The Destruction and Nationalization of American Business

I have heard people say the bailouts are not nationalism but that it’s a temporary situation and that is way too harsh.  What most people don’t realize is that this has been going on for over a 150 years.  Some of the earliest excesses in business gave rise to Federal solutions and some of the state government solutions also gave rise to Federal solutions.  The pace started slow but like any good exponential curve, once you get past the base building it goes up dramatically.  Lets look at few of the historical cases that have determined the climate we find ourselves in today.  I’m going to paraphrase several pages from “The Making of America” by C. Skousen.

The Founders of the Constitution were pro-trade and saw the advantages of free flowing commerce between the states. At the time the individual states were acting very territorial and parochial in their views using high tariffs and other discriminatory regulation of commerce to shape their state’s business landscape. Most early court cases dealt with restrictions against the states and their attempts to interfere with commerce as they sought some advantage.

Commerce as defined by the Supreme Court covers “every species of movement of persons or things,” whether for profit or not, including communications, transmission of intelligence, commercial negotiation which as shown “by the established course of the business,” will involve sooner or later an act of transportation of persons or things, or the flow of services or power across state lines.

Back to the Supreme Court, it has held that the federal government has regulatory power over interstate commerce covering all instruments of interstate commerce – navigable rivers, interstate railroads, pipelines, transmission lines, radio waves, telephone lines, and telegraph wires. Basically including any mode whatever by which person, things or communications are carried interstate.

According to the Supreme Court the federal government is empowered to adopt any measure which will protect, foster, control, constrain or prohibit commerce for the welfare of the public so long as the Fifth Amendment ‘due process’ clause is not violated.

With that foundation the emphasis changed.

• 1866 – all steam railroads were to be joined in a single system
• 1887 – Interstate Commerce Act, regulating railroad transportation rates, created Interstate Commerce Commission (ICC)
• 1903 – extension of the Safety Appliance Act dealing with safety and well-being of the workforce engaged in interstate commerce.
• 1910 - ICC authorized by congress to take the initiative and determine maximum reasonable rates
• 1914 – regulation of interstate gas and oil pipelines
• 1920 and 1940 – transportation acts regulate all transportation systems – motor, rail, water. Since then most railroads have merged, disappeared (bankrupt). So heavy handed has been the regulation that they have been ‘regulated into bankruptcy’.
• 1927 – regulation of interstate electric transmission lines.
• 1934 FCC setup to regulate interstate and foreign communication by wire and radio.
• 1935 – national Labor Relations Act – gives government jurisdiction over strikes and the basis of complaints leading to those strikes when affecting the nation’s commerce
• 1937 – regulation of gas
• 1938 – Civil Aeronautics Act – regulates the airways
• 1938 – Fair Labor Standards Act - government empowered to prescribe wages, hours, and working conditions.

Skousen points out that the discussion over regulation has usually been over two theories

• The federal government has unlimited power to apply the general welfare clause
• The federal government can only carry out enumerated powers for the general welfare.

I can extend this more but the last paragraph graphically illustrates the dividing line between constitutional belief systems in the US. We are now being caught in a classic pincher movement. One jaw is regulation, the other jaw is nationalization both being wielded by those who believe the federal government has unlimited power to promote the general welfare clause. If you would like to know about the clause, follow these links.

http://constitutionalawareness.org/genwelf.html
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=906063

So lets call a spade a spade, this is nationalization.  You do not have to own or control all parts of the economy to be nationalized.  We always start small to lull the masses to sleep and keep them believing the government has everything under control.  The government now owns AIG (80%), owns a car companies (GM)(Chrysler) with Mr. Obama as the SuperCEO for GM, he told CEO Rick Wagoner to resign and he did.  The banks that can are paying the TARP funds back as fast as they can.  They do not want this octopus in their business they realize the government is not a savior but a draconian master. 

Too bad it wasn’t as obvious to them in the first place.  Remember the Golden Rule:  he who has the gold makes the rules.   This pincer action is being used to destroy American business (your employment and source of taxes) and the idea that man is inherently good, can act to benefit his fellow being and is capable of much more without being coerced.  We are now on the road to the other fallen ‘isms’ have traveled.  I’ll illustrate next time what the majority of those are and how we stack up against them.

What to do?

First, decide if you want a welfare state, this question is older than earth – “I can take care of you better than you can, just give up your agency and I’ll save you”.  The question needs to be answered by you and you alone.  Your actions will follow.

Second, if you decide that the government should only have enumerated (specifically named) powers and is not your savior then act against the Obama budget, call your congressman/woman and require of them true fiscal responsibility.  Require them to read the budget as your representative and then tell you what the thing contains.  NO the vote is not finalized yet, there will be debate this spring and summers, it not too late but you must act. 

Third, decide you will join our effort to get back to a course of government by enumerated powers. 

Till next time.