The bailout has passed

October 3, 2008

263 – 171.  According to Article I Section IX of the U.S. Constitution,

No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.

That’s why there was a vote to begin with.  But for what purposes is Congress allowed to draw money from the treasury?  See Article I Section VIII:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Ah, the General Welfare Clause.  There was one of those in the Articles of Confederation, but read in that light, this hardly justifies pulling a $700 billion figure out of thin air and spreading it around lenders who were forced to give loans to folks as what weren’t terribly likely to pay them back.

To borrow money on the credit of the United States;

Money is leaving the treasury.  No borrowing there.

To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;

How exactly does extracting $700 billion constitute regulating commerce among the several states?  Sure, several lending companies are supposed to come under the thumb of the federal government a la AIG, but there’s nothing in Article I Section VIII to suggest that the federal government is supposed to control lending and credit throughout America.  If the Commerce Clause actually allowed that, then why hasn’t anyone bothered to say so until now?

In a different century, we would be issuing writs of nullification, declarations of secession, and threats to mobilize the militias over this crap.  But we’re a democracy now.  As H.L. Mencken put it, “Democracy is the theory that the common people know what they want and deserve to get it good and hard.”

To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States;

The bailout exists in flat violation of this clause.  “Uniform laws on the subject of bankruptcies.”  Uniform.  The same for everyone.  Am I very confused, or is the purpose of the bailout to keep certain companies from going bankrupt due to questionable lending practices?  Lending practices forced upon them by Congress?

To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;

No money is being created (yet), no foreign currency is involved.  If one were inclined to be snide, one might make a snarky remark about standards being fixed.  But let’s pretend one isn’t so inclined.

To provide for the punishment of counterfeiting the securities and current coin of the United States;

Nobody has even brought up conterfeiting.  Maybe that’s how they plan to collect the $700 billion without without raising taxes or expanding the national debt.

To establish post offices and post roads;

Let’s not bring USPS into this.  They have enough problems of their own.

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

The bailout scheme doesn’t deal with copyright law.

To constitute tribunals inferior to the Supreme Court;

No courts are being created.

To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;

Piracies… piracies…. oh wait, no, the bailout isn’t taking place on the high seas.

To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;

The bailout isn’t a declaration of war.  Yet.

To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;

No armies are being raised or supported through the bailout.

To provide and maintain a navy;

No navies either.

To make rules for the government and regulation of the land and naval forces;

Gee, Congress sure does seem to have more authority with respect to the armed forces than it does the economy.  Someone should let them know.  Maybe they’d stop screwing everything up all the time if they kept their grubby rat-claws out of the collective money jar of America.

To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;

Insurrections may arise as a result of the bailout, but I doubt it.

To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;

More on the armed forces.  It’s almost as if the Constitution is specifically enumerating the powers of the federal government or something.

To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings;–And

A special paragraph just for Washington D.C.  Nothing relating to the bailout here.

To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.

Again, nothing relating to the bailout here.

It would seem then that the $700 billion bailout fund is without legal justificiation.  Funny how that never came up when they were trying to scare us with really huge numbers and prophecies of doom.

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Where does the $700 billion figure in the bail-out plans come from?

September 29, 2008

We now have a confession:

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

This is supposed to be a loan, as in we’re not supposed to be taking $700 billion from tax-payers, lighting it on fire, and doing an angry monkey dance around the ashes while chanting and genuflecting to icons of Henry Paulson and Ben Bernanke.  We’re supposed to get that money back with interest at some point.  That said, when asking for a huge amount of dollars, you should be able to say where those dollars are going and how you came up with that figure.  “We just wanted to choose a really large number,” is perhaps the worst possible explanation you could give.  Saying nothing at all would have been better, at least from a PR point of view, because while everyone might suspect you’re a jackass, they wouldn’t know for sure.

Why would the Treasury pull such a huge number out of their hats?  I found James Madison hiding in a long-lost corner of the internet and asked him.  He said:

You will understand the game behind the curtain too well not to perceive the old trick of turning every contingency into a resource for accumulating force in the government.

Then he tried to sell me a magnet.