Capitalism 15 - Expanded Federal Powers and Interstate Commerce

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In 1913 the federal government took control of the nation's money supply by establishing the Federal Reserv...
In 1913 the federal government took control of the nation's money supply by establishing the Federal Reserve System. Misguided policies of easy money in the 1920s and very tight money in the 1930s resulted in the Great Depression. To deal with the depression, President Roosevelt wanted to expand the powers of the federal government, but was prevented from doing so by the Supreme Court. New Deal programs, including much of the National Industrial Recovery Act, were held to be unconstitutional by votes of 5 to 4. In 1937 FDR appointed to the Supreme Court a former Ku Klux Klan member and an avid supporter of FDR's New Deal policies named Hugo Black. After Black's appointment the balance of power on the court tipped and the court began to uphold laws giving the federal government powers beyond those enumerated in the Constitution. The Supreme Court held that Congress' power to regulate interstate commerce gave Congress the power to pass laws in any area that affected commerce, however slightly or remotely. For example, a farmer planted more wheat than allowed by federal law. When the farmer appeared in court, he was able to show that he and his family consumed all of the wheat grown on the farm. None was sold in commerce. "It doesn't matter", the Supreme Court ruled. If the farmer had planted less he may have been forced to buy some elsewhere, thereby lowering the wheat supply and raising the price of wheat as the government wished. Since the farmer's actions affected commerce, no matter how remotely, he was subject to the federal commerce power. As another example, if you own a restaurant and the tables or plates or stoves or food or anything in the restaurant comes from another state, your restaurant is in interstate commerce and subject to any controls the federal government may wish to impose. The scope of the commerce clause has been expanded far beyond what the founding fathers intended. Congress can now pass laws regulating virtually any economic activity, and the Supreme Court will uphold the law's constitutionality as a matter of course. The Supreme Court no longer enforces the doctrine of enumerated powers or the Tenth Amendment guarantee that federal powers are limited to those specific powers listed in the Constitution. In 1937 the United States ceased to be a constitutional republic, characterized by limited, enumerated powers, and became a democracy subject to majority rule. If travelers from another star do visit us one day, will they find it hard to understand human psychology? Will they wonder that the freest and most productive country in Earth's history would abandon the principles of liberty and capitalism that had served it so well? Will they wonder that the people of Earth could be so blind to the lessons of history that they would drift down the path of democracy and socialism when the benefits of liberty and capitalism had been so spectacularly demonstrated? Or will these alien visitors find a prosperous and peaceful world that awakened to the principles of liberty, individual rights and limited government, and adopted policies of freedom and capitalism throughout the world?
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