Home Building & Loan v. Blaisdell (1934) – Guest Essayist: James D. Best

Home Building & Loan v. Blaisdell (1934) started the modern trend of interpreting the Constitution to support popular passions. You can read the essay here or listen to it below.

Commentary—As California Goes, so Goes the Nation?

If the citizens neglect their duty and place unprincipled men in office, the government will soon be corrupted. — Noah Webster

My wife and I are vacationing in Southern California. The warm and sunny weather has made a perfect respite from the storms lashing our home in Nebraska. We both grew up in California, but moved out-of-state twenty-five years ago. We weren’t fed up with the place. A quarter century ago California was still livable. Actually, California is still livable, as long as you have piles of cash and a fondness for government.

Beltway elites like to fixate on a couple botched 2010 Senate races, but in truth that election was a rout for progressives. Republicans captured an additional 63 seats in the House of Representatives to win the majority, the largest midterm seat change in seventy years. Republicans gained 6 seats in the Senate, but not enough to gain control. Republicans won a record 680 additional seats in state legislatures. Five states saw both chambers switch from Democrat to Republican. In four additional states, Republicans flipped one of the chambers to give them control of both chambers. In three more states, Republicans increased their control in both houses, and in four states they picked up one chamber to split control of the legislature. Republicans also saw a net increase of six governorships to gain a national majority.

Commentary: How to Kill an Economy!

"I'm sure everyone feels sorry for the individual who has fallen by the wayside or who can't keep up in our competitive society, but my own compassion goes beyond that to the millions of unsung men and women who get up every morning, send the kids to school, go to work, try and keep up the payments on their house, pay exorbitant taxes to make possible compassion for the less fortunate, and as a result have to sacrifice many of their own desires and dreams and hopes. Government owes them something better than always finding a new way to make them share the fruit of their toils with others." --Ronald Reagan

When I was an economics major in college, I was taught that Franklin Roosevelt saved capitalism using Keynesian principles. The unchallenged assertion was that the sole reason the Great Depression lasted a decade was because New Dealers were too timid in spending borrowed money. In many economists’ minds, skyrocket spending to win World War II proved conclusively that huge deficits were the cure for slow growth. To a large extent, this is a rewriting of history. It didn’t happen this way.

Instead of spending our way back to wealth, two phenomena saved the American economy. Impending war forced Roosevelt to cease bashing business and the 80^th Congress elected in 1946 balanced the budget and undid the worst aspects of the New Deal.

Freedom’s Forge, How American Business Produced Victory in World War II by Arthur Herman does an excellent job of describing the shift from an anti-business bias to acquiescence of capitalism during Roosevelt’s third term. The new tolerance of a profit motive had a huge impact on the production of war materials. The United States manufactured two-thirds of all weapons and supplies used by the Allies, “yet the output of consumer goods was larger every war year than it had been in 1939, despite the restrictions and rationing. In 1945 Americans ate more meat, bought more shoes and gasoline, and used more electricity than they had before Hitler invaded France … total economic production in the United States had doubled; wages rose by 70 percent.”

Top Ten Reasons Government Can’t Cut Spending

“I have accepted a seat in the House of Representatives, and thereby have consented to my own ruin, to your ruin, and the ruin of our children. I give you this warning, that you may prepare your mind for your fate.” John Adams

Why is it so hard to cut government spending?

There are just so many reasons. Here're the top ten excuses carried on a 3x5 card by nearly every politician.

The Founders on Taxation and Debt

This has not been a particularly joyful season inside the beltway.  All we've seen is a lot of clamoring, to little effect. In the hinterlands, we hear the echoes of raucous debate about government spending, government borrowing, and government intrusion into our homes and business. One side yells that the only solution is to tax the rich until they squeal, while the other side of the aisle insists we must reform entitlements or go the way of Greece.

What would the Founders think about all this? Here is what they said in their own words.

“The people of the U.S. owe their independence and their liberty, to the wisdom of descrying in the minute tax of 3 pence on tea, the magnitude of the evil comprized in the precedent. Let them exert the same wisdom, in watching against every evil lurking under plausible disguises, and growing up from small beginnings.” —James Madison

“By any plain method of argument, as we are running the next generation into debt, we ought to do the work of it, otherwise we use them meanly and pitifully.”—Thomas Paine