SmallGovTimes.com » Voices and Choices

States distancing themselves from the federal government

J. D. Longstreet — Mon, 15 Mar 2010 12:29:29 +0000

As I have observed over the past few months the “State Sovereignty Movement” continues to sweep the nation with well over three-quarters of the fifty states taking action, through their respective state legislatures, re-establishing their “sovereignty”.

NINTH AMENDMENT to the US Constitution: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

TENTH AMENDMENT to the US Constitution: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

It is being reported that there are over 40 states with state sovereignty declarations as of this writing. If true, that is heartening. There is no doubt the states have been relegated to second-class citizenship in the US. That is just WRONG and must be corrected!

We found reports on the Internet stating that THERE ARE 12 NEW STATE SOVEREIGNTY DECLARATIONS IN PROGRESS, RIGHT NOW!! THEY INCLUDE ALABAMA. NEBRASKA, Rhode Island, WYOMING, WASHINGTON, INDIANA, KENTUCKY, GEORGIA, KANSAS, MISSOURI, MISSISSIPPI, AND MARYLAND!

WYOMING is the newest constitutionally sovereign state. The bill was signed into law on March 8^th, 2010. Utah did the same on the 25^th of February 2010. The debate continues in my home state of South Carolina, but my guess is it will pass the state legislature and be signed into law by the “Sandlappers” very soon now.

Here in North Carolina, House Bill H849 “supporting the state’s right to claim sovereignty over certain powers under the Tenth Amendment to the Constitution of the United States” has been filed.

Here’s the full text:

Whereas, the Tenth Amendment to the Constitution of the United States reads as follows: “The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the states, respectively, or to the people;” and

Whereas, the Tenth Amendment defines the total scope of federal power as being that specifically granted by the Constitution of the United States and no more; and

Whereas, the scope of power defined by the Tenth Amendment means that the federal government was created by the states specifically to be an agent of the states; and

Whereas, today, in 2009, the states are demonstrably treated as agents of the federal government; and

Whereas, many federal mandates are directly in violation of the Tenth Amendment to the Constitution of the United States; and

Whereas, Section 4 of Article IV of the Constitution of the United States says, “The United States shall guarantee to every state in this union a republican form of government,” and the Ninth Amendment states that “The enumeration in the constitution of certain rights, shall not be construed to deny or disparage others retained by the people;” and

Whereas, the United States Supreme Court ruled in New York v. United States, 112 S. Ct. 2408 (1992), that Congress may not simply commandeer the legislative and regulatory processes of the states; and

Whereas, a number of proposals from previous administrations and some now pending from the present administration and from Congress may further violate the Constitution of the United States; Now, therefore,

Be it resolved by the House of Representatives:

SECTION 1. The North Carolina House of Representatives supports the State’s right to claim sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government or reserved to the people by the Constitution of the United States.

SECTION 2. The North Carolina House of Representatives urges the federal government, as the agent of the State, to cease and desist, effective immediately, mandates that are beyond the scope of any constitutionally delegated powers.

SECTION 3. The North Carolina House of Representatives further urges that compulsory federal legislation which directs states to comply under threat of civil or criminal penalties or sanctions or requires states to pass legislation or lose federal funding be prohibited or repealed.

SECTION 4. The Principal Clerk shall transmit a certified copy of this resolution to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, and each member of the North Carolina Congressional Delegation.

SECTION 5. This resolution is effective upon adoption.

Read more on North Carolina’s efforts to re-establish its sovereignty HERE.

I took a look in my crystal ball and, for the life of me; I could see no indication of the effect the sovereignty movement will have on future relations between the states and their “agent”… the federal government. Only time will tell.

However, I must tell you, it does this old southern boy’s heart good to see “State’s Rights” again brought to the fore in the United States.

James Madison, The Founder we refer to as “The Father of the Constitution,” wrote the following: “To preserve the Republic, it is in the hands of the people. We have staked the whole future of American civilization not upon the power of government, far from it. We have staked the future of all of our political institutions upon the capacity of mankind for self-government; upon the capacity of each and all of us to govern ourselves, to control ourselves, to sustain ourselves according to the Ten Commandments”

As with all Americans we “Southerners” get a lot of things wrong. But we have been right on the issue of “State’s Rights” all along. See, southerners had a bit more than just a signature invested in the creation of the Constitution, itself. There was never any doubt, in our minds, about who “the greater” and who “the lesser” was/is in this association of states and federal government. I must tell you, I am more than a little pleased to find the names of several northern and western states, and even northeastern states, included in the list of the names of the states involved in the State Sovereignty Movement.

Washington would do well to take notice, serious notice, of this movement. The Congress and the President may have forgotten, but it is “the boss” filing this complaint. It is very easy to sit in Washington and spend North Carolina’s money, or the money of the folks from Texas or Oklahoma. But, believe me when I tell you that we have been paying attention and we do not like having our state’s treasuries looted by a heavy-handed federal government.

The current Congress would also do well to read up on the “Ordinance of Nullification” passed by my home state of South Carolina in 1828. You can read it for yourself HERE. Suffice it to say State Sovereignty is NOT a NEW issue in this country. It appears we will have to visit it – yet again.

Ron Paul to Census Bureau: it’s none of your business!

Steve Adcock — Fri, 12 Mar 2010 21:46:00 +0000

The Census has grown well beyond what the Constitution authorizes and includes invasive questions that, according to Texas Representative Ron Paul, can be used against you.

“The census should be nothing more than a headcount,” Paul wrote, citing Article 1, Section 2 of the Constitution that allows for the enumeration of citizens every ten years. “It was never intended to serve as a vehicle for gathering personal information on citizens.”

Paul voted against a Congressional resolution last week that encouraged participation in the 2010 census for precisely these concerns. The census includes questions regarding people’s names, addresses, race, home ownership and other irrelevant inquiries that go beyond the Constitution’s explicit authorization, he said.

“It is not hard to imagine that information compiled by the census could be used against people in the future, despite claims to the contrary and the best intentions of those currently in charge of the Census Bureau. The government can and does change its mind about these things, and people have a right to be skeptical about government promises.”

If the census really wants to encourage participation, Paul, said, then it should limit its questionnaire to one simple question, “How many people live here?”

Assemblyman wants city government to ban salt in restaurants

Steve Adcock — Fri, 12 Mar 2010 17:39:30 +0000

In further evidence that the police state in some parts of the United States is alive and well, one assemblyman in New York wants to use government to ban the use of salt in New York City’s restaurants, a move that chefs and restaurant owners call “absurd”.

Democrat Felix Ortiz introduced bill A10129 that implements $1,000 fines, per incident, to restaurants that add salt to any of the foods that they serve to customers. “No owner or operator of a restaurant in this state shall use salt in any form in the preparation of any food for consumption by customers of such restaurant, including food prepared to be consumed on the premises of such restaurant or off of such premises.”

“The consumer needs to make their own health choices,” remarked Abigael’s executive chef Jeff Nathan. “Modifying trans fats and sodium intake needs to be home based for optimal health. Regulating restaurants will not solve this health issue.”

“My Food, My Choice”, a NYC-based group dedicated to opposing the city’s move to legislate food preparation, is stepping up efforts to combat the apparent war on [certain] foods – dubbed “the food police” on the group’s web site.

“The Bloomberg administration is pursuing a sweeping sodium reduction campaign that makes NYC residents test subjects and pressures food companies to drastically change their products regardless of the desires of consumers. Worse yet, this bureaucratic agenda is not based on sound science, but on political science and alarmism,” the group claims.

Legalizing drugs may save $50 billion

Steve Adcock — Fri, 12 Mar 2010 01:30:30 +0000

A complete legalization of drugs throughout the United States would save governments at all levels nearly $50 billion per year, according to a study by Harvard economics professor Jeffrey Miron.

While the majority of the savings would be seen primarily a local levels, according to the report, the federal government would accrue more than $15 billion in savings from ceasing to enforce expensive and wasteful drug regulations.

“The report also estimates that drug legalization would yield tax revenue of $34.3 billion annually, assuming legal drugs are taxed at rates comparable to those on alcohol and tobacco,” according to Miron’s summary of his findings.

“The fact that legalization would reduce government expenditure and raise tax revenue is among the least significant arguments for legalization. Far more important benefits are increased freedom for drugs users, reduced crime, improved public health, greater respect for civil liberties, and lower violence and corruption in source countries,” he added.

Read the complete report here.

Final ‘reform’ push: Twisting arms

Michael D. Tanner — Thu, 11 Mar 2010 20:58:20 +0000

President Obama’s attempts to ram health- care reform through an increasingly reluctant Congress are starting to resemble a really eventful episode of “The Sopranos.”

Whether or not you believe former Rep. Eric Massa’s bizarre accusations of locker-room confrontations and conspiracies to drive him from office, there is no doubt that the Obama administration and its congressional allies are willing to use every trick in the book to get this bill passed.

They’ve already bought votes with pork and special deals — the “Louisiana purchase” ($300 million to bolster that state’s Medicaid program, which swayed Sen. Mary Landrieu); the “Cornhusker kickback” ($100 million to Medicaid there, sweetening the pot for Sen. Ben Nelson), and Florida’s “Gator Aid” (a Medicare deal potentially worth $5 billion, a hefty price for Sen. Bill Nelson’s vote). Plus the millions for Connecticut hospitals, Montana asbestos abatement and so on.

Expect the tactics to get even dirtier now.

Nor were the Obamans willing to let a little thing like election laws stand in the way. They rewrote Massachusetts law to allow for an appointed senator to hold office for several months, hoping to get the bill through before the special election that Scott Brown ultimately won. Their plans spoiled, they even considered holding up Brown’s seating to let the appointed senator continue to vote on health care — until public outrage forced them to back down.

And, of course, there has been an unprecedented willingness to ignore congressional rules — from the failure to appoint a “conference committee” to negotiate differences between the House and Senate bills, to their current plans to use the reconciliation process to bypass a Republican filibuster.

Expect the tactics to get even dirtier now.

Those who support the president can expect favors. No sooner had Rep Jim Matheson (D-Utah) suggested that he might be willing to switch his vote and support the latest version of ObamaCare than his brother was nominated for a federal judgeship.

Alan Mollohan (D-W.Va.) is also on the undecided list. And, purely by coincidence no doubt, the Justice Department just announced that it is dropping an FBI investigation that has been swirling about the congressman. Gosh, if only Charlie Rangel were one of the undecideds.

Those who oppose the president can expect the political equivalent of a horse head between their sheets.

Some of this is just traditional electioneering: On-the-fence Arkansas Sen. Blanche Lincoln is getting a primary challenger with some backing from the national Democratic machine.

But some of it is much nastier. Massa’s story may have credibility issues, but other opponents of the bill are also starting to feel the heat. For instance, Rep. Bart Stupak (D-Mich.), whose opposition to abortion funding has become one of the bill’s biggest hurdles, is now seeing attacks on his ethics.

MSNBC host Rachel Maddow recently questioned the legality of the low rent that a conservative Christian group charges Stupak for his DC apartment. She even noted ominously that disgraced South Carolina Gov. Mark Sanford stayed at the same building. The liberal blog Daily Kos has picked up on the charges and suggested that both the IRS and the House Ethics Committee investigate.

“Politics ain’t beanbag,” as Mr. Dooley noted. Presidents have always twisted arms and made deals. And when two-thirds of voters are opposed to your plans, you may have no choice but to play hardball.

But when Obama promised to change the way Washington does business, we didn’t think he meant making it a “family” business.

The sad truth about the health care bill

Neal Boortz — Thu, 11 Mar 2010 20:54:57 +0000

Barack Obama has been touting this fact, and he did it again yesterday during his speech in Missouri, that if you pass healthcare reform the cost for families currently receiving coverage would go down by “14% to 20%.”

If you believe this line of BS, you are truly drinking the Obama Kool-Aid. Even the aptly-named Dick Durbin knows that this fact is not true. He said just yesterday on the floor of the Senate: “Anyone who would stand before you and say well, if you pass health care reform, next year’s health care premiums are going down, I don’t think is telling the truth. I think it is likely they would go up, but what we are trying to do is slow the rate of increase.”

So who are you going to believe? Well let’s turn to the non-partisan Congressional Budget Office. An analysis of the Senate healthcare bill – the plan Obama wants the house to pass — found that healthcare premiums would actually RISE by $2,300. The CBO analysis says that “the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.” How did the CBO come up with those figures? Well I will tell you …

Premiums would be 27-30% higher because coverage would be broader. The law, for example, requires that all policies cover maternity care, prescription drugs, mental health & substance abuse and no denial of coverage for pre-existing conditions.
Premiums would be 7 to 10 percent lower b/c of changes to the way the individual market is structured.
Premiums would be 7 to 10 percent lower b/c of an influx of more people, many of them healthy, forced into the insurance market.

Considering those facts collectively, premiums would rise 10 to 13%. How does Obama come to his “14 to 20%” figure? He simply adds #2 and #3 and forgets about #1. Pretty clever, huh?

The standards themselves are, frankly, irrelevant

Neal McCluskey — Thu, 11 Mar 2010 20:54:03 +0000

Three days ago I reported that draft, grade-by-grade, national curricular standards would soon be released by the Common Core State Standards Initiative. Yesterday, they were. (If you want to get a sense for what the proposed standards are follow the link to them. Don’t bother with the appendices, though, unless you really want to get into the weeds.)

Naturally, in the coming days lots of people will be offering heaps of commentary about what the standards do or do not contain. That’s not my main concern (though reading through the English standards I am dubious that mastery of them could be easily or consistently assessed). You see, the content of the standards is largely irrelevant because the main problem isn’t what the standards are, but standardization itself.

As I’ve blathered about on numerous occasions, it makes little sense to expect all kids to master all the same things at the same rates. All kids are different – they have different talents, desires, and abilities — and to impose one, “best” progression on them is simply illogical.

Another problem with imposing a single standard nationwide — and yes, this will be imposed, unless states suddenly decide they don’t like getting their citizen’s tax dollars back from Uncle Sam – is that it prevents competition between curricula. And that, in turn, kills innovation, the lifeblood of progress. So unless these standards have achieved perfection — and I’m pretty sure they haven’t — it’s a very dangerous thing to make them the end-all and be-all.

Finally, no matter how brilliant the draft standards, there is no reason to believe that they will drive meaningful educational improvement. Government schools will still be government schools, and the people employed by them will still have very little incentive to push kids to excellence, and every incentive to game the system to make the standards toothless. And no one yet has offered a decent proposal, other than school-choice supporters, for getting around that very inconvenient, public-schooling truth.

All of these problems help to explain why there is no convincing empirical evidence that national standards drive superior educational outcomes. Unfortunately, most national-standards advocates will talk themselves blue in the face about what’s in the standards, but avoid at all costs the question of whether standardization makes sense in the first place.

Pentagon shooter pot scandal grows

Cliff Kincaid — Thu, 11 Mar 2010 19:18:36 +0000

Left-wing California politicians have been talking about legalizing and taxing marijuana to save the state from bankruptcy. But thanks to the state’s most notorious pothead, Pentagon shooter John Patrick Bedell, that vision may now go up in smoke. Bedell’s easy access to “medical marijuana” in California is quickly becoming a scandal that threatens the well-funded movement to increase access to the weed by legalizing it statewide―and perhaps nationwide.

Bedell had a doctor’s approval to get “medical marijuana” in 2006 and was reported by his father to have a “medicinal marijuana card” when he was declared missing in January of this year.

Facing a backlash over reports that Bedell was a psychotic pothead, the illegal-drug lobby is accusing anyone who brings up anything negative about “medical marijuana” of engaging in “reefer madness,” a term once given to chronic marijuana use of the kind that ultimately resulted in Bedell’s downward spiral and death in an exchange of gunfire at the Pentagon.

On top of the Bedell tragedy comes the apparent overdose of actor Corey Haim, who smoked marijuana at the age of 16 before moving on to other drugs, including cocaine, crack, stimulants and Valium.

Before Bedell brought discredit and attention on the “medical marijuana” movement, John Podesta, head of the Center for American Progress (CAP), had actually suggested on ABC News that the taxing and legalization of marijuana on a national basis could be a way to pay for Obama’s health care plan. Podesta is considered to be doing the bidding of billionaire George Soros, the hedge-fund operator who finances CAP and has funneled millions of dollars into the drug legalization movement.

The Bedell case is starting to focus public attention on what has been happening in California, where Bedell got his “medicine” and posted bizarre Internet commentaries about the virtues of dope. Alluding to the refusal of the Obama Administration to use federal resources to combat the growing “medical marijuana” problem, Roger Morgan, the executive director of the Coalition for a Drug-Free California, told AIM that “It is unthinkable that the Commander-In-Chief, whose primary responsibilities are to protect people and our tax dollars, could allow the untenable situation that exists in California today with de facto legalization.”

The report, Organized Crime in California Annual Report 2007-08, prepared by the California Department of Justice, states that, “California is the largest producer of marijuana in the United States and law enforcement agencies believe that Mexican and Asian DTOs [Drug Trafficking Organizations] and white criminal groups are responsible for the majority of marijuana cultivation in California.”

The Bedell case, Morgan said, should serve as a wake-up call. “Since the potential for psychosis is heightened the earlier one starts smoking, the fact that we have more kids smoking pot than tobacco in some places, like San Diego, should give cause for concern to every citizen, particularly parents and politicians,” he said. “Marijuana is a factor in California’s 24.2 percent High School drop-out rate, which costs taxpayers $46.4 billion annually. We can certainly anticipate an increase in physical and mental health problems, as well as traffic accidents, welfare and crime, as more young people start smoking pot because of the contrived perception that it is medicine and legal. In turn, many more will inflict the disease of addiction and psychosis on themselves and society will bear the burden.”

However, after California passed Proposition 215 legalizing medical marijuana in 1996, media celebrities such as Bill Maher, dubbed one of the top ten “celebstoners” by the National Organization for the Reform of Marijuana Laws (NORML), began to vigorously promote the weed. “The only thing bad about marijuana is it makes you eat cookie dough,” he joked.

But after Bedell’s shooting rampage, which resulted in two guards being shot and wounded, no one is laughing.

NORML reports, “Maher made pot a big part of his late-night TV talk shows―first on ‘Politically Incorrect’ and now on HBO’s ‘Real Time with Bill Maher.’ Also a stand-up comic, he’s given speeches at NORML and MPP [Marijuana Policy Project] conferences (he’s on their boards) and hosted a NORML benefit concert in Los Angeles in 2004. ‘Real Time’ received a 2006 Stony Award for Best Cable-News Series.”

A “Stony Award” is given by High Times, a magazine that glorifies the drug culture and claims that the “Golden State” is actually “pot paradise” and home to 250,000 residents with “proper state documentation” to obtain “cannabis medicine.”

The January 2010 High Times has an article headlined, “Cannabis Cures Cancer.”

For Bedell, however, the drug was a disaster. Before he showed up at the Pentagon, he was pulled over on February 1 by the Washoe County (Nevada) Sheriff’s Office for erratic driving and a failure to signal when turning, and then busted for unlawful possession of marijuana and driving under the influence of drugs. Bedell told the police he hadn’t smoked dope for weeks but reeked of the weed when ordered out of his car. He had 2.6 ounces of the drug and a pink marijuana pipe.

Even before it was revealed that Bedell had shot two Pentagon guards and was a marijuana addict/psychotic, questions were being raised about how doctors in California were approving access to the drug. The state medical board has investigated a number of doctors for being overly lax in issuing recommendations for the weed.

It turns out one “medical marijuana” card, in the form of a “physician’s statement” from Dr. Roger Stephen Ellis, was issued in 2006, entitling Bedell to access to marijuana for one month. It is not known who provided the marijuana card Bedell’s father said he had earlier this year.

Ellis, known as the “potdoc,” was the subject of an official inquiry in 2002 into how he was practicing medicine. According to a document posted on his own website, the inquiry was closed, on the condition that he would be in compliance with the state statute regarding the care and treatment of patients. Assurances to this effect were made on his behalf by his legal counsel, who told Ellis that he would be “bulletproof” to any complaints as a result

According to the physician’s statement signed by Ellis, Bedell was given access to the dope for “chronic insomnia,” when insomnia can itself be a symptom of marijuana withdrawal.

Charles Lane of the Washington Post writes that “By the time of his appointment with Ellis, Bedell was already exhibiting troubling signs of mental illness, according to recent published interviews with his family and friends. He was also using marijuana excessively. Bedell’s loved ones’ anguish at his death may be compounded now by the knowledge that, at one important moment in his troubled life, a doctor gave him help obtaining more marijuana―as opposed to real help.”

With a marijuana card, people can go to various California “dispensaries,” where they disappear into a back room and return with marijuana of their choosing in brown paper bags. Oaksterdam University, also known as “Cannabis College,” holds classes for “students” on how to grow high-quality marijuana and meet the demand.

Lane is one of the few, perhaps the only, mainstream media reporter willing to publicly take on the notion that smoking crude marijuana somehow has beneficial “medical properties.”

Lane says that “the legalization of physician-recommended pot in California is a prescription for disaster because it authorizes the ‘treatment’ of a wide range of real maladies with a spurious ‘medicine’―marijuana―that might be ineffective or actually harmful.”

Pot advocates are accusing Lane of “reefer madness” and pooh-pooh the notion that marijuana is linked in any way to health problems.

However, journalists who are interested in the truth can witness what happened when British journalist Nicky Taylor decided to experiment with the drug by smoking it on a daily basis. She reported a frightening experience of panic and paranoia. “At one point during her investigation, scientific tests proved that, thanks to the drug, she had developed a level of psychosis well above that seen in individuals with schizophrenia,” a British paper reported.

Some of her experiences in Amsterdam, where marijuana is legal, were captured on video. Taylor, who said she had tried marijuana in college, reported, “This is really disturbing. It’s worse than being blind drunk. I’m scared. I seem to have worked myself into a bit of a panic attack and I don’t know why.”

Later, she said, “I have to say that was the worst day ever, ever, ever of my whole life. Inside I was absolutely petrified. At one point I was even too scared to get out of the chair. It was like a massive, massive panic attack. I got this stupid feeling that it sort of unlocked some sort of paranoia in my head and forever I am going to be paranoid.”

In this context, it makes complete sense that John Patrick Bedell believed that the government was out to take his rights away, including his right to smoke pot. His marijuana use fueled his paranoia and made him susceptible to accepting other bizarre conspiracy theories, such as the 9/11 “inside job” nonsense made popular by such figures as radio show host Alex Jones and CAP senior fellow Van Jones.

Utah excludes residents from federal gun regulations

Steve Adcock — Thu, 11 Mar 2010 16:50:10 +0000

Utah has become the latest state to pass a law that essentially tells Washington bureaocrats that federal regulations regarding the sale and manufacture of weapons and ammunition are null and void within the state’s borders, according to reports from WorldNetDaily.

Utah joins two other states, Tennessee and Montana, in their bid to remove excessive federal gun regulations from their states’ residents.

“There are times when the state needs to push back against continued encroachment from the federal government,” said Utah Governor Gary Herbert in a statement. “Sending the message that we will stand up for a proper balance between the state and federal government is a good thing.”

According to Gary Marbut of the Montana Shooting Sports Association, several other states have similar legislation in the pipeline, including Oklahoma, Idaho, Wyoming, Alaska and South Dakota.

“It’s about states’ rights. Firearms are the vehicle, but the subject is states’ rights and an overbearing federal government,” Marbut said.

The Consumer Protection Agency?

Josh Fulton — Thu, 11 Mar 2010 01:59:31 +0000

I had heard about this, and hadn’t really thought much about it. I guess if I had any reactions to the idea, they were probably positive. Elizabeth Warren seemed likable and well-meaning, and if she’s pushing for it, why not?

Then I started watching this video of her on Charlie Rose, and I started thinking “Oh, it’s another regulatory agency.” One person’s “protections” are another person’s “regulations.”

I’m not exactly sure what this agency would “protect” or “regulate,” but the example Elizabeth Warren used was credit card contracts. The problem is they’re too long. Well, I think most people would agree with that, but how do we get the change most people want?

I think we can see how other “regulatory” agencies have worked in the past. Look at the SEC who let Bernie Madoff continue his Ponzi scheme for years despite warnings. Look at the FDA whose ‘Food Safety Czar’ is a former Monsanto chief lobbyist. Government regulatory agencies have a funny habit of becoming “captured.”

The solution isn’t government regulation, but free market regulation. Only the free market can determine what businesses deserve to succeed or fail. Some people may say that we have free market regulation now and that it hasn’t worked, but no, we do not have a free market in just about any sector of the economy.

Let’s just take a look at two different time periods to see how government intervention affects the economy in general. In 1920, industrial production fell 25%. Unemployment increased nearly nine fold. Yet the government did not intervene much, and the economy was in recovery beginning in 1922.

Compare this to 1930, when industrial production had only fallen 12% from its 1929 peak, but because of government intervention such as the Smoot-Hawley tariff and the National Industrial Recovery Act, the country spiraled into the Great Depression. No American depression had ever lasted so long.

Even today, government “regulations” are ever-present in virtually every industry. Between 2001 and 2009, there were 159 “economically significant” new regulations created. “Economically significant” means that they cost the economy $100M or more. The regulation ranged from boosting fuel economy standards for light trucks to continuing a ban on bringing torch lighters into airplane cabins. In 2009, $42.7B was spent just on “regulatory activities,” meaning issuing and enforcing regulations.

How does the government intervene in the credit card market? Well, the most obvious way is through the Fed setting the federal funds rate (even though the Fed is technically a “quasi-governmental” agency.)

The Fed allows Chase, BoA, and Citi, who collectively control over half of the nation’s outstanding credit card debt, to borrow money at .25%. That’s not a market rate. It’s a rate that’s created by the Federal Reserve. Anyone who wants to borrow at the same rate has to go through the hoops of chartering a bank. Is it any surprise that we begin to reward bad actors when we make it so difficult to enter a market?

The solution to “consumer protection” is to get rid of government-caused distortions in the market in order to allow competition, not to create new “regulators.”

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