Posted on 10/03/2008 1:39:48 PM PDT by BGHater
Ron Paul says that the Paulson plan is unconstitutional. So does Michele Malkin. Newt Gingrich hinted at constitutional problems but said outright that the plan was un-Republican. I heard a southern House Republican tell Larry Kudlow that the plan was unconstitutional and unprecedented.
I think they're wrong. Don't believe me? Then ask Alexander Hamilton.
You see, we've been here before. As George Washington was taking the oath of office, U.S. credit markets were in full meltdown. America faced a credit crisis in which debt obligations were being purchased by banking houses at 25 cents on the dollar. Paulson's predecessor was a guy named Hamilton, and Bush's predecessor was a guy named Washington. Hamilton wrote up a plan (called "Report on the Public Credit") in which he proposed that the Treasury department buy the troubled securities from the private sector, thus restoring the collapsing credit market.
Jefferson was opposed. He hated financial markets and manufacturing, which he thought were the industries of the past, associating them with Europe from which America had just broken away. He believed the future lay in small farming. Jefferson also believed that the Hamilton bailout plan was unconstitutional, and he talked Madison into fighting the plan in the House. Populists in the House said that since the debt was not created by the federal government, the federal government ought not to put itself on the hook.
Hamilton's case was simple. When any part of a nation participates in a massive repudiation of debt, the creditworthiness of the whole nation is damaged. Hamilton saw this as a national problem in need of a national solution. He argued that the whole nation would benefit from a return to a well-functioning credit market, with low interest rates fueling growth.
(Excerpt) Read more at forbes.com ...
hahaha...as if anyone in this government gives a damn about the Constitution!
Constitution? What’s that?
...Interesting post, but, I did see some response to the article...I’ll hold my tongue until I find more infomation...Still, you get a BBBBravo from me for raising a good point!!!
They bought treasury bonds, not busted derivatives from private banks.
But you see that's the problem with Hamilton's argument. Seeing a problem which in his opinion required a national solution did not make his plan constitutional. It just made it political.
...in any event, its one thing to pay off publicly incurred (state) debt (when fighting for independence) and paying off bad loans made by private institutions to private lenders. Moreover, Hamilton’s plan was to issue bonds, and for the government to pay the interest, not the principal...it wasn’t a handout to private investment firms and mortgage lenders.
“Constitution? What’s that?”
Its the place where the secret “reset button” is hidden.
It would be nice of we would use it.
History has clearly shown that Hamilton was right on this one, while Jefferson and Madison were wrong.
Ditto as to Hamilton’s and the Federalists’ support of a strong central bank — which Jefferson and Jackson were basically stupid to oppose
But then Hamilton, the Federalists and their Whig heirs were dead wrong about tariffs.
So nobody’s perfect!
“When any part of a nation participates in a massive repudiation of debt, the creditworthiness of the whole nation is damaged.”
What a crock. This author stretches the case a wee bit here. It wasn’t just “any part” of the nation, it was the state governments whose debt Hamilton wanted to assume. His rationale was clever, I must admit. If wealthy businessmen speculated in bonds held by the U.S. government, they’d be more likely to support the survival of the U.S. government, which was less than certain long-term. The survival of the U.S. Government is more than stable now, given our two hundred plus year tradition of following Hamilton’s lead by sticking our noses in the states’ business.
Hamilton proposed all sorts of things that didn’t fit Madison’s (correct) interpretation of the Constitution (i.e. the federal government does not have any power that the Constitution does not explicitly give to it). In suppose we should call him prescient for realizing before the Jeffersonians that the government can do whatever it says it can do, so long as politicians can agree.
I think it’s a problem that won’t let you go to the bathroom, a bowel thing. I think that’s how the government interprets it.
Its nothing but a slap in the face by elected politicians. Sadly, Wall Street & foreign lobbyists carry more sway with them than their constituents.
Looking at all of the earmarks and unfettered spending capability while seeing the poor financial state of the economy and citizenry is sobering. Perhaps if they had suggested some reform to prevent the situation from recurring I would not be so cynical. Maybe some housecleaning in treasury, SEC and at the fed. Perhaps a loan rating system and some full disclosure about their substandard loans. Perhaps some stimulus & guarantees for interbank lending or some redefinition of acceptable cash reserves. Maybe adding some specifics to questionable accounting standards. Perhaps some absolute minimum standards as to what kind of loans that Fannie & Freddie will buy. Lots of economists/investors/bankers have valid ideas, but I see none of that in the bill. Only alot of free money.
“Ditto as to Hamilton’s and the Federalists’ support of a strong central bank — which Jefferson and Jackson were basically stupid to oppose”
The history I read doesn’t prove Hamilton right on that point. What happened between banks? The largest economic expansion in the history of mankind. What happened after we got the Federal Reserve System? Unprecedented inflation and ever closer boom/bust cycles.
However beneficial a central bank is, the Constitution does not alow us to have one. Madison was right. And no, it isn’t implied by the coining and value-setting clause. If the Constitution explicitly called for the establishment of a post-office, it could have called for a central bank. It didn’t.
I wonder if all the big government republican apologists who bashed ron paul in the primary still think he is a kook? None of the other republican presidential candidates would have opposed this bailout. (maybe Trancredo)
So....sue the bastids!
Tanc voted for it. Duncan Hunter voted against it.
And in any case, history isn’t over yet.
Jefferson’s ideas may prove perfectly correct in retrospect a century from now.
Good for Hunter! Sorry I had faith in Trancredo... :)
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
88888888888888888888888888888888888888888888888888888888888888
Constitution of the United States > Article III: The Judicial Branch
Section 2
Clause 1:
The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction;—to Controversies to which the United States shall be a Party;—to Controversies between two or more States;—between a State and Citizens of another State;11—between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.
888888888888888888888888888888888888888888888888888888
seems to me that if Section 8 of this “Act” remains as above (from Bush’s orig 3 pg proposal), the whole Act must be tossed as Unconstitutional....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.