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Understanding The Game Behind The Curtain

This entry is part 2 of 6 in the series Crises, Coups and Constitutional Conventions

There is currently a movement in the United States that is gaining a disturbing momentum. The leaders of the movement are agitating state governments to petition Congress to call a new constitutional convention. While groups on the left have been demanding a new convention for the purpose of re-writing the existing Constitution for decades  the current calls are coming from groups that most would place in the “conservative” category. The liberal groups are calling straightforwardly for a convention with plenipotentiary constitution making authority while the conservative elements are calling for a convention limited by charter for the purpose of amending the existing Constitution.  While the latter sounds reasonable it is the opinion of the Institute For Principled Policy, not on our own authority but based on extensive research on the legal, historical, and procedural precedents set by conventions of the United States, colonial America, and Great Britain, that the chartering of a so-called controlled or “shackled” constitutional convention will have the same result as the calling of a convention with plenipotentiary authority. That predicted result in either case is a new constitution. Based on further research into existing constitutional models, parts which are already being implemented, we believe that the government created by any new constitution will be divorced from both the bedrock philosophical moorings laid out in the Declaration of Independence and from the shackles imposed by the current constitution. In this light the Hegelian Dialectical nature of the debate over a new constitutional convention is exposed.

In this series we will present the case and documentation that are the foundation our positions.

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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 government– James Madison to Thomas Jefferson March 14, 17941

Who are the players?

There are four major views about the calling of a new Constitutional Convention (Con Con). One of them is by far the most dangerous, but it’s not the one you might think. That group will be revealed later in the discussion. The first position we are describing as the “What’s a Constitution?” position. While that’s something of an overstatement (all of these position descriptions are slightly caricaturized in order to simplify the discussion. In reality there are positions that are subtle blends of these positions), what can be stated without exaggeration is that constitutional literacy is at a nadir. We can also say without exaggeration that this is apparently the majority position. This group is, by and large, out of the debate over a new Con Con except insofar as it can be manipulated by one or the other of the remaining groups. Because this group is so grossly ignorant of the Constitution they are often easily swayed by attractively packaged sound-byte style arguments. Because they neither know nor care to know the historical conditions of the first Con Con, they are unable to discern that there are concerted efforts to create a public demand for a new Con Con using deception and outright falsehood to do so. For simplicity’s sake we will call this group “the disengaged.”

The second position is best characterized by the statement “A new Con Con is a dangerous idea in the current social and political climate.” This group is best described as “constitutionalist” rather than “conservative,” since they believe that there is nothing wrong with the country that cannot be solved by a return to foundational constitutional principles. This group would argue that the original intent of the Constitution should be the guiding principle of law, but that the intent of the framers was set aside long ago by “consolidationists,”- those who would concentrate government authority in Washington DC by any means necessary but mostly through the federal courts. Thomas Jefferson foresaw the problem of expansion of federal authority through the process of construction and stated to Wilson Nicholas in an 1803 letter-

I had rather ask an enlargement of power from the nation, where it is found necessary, than to assume it by a construction which would make our powers boundless. Our peculiar security is in the possession of a written Constitution. Let us not make it a blank paper by construction.2

To make it clear, the Institute for Principled Policy takes this position. For simplicity we will refer to this group as “the constitutionalists.”

The third position is best characterized by the statement “A new Constitution MUST be written in a new convention immediately, if not sooner” position. This group can be spotted by their rhetoric. You will hear things like “the Constitution was written for a different time” or “the Constitution was written before mass communication, transcontinental travel, while the US was a small de-populated shoestring nation, before the ICBM, terrorism, etc., etc. etc.” Of course, all of these arguments are empty because they ignore the reason the Constitution was written the way it was.

The Constitution was written to restrict the ability to concentrate power in a central government. The desire to accumulate power is a timeless problem based on man’s sinful nature. The members of this group are radical revolutionaries. They are fully aware that the limits on government built into the Constitution simply cannot be sufficiently twisted, manipulated or re-interpreted to allow the confiscation and redistribution of wealth or to build the necessary power structures required to administer the giant welfare state that would have to be created.

This group believes strongly that the current Constitution represents an obsolete view of government as the protector of God-given rights in favor of the view that government is the fount from which springs all good things including man’s rights and needs. Because the document represents superseded theory of government it must be smashed and replaced with one that is more in tune with “modern theories” (in fact just rehashed ancient theories of despotism) of government. Members of this group, in accordance with their operational atheism (though many would claim agnosticism or some form of powerless faith in a deistic god), believe that the end justifies the means by which the smashing of the Constitution is done. They will say or do ANYTHING to get a new convention. They are media savvy and smart enough to realize that they are in a minority. Therefore, in order to get the convention they want a way must be devised to recruit members of another one of these groups. They realize that with a careful use of deception and manipulation of certain crises enough people from the first or second groups can be induced to change positions to the fourth group and the fourth group can be baited into joining them in calls for a new convention. For simplicity we will refer to this group as “the radicals.”

The fourth group is best characterized by the statement “a ‘shackled’ Constitutional Convention can be called and completely controlled by the states” position. Of the four basic positions this one is the most dangerous. Considering the description of the previous position you may find this surprising. But it is the combination of historical illiteracy and the legitimate desire to use existing legal procedures to solve crises in government that has led to a situation that can only be described using Paul Craig Roberts’ phrase, “the tyranny of good intentions”3. That is because they have taken the bait dangled by the radicals without doing the necessary historical research to confirm the assertions made by them. The bait is that a single issue convention can be called by the states and can be controlled by “strongly worded” state and federal constitutional convention resolutions, up to and including adding “criminal penalties” for failure to comply with those resolutions (creating major procedural and constitutional faux pas that will be discussed later). The problem with this is that the bait hides a hook. The hook is that all of the procedural rules and legal and historical precedents expose the fact that a “controlled” convention is a myth cut from whole and that a convention cannot be held to any legislative restrictions. Once the bait is taken and the hook set the fish finds itself in a situation that it neither expected nor wanted. The fisherman however has exactly what he set out to get.

The vulnerable group is the most dangerous in the Con Con debate because, in many cases, they have trusted moles from the radical group. The radicals have worked themselves into prominent positions in think tanks that the vulnerables trust to give them the correct information and have badly misled them. The radicals are willing and able to use personal relationships to pass along skillfully twisted versions of history and carefully constructed tendentious arguments in favor of a “controlled” single-issue convention. Though the vulnerable group is the most dangerous, they are not the enemy; in fact many good constitutionalists have adopted this position. Most of them believe in government limited by law. What has happened is that many in this group have been seduced by reasonable-sounding but false arguments regarding constitutional procedures and precedents. This group is well-meaning and enthusiastic about real reform and a lack of historical reference points makes them vulnerable to unscrupulous radical Con Con advocates with a knapsack full of convincing but false talking points. For simplicity we’ll refer to this group as “the vulnerable.”

Rules of the game

Most of the players are under the impression that there are a set of rules. They believe that all players have agreed to be honest in presenting their arguments and the facts that form the foundations of those arguments. In any game where at least one of the players believes that the end justifies the means (e.g., the radicals, including those who are posing as vulnerables) the rules the others are playing by are rendered meaningless by players who deny either the validity of the rules or that the rules apply to them. It is as if in a high-stakes poker game one of the players has slipped a marked deck into the game and additionally has concealed a number of face cards for later use. The cheater might attempt to defend himself with the excuse that his winnings will be used for “the greater good” but that does not change the fact he is a fraud and that his idea of the “greater good” not shared by the other players. This puts the other players at an extreme disadvantage because they still assume that there are rules that all of them are playing by. In the case of the Con Con call game, the rules are thought by the players to be honesty regarding arguments made about the historical, procedural and legal precedents of previous calls, resolutions and conventions. The stakes in the game of whether or not to call a new constitutional convention are too high to assume impeccable honesty on the part of those making the case for a new convention. Therefore the players must carefully examine the claims both for and against the calling of a new constitutional convention. In the words of Ronald Reagan, “trust but verify.” They must ask carefully crafted questions aimed at confirming the claims, pro and con, of the different players and, VERY importantly, they must CONFIRM the answers given. It is not enough to trust that the answers given are the honest truth. Remember, that the radicals will say ANYTHING to get a new convention and that they do not play by the rules. We realize that since this assertion is done in a way that puts the burden of proof on us and so we will make our case by providing the answers to questions that no one else seems to be asking (or if they are asking they are accepting answers at face value) regarding the calling of a new constitutional convention.

In the next part of this series we will begin to examine the questions that MUST be answered.

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1 Madison, James, Letters and Other Writings of James Madison Fourth President of the United States in Four Volumes, Vol. II 1794-1815, J.B. Lippincott & Co., Philadelphia, PA, 1865, P. 7

2 Peterson, Merrill D., ed., Thomas Jefferson, Writings, Library of America, Literary Classics of the United States, Inc., New York, NY, 1984, P. 1140, letter to Wilson Carey Nicholas

3 Roberts, Paul Craig, Lawrence M. Stratton, The Tyranny of Good Intentions; How Prosecutors and Bureaucrats Are Trampling The Constitution In The Name of Justice, Forum (an imprint of Prima Publishing), Roseville, CA 95661, 2000

Con-Con Con Job, Taxation, Executive Usurpation, Public Policy Radar, Private Property, Commentary, The Vote, Economics, Biblical Worldview, Constitution

Crises, Coups and Constitutional Conventions- Introduction

This entry is part 1 of 6 in the series Crises, Coups and Constitutional Conventions

There is currently a movement in the United States that is gaining a disturbing momentum. The leaders of the movement are agitating state governments to petition Congress to call a new constitutional convention. While groups on the left have been demanding a new convention for the purpose of re-writing the existing Constitution for decades  the current calls are coming from groups that most would place in the “conservative” category. The liberal groups are calling straightforwardly for a convention with plenipotentiary constitution making authority while the conservative elements are calling for a convention limited by charter for the purpose of amending the existing Constitution.  While the latter sounds reasonable it is the opinion of the Institute For Principled Policy, not on our own authority but based on extensive research on the legal, historical, and procedural precedents set by conventions of the United States, colonial America, and Great Britain, that the chartering of a so-called controlled or “shackled” constitutional convention will have the same result as the calling of a convention with plenipotentiary authority. That predicted result in either case is a new constitution. Based on further research into existing constitutional models, parts which are already being implemented, we believe that the government created by any new constitution will be divorced from both the bedrock philosophical moorings laid out in the Declaration of Independence and from the shackles imposed by the current constitution. In this light the Hegelian Dialectical nature of the debate over a new constitutional convention is exposed.

In this series we will present the case and documentation that are the foundation our positions.

_______________________________________________________

About once a decade or so, over the last 40 years, a group of social activists decides that a new constitutional convention would be a good idea for one reason or another. The 2010’s have proven to be no exception. What is exceptional about the early 2010’s is that there is a looming governmental and economic crisis that could conceivably provide the “tipping point” necessary for a new convention. In the past, issues like the so-called “Fair Tax,” immigration reform, a balanced budget amendment, state sovereignty (already covered in the 9th and 10th amendments to the Constitution) and a host of others, one group has a list of 10 proposed amendments, have been used as motivating issues. Up to this point, none of these issues, taken singly, have had the horsepower necessary to create the political pressure necessary to trigger a serious call for a constitutional convention.

The concept of the “tipping point,” a rapid and pivotal change in public opinion or the opinion of key players at critical points of history that occur prior to and which drive key historical events1,  is a crucial concept in the history of  the Constitution. The number of constitutional conventions held in the United States is small, only one so far, but the histories of the convention are voluminous. And, sadly, much of what is written in these histories is wrong, based on the writings of those who were diligently working to create a shift in public opinion and were not above a healthy dose of propaganda to create a “tipping point” in favor of replacing the confederated government of the Articles of Confederation with a new, “national” government which would eliminate the states as sovereign entities. After working for years to undermine the authority and effectiveness of the Articles of Confederation, nationalists (those in favor of a new national government) in Massachusetts, found their state embroiled in a crisis, which if sold properly, could be used to mold public opinion and the opinions of key players like George Washington into demanding a new constitutional convention. Men like Henry Knox, Benjamin Lincoln and other former members of Washington’s Continental Army staff, many of them members of the society of the Cincinnati, began writing exaggerated and inflammatory accounts of the events of Shays’ rebellion to key players in Congress, the press and George Washington. Thus Shays’ Rebellion, a local crisis based on a failure of the Massachusetts state government to redress the grievances of its citizens, was turned into an embryonic popular revolt that “threatened to spread across state lines” using carefully constructed accounts of the events that created something of a panic. These were all but a complete fiction. And yet the evidence of this has only been chronicled in any detail in the early 21st century by a scholar who discovered that his university was in possession of the official archives of the rebellion and decided it was time for a fresh look at the data. What he discovered was that the generally accepted accounts of the rebellion don’t match the events painted by the official records.  History truly is in the hands of the victors.

The question we must ask in light of this information is, can something similar happen in our time? Are there individual or groups who want a fundamental change in our form of government and are they willing to exploit a crisis or create one to achieve the goal? Secretary of State Hillary Clinton, a progressive product of 1960’s radicalism, demonstrated that her training was not wasted. “Never waste a crisis” she told the European Union when speaking on global climate change and the global economic meltdowns (speaking of created crises). [youtube]http://www.youtube.com/watch?v=B62igfNu-T0[/youtube]Clinton knows history. She knows that no radical change to government is possible except as a reaction to some crisis that is perceived as having no existing remedy that   requires quick and decisive action. Thus the quote attributed to James Madison- “Crisis is the rallying cry of the tyrant”- is demonstrated to be an important insight, whether or not Madison actually said or wrote it.

What if a “perfect storm” of concern and outrage over a combination of two or more of the “hot button” issues from the list above or some other societal problems begins to gain momentum? What about a complete economic collapse? What about more “Obamacare” or bank/financial bailout type situations?  Do people really understand that the problem with our current  government lies not in its structure but in the fact that its limits as outlined in the Constitution, the highest law of the land,  are repeatedly ignored or directly flouted by the very people they return to office election cycle after election cycle? Do people who should, really understand the ins and outs of a new constitutional convention or have the waters regarding the first convention, what happened there and what those precedents mean for a new convention been too muddied by historical revisionism and malignant neglect?  Or have those events been clouded by a fog of general ignorance of the history and causes of the first convention in combination with deliberate efforts to obfuscate them?

In that vein, are you able to spot both the drum beat of  crisis and the fatal problems with this “model resolution” calling for a “shackled” constitutional convention for one purpose and one alone?

Federal Relations Working Group Resolution on Article V of the U.S. Constitution2

Whereas the growth of federal government power at the expense of states has accelerated in recent years; and Whereas limiting the continued unchecked growth of federal power may require Constitutional reform; and

Whereas Congress is unlikely, without outside encouragement to propose any Constitutional Amendment that limits its own power; and

Whereas two-thirds of the states should have the same power to propose individual amendments to the Constitution for ratification as does two-thirds of Congress; and

Whereas when state legislators understand that legal and political procedures could limit an Article V Convention to the consideration of just one amendment, the balance of power between the federal and state governments would be fundamentally altered;

Therefore be it resolved that the American Legislative Exchange Council (ALEC) support and facilitate the education of state legislators about how an Article V Convention called by state legislatures could be reliably limited to an up or down vote on the text of a single amendment to the U.S. Constitution, including the possibility of an amendment that would give two-thirds of the states the explicit right to propose amendments without having to obtain the consent of Congress;

Therefore be it further resolved that ALEC facilitate times for legislators interested in working on this issue in more detail to meet during future ALEC meetings and events.

The drumbeat of the crisis is readily evident . But did you find the far more subtle problem in the “Whereas’s?” It’s there and it’s big. But don’t feel bad if you can’t find it. Most can’t. That’s because there has been so little effort put into teaching the Constitution, how it works and it’s history in primary and secondary education. Colleges, aside from a few isolated outposts of original intent thought teach a dreadfully deconstructed version of the events surrounding its development, how it’s supposed to function and the document itself. That’s why this series is being written.

Since many don’t know the history leading up to and during the Philadelphia Convention in 1787 we’re going to walk through some of the high points (and some of the low) and point out where there has been unintentional and where there has been deliberate blurring of those events.  Some of the history isn’t pretty and some readers will find that founders they had looked at almost as demi-gods will emerge as men of much lower stature, men of great ability who sometimes used their God-given talent to further their own, sometimes less than lofty goals and ends. This is not necessarily a bad thing. Deification of men, no matter their historical importance and personal abilities is a dangerous matter. We will also expose some rather gaping flaws in the Constitution. This will challenge the beliefs of some who believe the Constitution is a Divinely inspired document handed down in revelatory style, on par with the Bible. It will also challenge those adherents to the American civil religion, the First Church of the United States, wherein American citizenship somehow automatically rates a free trip through the Pearly Gates as long as the holy sacraments are received by the congregants.

Don’t misunderstand; the Constitution is a brilliantly written document and is unequaled in history. It has some glaring mistakes, something that is to be expected of a document written by men with different backgrounds, motivations and viewpoints. It is marvelous, eloquent, flawed and in modern political discourse bantered about for public consumption but mostly ignored by the men and women we have charged with a solemn oath to uphold and defend it.

And most of all, it needs to be preserved, defended and protected from those who would like nothing better than to replace it with governing documents that will disconnect our government from its Christian philosophical foundation and  radically redistribute power and wealth and alter American society.

This series will be comprised of 3 parts. Part I is a historical examination of the series of crises that resulted in the  Philadelphia convention in 1787. Part II will be an examination of what is happening today to create or use existing crises to gin up a public cry for a new convention. In the final section we will expose existing plans, already partially implemented as part of the existing system of government, much of it in violation of the current Constitution, just waiting for the exploitation or creation of the level of crisis necessary to create the “tipping point” for a new constitutional convention.

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1 Gladwell, Malcolm The Tipping Point: How Little Things Can Make A Big Difference; Little, Brown, and Co., Boston, 2002, rear cover, “The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire”

2 American Legislative Exchange Council Resolution Passed by the International Relations Task Force and Federal Relations Working Group on December 4, 2009. Approved by the ALEC Board of Directors on January 8, 2010

Taxation, Education, Executive Usurpation, Private Property, Commentary, Economics, Book Review

Hamilton’s Curse Chapter 8–Poisoned Fruits of “Hamilton’s Republic”

This entry is part 5 of 9 in the series Hamilton's Curse

HamiltonsCurse“Conservatives who genuinely believe in limited government are not generally exposed to the Hamilton who at the Constitutional Convention called for a king-like permanent president and who subsequently dedicated himself to undermining the limits on governmental power laid out in the very Constitution he championed in the Federalist Papers.”  This quote from page 171 of the book Hamilton’s Curse is a bit of an understatement, as most Americans, conservative and otherwise, are generally exposed to the results of Hamilton’s efforts in our government, our systems of education, business and finance, to name but a few.  The bowl of Hamilton’s poisoned fruit is spilling over with plenty.

As a matter of fact, the 1930’s saw the implementation of Hamiltonian ideology in a key area:  education.  Charles Beard, et.al., introduced the “economic basis” theory of government, which has since poisoned generations of students, policymakers and jurists with this pernicious theory.  This “economic basis” theorem is pure Hamiltonian, and is a consequence of the shift that happened in this country from 1913 onward (with the implementation of the income tax and the Federal Reserve laying the groundwork for a wholesale restructuring of our form of government.)

DiLorenzo lays out the case for the interface of big business interests supporting big government intervention programs (think the Bush/Obama “stimulus” packages and your on the right track); a laundry list of federal “welfare” to business interests that caps out at a neat $90 billion per year.  Other studies have shown it to be greater than that in some instances.

Couple this with a “justice” system at the federal level (Supreme Court) who from 1937-1995 couldn’t find a single piece of federal legislation to be unconstitutional, and you get the complete Hamiltonian package of an “energetic” government with the “fuel” of commercial interests to drive it onward.

This is an amazing record for a body that routinely passes unconstitutional legislation (and did during that period too).  The key to this amazing record is a wildly broad reading of the interstate commerce clause which basically posits that pretty much any form of human behavior has relationships to interstate commerce, and can therefore be regulated by federal statute.

So what are some of the fruits of this poisonous philosophy of “government uber alles?”  Here’s just a representative sample of the results:

–the use of federal grants to states as a control mechanism to kill states rights (think ‘highway funds’ or ‘crime prevention grants’ and you see the link);

–the use of the Incorporation doctrine (through the 14th Amendment) to apply the strictures on the federal government through the Bill of Rights to the states as a restriction on state sovereignty;

–adoption of the “higher law theory” of jurisprudence:  allowing the courts to sidestep the rules of the Constitution in order to apply novel legal (but extra-constitutional) theories;

–the use of executive orders by the President to control or seize power, thus allowing the Executive to act as dictator;

–manipulation of the monetary supply by the Federal Reserve in order to create economic instability as a precursor to radical shifts in power through legislative enactments;

–attaching citizens to the federal government, tying bondholders and others to a primary interest in the growth of government.  Woods illustrates it this way: “According to economist Gary Shilling, 52.6 percent of Americans in 2007 received significant assistance of some kind from the federal government.” and;

–creating an international mercantilist empire, the needs of which lead to agressive expansions of military force and presence.

These are just some of the ways the fruit of Hamilton’s philosophy has ripened (and rotted on the vine).  Woods sums up the chapter’s theme:  “The final characteristic of empires, according to Morley, is that they are sold to the public in grandiose terms about spreading blessings for all mankind, when in reality their main purpose is to allow those who pull the strings of the empire to accumulate money and power.”

Hamilton would be proud of seeing the modern results of his efforts.

Book Review, Taxation, Public Policy Radar, Private Property, Commentary, Public Policy Principles News, Economics, Biblical Worldview

Hamilton’s Curse- The Hamiltonian Revolution of 1913

This entry is part 4 of 9 in the series Hamilton's Curse

The American Revolution (incorrectly so-called, at least between 1775-83) didn’t end with the Treaty of Paris in 1783. Once the British were defeated the real American Revolution, the internal battle over the form of the American government would take, began. The real revolution was fought between conservatives (the deliberately mis-named “Anti-Federalists” whom we will refer to as the “true federalists”), who originally wanted to retain but amend the Articles of Confederation and a group of nationalists (whose press-savvy leadership adopted the misnomer “Federalists” who we refer to in this article by their true view- “nationalists”) who desperately wanted to eliminate the state governments as sovereign entities and tried to use the Constitutional Convention, unsuccessfully, to do it. Just to clarify- there were Federalists who were true federalists, mostly in the south. That’s why we use the term “nationalists” instead of “Federalists” to differentiate these two groups using the same party label.

Since the nationalists had failed to eliminate the state governments at the convention they devised a plan under the leadership of Alexander Hamilton to subjugate them by adopting a new constitutional hermeneutic clearly not supported by the text of the document. The hermeneutic they adopted said, in effect, whatever authority is not expressly forbidden to the federal government by the Constitution was permitted to it, including the powers reserved to the states and to the people alone. And the method they chose to impose this hermeneutic on the new federal government was to pack the judiciary branch with its adherents.

The battle to subjugate the states see-sawed for 126 years. From splits over a national bank and foreign policy during the Washington administration to Jefferson’s “revolution” of 1800 to the War of 1812, the Monroe Doctrine, Jackson’s “Tariff of Abominations,” the nullification and secession crises, battle over the Bank of the United States, the Missouri Compromise, the Mexican War, “Manifest Destiny,” the Kansas-Nebraska Act, “Bleeding Kansas,” the Dred Scott decision, the “Secret Six,” John Brown’s raid and state treason trial were all merely the warm-ups to the real showdown between nationalists and true federalists over the Constitution and its proper interpretation- the War Between The States. The military victory of the nationalist northern Union over the federalist southern Confederation seemed to answer the question of constitutional interpretation and the nature of the Union by force. But questions answered by force of arms are rarely actually settled.

Even after a victory by force of arms the nationalists realized that there still existed in the language of the Constitution elements of state sovereignty and stiff controls on the growth of size in the federal government in the form of the minting and value of money and restriction of direct taxation (like income taxes). Nationalists knew that those parts of the Constitution that covered these restrictions intact could not be pushed aside by nationalist judicial reinterpretation, something Thomas Jefferson warned against –

Our peculiar security is in the possession of a written Constitution. Let us not make it a blank paper by construction.

Nationalists knew this because even a Supreme court packed with their cronies simply could not create by construction an argument that made explicit prohibition of direct taxation impermissible. That was demonstrated when the Supreme court declared the first two federal income taxes unconstitutional in 1872 and 1896. They just couldn’t get the job done by simply declaring they had the power to pass a tax and attempting to justify it by manipulating the meaning of the clear words of the Constitution.

Nationalists also knew that they had to stop the 10th amendment to the Constitution from being used to stifle federal usurpation of state and local authority as had been done before 1861. The only way to accomplish this was to remove the state governments’ representation in the federal Congress. They had to strip the authority to choose Senators from the state governments and place that authority in the hands of a more easily manipulated body with a short memory and nationalize it as much as possible. They were creating a super-representative with a term length guaranteed to keep the average voter from remembering that a Senator was a profligate tax-and-spender for the first 41/2 years of his term, especially if he supported some showy but meaningless legislation that allowed him to claim that he had been a “true fiscal conservative” his whole term (sound familiar?) during the final 18 months of it.

Last but certainly not least, nationalists understood that their grip on power would be tenuous and their ability to manipulate the populace would be limited without complete control of money and credit. They needed a national bank with the ability to nationalize interest rates and a fiat money supply which could be inflated or deflated to help manipulate voters, especially around presidential election years.

DiLorenzo explains in this chapter how all of this was accomplished within the span of a single year- 1913. He also explains that this was not the result of recent “progressive” tinkering as some historians have claimed but the result of deliberate and concerted efforts by men dedicated to accumulating and centralizing power in a national government at the expense of state and local governments over more than a century.

He also explains that the movement has had several incarnations during that period. Hamilton and his followers were advocates for a high tariff to “protect infant American industry” and an American form of Mercantilism.

Later, Henry Clay modified Hamilton’s vision into his “American System” of corporate welfare for road and canal building (which bankrupted several states, including Lincoln’s Illinois) and other “vital” industries, a national bank to “create credit” for these schemes and centralization of power in Washington, especially the power to tax.

Lincoln, calling himself Clay’s political heir, then further modified and implemented Clay’s system by claiming that the federal government had the “right” to keep states from seceding from the union by force of arms, thus stripping the 10th amendment of any real meaning, and tacitly claiming that it was necessary for northern corporate welfare that southern tariffs continue to be collected. Since he no longer had southern revenues to pay for the war to coerce them back into the union, he forced a graduated income tax (including withholding) through Congress claiming that it was constitutional because it was an “indirect direct tax,” making a mockery of the constitutional prohibition against direct taxation without apportionment.

I have included some media to illustrate what is meant about how nationalists think about the Constitution. Especially illustrative of the ultra-nationalist “living document” theory of constitutional interpretation is this conversation between Judge Andrew Napolitano and Rep. James Clyburn (D-SC) on the constitutionality of the federal health care law. Napolitano is taking the strict constitutional constructionist position (and dropping the ball on federal intervention in education matters).

[youtube]http://www.youtube.com/watch?v=00Xcqp46A64[/youtube]

In this article, Republican party “big tent” proponent, self-titled “conservative” and  naturalized American citizen born in Canada, David Frum, completely fails to make the case that the health care law is somehow constitutional. He does, however, expose his position as a nationalist in the Hamilton-Webster-Lincoln tradition as described earlier by adhering to the arguments stemming from the constitutional position described for that group of thinkers.

By the late 19th century it became clear to nationalists that they still had one obstacle in their path; the Constitution. The language in certain sections of the constitution simply could not be adequately de-constructed by re-interpretation and changes HAD to be made.

Hence the concerted efforts by nationalists to get the 16th and 17th amendments passed. Unfortunately, there was such a complete lack of understanding among the citizenry of what money and its purpose and function were, let alone the constitutional restrictions connected with the coining of it and the regulation of its value, that there was very little protest when the Federal Reserve System, a privately owned and operated national banking system, was created by law in complete violation of the Constitution, in the same year that the 16th and 17th amendments were finally passed. Thus, the last vestiges of the original American Republic  disappeared in a single year. The Revolution of 1913 completed what was started in 1861-5. The conversion of the United States from a federated republic of autonomous states ruled by law under a Constitution which limited the powers of the federation government to a single government entity free from limitations of its power by decree of its own courts and driven by the “will of the people” as manipulated by government/media for the “common good.”

DiLorenzo explains how this all took place in the course of a few short months and what the devastating results have been in the years since.

Taxation, Education, Events, Public Policy Radar, Private Property, Economics, Biblical Worldview

Another Policy Institute Board Member to Teach at Freedom Action

This entry is part 1 of 3 in the series Freedom Action Conference 2010

Freedom Action Conference

This Just Announced!

The director of the Institute For Principled Policy and the CEO of Principled Consulting, LLC Barry Sheets will be  teaching a session at the 2010 Freedom Action Conference on the subject of “Running a Grassroots Political Campaign on a Shoestring.”

This is just one of the many sessions that will be held at Valley Forge. DON’T MISS IT! Follow the links to FreedomActionConference.com, and register for the conference today to get the Early Bird registration discount.

Public Policy Principles News, Economics, Biblical Worldview, Taxation, Public Policy Radar

Where Is The Money Coming From?

The video below is a humorous look at the European economic crisis, sometimes called the PIIGS Crisis (Portugal, Ireland, Italy Greece, Spain lending their first letters to the acronym). It’s actually very funny in an extremely unsettling way. Have a look and judge for yourself. From the Australian comedy team Clarke and Dawe.

What’s not so funny is that the question that is asked repeatedly- “But where is the money coming from?”- is THE pivotal question of the day.  Since most economists are Keynsian it is assumed that these countries economies MUST be bailed out in order to keep the world economy from falling like dominoes. But of course that presupposes several things. The primary presupposition is that “failure is not an option.” Well, of course it’s an option.

[youtube]http://www.youtube.com/watch?v=H0a_FA_J6Sw[/youtube]

As any mortgage payer can tell you, if you can’t make your house payment the mortgage company will take it away from you. Well, at least that was the case in the recent past. Many branches of government are now attempting to make it possible for mortgagees to keep their houses without bothering to make the payments. No one is even bothering to try to make any kind of rational argument for why government should interfere with the mortgage contract in favor of the borrower at the expense of the lender. The arguments are all purely emotional, playing on the natural feelings of pity (and as we will demonstrate in a moment, envy) in the listener. But the facts are that it is dangerous and counterproductive to not allow failure. That is because, eventually (paraphrasing Margaret Thatcher) you run out of other people’s money. This principle is exactly the same for governments as it is for individuals and families.

The consequences of failure for families is bankruptcy and damage to the ability to borrow money. This is not necessarily a bad thing because it forces the individual or the family to do what it should have done in the first place; to buy only what is needed and to save for special expenses and pay for them in cash. This can wreak havoc on families who have come to expect to live the “good life” on credit and can lead to marital strife and, often, divorce.

The same can be said for countries, except that citizens of bankrupt countries who have come to expect to live the “good life” in the form of “cradle-to-grave” care with guarantees of food, clothing, housing, transportation, etc. paid for by the public treasury filled in large part by taxes levied progressively against the more productive members of society, rather than by the proceeds of their own labor. As these nations begin to exhaust the capital available from their more productive elements to pay for the support of the less productive elements of society, they have no choice except to either borrow from nations which do still have capital available or default on all obligations. The latter can be accompanied with threats against neighboring nations of impending unrest leading to civil war or  revolution which could cross borders into neighboring nations also on the verge of economic collapse.

The now obvious danger lies in the second major presupposition which is that that there is some large (Marxists and some Keynsians believe inexhaustable) pool of capital somewhere that can be tapped for these bailouts. The nurturing of this idea breeds an attitude of entitlement to the fruits of others’ labors. That is, the successful must be forced to bear a large portion if not the lion’s share of the burden for those who are not successful or refuse to try to become successful because they have no incentive to do so.

This is usually sold as the more “fortunate” being required to support the “less fortunate” but of course that begs the question. What makes some more “fortunate” than others? Usually it’s a combination of wit, the ability to calculate risk, proper timing, management savvy, knowing the market, filling a need, etc. The word “fortunate” implies that there is luck involved. None of the things listed describing the “fortunate” include luck as a factor, do they? That’s because it’s hard work to make a fortune. But it’s very easy to convince people who had nothing to do with creating the wealth that they are somehow entitled to a piece of the pie that was baked by someone else.

So, after an indefinite period of governments artificially “creating” wealth by inflation (actually a form of confiscatory taxation) and seizing more and more of the capital that would otherwise invested by the wealthy in order to create even more wealth in the private sector we find that there isn’t anything left to confiscate for redistribution. As Gary North demonstrates in this article “There Is No Money,” once that point is reached, and we’re getting dangerously close to that precipice, there is nowhere to go but default and that spells the end of the welfare state gravy train.

Of course, we here in the United States are not in any way inoculated against what is going on in Europe. We owe China billions,  if not trillions, for the US bonds they hold. Yet we have pledged huge amounts of money, over $108 billion dollars, to bail out central banks worldwide. Forty billion dollars of that is going to Greece so that they can continue to provide cradle-to-grave care for a people who have come to expect to be carried by their government whether or not they work. Don’t even try to convince them they should sacrifice by becoming more productive.

Since many of these loans are from the International Monetary Fund (IMF) they must theoretically be repaid for the member states to be able to continue to be eligible to continue to borrow. Let’s ask a question then. Who do you suppose would loan you money at all, let alone at a high interest rate, if you disclosed that not only were you had spent 14%  more than you made last year and that when you already had a personal debt that equaled more than 115% of your entire yearly income and were expecting to spend significantly more than you make this year? No one who had even a rudimentary sense of mathematics would. And yet this is where Greece, and several other countries in Europe stand currently. And this doesn’t include Central and South America, Africa or Asia, each of which have countries at least as bad off.

And so we ask- Where is the money coming from?

Taxation, Public Policy Radar, Private Property, Commentary, Public Policy Principles News, Economics, Biblical Worldview

An Open Letter To Rep. John Boccieri

To the editor:

Though I address this letter to the editor, I am really addressing this to our 16th district congressman, Representative John Boccieri.  Congressman, it is well known that you first voted in opposition to the recently passed health care bill, but then shortly before the final vote changed your position and voted for this bill.  You have released some public rationale for your change, but since your vote was such a crucial vote in this very important decision affecting many of us in your district I am requesting that you publicly explain some things to your constituents.   Would you please address these issues?  I am sure many others share these questions and concerns:

  1. The administration is calling this health care bill a transition, what President Obama called a “fundamental changing of America” with more to follow.  Could you please explain philosophically what this means to you and how you want America to “fundamentally” be changed?


  2. In supporting this Bill, I assume you believe that health care is a fundamental right that is owed to every American, could you then explain what the basis for this fundamental right is since I do not see it in the Constitution or in Natural Law?


  3. Socialism is defined as central government control or oversight of economics, I’ve read and taught such socialists as Robert Owen, Marx, and Stalin and it looks like socialism to me; do you understand and accept it as socialized medicine, why or why not?


  4. Can you explain how this Senate version of the health care bill is a significant improvement over the one that you voted against in the House?


  5. Since you were a former state house representative how do you expect the financially strapped State of Ohio to pay for the loss of Medicare funding for Ohio that will occur with this Bill?


  6. The Senate version you voted for supports that the government should pay for abortions, that those of us who are pro-life should subsidize abortion.  Can we now assume that you support tax-payer funded abortion?  How do you reconcile that to your Roman Catholic faith?


  7. Physicians are divided on this bill.  Some reports say that as many as 30% of general practice physicians may resign their practices with the activation of this bill.  Can you explain to us how we can increase and improve medical care when there will be more patients and fewer general practice physicians?


  8. Section 52.10 of the Health Care Bill has a provision in it that allows the government to establish a “ready reserve” private army.   Why is this hidden in a health care bill?  As a person with a military background do you really support the establishment of a new private army?


  9. The health care bill has inserted a segment into it that removes the oversight of student loans from the banks into the direct hands of the government.   There are good reasons on both sides of this issue.  The question is, why do you support this hidden in a health care bill without permitting any transparent public debate on the issue?

Thank you for your kind attention to these issues.

Mark Hamilton.

Dr. Hamilton is an associate professor of philosophy at Ashland University where he has taught for 28 years.  He is also the NCAA Faculty Athletics Representative at Ashland University.  He currently serves as the board chairman of the Institute for Principled Policy

Gambling, Commentary, Public Policy Principles News, The Vote, Taxation, Education

The WRFD Town Hall Meeting- A Review

From the WRFD WebsiteThis author has been teaching an adult Sunday school class on God and Government (using Gary DeMar’s book of the same name as a guide) at his church. Class members (who are currently viewing David Barton’s The Keys to Good Government) are being convicted of the necessity to examine not just the public lives of those who want to be stewards in high office but to also examine their private lives, as well. They are seeing, some for the first time, that private character matters in the behavior of public officials.And some are awakening to the necessity of electing men who are not just Christian but actually apply their faith to all of their life, including their exercise of duty while in office.

You may think this means a position advocating hiring  private detectives to look in bedroom windows and such. You would be wrong. What is being advocated is the examination of the fruit of the faith of candidates and office holders. Many are shocked to learn that the word that is translated as “minister” in some versions (“servant” in some others) is a title used for both civil authority and ecclesiastical authority strongly implying that the admonitions for office holders of Exodus 18 and 1Timothy 3 apply to both offices. The Timothy passages tell us to look to the way a man conducts his family business as an indicator for whether he is capable of handling higher office. That is because how a man manages his family is an indicator of how well a man disciplines himself and maintains his relationship to God. This follows from the idea that a man faithful to God is a man who applies his faith to the management of his family and will also do in the management of his duties that come with higher office, whether civil or ecclesiastical.

Sadly, a man’s faith in God is no longer a guarantee that his family, business or duties of higher office will be handled in a godly manner. Modern pietistic Christianity has bought into the secular humanist argument (made popular by Col. Robert Ingersoll a militantly anti-Christian crusader of the 19th century) that a man’s life can be compartmentalized into separate spiritual and worldly spheres of influence. Thus, a man can be a pillar of his church and completely corrupt in the conduct of his personal and business affairs and his duties of higher office.

If you have paid any attention to recent Supreme court justice confirmation hearings, you will have heard nominees questioned about their faith. To a man, these nominees have declared that they were men of faith and, astonishingly,  that their faith would have absolutely no bearing on any decision they would make from the bench. Frankly, a man who can compartmentalize his faith to this degree is far more frightening than a man who applies his faith to all aspects of his life as the  foundational operating philosophy. That man’s decisions will be predictable based on a knowledge of the law that emanates from his faith. A man who does not apply his faith as a governing philosophy will be like a philosophical nomad traveling from place to place in search of a temporarily green place to nurture his philosophical flock.  This seems fine until one day everyone discovers that all of the ground the nomad traveled has been made barren through his abuse of it. Think in terms of modern Supreme court decisions where justices turn every which way, examining European law for example,  searching for legal philosophy on which to base decisions when all they need do is apply biblical case law as courts have done since their inception here in the early 17th century.

As part of the Sunday school class, this author made the observation that not only was the average Christian compartmentalizing his faith when choosing candidates for higher office, but that so-called Christian leadership, who should, theoretically, know better, actively participate in making it more difficult to discern which candidates for civil office are worthy of the Christian vote. One of the things I had in mind (though not by a long-shot the only thing) were the things I saw and heard at the recent WRFD town hall meeting.

Several members of the Institute for Principled Policy’s governing board were audience participants at the town hall meeting and we were there from about 2:30 pm for the pre-show until about 5:00 pm. At the outset it should be made clear that the host of the program, Pastor Bob Burney, did his best to make the town hall meeting what he promised it would be; open and informative. How do I know this? The format of the meeting was that the participants would write questions out on a pre-printed form and submit them to one of the programs producers or one of the floor volunteers. They were reviewed for things like language and coherence (I presume) and then handed to Pastor Burney.

It is this writer’s opinion that Pastor Burney is a Christian who is not afraid to ask tough questions of political candidates to ferret out their positions on issues. This is because he read a question that this writer had submitted to find where John Kasich, candidate for Governor, stood on the second amendment. He didn’t change the wording, or soften the question in any way. Why so sure? This writer wrote the question. It read approximately like this-

Keeping the phrase from the 2nd amendment…”shall not be infringed…” in mind- how can a law that prohibits the ownership of a gun on the basis of caliber, firing rate, magazine size or stock configuration not be an infringement? If you agree that it is an infringement then please explain your vote to restrict my ownership of guns on this basis as a congressman

Sad to say, this question was read during a news break and so the radio audience never heard it. But the studio audience did. And they also heard the 2-3 minute long answer which completely failed to address the specifics of the question. The audience present heard Kasich declaim using phrases taken directly from the politician’s rhetorical cliche handbook. Things like “I agree with the NRA (National Rifle Assoc.) more than I do my wife” and “I own a gun.” They also heard Kasich imply that he the had NRA’s endorsement. He doesn’t.

Why does all of this matter? Why should a Christian care one way or another about a candidate’s votes in Congress? After all, Kasich has a “conservative” reputation and his wife and children were there with him, he has his kids in Christian school, doesn’t he? That’s a great question because it aims right at the heart of the issue of how Christians are supposed to evaluate candidates for office. And the sad fact is that Christians have been misled by those in leadership to think about candidate evaluation in completely the wrong context.

Look again at the rationalizations listed above. In every instance they are based on outward appearances. Yes, Kasich is nominally “conservative.” But that word can be defined in many ways by many different people and groups who award that title. One group’s conservative vote might be another’s progressive vote in Congress. The standards are variable. In fact, by a constitutionalist’s (defined as someone who subscribes to a strict literal interpretation of the meaning of the US Constitution) standard Kasich is conservative to moderate on economics (OK on taxes, flawed on spending) with a moderate progressive streak on social issues. In short he is a so-called “big government” conservative. That’s why the second amendment question quoted above is of vital importance.

How so? In order to understand we must look at what it means to be a representative. All government structures of God have certain characteristics. They are both representative and covenantal. Governments of all jurisdictions self, family, civil, church) are representative in two directions. The chosen representative represents the authority of God to those within his jurisdiction and those people in his jurisdiction back to God. With that in mind, it is easy to see that a people who despise God will seek poor representation who also despises God.  In return as a judgment God will give them the poor representation of and to Himself that they ask for and deserve.

So what is the covenant aspect and why does it matter to civil government? A covenant is a contract. According to a biblical view of government, it is a contract in which God is a party to the contract as both the initiator and arbiter of the contract. God gives the parties to the covenant a choice. Obey the stipulations of the covenant and see earthly and eternal rewards or disobey them and receive earthly and eternal punishment. There is no negotiating the terms of such a contract and neither is there an opt-out. Believers or not, human beings are subject to the terms of the covenant. The covenant applies to all aspects of life including the political.

You might be thinking “I thought there was a separation of  church and state, so how can God be involved in government?” Yes, indeed there is a separation of church and state in terms of jurisdictions (spheres of authority). The state is forbidden by God from engaging in or interfering with the jurisdiction reserved to His church. Likewise the church’s jurisdiction is to act in an advisory capacity to government secondarily. Primarily, the church’s responsibility is to teach the tenets of the Christian faith and how to apply those principles to every facet of their lives to believers . That includes the choosing of and acting as good godly representatives as described above. Hence, the secondary responsibility to act as an advisor to godly representatives in a teaching capacity.

Now to why the second amendment question is so important. When John Kasich and Ted Strickland were elected to Congress, and this goes for all Federal representatives, they swore an oath before God to “…uphold, defend and protect the Constitution of the United States of America…” Kasich violated that oath when he voted to give the federal government an authority that the highest law of the land denied to it. The authority to ban the sale of guns for any reason or in other words infringe upon the right to keep and bear arms. That makes him a willful covenant breaker.

Now, Kasich could have made an effort to repair his reputation as a covenant breaker by explaining that his bad votes had been mistakes and that he now regretted them on the basis of principles that he did not understand at the time. He made no effort to do so and instead chose to attempt to defend his votes and when it became clear that none of his attempts to side step the question were satisfactory he said simply “It is what it is.” That spoke volumes. He broke his covenant without remorse. To a Christian who has a consistent worldview, this made him someone who could not be eligible to be a representative in civil authority.

While Pastor Burney was as faithful to his promise as possible there were other participants that were not so faithful. The questioning noted above took place before the late arrival of Chris Long of Ohio Christian Alliance. This author had submitted several questions of a similar nature to the one above. All of them designed to determine where the candidate answering the question stood as regards the keeping of his or her oaths before God to “…uphold, defend and protect the Constitution of the United States of America…” All of them were very specific questions about parts of the Constitution very relevant to issues of the day.

After Mr. Long’s arrival the facilitation of the meeting was immediately transferred to his control and its nature instantly changed. Instead of allowing tough questions which were designed to get at the core principles of the candidates it became obvious that questions were being screened to protect candidates from hard ball questions. In fact, this writer watched from the front row just in front of the podium where the hosts and guests were seated as Mr. Long sorted audience questions, removing those presumably deemed inappropriate and handing the remaining soft ball questions to Pastor Burney to use.

You might be asking why this would be in light of what has been explained above. But if you think about this for just a minute you might see what’s happening here. It has already been discussed earlier in this posting. It is the habit Christians have allowed themselves to fall into of considering only the outward appearances of faith in looking for a candidate. And many Christian leaders have allowed themselves to be co-opted by a political party. This is nothing new. The Democratic Party co-opted liberal churches and leaders very early in the twentieth century. Conservative evangelicals, on the other hand, tended to avoid politics altogether during the period from about 1925 until the presidential election of 1976 when many of the were persuaded by Christian leaders to vote for a self-proclaimed “born-again Christian-” Jimmy Carter. Most conservative evangelicals found the policies of the Carter administration completely unpalatable, not to mention decidedly un-Christian and this disaffected new voting bloc was easily convinced to join the Reagan coalition inside the Republican Party. Christian leaders became aware that they had been the deciding factor in the Republican party in both keeping George Bush from getting the Republican  nomination (something they had obviously forgotten by 1988 and a fact that was a harbinger of future events with unpleasant consequences) and in delivering the White House to Reagan in 1980. They then began to try to leverage their power inside the Republican party to get some of the social and economic legislation that they believed the nation needed. In the process, many Christian leaders became Republicans first and Christians second. This culminated in the disastrous first and second Bush administrations.

With this short history in mind we have to ask ourselves why Christians continue to allow themselves to be used and, yes, seduced into supporting  nominal and  pseudo-Christian candidates by a political party which ignores, insults and does their level best to make sure that Christians stay home for primaries but insists they show their loyalty to the party and vote for candidates whose policies are repugnant to them in general elections. We also have to wonder how Christian leaders have come to the conclusion that they must either support and even work to protect  exclusively Republican candidates who are openly covenant breakers.

The answer lies in simply denying that they are indeed covenant breakers. The best way to do that is by maintaining a state of plausible deniability. If you never ask the tough questions you can easily deny knowledge that the candidate in question’s policies are in conflict with his oath of office. Sadly, this doesn’t often stop Christians from defending these candidates when their shortcomings are made public. Many will stop at almost nothing to protect their chosen candidates because they are nominally Christian (outwardly) and have the added ability to win elections. Winning with a nominal Christian candidate  who may be an oath breaker has become more important than providing a candidate with a consistent Christian worldview who could be a true oath honoring representative.  Earthly power beats godly covenant. Not hardly.

Taxation, Public Policy Radar, Commentary, Public Policy Principles News, Economics

“NO” On Ohio Issue 1

This entry is part 1 of 4 in the series 2009 Election Issues

Voting MachineIssue one should be a “no-brainer”.  It authorizes $200 million dollars from the State of Ohio coffers to be distributed to Veterans of the Persian Gulf, Afghanistan, and Iraq Conflicts.  This money would provide Ohioans who fought in these “wars” $100 per month of service , not to exceed $1000, while  soldiers stationed in other locations during these conflicts could receive $50 per month for months served, not to exceed $500.

These would be bonuses from the people of Ohio to show appreciation to those from Ohio who served.  It would also offer a $5000 death benefit to the families of soldiers killed in the line of duty.  This would continue practices established after previous wars and conflicts.   This is a quite appropriate action.

We owe those who fight on our behalf.  We are thankful for their service and appreciate their unselfish service.  The only trouble is that this money would be raised by bonds and would need to be paid back by the State to those who purchase the bonds.  And the State of Ohio does not have this money! It would need to be borrowed money.

How can the State of Ohio justify going into more debt?  And though IPP strongly supports the American military and appreciates the service of Ohio’s veterans, we do not believe that Ohio should make this type of commitment at this time without having the money in hand while knowing that the State would not be able to pay off its bonds from a State surplus.  Therefore though we support the sentiment of this amendment and support the military, but we believe the State of Ohio cannot pledge itself to this type of financial obligation.

Therefore we do not believe that this is the right time for such an action.  The State of Ohio is so desperate for funding that is relying upon legal gambling to rescue it from its financial dire straits.  IPP therefore proposes that this action be delayed.  So Vote No on Issue I.

We also propose an alternative:  that the State open a private account that it would oversee and that 100% of the proceeds go directly to these veterans divided equally among them and that this fund be an open fund contributed to on a voluntary basis by the citizens of Ohio.  This way the benefactors of the bravery or these soldiers, the citizenry, can tangibly and personally say “thank you” and that the State of Ohio would not risk further financial obligation and debt.  We believe this is the appropriate alternative to this bill and IPP pledges the first $500.00 into this account if this bill is voted down and the alternative voluntary account is established as a different option.   Then the State could run public service announcements to generate funding for this account while virtuous citizens could demonstrate their appreciation by voluntarily donating their resources directly into this fund.

Commentary, Economics, Taxation, Private Property

Some Wisdom On Property Taxes From A Very Odd Source

tax

“As Property Taxes Become a Real Burden, Can Backlash Be Far Off?” screams a headline from an article in the (gack….choke…) New York Times. We will avoid the obvious comments about stupid questions and proceed with the point. Of course the backlash isn’t far off!

Let us illustrate with an example. In Westerville there is a pending levy vote on 7.99 additional mills. For a house with a value of $170,000 (a reasonable middle-of-the-road value there) this will bring a tax increase of $475 per year which will mostly go to salary increases for administrators and teachers. But wait a second. Just last spring an additional millage was voted to a “capital improvements” renewal levy that will cost at least $75 additional dollars per year, leaving out the increase on a renewal caused by being taxed at the current valuation rather than the previous one (tens more dollars per year). Let’s call it an even $100 more per year. And, oh, yes. Forgot to mention that suddenly the fire department needs 2.7 additional mills. That’s about $160 more per year.

Now all of a sudden you’ve got, when all of the voted millages kick in, an additional $735 dollars per year for so-called “necessities” that aren’t really. That’s an additional $61.25 per month that is unavailable for spending on items from local businesses like restaurants, clothing, grocery and hardware stores. Throw in various “throw-away”  millage increases for mental retardation, libraries and various other socialistic tax vampire increases and you’re looking at nearly $900 per year in additional taxes over two years.

The theoretical house in Westerville 12 years ago may have been valued at, say, $122,000 then and $170,000 now (the obvious recent drop in value due to the market crash was, of course, ignored by the Franklin County Auditor who chose to hold the property valuation line in most cases. The Delaware County Auditor George Kaitsa claims that some values have actually increased  in the Westerville School District portions of Delaware County, proving that Fantasyland actually exists and the Delaware County Auditor is its Great and Powerful Oz. Pay no attention to that man behind the curtain). In other words, the house supposedly appreciated by about 39% in 12 years. But what about the taxes? That same house paid about $1750 per year in property taxes in 1997 and now pays about $3300 in taxes or about 89% more currently. The growth of current taxes has outstripped the value of the house by a factor of over 2 times. Now if the new millages pass and the taxes take effect that additional $900 per year comes into the picture and suddenly the $3300 per year in taxes is $4200 per year. That means in 13 years the value of the home will have grown 39% (assuming a continued flat real estate market) and the taxes will have grown by 140%, outstripping the growth in value by about 3.5 times. This thoroughly crushes the argument that failing to pass levies leads to decreases in property values. Who wants to move into a tax district where the taxes grow 3.5 times faster than property values? These are ugly numbers that should be a wake up call to voters who know them. We’ll see. The tax districts certainly aren’t being honest about it.

The article itself attempts to make some absurd points about New York real estate values and taxation. It is the New York Times, after all, the home paper of Pulitzer Prize winning Stalinist dupe and “progressive”  Lincoln Steffens (who once gushed of the Soviet Union of the late 1920’s and early 1930’s “I have seen the future- and it works!”) and hyper-Keynsian Paul Krugman who still thinks the fascistic economic misadventures of Hoover and Roosevelt that created a 17 year long “Great Depression” (24 years if you count how long it took for the stock market to recover) from a rather nasty but potentially short-lived recession (ala the very deep, short and little known depression of 1921) saved the country from the same “Great Depression.” For instance

Property taxes are high around here in large part, of course, because property values are high. But there are several reasons why property taxes are higher here than in other costly parts of the country. Unlike California and Massachusetts, there are few, if any, longstanding brakes in place that kept property taxes down (and, in California, led to disastrous revenue shortages). Public employees unions are powerful and politically feared. And we’ve come to expect good services — top-rated schools, nearby police in little boutique towns — and have been willing to pay for them.

Taxes are high because values are high? Well, no kidding but what about the points made earlier in this analysis regarding the rate of tax growth? Taxes are high because unions are feared? Why are such a tiny percentage of workers so fearsome? And frankly, the claim that California has been “deprived of revenue” due to property tax reforms is to approach the subject as if the state of California had a right to that revenue without recourse to a vote which proposition 13 brought to a halt in the late 1970’s. It doesn’t (Ohio failed to learn that ugly lesson and recently passed into law a bill that allowed school districts to offer permanent levies that feature tax rates that grow with property values without an intervening approval vote; hence the rapidly burning fuse on the property tax powder keg). And “good services” need not necessarily be expensive. Neither can they be cheap.

The fact is that school systems and bureaucracies dependent on the property tax have become bloated thanks to property value increases that far outstripped inflation. Now that the property value gravy train is derailed they all are, like all leeches, starved for more lifeblood in order to continue growing. That’s right. The real problem is not that these agencies need the funds to operate properly and efficiently, they need them to continue to grow. The fact is that what the Times is calling “good services” are often rapidly expanding unelected bureaucratic agencies that stifle small business and trample private property rights (zoning and planning boards, municipal business sign and licensing provisions, etc).

The so-called “good schools” are likewise unresponsive to parents who want their children to be taught how to read at an intelligent level and reason in a manner that comports with their personal values. The schools’  goal is to foster thinking that state and federal mandates designed to create worker drones (“School to Work”) requires. This “education strategy” has created such abysmally dull thinking and widespread illiteracy in the United States, which in the 19th century was able to boast of literacy in the high 90% range, that it now declines to keep statistics on the subject. So much for “good services.”

The cost of the growth of government is tacitly admitted here

…several reasons why property taxes are so high: unreasonable state mandates piled on local governments; income tax dollars inequitably distributed back to local governments; far too many local governments — more than 10,500 in New York — that need to be consolidated or eliminated; fraud and waste; and economic stagnation producing no expansion in the property tax base. You could throw in crippling Medicaid costs and unsustainable pension costs.

The specter of unfunded mandates rears its ugly head. Also, what’s with “redistribution” of money from the state to local governments? Why is the money being taken from those jurisdictions in the first place? Money cannot be taxed and run through a bureaucracy without scraping off and, frankly, wasting significant percentages of it (conservatively 70% and up). Why not just drastically cut state taxes (and corresponding mandates) and allowing the local governments to go to voters for what they actually need to run without intervening and ultra-expensive bureaucracies? The alleged fraud and waste at the local level is obviously only compounded at the state and federal levels which are far less responsive to electoral safeguards. It’s a lot harder for crooked politicians to survive in small towns than it is in Albany or Columbus or Washington DC (and a lot less expensive). Everybody knows who and what you are in Podunk.


The last 2 paragraphs of the article tells the tale.

Gerald Prante, an economist with the Tax Foundation in Washington, said at least people feel they get something tangible from their local taxes and can tolerate them if they believe they’re getting what they paid for “If I told you I spent $40,000 on a car, it doesn’t tell you much unless you know what kind of car,” he said. “If it’s a Lamborghini, it was probably a good deal. If it was a Saturn, it’s not such a good deal.”Thus, for all the angst, the fact that most local school budgets still routinely pass indicates we might be more likely to grumble than to cut close to home.

The problem is that many suburbanites who bought the luxury car a few years back now can barely afford the Saturn.

Are taxpayers actually looking at the costs versus the return yet? When they do- WATCH OUT! And help spread the word.