Wednesday, April 4, 2012

FDR, Obama and the Supreme Court

Amity Shlaes should be awarded the Nobel Prize for literature for her epic history of the Great Depression: The Forgotten Man. But, she won't. She won't because she portrays an historical and economically sound assessment of the facts of the Great Depression rather than the whitewashed history taught in our schools.

Much like the Obama Administration's profligate spending and castigation of the court, FDR greatly expanded government spending during his first term and used the Commerce Clause to attempt to regulate private businesses.

The Schechter brothers were butchers, the middle-men between the farmer who raised chickens and the retail stores who sold them. FDR's Justice Department sued the brothers for violating the National Recovery Administration's code of " fair practices." The NRA was an agency with dubious and unprecedented authority over private business which was later unanimously ruled un-constitutional by the Supreme Court. In the meantime, however, the small-business Schechter brothers were sued by Justice for violating an NRA code.

The case centered around a section of code which prohibited the selling of unfit produce. "Straight killing" a practice employed by the kosher Schechter brothers according to the Kasruth allowed clients to select their chicken (to ensure the good health of the bird) and the brothers would then slaughter it. The NRA did not approve of this kosher practice and that is how the Schechter's ended up in court. The case ultimately went all the way to the Supreme Court and was argued under the Commerce Clause. The court unanimously ruled in favor of the Schechter's against the government. The ruling argued--among other things--that "Extraordinary conditions do not create or enlarge constitutional power." The Justices argued that the NRA had "abused the Schecters...through unconstituional "coercive exercise of the law-making power."" (242)

Shlaes records a comment made by Justice Brandeis after the ruling to one of FDR's New Deal advisers: "This is the end of this business of centralization, and I want you to back and tell the president that we're not going to let this government centralize everything. It's come to an end." (243)

After this loss (and others) at the hand of the Supreme Court Justices, FDR acted. In an amazing act of hubris he determined he would "skip state ratification and simply send over to Congress legislation that would increase the number of justices from nine to a figure that could range as far as fifteen. For each justice who stayed past the age of seventy, a new one could be added." (302) FDR's stunning court-packing proposal to amend the Constitution without state ratification and to alter the Supreme Court's make-up was a step over the line that even the Democratic Congress could not stomach. But it was the public outrage that surprised many in Washington.

President Obama has employed many strategies out of FDR's playbook--most notably his attacks against the wealthy. But his recent politicalization and castigation of the Supreme Court is one move that, perhaps, should have been more carefully considered. His recent comments were a thinly veiled threat. An empty one, it would seem, given the Court's robust history of considering the Constitution first and foremost.

And given the American citizen's affinity for separation of powers to protect individual liberty.

Monday, April 2, 2012

Student Loan Default--A Question of Character

A few weeks ago I clipped a small article from Barron's which revealed some statistics on outstanding student loans. The numbers shake out like this: During the third quarter of 2011, a startling $85 billion of student debt was delinquent. There are 37 million borrowers with loan balances.

Last week I attended a presentation by Hillsdale College. They cited the student loan default rate at 28%. The percentage of Hillsdale students who defaulted? Less than .5%. And, sadly, both of those students died.

If you haven't acquainted yourself with Hillsdale. You should.