.100 I want to really go back 220-some years to the original battle between Hamilton and Jefferson 119 00:12:57.100 --> 00:13:03.060 over what this Constitution is to do, and it took a long time to get here, but now we're 120 00:13:03.060 --> 00:13:08.220 finally adopting this horrible system that Randy described very nicely here. 121 00:13:08.220 --> 00:13:13.780 I don't know if nicely is the word to describe it, I think Obamianism is pretty good. 122 00:13:13.780 --> 00:13:18.460 I think the guy's name is Rocky D. in Charleston, South Carolina, I don't know what his real 123 00:13:18.460 --> 00:13:23.460 and the Federal Name is, but that's what he goes by on his radio show. 124 00:13:23.460 --> 00:13:26.460 And as far as optimism, I'll repeat what Lew Rockwell said yesterday. 125 00:13:26.460 --> 00:13:33.460 If you think of what the 1930s when we had an economic catastrophe created by the Fed once again, 126 00:13:33.460 --> 00:13:39.460 we only had about a half a dozen classical liberals who were effective in opposing these things. 127 00:13:39.460 --> 00:13:48.340 and Lew rattled off, you know, Benjamin Anderson, John T. Flynn, H.L. Mencken, but even they 128 00:13:48.340 --> 00:13:50.300 got the Rush Limbaugh treatment. 129 00:13:50.300 --> 00:13:53.440 You know, they had the government crack down on them, the government tried to do all sorts 130 00:13:53.440 --> 00:14:01.060 of nasty things to them, the FDR tried to put Andrew Carnegie in prison and things like 131 00:14:01.060 --> 00:14:02.060 that. 132 00:14:02.060 --> 00:14:07.300 But the optimism is we've got hundreds, thousands and thousands of scholars and writers now 133 00:14:07.300 --> 00:14:12.300 The Internet and all these books that Jeff Tucker sells downstairs that people actually read. 134 00:14:12.300 --> 00:14:14.300 I assume you do, you spend all your money on them. 135 00:14:14.300 --> 00:14:18.300 I see people with big shopping bags walking around here. 136 00:14:18.300 --> 00:14:24.300 And so we've got a huge infrastructure of ideas to oppose all of this with now. 137 00:14:24.300 --> 00:14:28.300 And I can't make any predictions as to what's going to happen. 138 00:14:28.300 --> 00:14:34.300 But this will, of course, all be very bad for the economy, all these things, the bailouts and all this. 139 00:14:34.300 --> 00:14:38.800 and it's up to us to point this out and explain to people I remember after the 140 00:14:38.800 --> 00:14:43.300 collapse of socialism I recommended and no one listened to me that we hold a big 141 00:14:43.300 --> 00:14:48.740 conference on why socialism failed even though we you know right here we've been 142 00:14:48.740 --> 00:14:52.020 talking about this forever but you know aimed at the general public to have a 143 00:14:52.020 --> 00:14:56.420 book out there that would explain to everybody you know why this happened so 144 00:14:56.420 --> 00:15:01.540 that it doesn't happen again and and here you are you have a president getting 145 00:15:01.540 --> 00:15:16.540 I was writing about Acorn 25 years ago. I published a book in 1985 entitled Destroying Democracy, How Government Funds Partisan Politics. 146 00:15:16.540 --> 00:15:23.540 It was about government actually writing checks, giving money to special interest groups who would lobby for bigger government. 147 00:15:23.540 --> 00:15:53.540 and with James Bennett was my co-author and we had a section in there on Acorn and they were one of the groups that were getting government money back then, 25, 30 years ago and they were the craziest of the crazy socialists, they were communists, they were in the nationalized power industry, the medical care industry, the housing industry, communists basically and Obama is their lawyer and so I think we need to 148 00:15:53.540 --> 00:16:23.540 I've realized that and when he says I want to transform society, that's the direction he wants to transform it in and all we can do now is try to educate the public and wake them up, give them a good head slap, so to speak, and try to educate them on what's going on, I know we do have Rush Limbaugh on our side, I don't like Rush that much but he's getting better now as a lot of the conservatives are because they realized what the fight is right now and that's all I'm going to say. 149 00:16:23.540 --> 00:16:25.540 Thank you very much.