The Constitution’s Commerce Clause, sometimes called the Interstate Commerce Clause, is found in Article 1, Section 8, Clause 3′s enumerated (or listed) powers to Congress: “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”. As McDurmon points out, the most significant abuse of the Commerce Clause has been in regard to the regulation of commerce “among the several States,” the scope of which has been dramatically expanded through the Supreme Court’s “progressive” interpretation of the Constitution. As noted above, the result is that Congress and the federal government now regulate (and control) virtually every aspect of American life.

McDurmon points out that the precedent-establishing 1824 Supreme Court decision of Gibbons v. Ogden firmly placed authority over the regulation of interstate commerce with Congress. He also points out that while this early decision expanded federal power, it also clearly recognized that there were limits on Congress’ power — specifically because the very existence of the Constitution’s enumerated powers “presupposes something not enumerated.” Stated another way, McDurmon explains: “the very fact that the Constitution designates a particular power to Congress, means automatically that the Constitution intended specifically to forbid what it does not designate.” This limited power perspective is key for properly interpreting the Founder’s intent regarding the federal regulation of commerce among the states — if anyone doubts this limited federal power standard then they need look no further than the Tenth Amendment for an explicit statement acknowledging that the states and the people retain extensive power.

In his article, McDurmon argues that the Supreme Court’s vast expansion of the Commerce Clause has created what amounts to federal tyranny. However, McDurmon offers hope for a return to a limited interpretation of the Commerce Clause and cites a recent Supreme Court decision as evidence. In fact, this 1995 decision, United States v. Lopez, has become what McDurmon calls an exit ramp from the abusive highway created by those favoring an expansive federal government.

Within the Lopez decision, the Supreme Court provides a history of their changing interpretation of the Commerce Clause spanning nearly two centuries. This history shows that embedded within many Court decisions expanding Congress’ Commerce Clause powers, the Court repeatedly acknowledged that there are also limits on these powers. In fact, such a viewpoint was the prevailing opinion until FDR’s New Deal.

Even in 1935 the Supreme Court limited Congress’ power by striking down part of the New Deal as unconstitutional. FDR responded by trying to expand the size of, or “pack,” the Supreme Court with new, sympathetic Justices. This move, however, was unsuccessful but provided significant pressure on the Court to be less critical of FDR’s expansive federal policies. The result of this influence became so noticeable that in 1937 the Supreme Court reversed itself and began to uphold New Deal legislation. The result was a huge expansion of the federal government’s role in all levels of American life.

However, the 1995 Lopez decision was different and departed significantly from the post-New Deal federal expansion trend. According to McDurmon, the significance of Lopez is this: it reaffirms that “despite all of this increase of tyranny in the area of Interstate Commerce, there still must remain a line drawn somewhere between the power enumerated to Congress and those forbidden to it and thus reserved for the states.” It clearly notes that while the federal government argued otherwise, real Constitutional limits on Congress’ Commerce Clause regulatory powers do in fact exist. The Lopez decision is very explicit in this regard:

To uphold the Government’s contentions here, we would have to pile inference upon inference in a manner that would bid fair to convert congressional authority under the Commerce Clause to a general police power of the sort retained by the States. Admittedly, some of our prior cases have taken long steps down that road, giving great deference to congressional action. The broad language in these opinions has suggested the possibility of additional expansion, but we decline here to proceed any further. To do so would require us to conclude that the Constitution’s enumeration of powers does not presuppose something not enumerated, and that there never will be a distinction between what is truly national and what is truly local. This we are unwilling to do.

In conclusion, upcoming Supreme Court decisions related to the Commerce Clause must now consider the impact of the Lopez decision — remember, Lopez essentially reaffirmed the pre-1937 understanding of the  Commerce Clause. With massive federal policy expansions like the “Obamacare individual mandate” very likely to be settled by the Supreme Court, McDurmon argues that in light of Lopez, this federal prescription could already be doomed. Since Lopez ruled against the government and its economic argument espousing even more federal powers, similar decisions in the future could reverse the tide of federal expansion. Such a shift would amount to a significant victory for the states and for personal liberty and would give advocates of limited government reason to cheer.

Image credit: Francesco Marino

There are a few possible reasons for this rather common occurrence. For starters, it could be because most people tend to take advantage of something that favors them even if it means “bending the rules” a bit. Given this scenario, they might support federal intervention when the outcome leads to something they benefit from or personally like. However, if that be the case, then maybe such individuals should reexamine their values and see if they really believe in the Constitution and its limited government requirements. Regrettably, after such an evaluation, some will find that they actually are not interested in expanding personal liberty but are instead seeking to govern outcomes and behavior.

Others, though, will evaluate their inconsistencies and see the folly of their ways. They now realize they had taken the path of least resistance toward a flawed outcome, the result of which was another step down the slippery slope of big government. Reforming themselves, they will do the heavy lifting necessary to correct their thinking and align their viewpoints with the Constitution. In diagnosing their mistake, they realize they failed to ask the right constitutional questions before seeking a government solution.

So what are the right constitutional questions to ask when evaluating the government’s role in addressing social problems? To explore this issue, let us look at a real problem that divides many on the limited-government side of the equation — drunk driving.

Few people of any political persuasion would argue that driving while drunk is a good thing. Period. In fact, most people can share personal horror stories about death and destruction caused by a drunk driver. That negative being the case, is it not then a good thing for government to severely crack down on such drivers? If so, would it not be easier to lobby one government — the federal government — to pass a law that would address this issue once and for all? Would not a single federal standard makes sense compared to the alternative of having to lobby all 50 legislatures across the country for the same thing?

These are reasonable questions that make logical sense to most people. Due to public awareness and outcry over the problems of drunk driving, enough people acted on these sentiments to do just that in 2000. The result was a new federal law signed by President Clinton that prodded the States to adopt a 0.08% and above blood-alcohol level standard for defining drunk driving. The States, faced with losing federal highway funds if they did not comply with this new standard, quickly enacted their own laws establishing this standard.

Sounds good so far, right? Well, that depends on how well one knows the Constitution. Three constitutional questions immediately come to mind regarding this touchy issue:

1. Is drunk driving a state or a federal issue?

2. Where does the Constitution empower the federal government to create national standards to penalize drunk driving?

3. Where does the Constitution authorize the federal government to mandate the States to adopt any drunk driving standard?

While legitimate constitutional questions should also be asked about the very existence of “federal highway funds” and the withholding of them as punishment, that is left for another article.  The important question within this context has to do with whether drunk driving is a state or a federal issue. If it is a state issue, then the federal government is not authorized to act and should remain silent — no matter how good or heartwarming the outcome would be for them to intervene. Unconstitutional federal intervention, even when done under the best of intentions, is simply wrong. Not only does it establish a bad precedent, but it leads to additional abuse as federal power is amassed at the expense of individual liberty and State sovereignty.

The Tenth Amendment allows the States great latitude and flexibility. This means they can act on many social problems that the federal government is prohibited from addressing. Since the Constitution prohibits federal intervention on many fronts, problems like drunk driving can and should only be addressed at state and/or local levels.

Ludwig von Mises Institute President Lew Rockwell explored this issue in his November 3, 2000 article entitled “Legalize Drunk Driving.” While Rockwell points out many legal problems with drunk driving laws in general and this federal one in particular, he concludes his article with a final point against the 2000 federal drunk driving law:

It is a violation of states rights. Not only is there is no warrant in the Constitution for the federal government to legislate blood-alcohol content – the 10th amendment should prevent it from doing so. The question of drunk driving should first be returned to the states . . .

So, as readers, your challenge is to ask the right constitutional questions about everything the federal government has done, is doing, or even considers doing. Is the matter in question a State or a federal issue? If a State issue then why is the federal government involved at all?

The answers to these questions can sometimes mean more short-run work for you as you are forced to lobby multiple state legislatures to produce national change; however, in the long-run it is a good thing. This process not only preserves the Founders’ constitutional balance of power, but many find that after asking the right constitutional questions a better and more effective solution emerges — one that both addresses the problem and preserves liberty.

Image Credit: Rob Wiltshire

The first three myths addressed by Saied involve inflation and energy. (Regarding inflation, Saied clarified that he employed the popular notion of inflation as “the general rise in prices” instead of the correct “expansion of the money supply” definition.) The final three myths cover consumption and were created by the attempts of Keynesian economists to influence public policy.

Myth #1: “High oil prices are due to America’s dependence on foreign oil.”

Saeid argues that the country of origin does not determine the price of oil but economic factors — like supply, demand, labor, and production costs — are what drive the price of oil.

The high price of oil has nothing to do with its origin; the price of oil is determined in international markets. Even if the United States were to produce 100% of the oil it consumes, the price would be the same if the worldwide supply and demand of oil were to remain the same. Oil is a commodity, so the price of a barrel produced in the United States is basically the same as the price of a barrel of oil produced in any other country, but the costs of labor, land, and regulatory compliance are usually higher in the United States than in third-world countries. Lowering these costs would help increase supply. Increasing supply, whether in the United States or elsewhere, will push prices lower.

Regarding dependence, Saied points out that importing something doesn’t mean you depend on it and he uses a local supermarket analogy to explain. In a sense, we import food from our local supermarket for our own consumption. That transaction makes the supermarket an exporter to us. That being the case, Saied argues that the exporter depends on the customer more than the other way around. In short, the overarching reason why we import something is because we can purchase it for less than we can produce it ourselves.

Regarding the high price of oil, Saied concludes that the central bank’s financial policies are to blame:

Most, if not all, of the higher price of oil can be explained by the expansion of the money supply or the debasement of the dollar. The foreign producers are not at fault; our national central bank is the culprit.

Myth #2: “Inflation is caused by rising oil prices.”

This statement is simply false, Saied argues. Again he lays the blame on the central bank’s policies:

If the money supply were to remain constant, then an increase in the price of one good, such as oil, would cause a decrease in the price of other goods. If more money is spent on oil, then less money will be available to spend on other goods. This will in turn cause a drop in the demand for other goods, which will subsequently cause a drop in the prices of these goods. The reality is that inflation is always a monetary matter, caused by the increase in the money supply due to the interest-rate-easing policies of central banks.

Myth #3: “Current inflation is being caused by the increased demand of millions of new consumers in China and India.”

At first glance this myth appears to be true because the demand for oil has increased significantly with the industrialization of India and China. However, Saied correctly points out that these new consumers are also new producers which means that they generally produce more than they consume “because most workers have to produce more than what they earn in wages (if not, they lose their jobs).” So India and China’s increased production has increased the supply of goods worldwide which has lowered prices for many items, particularly items produced in China. In aggregate, this increased production offsets their increased consumption so, while oil prices may rise, other prices fall by an even greater amount. Saied notes, though, that there is one factor that can alter this scenario temporarily:

[T]he only way these new workers can increase their consumption beyond what they produce is through credit. Thus we return to the real culprit behind inflation: credit expansion due to central banks’ intervention in the financial markets.

Myth #4: “Consumption is the most important element of the economy.”

Again this myth is not true. Investment is key to the long term success of the economy. Saied explains:

Consumption is indeed important in a free economy: particularly the freedom of consumers to buy their goods in unhampered markets. However, key to long-term economic growth is investment (savings), which is the opposite of consumption. Public policies that promote consumption — such as low interest rates — do so at the expense of savings. Less savings means less investments; an economy that does not save or invest will consume all of its resources and eventually end up bankrupt.

Myth #5: “Excess consumption is a feature of the free-market capitalist system.”

This myth is simply not true. Excess consumption is caused by a disincentive to save. Again, Saied points largely to the central bank as creating an environment in which excess consumption is encouraged.

Excess consumption is mostly caused by central bank’s artificially low interest rates, which promote lower savings and higher consumption than would naturally occur. Currently, the real interest rates of savings accounts are negative. Thus it makes no economic sense to save. Since these same policies cause price increases, it makes sense to consume as much as you can immediately, before prices rise. Therefore we see that excess consumption is being caused by government policies and not by the capitalist free-market system.

What does the phrase “real interest rates of savings accounts are negative” actually mean? It means that the low levels of interest earned on one’s savings or investments (the dividends paid) are less than the rate of inflation. Put another way, the purchasing power of money sitting in a savings account is reduced over time as the dollar, in this case, becomes worth less in real terms — in effect, the low rate of interest paid on one’s savings fails to offset the inflation loss thus he cannot even reach “break even” status with his savings and/or investments. When this happens, the act of putting money into “savings” becomes a costly activity and so, in an effort to preserve their purchasing power, consumers buy more than they need before prices increase due to their money losing more value.

Myth #6: “Federal Reserve interest-rate policy can help the economy.”

Saied points out that to keep target interest rates low the Federal Reserve (“the Fed”) must, in reality, create money “out of thin air.” A fancy way of describing this intervention is to say that the Fed is “adding liquidity to the money supply.” Fancy term or not, though, the result is the same: more money is created without assets to back up that new money. Saied explains:

Many believe that this artificial injection of liquidity creates economic stimuli and promotes growth. However, even though it creates an apparent bonanza, these monetary injections must eventually be “paid back.” This payback happens by means of higher prices, the so-called inflation.

This increase in prices occurs because our money is actually worth less now than it was before the Fed’s “liquidity increase.” This reduction in purchasing power causes a problem for consumers because they are now worse off than before the Fed intervention.

A second problem also is created by the Fed’s intervention. Fed-induced below-market interest rates encourage excessive debt accumulation through unwarranted borrowing. The problem is further compounded by the low savings rates explained above. Saied points out that this whole scenario encourages “people to withdraw money, lowering the market supply of funds.” The results is an “eventual credit crisis, which follows the boom period that was caused by artificially low interest rates.”

Saied concludes that the current financial crisis should have pushed interest rates higher but Fed intervention prevented a free-market correction from occurring. Fed interventions have serious costs and, as noted above, produce other problems that prolong a financial crisis. Furthermore, many libertarians and strict-constructionists point out that there is no constitutional justification for such interventions by the federal government.

Free market proponents tend to argue that Fed intervention prolongs economic suffering and endangers the American Dream. Given these outcomes and the likely unconstitutional nature of such actions, the Fed’s manipulation of our economy must be vigorously opposed. Sadly, the widespread acceptance of the above economic myths, especially when propagated by supposed defenders of the free-market system, hampers efforts to build the public support necessary for a return to free-market principles.  However, when free-market advocates effectively challenge these myths and their false assumptions, the American people will be able to see the wisdom of implementing serious economic reform — the kind that yields real free-market solutions capable of producing recovery and long-term economic prosperity.

Image Credit: Michelle Meiklejohn

Jon N. Hall uses the Equal Protection Clause of the Fourteenth Amendment to the Constitution to argue against the “individual mandate” found in The Patient Protection and Affordable Care Act. Among other things, this federal law — derisively referred to as ObamaCare — mandates that most Americans purchase health insurance. In his article entitled “ObamaCare Flushes the Constitution,” Hall writes:

Some might wish that ObamaCare were still being defended with the Commerce Clause, as America needs clarity on the limits of that pesky clause. But a defense based on the taxing prerogative of the feds sets up what might be an even more vital precedent. The argument the states should now use to combat ObamaCare is the 14th Amendment’s Equal Protection Clause.

The “individual mandate” is unconstitutional because it will be applied unequally. It seems some individuals are more equal than others — they are exempted from paying this new tax.

Exempted people under The Patient Protection and Affordable Care Act include those who are part of a “recognized religious sect” (i.e. the Amish), the poor, and those unable to pay. Hall argues, though, that since the White House’s own legal team defending this law from State challenges will argue that the “individual mandate” is a tax, then such individual exclusions are discriminatory,  arbitrary, and unequal. As such, they must be opposed on Fourteenth Amendment equal protection grounds.

In his article Hall explains several specific flaws contained within the “individual mandate” that should render it unconstitutional by equal protection standards.  In short, since the “individual mandate” is not applied equally to all people it is inherently unfair and thus violates the Constitution. He concludes with a warning of continued federal encroachment and the need to address it head-on:

Sadly, it has fallen to the states to defend the republic — the republic the states themselves created — from an out-of-control federal government. If the states’ suits over ObamaCare fail to get the judiciary to define limits to the federal government’s powers to tax and regulate, then We The People must seek other means of redress.

We’ve come to a point in America where the federal government is going to do whatever it wants to do; the Constitution seems to be is irrelevant. The Land of the Free is fast becoming The Nation of Slaves — tax slaves.

As Hall correctly noted, the federal government was the creation of the States. It has, however, become a greedy master that is rapidly devouring our freedoms and produce.  Legislative behemoths like The Patient Protection and Affordable Care Act usurp the Constitution on a variety of fronts, the Fourteenth Amendment being one of them. To save ourselves, we the People — along with the States — must together rise up and put this federal beast back on a short Constitutional leash.

Additional Information Related to the “Individual Mandate” and the Constitution

No Health Care in the Constitution

Napolitano: High Court Key to Obamacare Survival

The Individual Mandate: We’re All Amish Now

Hillary Taxes Breathing

To Hell with the Constitution? – also by Jon N. Hall

Image Credit: renjith krishnan

“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.”

These twenty-eight words are simple, forceful, and to the point. They are clear and leave no room for confusion or alternate interpretations. Yet, these words are continually ignored by many within our federal government. After more than a century of violating the Tenth Amendment, the bulk of government power no longer resides with the States and the People but is instead squarely in the corner of the federal government. This should not be.

Several writers have provided valuable insights regarding this significant loss of liberty. One such is Dr. Archie Jones of The American Vision. In his article entitled “The Liberty Amendment,” he builds a powerful case for a literal interpretation of the Tenth Amendment and demonstrates the safeguards within it that work to preserve the liberties of the States and the People:

No fundamental provision of the Constitution or the Bill of Rights is more neglected—or thoroughly violated—today than the Tenth Amendment. It is violated in spirit and in practice. Its violation is advocated implicitly and explicitly: in the teaching of American history and government, in legal theory, in what passes for “Constitutional Law,” and in the functioning of everyday American politics and government.

Our Constitution—as the very words of the Tenth Amendment make clear—was intended to be a delegated powers document. The states which formed and ratified the Constitution were free and independent states—nations—which delegated certain authority and powers to the new central or national government created by the Constitution. They delegated—and manifestly intended to delegate—only those powers stated in the Constitution: and no more. They forbade themselves certain other powers which they also stated in Article I, Section 10 of the Constitution.

By clear intention and unmistakable logic the several states entrusted no more authority or powers to the central government which their representatives had created. All other authority and powers which the states had had before they ratified the Constitution they retained to themselves—and intended to retain to themselves.

The Constitution therefore is also a reserved powers document. The powers which the states have neither forbidden to themselves in the Constitution nor delegated to the central government in the Constitution are reserved to the states. These powers are “reserved to the States respectively”: they are reserved to each respective state.

These reserved powers are “reserved to the States respectively, or to the people.” This does not mean that they are reserved to the people of the nation as a whole, for that would mean that they are delegated to the central government—and would make the Tenth Amendment meaningless and ridiculous. The reserved powers are reserved to the people of the respective states. The powers which the government of each state or the people of that state have not delegated to the central government are reserved to the people or government of each state.

The neglected, abused, violated Tenth Amendment is much more than an amendment to our Constitution, much more than the final amendment to the Bill of Rights. The Tenth Amendment is the anchor and guarantee of federalism, a fundamental and essential principle of the Constitution—a principle insisted upon by the states whose representatives framed and ratified the Constitution.

It protects the self-government of the people of each state by protecting the powers which the state has neither assigned to the central government nor forbidden to itself in the Constitution. It thus protects each state’s authority and freedom to govern itself as its people and their representatives see fit (so long as they do not set up a non-republican form of civil government or violate the Constitution’s prohibitions of certain powers to them).

Dr. Jones goes on to point out that the Constitutional system of checks and balances created within the federal government is actually extended across governments to provide extra safeguards for liberty. In short, the federal government is to be checked and balanced by the governments of the States:

The famous system of separation of powers, with accompanying checks and balances between and among the three branches of our central/national government, was intended to protect liberty and justice by preventing the concentration of power, and consequent abuses of power and usurpations of power, in any one branch of the national government. Federalism, Madison tells us, is a system of separation of powers and checks and balances between the central or national government and the state governments. So important is federalism’s separation of powers with accompanying checks and balances between the central government and the state governments that federalism provides us “a double security to liberty.”

Dr. Jones points out that the Tenth Amendment was ratified to permanently create a balanced and limited federal government. He correctly argues that the Tenth Amendment must be followed if the federal government is to be restrained to its Constitutional role:

The Tenth Amendment was intended to make it clear that federalism is to remain basic to our Constitution and constitutional law. No fundamental provision of the Constitution and the Bill of Rights needs more urgently to be restored to its rightful place in our civil government and law.

Restoration of the Tenth Amendment to its rightful place in American political thought, constitutional law, and civil government is a necessary condition of the restoration of justice and freedom in America.

As voters and citizens we must demand that our federal government be restrained and subject to the limitations of the Tenth Amendment. Likewise we must demand that the States and the People retake their rightful place within our federal system. It is wrong to ignore and disobey the Constitution. The amendment process provides a sufficient tool-set for addressing perceived shortcomings; however, before proceeding down that path, one should consider that many of the issues currently handled by the federal government could be addressed more effectively at the state and/or local levels where Constitutional prohibitions against government involvement do not exist.

Additional Information on the Tenth Amendment

Amendment X: The False Truism

Roger Clemens: Pleading the Tenth

On the Tenth Amendment — Federalism

Tenth Amendment Center – provides a wealth of articles and resources

It doesn’t take a rocket scientist to see that the dramatic increase in federal power has come at the expense of individual rights and the rights of the States. However, by carefully looking back in our history we can see when and where our nation left the original intent of the Constitution and got on the road to big government. By understanding the cause and nature of this shift we become better prepared to diagnose current big government problems. Armed with that knowledge we can spread the word and push our government back to the Constitution.

When did the massive growth of federal power begin under our Constitutional form of government?

Randall G. Holcombe provides a well-documented history of federal expansion in his article entitled “Federal Government Growth Before the New Deal.” Published in The Freeman (September, 1997), Holcombe writes:

The origins of federal growth are in the Constitutional Convention. But the modern period of growth began with the Progressive Era before World War I. Contrary to popular belief, that growth continued through the 1920s. The percentage by which the federal government grew was greater during Herbert Hoover’s four years as president than during the first seven years of the New Deal. Roosevelt merely continued a long-standing trend.

What triggered this growth? Holcombe points out that over time the federal government shifted mandates from protecting personal liberty to that of extending economic vitality. The 16th Amendment grant of the power to tax incomes further propelled this transformation. Holcombe explains:

The story of the growth of the federal government can be divided into two parts: before and after 1913, when the 16th amendment to the Constitution, which permitted a federal income tax, was ratified. In 1913 federal spending was a mere 2.5 percent of GNP (today spending is almost ten times that level); so if the federal government is measured only by spending, little growth took place before the income tax. Before 1913, however, the federal government grew in other ways, by enlarging its power and changing its mandate. When the colonies came together to form the United States, the founders viewed the new government as the defender of its citizens’ liberty. That meant protecting their rights-and in those days the most significant threat to the rights of individuals was, in nearly everyone’s eyes, the government itself. By 1913 the federal government had been transformed into an organization not to protect rights, but, ostensibly, to further the nation’s economic well-being. [Note that Holcombe's 1997 federal spending figures of nearly 25% of GNP would be considered small when compared to the staggering debt-fueled expenditures of the past decade.]

The above quote explains when but how did federal expansion begin? Holcombe pointed out that the “first major event in the growth of the federal government was the ratification of the Constitution in 1789.” The Constitution was much stronger than the previous Articles of Confederation. However, compared to the Articles, Holcombe argues that the Constitution created a federal government that “gained more power, was less accountable, and had greater latitude to determine its own scope of action.”

While the debate over ratification of the Constitution was fierce in the late 1780s, few today would argue against the wisdom of its clearly limited increase in federal power over the Articles of Confederation. While lovers of liberty rightly oppose concentrated and unaccountable government power, a weak government — like that created under the Articles of Confederation — also has problems because it cannot safeguard anyone’s rights. Clearly a strong yet constrained federal government is vital to our nation. However, must federal power and reach grow larger and larger year after year? In our American history, can we point to a tipping point that produced the trend for rapidly growing federal intervention? Holcombe provides an answer:

Undoubtedly the biggest event in the growth of the federal government was the Civil War, which established its supremacy over the states. The Civil War brought much new power to the federal government, and laid the groundwork for the growth of interest groups. The first interest group to systematically raid the Treasury for its own benefit was the war veterans.

The growth of federal spending and intervention following the Civil War continued at an accelerated pace. Holcombe continues:

While veterans were a model for future interest groups, the Treasury at that time had decidedly limited means. At any rate, other groups were more interested in regulatory benefits. The Interstate Commerce Commission was created in 1887, and the Sherman Antitrust Act passed in 1890. The transformation of the U.S. government continued as the turn of the century ushered in the Progressive Era. The Food and Drug Administration was created in 1906, the Federal Reserve in 1913, and the Federal Trade Commission in 1914. A government initially committed to protecting the liberty of its citizens now seemed to be just as firmly committed to looking out for their economic welfare.

The Progressive Era was interrupted by World War I, during which federal power advanced in unprecedented ways. The railroads were nationalized, waterborne shipping was regulated, and the United States Food Administration, created in 1917, controlled all aspects of the food industry, from agriculture to distribution to sales. Similar regulation was applied to fuels, and eventually to the whole economy. When the federal income tax was introduced in 1913, the highest tax bracket was 7 percent for all income above $20,000. Because of the demand for war-related spending, by 1918 the highest rate rose to 77 percent beginning at $4,000.

Holcombe provides a summary of the rapid growth of federal non-war spending during the 1920s, the tremendous growth in law-enforcement budgets during the Prohibition era, the beginnings of agricultural price supports, the influence of Keynes and Marx on economics, the establishment of federal regulations for businesses via antitrust laws, and the creation of many federal corporations. Regarding federal corporations, Holcombe noted that

[t]hese corporations provided a model for government growth that extended through the 1920s to the present day. In 1923, 12 federally owned banks were created by the Federal Agricultural Credits Act. In 1924 the Inland Waterways Corporation was established to operate vessels on the Mississippi River, and in 1929 the Federal Farm Board was established to finance agricultural price supports. Creation of those corporations was integral to the growth of the federal government during the 1920s, but their purpose was also significant. In each case they were established to help further the economic well-being of a particular group of Americans, reinforcing the federal government’s transition from a guardian of liberty to an organization designed to oversee the national economy.

It is quite surprising to think that all the above referenced federal government expansions were in place before Franklin D. Roosevelt’s New Deal. Holcombe concludes:

The New Deal is often seen as the pivotal event in the growth of America’s twentieth-century Leviathan. But the federal government has grown since its inception. The most important event in the history of federal government growth was undoubtedly the Civil War. Then, supported by the popular demand for more government involvement in the economy, the ideological foundation of the massive growth in federal spending was laid during the Progressive Era at the beginning of the twentieth century. The federal income tax made that growth in spending possible.

That the federal government grew during FDR’s presidency is undeniable. But [Presidents] Wilson and Lincoln had already set precedents for increases in government power in wartime. Thus, the main factors underlying the growth in government were firmly in place well before the New Deal.

Clearly, the federal government’s growth and expansion quickly resulted in an erosion of rights for both individuals and the States. Add to this trend the rapid growth under the New Deal and beyond — including the Great Society, the Post 9/11 years, and the Obama Presidency — and few would even try to argue that we really live under a Constitutional republic today. Given this reality, is anyone surprised that millions of patriots now seek to defang the federal Leviathan that usurped the Constitution and is trampling our rights?

As Americans, let us all work together to preserve our liberty and restore the People’s rightful place within our government!

Image Credit: Susie B