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September 24, 2018 | How the Supreme Court Failed Americans

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

FRANKFURT, GERMANY – It’s hard to know where to start. We connect the dots… but the dots just get wackier.

The stock market – already outrageously overpriced – goes higher!

The deficit – already way out of control – just gets worse!

America’s empire – already overstretched, over-indebted, and oversized – just gets bigger.

And the foundation myths – on which the whole edifice rests – just become further and further detached from reality.


Pack the Court

Last week, we looked at one of them. The Supreme Court, say the mythmakers, is the last bulwark protecting our freedom and guaranteeing our Constitution.

That’s what it says on paper. That’s what you learn in civics classes. And that’s why Supreme Court justices must spend their whole lives beyond reproach… unblemished by sin… unsullied by mistakes… and untainted by the kind of flesh-and-blood goofiness that afflicts the rest of humankind.

Only angels can join the Supremes; nominees must show their wings to gain admittance.

The measure of a great court is how courageous it is – that is, how far its judgements inconvenience the powerful and upset popular opinion. If the court is merely echoing the cronies and the mob, why bother having it?

In the mid-1930s, the august justices considered many of Franklin Roosevelt’s programs to be unconstitutional. In response, Roosevelt proposed to “pack the court.” Whenever a justice hit 70 years of age and failed to retire, the president would simply appoint an additional judge.

The plan never went into effect. The court backed down. And by 1938, the New Deal was no longer unconstitutional… It was the law of the land.

The angels flew along with the wind, not against it.

And since then, we can’t think of a single opinion that has significantly slowed the growth of the Deep State… nor any opinion that has been deeply at odds with public opinion.


Deep State Court

Thanks to the cowardice of the Supreme Court, the Deep State grows… and the power of states and individuals declines.

Since the 1930s, the feds have intruded into almost every aspect of our lives, with no enabling provision in the Constitution. Where were the Supremes?

And where have they been since the 1950s, when the feds began a long list of wars… without Congressional declaration?

And where have they been hiding out since 1971, when the feds substituted paper money for the gold and silver called for in the constitution?

And where in the Constitution does it give the feds the right to set prices… and to make one group of citizens (stockholders/Wall Street/cronies) richer at the expense of another group (wage earners)?

Where are the Supremes now… when the police, using a foul doctrine called “civil asset forfeiture,” with no due process of law, steal more money than freelance thieves?

Where are they now… when the president – on his own say-so – imposes taxes on hundreds of billions’ worth of imported consumer items, claiming it is a matter of national security?

Today, the whole idea of an independent court upholding the Constitution is fantasy. Justices are chosen by one branch of the Deep State – the administration – and approved by another, the legislature. Senators grill them harshly to make sure they don’t have any funny ideas – such as protecting citizens from the feds.

The Supremes shirked. And now, POTUS has more power than George III… and the feds can do almost anything they please.


Re-Industrialize America

But now, let’s turn to the trade war… the South China Morning Post caught up with Steve Bannon and asked him what it was all about:

Bannon, who claimed to have helped Trump draw up the trade war plan, said that in the past, tariffs had been limited to imports of between roughly US$10 billion and US$30 billion. But the sheer magnitude of the more than US$500 billion in question this time had “caught Beijing off guard.”

“It’s not just any tariff. It’s tariffs on a scale and depth that is previously inconceivable in U.S. history,” Bannon said.

“They never envisioned that somebody would actually do this.”

He’s right about that. They probably never imagined Americans would do something that could have such catastrophic consequences for everyone – including the Deep State.

And maybe they had a scholar who was an expert on the U.S. Constitution. Surely, he would have told China’s leaders that the U.S. president lacks the authority.

Tariffs are taxes; only Congress is supposed to have the power to levy taxes.

And surely, in the debate that followed, it would soon come out that it is not the Chinese who would pay the tax, but Americans… and that the tax would directly damage U.S. industry and households.

And yes… so far, it looks like we were wrong. Trade is what fattens up the goose. Kill trade and you strangle the poor bird. Then, everyone goes hungry… including the Deep State foxes who were planning to eat it.

We predicted that Mr. Trump would back down as soon as someone explained it to him.

Apparently not. Bannon says the president is ready to go all the way, even if it threatens the whole shebang. From the South China Morning Post:

Bannon said the aim was not just to force China to give up on its “unfair trade practices” – the ultimate goal was to “re-industrialise America” because manufacturing was the core of a nation’s power.

NBC News gives us a hint of what “re-industrializing” could be like:

The impact of President Donald Trump’s escalating tit-for-tat over tariffs is already being felt, say auto industry experts. New car prices are beginning to rise, and auto exports are dropping.

But a new report warns that sales could plunge by as much as 2 million vehicles a year, resulting in the loss of up to 715,000 American jobs and a hit of as much as $62 billion to the U.S. GDP.

But our concern today is not the economic impact – which is obvious – but the wacky incoherence of it.

Where in the Constitution does it give the feds the power to decide what kind of economy we have? Beats us.

But it’s probably a good thing Mr. Bannon and Mr. Trump have not decided to turn us into a nation of hunter-gatherers.




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September 24th, 2018

Posted In: Bill Bonner's Diary

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