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Monday, May 14, 2012

Constitutional Is As Constitutional Does

I've quoted it before, and I'll quote it again:

There's glory for you!'

'I don't know what you mean by "glory",' Alice said.

Humpty Dumpty smiled contemptuously. 'Of course you don't — till I tell you. I meant "there's a nice knock-down argument for you!"'

'But "glory" doesn't mean "a nice knock-down argument",' Alice objected.

'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'

'The question is,' said Alice, 'whether you can make words mean so many different things.'

'The question is,' said Humpty Dumpty, 'which is to be master — that's all.'

Alternately, instead of Lewis Carroll we could go the Sinclair Lewis route: I tell you, an honest man gets sick when he hears the word ‘constitutional’ today, after what Ron Paul did to it!

Okay, enough with the fucking Preamble...

I really do get a sick feeling when I hear people throw around words like 'unconstitutional' in lieu of actual arguments, particularly from people whose knowledge of the actual content--let alone historical interpretation and precedent--of the Constitution is tenuous at best.  One reason I pick on Ron Paul more than someone like Newt the Bombastic is because the latter actually tries to put together a cogent theory and doesn't have legions of Gingrichistas polluting the air with ignorance, whilst the former just waves his old man hands and tells people to get off his parchment.

Of late, the biggest constitutional bug up my ass has been regarding the nature of money in our Republic--something that actually goes back to a debate I had with a Tenther during my 2010 campaign.  Recently, South Carolina has been considering a measure that makes gold and silver coin legal tender in the state.  If enacted, SC would join UT in fulfilling a major fantasy of Tenthers, Ron Paul and his Istas, who think they've discovered some centuries old stealth tyranny and a majick elixir that will make everybody rich.

Y'see, if we get rid of Federal Reserve Notes and ultimately, the Federal Reserve itself, we can go back to those happy ante bellum days when the money-grubbing Yankees stayed north of Mason-Dixon and our negrahs was happy, singing songs about bluebirds and such.  Or something.

No, really, here's the original SC bill (from last session):

The South Carolina General Assembly finds and declares that the State is experiencing an economic crisis of severe magnitude caused in large part by the unconstitutional substitution of Federal Reserve Notes for silver and gold coin as legal tender in this State.

If only we didn't have the Federal Reserve issuing its notes, we never woulda had a housing crisis and bankers going off the reservation, as it were.  It's not entirely clear if the General Assembly is suggesting that the Fed itself is repugnant to the Constitution--it's not, from where I sit--or if they're claiming a constitutional failure on their part for allowing FRNs to be used to pay taxes and whatnot.  Whatever, it's the same glib use of 'unconstitutional' to provide some weight to their otherwise ethereal claims.  Small wonder that section was excised in later versions of the bill.

The Framers themselves were not monolithic in their philosophy about anything, including legal tender: 

Mr. Govr. MORRIS moved to strike out "and emit bills on the credit of the U. States"-If the United States had credit such bills would be unnecessary: if they had not, unjust & useless.
...
Mr. GHORUM was for striking out, without inserting any prohibition. if the words stand they may suggest and lead to the measure.

Col. [FN20] MASON had doubts on the subject. Congs. he thought would not have the power unless it were expressed. Though he had a mortal hatred to paper money, yet as he could not foresee all emergences, he was unwilling to tie the hands of the Legislature. He observed that the late war could not have been carried on, had such a prohibition existed.

Mr. GHORUM. The power as far as it will be necessary or safe, is involved in that of borrowing.

Mr. MERCER was a friend to paper money, though in the present state & temper of America, he should neither propose nor approve of such a measure. He was consequently opposed to a prohibition of it altogether. It will stamp suspicion on the Government to deny it a discretion on this point.
...
Mr. RANDOLPH, notwithstanding his antipathy to paper money, could not agree to strike out the words, as he could not foresee all the occasions which [FN21] might arise.
...
Mr. BUTLER. remarked that paper was a legal tender in no Country in Europe. He was urgent for disarming the Government of such a power.

Mr. MASON was still averse to tying the hands of the Legislature altogether. If there was no example in Europe as just remarked, it might be observed on the other side, that there was none in which the Government was restrained on this head.

Mr. READ, thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelations.

Mr. LANGDON had rather reject the whole plan than retain the three words "(and emit bills")

On the motion for striking out

N. H. ay. Mas. ay. Ct ay. N. J. no. Pa. ay. Del. ay. Md. no. Va. ay. [FN23] N. C. ay. S. C. ay. Geo. ay.

Of interest to me is that, while there is not enumerated power to print paper money, no prohibition against it was explicitly made in Art I, Sec 9, and the arguments during Convention do allow for some discretion of the part of Congress as part of its borrowing and other powers.  Knox v Lee/Parker v Davis (1870) fundamentally settled the question, and SCOTUS affirmed in 1884:

[W]e are irresistibly impelled to the conclusion that the impressing upon the Treasury notes of the United States the quality of being a legal tender in payment of private debts is an appropriate means, conducive and plainly adapted to the execution of the undoubted powers of Congress, consistent with the letter and spirit of the Constitution, and therefore within the meaning of that instrument, "necessary and proper for carrying into execution the powers vested by this Constitution in the government of the United States."

Now, of course just because something is constitutional doesn't mean it's a good idea.  As Justice Oliver Wendell Holmes observed:

It has given me great pleasure to sustain the Constitutionality of laws that I believe to be as bad...to mark the difference between what I would forbid and what the Constitution permits.

It might be permissible, but still stupid.  So is legal tender stupid?  Some people, including Ron Paul, think so.  Paul's Free Competition in Currency Act (linked above) aims to repeal an important section of our monetary law:

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

Because surely what we need is to return to the Halcyon Days when you could choose from any number of currencies!  I guess that's why William Stanley Jevons (of Jevons Paradox fame) observed:

In matters of currency self-interest acts in the opposite direction to what it does in other affairs, as will be explained, and if coining were left free, those who sold light coins at reduced prices would drive the best trade.

This conclusion is amply confirmed by experience; for at many times and places coins have been issued by private manufacturers, and always with the result of debasing the currency.
...
In my opinion there is nothing less fit to be left to the action of competition than money.

Much like 'constitutional', Paul and his ilk throw around 'competition' as though it alone justifies dismantling so much of our economic system.  No economic model, no substantive argument, just use some talisman words and everything becomes crystal clear to true believers.

Apropos of nothing, I've got a metric ton of Liberty Silver to sell you...

ntodd

Show a little "yuhyoohappy" during the NTodd Ain't Ann Romney Fundraiser *

May 14, 2012 in Constitution, Schmonstitution | Permalink

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Comments

And perhaps the TeaTards will force the US to produce a $1T platinum coin, next time they hold the debt limit hostage.

Now, I think that would be a *good* thing, because it would force TeaTards to argue against "hard currency", it would make the numismatists get all itchy with desire, and generally make a nice little circus with a great big FU to people who deserve it most.


Posted by: Snarki, child of Loki | May 15, 2012 9:59:11 AM

Concur on all counts!

And as a coin collector myself since childhood, I would love to get my hands on that coin. Heh.

Posted by: NTodd Pritsky | May 15, 2012 12:00:03 PM

Make one yourself! Here's how:

1. Get a Sacky dollar coin
2. Electroplate platinum on it: the law does NOT specify how much platinum is needed, so a 10 micron plating is enough.
3. Get a steel stamp from your local hardware store, just the letter "T"
4. Stamp the "T" right next to the "$1"
5. Voila! You're a trillionare!

Oh, yeah, it's legal tender, too.

Posted by: Snarki, child of Loki | May 15, 2012 1:44:10 PM

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