Sunday, April 30, 2017

Springtime in Chicago

Tony and I had a good reason to meet in Chicago last week. This is his home town and he offered to give me the "deindustrialization tour" of the Second City. So on a splendid spring day he drove me around while I observed. Not surprisingly, some parts of Chicago have absorbed the economic shock of globalism / neoliberalism far better than others.

Some observations:
  • The number of places to buy or eat good food seems limitless. The large ethnic populations like the Poles or Italians have their own supermarkets with an astonishing variety of offerings. While all this abundance of good eating appears to herald prosperity, the fact was that none of these establishments had many customers. The restaurant / supermarket business seems hopelessly overbuilt.
  • Even the high end retailers along the Miracle Mile seemed to lack sufficient customers.
  • Chicago built some pretty amazing public venues in recent years. One spanking new convention center looked to cover at least 5 city blocks. My guess is that the supply of convention space wildly exceeds the need world wide.
  • Considering all the talk of corruption in the Chicago construction business, some magnificent building has been done (see below). This pretty much validates Veblen theories in his Instinct of Workmanship.
  • The detritus of the South Side steel industry is gone. In its place are large empty fields covered in a lumpy soil that because it is spring, had a pretty good cover of grass. Some of the old industry remains. The Ford Torrence plant was still loading new Lincolns into rail cars. A solitary (but huge) Cargill grain elevator was still operating near the lakeshore�when we drove past it was maybe two miles away separated by a large expanse of grass waving in the wind. If you held your head so you could not see Lake Michigan, it looked astonishingly like North Dakota. One attempt at redevelopment produced a flat and treeless golf course with a overbearing clubhouse built on a hill that was probably the remains of a slag heap.
  • The South Side of Chicago where the housing is, is a scene of near hopeless devastation. Both the housing stock and people appear extensively damaged. The neighborhood businesses are in the beauty salon/tattoo parlor/small markets variety. The auto repair business seems safely in the hands of people advertising that they are Mexicans. Even though it was only 5:30 pm., many of those on the streets looked like they had gotten a head start on being wasted for the evening. Whatever it was, it conveyed an expression of profound aimlessness. What was so distressing was that this urban damage went on for miles.
  • Tony could not resist taking me back to the motel by way of Wrigleyville�the neighborhood surrounding the stadium where the long-hapless Cubs won the World Series of Baseball last fall. This is the North Side, home to an astonishing number of what we used to call Yuppies, and NO, I have no idea what supports such lifestyles. After eating at a sports bar maybe 50' from the entrance to the bleacher section of Wrigley Stadium, we found ourselves blocked in by a police SUV. I cringed a little but soon discovered the young cop was admiring my 21 yo Lexus. In my 67 years on earth, I have never been so kind and gracious to a cop before.
  • Tony stopped at one more sports bar because he has known the owner for years. There we got to watch the Preds-Blues game along with a handful of still-disappointed Black Hawk fans. In spite of the fact that Tony claims this bar serves one of the best pizzas in Chicago, it was also suffering from too few customers.
Chicago's economic ennui is likely shared across the world. But one thing is still abundantly clear�this was once a city of energy, distinction, and vast industrial power. This was a city built by folks of great imagination. Deindustrialization is the proximate cause of the widespread destruction of this city. But more importantly, most of the destruction demonstrates a failure of imagination. Of course, it requires SOME imagination to build a golf course on a slag heap but compared to what was once there, it demonstrates the imagination of a child playing grown-up. In my darker moments I am convinced that we are doomed because we have passed "peak imagination." I hope I am wrong.

On passing through the center of the city

Cloud Gate (the Bean) has some interesting neighbors. The building with the steeply pitched roof is officially the Crain Communications Building but the locals call it Vagina Tower because it is such a contrast to the phallic buildings that surround it.  If you look closely, that roof is being worked on by some crazy-brave people.

The Bean seems very popular in spite of the hassles to see it up close�including parking that costs $21 for the first 20 minutes. The main reason is that unlike most public art (which looks like it was constructed by metal shop troublemakers), its execution is so perfect, it borders on miraculous. Most of us cannot conceive of making stainless steel so shiny, much less shaped so perfectly that it becomes a very expensive fun house mirror. The trick is grind the plates and welds to 1000 grit and then polish everything with jewelers rouge. I get weary just thinking about it. The most interesting reflections are seen from underneath. Tony and I can be seen in several places in this shot.

The older skyscrapers on Michigan Ave. are in excellent shape�some are quite beautiful. Tony checks his smart phone.

The Chicago Cultural Center is housed in the old public library. It has been superbly restored and maintained. Shown here is the Tiffany dome.

Wherever you look, there are monuments to the instinct of workmanship. Not only did world-class artisans come to Chicago to build such magnificent structures, but it's obvious that some of their descendants must still work in the city.

Hard to remember when public libraries were accorded such respect.

And this is the new Public Library�a post-modernist monstrosity. Those sculptures on the corners are supposed to depict owls. And no, they are not made of aged copper�that is painted aluminum.

The First Impression is a tile header over the door to what was once an important print shop on Printers Row. It is fabulously maintained / restored.

Saturday, April 29, 2017

Tesla's growing pains

From 1974 until 2007, I drove a Saab. My last one had 296k on the odometer when it was destroyed in a tennis-ball-sized hail storm. So I know about driving a car from a niche manufacturer�it's an interesting trip. In 1974, Saab built arguably the most interesting car on the planet�roomy cabin, great driving position, a fold-down rear seat (which allowed me to avoid the dreaded pickup truck even during a major rehab project), good�if not great�mileage, four-wheel disc breaks, great suspension for bad weather and roads, and the big deal�front-wheel drive. In 1974, there were a tiny handful of cars with front-wheel drive and Saab's was easily the best.

Saabs are still being made by a Chinese company. And of course, they are FAR from the most innovative on the planet. In fact, almost every car maker makes some version of the Saab 99. Most are cheaper. Many are better built�the Toyota Camry, for example. It is quite easy to see a quite similar future for Tesla. Yes, Elon Musk has provided the world an enormous gift when he showed the rest of us how to design and build the very cool electric car. But this is manufacturing and there are others who have been making cars a whole lot longer than Musk and are perfectly capable of reducing Tesla to an interesting historical detail.

Toyota could easily build a line of fine electric cars but so far, their big bet on hybrids has seemed to be paying off. They have also built a fuel-cell car so even their electric experiments have avoided the big battery packs. Volkswagen, on the other hand, bet big on "clean" diesels and have clearly lost that bet. They have a huge market in China which is mandating large fleets of EVs. The latest Geneva Auto Show saw Volkswagen's thinking on what their EV fleet will look like�and it just sparkled with innovative thinking. It is very possible that we have already seen "peak Tesla"�the era when the company was redefining parts of the transportation infrastructure may already behind us. From now on, Tesla will be trying to survive in a market where their competitors got his message and will now compete on execution�cost, build excellence, customer support, etc.

But right now Musk hopes to keep building the best cars. And as he is finding out, manufacturing is a LOT harder than it looks. Personally, I think Musk belongs on Mount Rushmore for what he has already accomplished. But the truth be told, he is going to find the going a lot harder when folks like VW start selling an electric Microbus.

Tesla's German Manufacturing Head Axed After 'Clash' With Elon Musk

Raphael Orlove, 28 APR 2017

�I definitely did not depart because I had lost interest in working,� Klaus Grohmann, the head of Tesla�s contentious but critical manufacturing arm in Germany, told Reuters. This is what happens when you butt heads with Elon Musk.

Up until this week, Grohmann was the head of Grohmann Automation, the designer of several of Tesla�s critical automated manufacturing systems. It was absorbed into Tesla before becoming a perpetual thorn in the California�s company�s side as its union demanded better wages, threatened to strike and, apparently, Mr. Grohmann got into it with Elon.

The problem is an easy one to understand, though probably not one that should get somebody fired. Reuters lays out the details in its exclusive as best it can:

Tesla planned to keep Grohmann on, and Grohmann wanted to stay, but the clash with Musk over how to treat existing clients resulted in his departure, the source said.

Grohmann disagreed with Musk�s demands to focus management attention on Tesla projects to the detriment of Grohmann Engineering�s legacy clients, which included Tesla�s direct German-based rivals Daimler and BMW, two sources familiar with the matter said.

Reached by phone, Klaus Grohmann declined to comment on the circumstances of his leaving, citing confidentiality clauses.

�I definitely did not depart because I had lost interest in working,� Grohmann said, without elaborating.?

So the two sides of the issue are that Tesla wants Grohmann�s engineering work all to itself (Tesla did absorb the company, after all), while Grohmann wanted to continue working for a healthy variety of companies (Tesla is far from the mot stable member of the auto industry). Ultimately bossman Musk got his way, by the looks of things.

This all just reminds me that so, so many companies in the EV world have been formed by people who have been fired by Elon or quit after working with him. Faraday Future and Lucid are the biggest operations run by ex-Tesla people, but they�re working everywhere from startups like battery manufacturer Northvolt to holding jobs in Audi and Apple. But it�d be wrong to take away from all this that Elon is difficult to work with. Maybe he�s just, uh, demanding. more

Sunday, April 23, 2017

Private banks create virtually all money

Do you want to shock, confuse, and probably alienate your friends? Probably the easiest way is to explain what really happens when they sign up for a home mortgage.
  • The bank will engage in a massive invasion of the borrower's privacy in the name of their financial interests. What is really happening is the bank is trying to ascertain if the borrower can actually service the debt�sort of like "hiring" a slave, when you think about it. This step is critically important because without performing loans, banks cannot exist.
  • The bank will then, after the signing of important-looking and expensive documents, create a new balance in the borrower's account. The bank has done nothing except reprogram some computer memory in the bank's electronic books. With a few keystrokes, the bank has put a customer on the hook for a large sum of money payable over 30 years. Roughly 40% of everything the borrower earns in those next 30 years will go to pay off the the creation of those few keystrokes.
This is what actually happens. But because of the massively unequal nature of this transaction, the banking industry has created an amazing body of lies to justify this rip-off. In fact, most of us who subscribe to the above explanation for how banking really works have faced the angry reaction from those who believe the big banking lies should we ever make the mistake of springing too many facts on the credulous.

But now, no less than the Bank of England has come clean and admitted that loans create deposits rather than the other way around. The story of BoE making this amazing admission follows (complete with video.)


Published: March 13, 2017

Private Banks � Not the Government or Central Banks � Create 97 Percent of All Money

Who creates money?

Most people assume that money is created by governments � or perhaps central banks.In reality � as noted by the Bank of England, Britain�s central bank � 97% of all money in circulation is created by private banks.Bank Loans = Creating Money Out of Thin AirBut how do private banks create money?We�ve all been taught that banks first take in deposits, and then they loan out those deposits to folks who want to borrow.But this is a myth �The Bank of England the German central bank have explained that loans are extended before deposits exist � and that the loans create deposits:

The above is from an official video released by the Bank of England.The Bank of England explains:

Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower�s bank account, thereby creating new money.

The reality of how money is created today differs from the description found in some economics textbooks:

Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.


One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them. In this view deposits are typically �created� by the saving decisions of households, and banks then �lend out� those existing deposits to borrowers, for example to companies looking to finance investment or individuals wanting to purchase houses.


In reality in the modern economy, commercial banks are the creators of deposit money �. Rather than banks lending out deposits that are placed with them, the act of lending creates deposits � the reverse of the sequence typically described in textbooks.


Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created. For this reason, some economists have referred to bank deposits as �fountain pen money�, created at the stroke of bankers� pens when they approve loans.


This description of money creation contrasts with the notion that banks can only lend out pre-existing money, outlined in the previous section. Bank deposits are simply a record of how much the bank itself owes its customers. So they are a liability of the bank, not an asset that could be lent out.

Similarly, the Federal Reserve Bank of Chicago published a booklet called �Modern Money Mechanics� in the 1960s stating:

[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers� transaction accounts.

Monetary expert and economics professor Randall Wray explained to Washington�s Blog that:

Bank deposits are bank IOUs.

Economics professor Richard Werner � who obtained his PhD in economics from Oxford, was the first Shimomura Fellow at the Research Institute for Capital Formation at the Development Bank of Japan, Visiting Researcher at the Institute for Monetary and Economic Studies at the Bank of Japan, Visiting Scholar at the Institute for Monetary and Fiscal Studies at the Ministry of Finance, and chief economist of Jardine Fleming � was granted access to study a bank�s books, and confirmed that private banks create money when they simply create fictitious deposits into a borrower�s account.Werner explains:

What banks do is to simply reclassify their accounts payable items arising from the act of lending as �customer deposits�, and the general public, when receiving payment in the form of a transfer of bank deposits, believes that a form of money had been paid into the bank.


No balance is drawn down to make a payment to the borrower.


The bank does not actually make any money available to the borrower: No transfer of funds from anywhere to the customer or indeed the customer�s account takes place. There is no equal reduction in the balance of another account to defray the borrower. Instead, the bank simply re-classified its liabilities, changing the �accounts payable� obligation arising from the bank loan contract to another liability category called �customer deposits�.

While the borrower is given the impression that the bank had transferred money from its capital, reserves or other accounts to the borrower�s account (as indeed major theories of banking, the financial intermediation and fractional reserve theories, erroneously claim), in reality this is not the case. Neither the bank nor the customer deposited any money, nor were any funds from anywhere outside the bank utilised to make the deposit in the borrower�s account. Indeed, there was no depositing of any funds.


The bank�s liability is simply re-named a �bank deposit�.


Banks create money when they grant a loan: they invent a fictitious customer deposit, which the central bank and all users of our monetary system, consider to be �money�, indistinguishable from �real� deposits not newly invented by the banks. Thus banks do not just grant credit, they create credit, and simultaneously they create money.


Instead of discharging their liability to pay out loans, the banks merely reclassify their liabilities originating from loan contracts from what should be an �accounts payable� item to �customer deposit� �.

How Can Banks DO This?Professor Werner explains the reason that banks � but no one else � can create money out of thin air is that they are the only institution exempted from normal accounting rules.Specifically, every other company would be busted for fraudulent accounting if they conjured new money out of thin air by reclassifying a liability (i.e. an accounts payable) as an asset (i.e. a deposit).But the banks have pushed through exemptions so that they don�t have to follow normal accounting rules:

What enables banks to create credit and hence money is their exemption from the Client Money Rules. Thanks to this exemption they are allowed to keep customer deposits on their own balance sheet. This means that depositors who deposit their money with a bank are no longer the legal owners of this money. Instead, they are just one of the general creditors of the bank whom it owes money to. It also means that the bank is able to access the records of the customer deposits held with it and invent a new �customer deposit� that had not actually been paid in, but instead is a re-classified accounts payable liability of the bank arising from a loan contract.


What makes banks unique and explains the combination of lending and deposit-taking under one roof is the more fundamental fact that they do not have to segregate client accounts, and thus are able to engage in an exercise of �re-labelling� and mixing different liabilities, specifically by re-assigning their accounts payable liabilities incurred when entering into loan agreements, to another category of liability called �customer deposits�.

What distinguishes banks from non-banks is their ability to create credit and money through lending, which is accomplished by booking what actually are accounts payable liabilities as imaginary customer deposits, and this is in turn made possible by a particular regulation that renders banks unique: their exemption from the Client Money Rules. [Werner gives a concrete example on British law for banking and non-banking institutions.]

Sound fraudulent? Professor Werner thinks so, also:

But he also makes some more important points �What Does It All Mean? The Implications of Money Creation By Private BanksMainstream economists believe that private debt doesn�t even �exist� as a force that acts on the economy. For example, Ben Bernanke and Paul Krugman assume that huge levels of household debt don�t hurt the economy because more debt among households just means that savers have loaned them money � i.e. that it is a net wash to the economy. To make this assumption, they rely on the myth debunked above � that banks can only loan as much money out as they have in deposits. In reality, 143 years of history shows that excessive private debt � in and of itself � can cause depressions. Moreover, Professor Werner points out that attempts to shore up the banking system with capital requirements (such as the Basel accords) are doomed to failure, since they don�t recognize that banks create money at will:

Basel rules were doomed to failure, since they consider banks as financial intermediaries, when in actual fact they are the creators of the money supply. Since banks invent money as fictitious deposits, it can be readily shown that capital adequacy based bank regulation does not have to restrict bank activity: banks can create money and hence can arrange for money to be made available to purchase newly issued shares that increase their bank capital. In other words, banks could simply invent the money that is then used to increase their capital. This is what Barclays Bank did in 2008, in order to avoid the use of tax money to shore up the bank�s capital: Barclays �raised� �5.8 bn in new equity from Gulf sovereign wealth investors � by, it has transpired, lending them the money! As is explained in Werner (2014a), Barclays implemented a standard loan operation, thus inventing the �5.8 bn deposit �lent� to the investor. This deposit was then used to �purchase� the newly issued Barclays shares. Thus in this case the bank liability originating from the bank loan to the Gulf investor transmuted from (1) an accounts payable liability to (2) a customer deposit liability, to finally end up as (3) equity � another category on the liability side of the bank�s balance sheet. Effectively, Barclays invented its own capital. This certainly was cheaper for the UK tax payer than using tax money. As publicly listed companies in general are not allowed to lend money to firms for the purpose of buying their stocks, it was not in conformity with the Companies Act 2006 (Section 678, Prohibition of assistance for acquisition of shares in public company). But regulators were willing to overlook this. As Werner (2014b) argues, using central bank or bank credit creation is in principle the most cost-effective way to clean up the banking system and ensure that bank credit growth recovers quickly. The Barclays case is however evidence that stricter capital requirements do not necessary prevent banks from expanding credit and money creation, since their creation of deposits generates more purchasing power with which increased bank capital can also be funded.

Moreover, Werner points out that banks create the boom-bust cycle by lending too much for speculative, non-productive purposes

By failing to take into account the fact that banks create money, economists and governments are sowing the seeds for future crashes.But the economics field is very resistant to change �Economics professor Steve Keen notes in Forbes:
In any genuine science, empirical data like this would have forced the orthodoxy to rethink its position. But in economics, the profession has sailed on, blithely unaware of how their model of �banks as intermediaries between savers and investors� is seriously wrong, and now blinds them to the remedy for the crisis as it previously blinded them to the possibility of a crisis occurring.

A wit once defined an economist as someone who, when shown that something works in practice, replies �Ah! But does it work in theory?�

And a 2016 IMF paper notes:

Around [the 1960s] banks began to completely disappear from most macroeconomic models of how the economy works.�

This helps explain why, when faced with the Great Recession in 2008, macroeconomics was initially unprepared to contribute much to the analysis of the interaction of banks with the macro economy. Today there is a sizable body of research on this topic, but the literature still has many difficulties.�


Virtually all recent mainstream neoclassical economic research is based on the highly misleading �intermediation of loanable funds� description of banking �


In modern neoclassical intermediation of loanable funds theories, banks are seen as intermediating real savings. Lending, in this narrative, starts with banks collecting deposits of previously saved real resources (perishable consumer goods, consumer durables, machines and equipment, etc.) from savers and ends with the lending of those same real resources to borrowers. But such institutions simply do not exist in the real world. There are no loanable funds of real resources that bankers can collect and then lend out. Banks do of course collect checks or similar financial instruments, but because such instruments�to have any value�must be drawn on funds from elsewhere in the financial system, they cannot be deposits of new funds from outside the financial system. New funds are produced only with new bank loans (or when banks purchase additional financial or real assets), through book entries made by keystrokes on the banker�s keyboard at the time of disbursement. This means that the funds do not exist before the loan and that they are in the form of electronic entries�or, historically, paper ledger entries�rather than real resources.�


This �financing through money creation� function of banks has been repeatedly described in publications of the world�s leading central banks�see McLeay, Radia, and Thomas (2014a, 2014b) for excellent summaries. What has been much more challenging, however, is the incorporation of these insights into macroeconomic models [how true].
What�s the Solution?We�ve seen the problems created by failing to take into account the fact that private banks create money.But there are solutions �Initially, Professor Werner notes that preventing banks from creating new money to loan for speculation and mere personal consumption would prevent booms and busts:

Werner says that the �Asian Miracle� happened for exactly this reason:

Additionally, allowing small community banks to grow would cause the real economy to flourish � since small banks loan to small businesses (which create most of the jobs), while big banks only loan to giant companies and speculators:

Indeed, big banks are virtually out of the business of traditional lending � and small banks are the only ones funding Main Street.Werner says this is the secret of Germany�s economic success:

Postscript: Due to their unique money-printing powers, banks now literally own the world � including the entire political system.There�s a war raging in connection with banking. Remember that the giant banks tried to kill off community banking through the Trans Pacific Partnership. And as Professor Werner points out, the European Central Bank is currently in a war to destroy community banks:

One of key battles for prosperity and democracy today is decentralization of the banking system. more

Sunday, April 16, 2017

The left is finally intellectually bankrupt

The election of 2016 proved to have at least one significant virtue�it fully exposed the corruption and ideological emptiness of the so-called "Liberal" class. None of this gives me a scintilla of joy. When I was young, being a good Liberal was actually something to aspire to�at least that was what I believed after I read Ken Galbraith's The New Industrial State. I believed we were the children of the Enlightenment who were responsible for the overwhelming majority of human progress.

As Thomas Franks and Chris Hedges have so excellently described, those kind of liberals only seem to exist in the memories of us aging coots. If Hillary Clinton and John Podesta are any example, liberals have become amazingly shallow, pathetically ignorant, and corrupt to the bone. Their political ideas are limited to schemes that enrich their friends. Their economic ideas can literally be found in the pages of the Economist. Debbie Wassermann Schultz, the Clinton campaign chair is a hired gun for the payday lending people. They seem to draw the line at actual slavery but that is about the only limit to depths of their neofeudal understanding of economic possibilities.

And in their latest excuse for the pathetic political performance of these thoroughly dislikable charlatans, today's liberals have resorted to actual McCarthyism. The claim that they lost because Russia is childish even by "the dog ate my homework" standards. But that's all they have so they are sticking to their fantasies even though it endangers world peace because in their pinched worldviews, it even makes sense. It made sense to Tailgunner Joe too. So there!

Left degeneracy plumbs new depths

by Patricia Greanville, March 24, 2017

An appeal landed in my mailbox yesterday from I suppose the editors of Mother Jones or their marketing machine in conjunction with an outfit called Citizens United. The letter blares across the page something that can only be of interest to people suffering from a bizarre sense of priority, abysmal ignorance or clinical stupidity:
Donald Trump just SLANDERED President Obama!
The implication is that we should urgently do something about this. Aux armes! Further, in what we must accept as a compelling supporting rationale for action, the authors of the appeal, proving they do come from Lalaland, offer this laughable argument:
�Donald Trump is wrong!!! President Obama has always been on our side. He�s been fighting to overturn Citizens United since Day One.
With equal breathless dishonesty, the letter has the audacity to talk about defending �Obama�s legacy�, a supposedly sterling body of work apparently about to be wrecked by the horrid Trumpinator.

By the standards of silliness this marks a new low; by the standards of left thinking, such as it is practiced in the US, it confirms the irrelevancy of this �new�, thoroughly bourgeois identity politics �left� to the problems really threatening humanity. By the standards of honesty, well, it does not qualify in that category, but let�s just say it is yet another contorted effort at bashing Trump. Which would be alright�considering the man offers any serious critic a multitude of valid grounds on which to oppose him� if these guardians of political correctness and truth also looked homeward for many of the curses besetting the nation.

The fact that these liberal champions refuse to recognize the horrid, smoothly hypocritical track record of the Democrats (their darling Obama and the abjectly corrupt Clintons, in particular), and their favorite party�s drive to war, in lockstep with their new pals, the CIA and the resilient Neocon vermin, a posture which now almost guarantees some sort of nuclear confrontation with Russia or China in the near horizon (with unthinkable consequences for this planet as we know it lest we quickly correct course), says all you need to know about the degeneracy of the so-called left in the United States and in the West, in general.

The traditional �left� in the US (always basically a bunch of centrist liberals since the radical left was reduced to ashes by unrelenting campaigns of anticommunism endorsed by the very same liberals) is so wanting these days in essential morality that now even voices that just a few years ago would have been categorized as unqualifiedly on the Right�and therefore by the left�s own reckoning �on the wrong side of history�, are about the only ones saying and doing things that are desperately needed.

Like opposing imperialist wars, for example. Do you see any of the legendary voices on the mainstream �left� uttering a single word of opposition to the dishonest campaign to demonize Russia? Instead, they are busily criminalizing any kind of contact with Russian diplomats or politicians that could lead to a de-escalation of tensions. So, nope. They are not there. Quite the opposite. Which leaves us as I say with the likes of Ron and Rand Paul and other libertarians, or the new French right champion, ultranationalist Marine Le Pen (already in the CIA crosshairs), doing wittingly or unwittingly what the left should be doing.

Incidentally, Le Pen�s banishment from polite society is predicated on her opposition to the EU�s slavish attachment to Washington�s push to war with Russia, and her impatience with NATO. I suppose that were France�s WW2 iconic hero Gen. Charles de Gaulle alive, he too would be promptly consigned to the netherworld of political undesirables since, as a recalcitrant nationalist and one suspicious of Anglo-American intrigues and treacheries, he held almost exactly the same views as Le Pen. This all by itself shows how much the world has changed.

The question arises: Has humanity �with the help of the lying, escapist mainstream media � really forgotten how to use its imagination? Sure, capitalism with its endless economic-insecurity distractions and malignantly convoluted superficial politics does consume a great deal of a person�s psychic space. This certainly stunts the imagination, especially in a culture that boasts a long history of proud anti-intellectualism. But still.

Not too long ago, when some sanity and probity still held sway and when the collapse of liberaloid values was not yet total, most people in these formations clearly understood that the first and foremost duty of a progressive was to avoid wars at all costs, particularly a terminal, horrid war between the nuclear superpowers. This was and is the ultimate sin, the ultimate obscenity. Besides being the most elementary proof of common sense. Avoiding the Doomsday scenario was seen as imperative. People openly pushing for such confrontational policies would have lost much if not all political traction and even the presstitutes would have filed some demurring comment. Some on the liberal left might have even risen to denounce such dangerous warmongering.

This was the basic consensus for generations, ever since atomic weapons came to occupy center stage in world politics.

Even the ever supremacist, devious, and savagely capitalist United States agreed with its nemesis, the Soviet Union, to lower the threat of an Armageddon by signing treaties of weapons parity and reduction in nuclear arsenals, thereby at least assuring a balance of terror: the aptly labeled Mutual Assured Destruction (MAD), a concept promulgated and observed even by reactionaries like Ronald Reagan. Apparently it worked.

The importance of this glimmer of sanity in the engulfing madness cannot be overestimated. But the dark forces never give up and in the intervening years the Anglo-American establishment quietly retired the MAD principle, reinstating the far more dangerous and de-stabilzing �first strike� principle. Meanwhile, nuclear weapons have become even more potent, and there�s now almost open acknowledgement by the Pentagon that DU (depleted uranium) munitions, warheads and other forms of �tactical nukes� are standard choices for field commanders. The Middle East, of course, has been the testing lab, with Iraq, Syria and other victim nations subjected to what many suspect is an international crime of truly horrifying and unprecedented dimensions.

The problem with the development and use of tactical nuclear weapons in the modern battlefield (besides the abject cowardly criminality involved in using such weapons against weaker nations) is that when used by a superpower on another superpower�s troops or �prime assets�, things can get rapidly out of control. A shooting war is no moment for cool heads to prevail, especially in utterly brainwashed and self-righteous chauvinist nations like America, where the public has been systematically denied access to truth in these essential matters. In America, for most people, the first realization that a war had begun would be a huge flash and thunder and then�well nothing. Utter pulverization. In other words, for most Americans the final war and their own death sentences would come as total surprise.

In Russia at least the public is well aware of where the world stands, and some, many I hazard, perfectly understand the context and support their leaders� struggles to maintain the peace. That said, if attacked by the US and the rest of the NATO mafia, Russia will not back down. It will respond with devastating efficiency. After all, last time Russia was attacked it lost 27 million lives, the equivalent in those days of the whole population of New York, California and Texas combined. This is something the American mind, still obsessed with less than 3,000 casualties on 9/11, can�t begin to wrap its jingoist mind around. So there will not be a repetition of Barbarossa no matter how much the despicable, overwhelmingly Zionist US Neocons push and huff to make it happen. Prominent, highly respectable Russians residing in the US, filed a letter of warning to the American people. The media naturally chose to ignore the document entirely.

The Russians� warning packed a sobering sentence. It should be obligatory reading:

If there is going to be a war with Russia, then the United States will most certainly be destroyed, and most of us will end up dead. (1)

The dream of nuclear supremacy, the longed for �pre-emptive strike�, the ability to deal Russia a disabling blow, with a �tolerable� level of retaliation, say only 50 to 75 million dead in the US, is talked about seriously in high military policy precincts. The submerged crime that such a war would be provoked and waged to secure not US national security but decisive advantage for its ruling class of billionaires and associated cliques of privileged rulers around the world, is never discussed. How could it? This truly insane posture has also been official Pentagon policy since at least 2006 when some people began to believe the US had attained nuclear supremacy over Russia and China. A paper filed in 2006 by two analysts with Foreign Affairs, a blue-ribbon establishment think tank, summed up the situation rather nicely:
For almost half a century, the world�s most powerful nuclear states have been locked in a military stalemate known as mutual assured destruction (MAD). By the early 1960s, the nuclear arsenals of the United States and the Soviet Union had grown so large and sophisticated that neither country could entirely destroy the other�s retaliatory force by launching first, even with a surprise attack. Starting a nuclear war was therefore tantamount to committing suicide.

During the Cold War, many scholars and policy analysts believed that MAD made the world relatively stable and peaceful because it induced great caution in international politics, discouraged the use of nuclear threats to resolve disputes, and generally restrained the superpowers� behavior. (Revealingly, the last intense nuclear standoff, the 1962 Cuban missile crisis, occurred at the dawn of the era of MAD.) Because of the nuclear stalemate, the optimists argued, the era of intentional great-power wars had ended. Critics of MAD, however, argued that it prevented not great-power war but the rolling back of the power and influence of a dangerously expansionist and totalitarian Soviet Union. From that perspective, MAD prolonged the life of an evil empire.

This debate may now seem like ancient history, but it is actually more relevant than ever � because the age of MAD is nearing an end. Today, for the first time in almost 50 years, the United States stands on the verge of attaining nuclear primacy. It will probably soon be possible for the United States to destroy the long-range nuclear arsenals of Russia or China with a first strike. This dramatic shift in the nuclear balance of power stems from a series of improvements in the United States� nuclear systems, the precipitous decline of Russia�s arsenal, and the glacial pace of modernization of China�s nuclear forces. Unless Washington�s policies change or Moscow and Beijing take steps to increase the size and readiness of their forces, Russia and China � and the rest of the world � will live in the shadow of U.S. nuclear primacy for many years to come.

One�s views on the implications of this change will depend on one�s theoretical perspective. Hawks, who believe that the United States is a benevolent force in the world, will welcome the new nuclear era because they trust that U.S. dominance in both conventional and nuclear weapons will help deter aggression by other countries. For example, as U.S. nuclear primacy grows, China�s leaders may act more cautiously on issues such as Taiwan, realizing that their vulnerable nuclear forces will not deter U.S. intervention � and that Chinese nuclear threats could invite a U.S. strike on Beijing�s arsenal. But doves, who oppose using nuclear threats to coerce other states and fear an emboldened and unconstrained United States, will worry. Nuclear primacy might lure Washington into more aggressive behavior, they argue, especially when combined with U.S. dominance in so many other dimensions of national power.

Finally, a third group � owls, who worry about the possibility of inadvertent conflict � will fret that U.S. nuclear primacy could prompt other nuclear powers to adopt strategic postures, such as by giving control of nuclear weapons to lower-level commanders, that would make an unauthorized nuclear strike more likely � thereby creating what strategic theorists call �crisis instability.�

(The Rise of US Nuclear Primacy | By Keir A. Lieber and Daryl G. Press* | Foreign Affairs | March/April 2006)
Goes without saying that enormous, obscene sums are being dedicated by the US to achieve this �nuclear supremacy�, all, as previously stated, under an almost complete news blackout about the subject. Problem is, the Russians and the Chinese are not exactly pikers, and Russia�s nothing short of astonishing rebirth as a first class world power, its Phoenix-like re-emergence from the Western-inspired Yeltsin putrefaction, has created new realities to factor in. Western leadership, of course, we see from their actions, continues to ignore them. And yet, as even some Western news sources have indicated, the Russian nuclear defence/deterrent force is something that should compel attention and respect. Ponder:
Russia Unveils RS-28 Sarmat �Satan 2� Nuclear Missile
Russia has declassified the first image of its new thermonuclear-armed intercontinental ballistic missile.

The RS-28 Sarmat could carry a payload capable of wiping out a landmass �the size of Texas or France,� according to a report by the Kremlin-aligned Sputnik news agency.

Known colloquially as �Satan 2,� the missile will replace the RS-36M � which was dubbed �Satan� by NATO after entering service in the 1970s.

Satan 2 missile: Good bye to all that. Just one can wipe out all of Texas or France. An image of an RS-28 Sarmat missile. Makeyev Rocket Design Bureau.

Robert Kelley, a former nuclear weapons expert at the U.S. Department of Energy, said the new missile was likely an upgrade of electronics � rather than explosive power or range.

�The range of the missiles will be about the same, the explosive destructive power will be about the same [but] the reliability, flexibility and confidence [in the warheads� ability to hit their targets] will go way up,� said Kelley, who is now a now a distinguished associate fellow at the Stockholm International Peace Research Institute.

He added: �Your iPhone can do thousands of more things today than in the 1970s when these systems were first deployed. Many of the clunky electronic circuits of that era no longer exist and no one knows how to make them anymore.�

According to Russian media, the missile�s first stage engine PDU-99 was tested in August, while a hypersonic warhead was reportedly tested in April.

The new version of the Sarmat is expected to enter service late in 2017.

(Source: NBC News)
That means that just two of these �Satans� could wipe out the whole US Eastern Seaboard for the next 50,000 years. What do you call a leadership that consciously and recklessly plays with such diabolical weapons of mass destruction? That constantly taunts and provokes the population of a nuclear-armed nation that wishes no conflict with anyone but which has suffered terribly in recent wars?


The whore media will not talk about these things�things that really matter� because the US ruling class thinks that it can win a nuclear clash with Russia, and that the sooner this is resolved, the better. The thousands of prostituted �strategic analysts� crawling all over the so-called �defence establishment� of the West, the people who furnish the MIC with its excuses and raison d�etre, believe this posture is �rational�, well, their careers and livelihoods depend on that.

The current situation means that a huge war can now occur by choice�following Washington�s unquenchable desire for hegemony� or by a concatenation of absurd grotesque increments, as the Great War of 1914 demonstrated beyond reasonable doubt. This folly which buried a whole generation and destroyed 40 million lives, as documented by historians such as Barbara Tuchman, showed that humanity can indeed bumble its way, inch by inch, into a horrid conflagration. And politicians in 1914 Europe, multiple defects aside, were towering statesmen when compared to the sociopathic dwarves, cowards, and drooling fools running the show these days on both sides of the Atlantic.

This is the backdrop against which we measure the ludicrous sense of priority exhibited by the editors of Mother Jones, their cohorts in the rest of the liberal media, and their millions of low-info, desperately confused followers, as they feed off of these inflammatory messages about Trumpian sins.

MJ wants Trump�s scalp for daring to imply that the saintly Obama wiretapped his phones. But, is Trump so far from the truth in this case? Apparently, to the alarm of his innumerable critics, all zealous guardians of the warmongering imperial status quo, this is a broken clock that manages to tell the right time more than twice a day. Too often for their comfort. Accordingly, and quite possibly dishonestly given the IQ prevailing in this segment, this crowd remains tediously and recklessly fixated on the admittedly ugly idiosyncrasies defining Trump and his regime as if the US had never seen a repulsive chief of state before, well, not so overtly, that is. More than that, they are tilting at windmills. Donald Trump for all his bluster caved in to the Deep State with the firing of Michael Flynn, and these days, stylistic questions aside, he is simply more of the same criminality at the helm of the empire and no longer represents a real neofascist threat, as continually proclaimed.

The only real and credible neofascist threat to the people of the United States and the world at large can now emanate exclusively from the unified councils of the US ruling plutocracy, acting through their favorite tool, the mendacious duopoly, and the power ministries (CIA, FBI, NSA, Pentagon agencies, etc.) operating with the usual support of the whore media (including so-called alternative media such as Mother Jones, which provide a �left� imprimatur to these undemocratic proceedings). In other words, the US will go into full overt fascist mode when the deep state deems it necessary and not a moment sooner, Trump or no Trump in the equation.

Glen Ford, for one, refuses to be swept into the anti-Trumpian frenzy on the basis of stupid or fabricated reasons. Declares the editor of Black Agenda Report, dismissing the charge that Trump is in this case offering just one more of his famous �alternative facts�:

The ruling class/War Party/corporate media campaign for regime change in Washington has moments of pure silliness, with grown men claiming that U.S. presidents don�t have the power to wiretap people. Someone should have informed Dr. Martin Luther King. But, if self-described �progressives� can believe that the CIA is a benign, democratic institution, they can believe anything. �The destabilization of the U.S. bourgeois state is a project, not of the Kremlin, but of multinational and finance capital headquartered in the U.S.� (Corporate Media Counting Cadence to Fascism, BAR)

Facile observers like to compare Trump to Hitler and Mussolini, but those two, despite their criminality, perhaps insanity in the former, at least had the ability in their prime to thread coherent thoughts and even weave a complete ideology. Hitler and Mussolini took pride in writing their own speeches, in an age without teleprompters. They both read voraciously, and even wrote books, without the aid of a corral of ghost writers, not to mention professional spin doctors. Hitler, no chicken hawk, fought with valor in WW1 and entertained dreams of artistic distinction. That Mein Kampf, besides its ugly message, is basically unreadable due to pervasive incoherence and shall we say, �philosophical overreach�, is nonetheless an accomplishment that the Donald could only dream of. What�s more, both Mussolini and der Fuhrer faced at the beginning of their careers a real left, something that Trump has never seen in his entire miniscule tenure. Because a real left has not existed in the United Sates for generations.

Still, by shilling for the Democrats and the imperialist Duopoly, Mother Jones, along with the rest of the bankrupt �liberal intelligentsia�, has become a joke, even if millions of low-info liberals, sold on the largely manufactured anti-Trump hysteria, continue to cheer.

As said many times on these pages and articulated by numerous authors, this is NOT to excuse, defend or endorse Trump, except in those moments when the man, regrettably in a rather incompetent and opportunistic fashion, happened to make noises toward peace and non-intervention in the world. Such worthy ideas �perhaps the difference between life and death for this planet, or at the very least untold suffering for many millions of human beings around the globe�have now been betrayed by Trump himself, or abandoned or neutralized in large part as a result of the machinations of the deep state and their allies in what used to be the left in America.

Should we now kneel and pray on the altar of St. Obama. more

Tuesday, April 11, 2017

"If you build it they will come" and there goes the retailing bubble

One of the great pieces of economic nonsense from the age of Reagan was the "supply-side" notion "If you build it, they will come." The essential idea was that supply creates its own demand. This comforting little nostrum allowed the supply-siders to stop worrying about such "minor" matters as income stability and growth. Soon it also became quite fashionable to stop worrying about the health of local manufacturing. So long as there were goods to sell, who could possibly be concerned about where they came from?

But the ultimate disaster of supply-side thinking is still unfolding. If you actually believe that supply creates its own demand, what's to stop you from building a major mall out in the middle of a lot of nowheres? And so retail outlets multiplied to the point where virtually every person in the land is now near a major distribution of goods. The standard estimate is that we are 'blessed' with nearly 25 sq.' (2.3 sq meters) per capita of retail space (compared to less than 2 sq.' in Japan.)

Unbelievably, much of this retail space was built after it had become blindingly obvious that the internet was going to utterly change the way goods are marketed. It is hard to imagine the staying power of an idea that is mathematically ridiculous but here is the textbook case. Of course the real estate speculators were all excited about turning "empty" land into palaces of greed and envy, but let's not forget the "smart" money like teacher's pension funds that plowed rivers of cash into the idea that there cannot be too many malls.

So now the realization is finally dawning that there is at least 10x too much retail space (and that is even before Amazon eats everyone's lunch.) It it hardly beyond belief that a 2008-style bubble-crash in commercial real estate is virtually inevitable. We still have not figured out how to avoid these bubbles driven by mass stupidity. We are no better off than in 2008.

America�s Retailers Are Closing Stores Faster Than Ever

Lindsey Rupp, Lauren Coleman-Lochner, and Nick Turner, April 7, 2017

Rue21 may be latest casualty as it prepares bankruptcy filing
Amazon is gobbling up most of the industry�s online growth

The battered American retail industry took a few more lumps this week, with stores at both ends of the price spectrum preparing to close their doors.

At the bottom, the seemingly ubiquitous Payless Inc. shoe chain filed for bankruptcy and announced plans to shutter hundreds of locations. Ralph Lauren Corp., meanwhile, said it will close its flagship Fifth Avenue Polo store -- a symbol of old-fashioned luxury that no longer resonates with today�s shoppers.

And the teen-apparel retailer Rue21 Inc. could be the next casualty. The chain, which has about 1,000 stores, is preparing to file for bankruptcy as soon as this month, according to people familiar with the situation. Just a few years ago, it was sold to private equity firm Apax Partners for about a billion dollars.

�It�s an industry that�s still in search for answers,� said Noel Hebert, an analyst at Bloomberg Intelligence. �I don�t know how many malls can reinvent themselves.�

The rapid descent of so many retailers has left shopping malls with hundreds of slots to fill, and the pain could be just beginning. More than 10 percent of U.S. retail space, or nearly 1 billion square feet, may need to be closed, converted to other uses or renegotiated for lower rent in coming years, according to data provided to Bloomberg by CoStar Group.

The blight also is taking a toll on jobs. According to Labor Department figures released on Friday, retailers cut around 30,000 positions in March. That was about the same total as in February and marked the worst two-month showing since 2009.

Urban Outfitters Chief Executive Officer Richard Hayne didn�t mince words when he sized up the situation last month. Malls added way too many stores in recent years -- and way too many of them sell the same thing: apparel.

�This created a bubble, and like housing, that bubble has now burst,� he said. �We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.�

Year-to-date store closings are already outpacing those of 2008, when the last U.S. recession was raging, according to Credit Suisse Group AG analyst Christian Buss. About 2,880 have been announced so far this year, compared with 1,153 for this period of 2016, he said in a report.

New Peak

Extrapolating out to the full year, there could be 8,640 store closings in 2017, Buss said. That would be higher than the 2008 peak of about 6,200.

Retail defaults are contributing to the trend. Payless is closing 400 stores as part of a bankruptcy plan announced on Tuesday. The mammoth chain had roughly 4,000 locations and 22,000 employees -- more than it needs to handle sluggish demand.

HHGregg Inc., Gordmans Stores Inc. and Gander Mountain Co. all entered bankruptcy this year. RadioShack, meanwhile, filed for Chapter 11 for the second time in two years.

Other companies are plowing ahead with store closures outside of bankruptcy court. Sears Holdings Corp., Macy�s Inc. and J.C. Penney Co. are shutting hundreds of locations combined, reeling from an especially punishing slump in the department-store industry.

Others are trying to re-emerge as e-commerce brands. Kenneth Cole Productions said in November that it would close almost all of its locations. Bebe Stores Inc., a women�s apparel chain, is planning to take a similar step, people familiar with the situation said last month.

�Today, convenience is sitting at home in your underwear on your phone or iPad,� Buss said. �The types of trips you�ll take to the mall and the number of trips you�ll take are going to be different.�

But even brands moving aggressively online have struggled to match the growth of market leader Inc.

The Seattle-based company accounted for 53 percent of e-commerce sales growth last year, with the rest of the industry sharing the remaining 47 percent, according to EMarketer Inc.

While high-end malls continue to perform well, the exodus away from brick-and-mortar stores is taking a toll on so-called C- and D-class shopping centers, according to Oliver Chen, an analyst at Cowen & Co. There are roughly 1,200 malls in the U.S., and those classes represent about 30 percent of the total, he said.

The glut of stores is far worse in the U.S. than in other countries.

�Retail square feet per capita in the United States is more than six times that of Europe or Japan,� Urban Outfitters� Hayne said last month. �And this doesn�t count digital commerce.�

Still, the Class A malls continue to thrive, Chen said. And most Americans continue to do shopping in person: Customers prefer physical stores 75 percent of the time, according to Cowen research.

The key is creating the right experience, whether it�s online or off.

Retailers should �refocus on customers,� Chen said. �Management needs to be fixated on speed of delivery, speed of supply chain, and be able to test read and react to new and emerging trends.� more

Sunday, April 9, 2017

Constitutional Foundation of the US Economy: Powers are Implied Not Enumerated

Almost every major advance of the US economy has been nurtured or facilitated at some point by the active involvement and encouragement of the national government. It's been a partnership�sometimes uneasy, sometimes close, but most definitely a partnership�between government and free enterprise, that has led the development of the US economy. This role of the national government was deliberately written into the Constitution, and touches directly on Constitutional issues that the left has ignored, but which the wrong-wing (conservatives and libertarians) have long waged a smear campaign against.

These issues go to the heart of the question: What is the role and purpose of government? They include such specific issues as the General Welfare clause, states rights, implied versus enumerated powers, and the reach and scope of the Commerce clause. Contrary to the idealized wrong-wing myth of the U.S. economy being founded on the principles of laissez-faire, the framers of the Constitution deliberately set out to create a central government strong enough to force the thirteen states into one national economy. To do this, the national government undertook a number of programs and policies to build and strengthen the national economy by encouraging and protecting manufactures and commerce, establishing a national banking system, and promoting and directly assisting the development of transportation.

The first Act of Congress established the administering of oaths of office for federal officials, but the second Act was the imposition of the Hamilton Tariff to protect domestic industry and raise revenue. In 1791, Congress chartered the First Bank of the United States. The Patent Office was created in 1802. Direct federal involvement in the building of transportation infrastructure included projects authorized under the 1807 Coast and Geodetic Survey, and other measures to improve river and harbor navigation, which were formalized and put on a more permanent footing by the 1824 Rivers and Harbors Act. Various Army expeditions to the west, beginning with Lewis and Clark's Corps of Discovery in 1804 and continuing into the 1870s, gathered and disseminated geographical and scientific knowledge that was crucial to opening the West to settlement (see for example, the careers of Major Stephen Harriman Long, Major General John C. Fr�mont, and Brigadier General Randolph B. Marcy). These expeditions were almost always under the direction of an officer from the Army Corps of Topographical Engineers, an organization that has been almost completely written out of American history, but which comprised the elite of U.S. Army officers. Pursuant to the General Survey Act of 1824, Army officers were assigned to assist or direct the surveying and construction of the early roads, railroads and canals -- whether they were private or state projects did not matter.

Our national government has also played a crucial role in the development of metal-cutting and metal-forming machine tools and mass mechanical assembly, which form the basis of modern industrial economies; the building of a trans-continental railroad system; the application of science to agriculture, and the mechanization of farming; improvements of steam propulsion for maritime transport; development of radio; creation of a nation-wide electricity power grid; creation of a national system of paved roads; development of aviation; development of frozen foods; development of electronics; creation of nuclear power; the creation of computers, and development of the internet.
It is no accident that our national government has played this role of nurturing and facilitating the development of the economy. Such a role was clearly the intent and desire of the Founders�contrary to all the wrong-wing lies about small government and free enterprise. This review of the creation of the Constitution shows that an activist role for government was clearly intended all along. The Republicans and conservatives (I prefer to call them the wrong-wing because so little of what they believe and proclaim about American history is correct) have a directly contrary view of this history.

This is extremely important history and information you need to know and master, because it determines what a person believes is the meaning and purpose of government. The wrong-wingers actually have a coherent philosophy of government by which they are steered to rejecting government programs such as Social Security or national health care as unconstitutional and dangerous to individual liberties. They continue to believe in this philosophy of government, even though the conservative legal challenges to Social Security and other programs have been repeatedly struck down in the courts. This is a major reason why the Federalist Society was organized: to cultivate and promote jurists who believe in this philosophy of limited government, so that eventually Social Security and other programs can be challenged and found �unconstitutional.�)

The thing is, this wrong-wing philosophy of government is the Anti-Federalist philosophy that was defeated in the Constitutional Convention, defeated again with the ratification of the Constitution, defeated a third time in the Civil War, and defeated for a fourth time with the adoption and popular acceptance of the New Deal programs. I believe an even greater danger than new Justice Gorsuch joining a majority to strike down Roe v. Wade, is his joining a majority to enshrine the conservative/libertarian�s anti-Federalist �enumerated powers� doctrine and thus rule Social Security, Medicare and Medicaid, the EPA�indeed, the entirety of the �regulatory state� Bannon has targeted�to be �unconstitutional.�

In short, in recounting the actual history of how the United States developed economically, we repeatedly disprove the historical mythology of the wrong wing, which underlies their seemingly crazy ideas, such as �Social Security is unconstitutional.� So, this is history we need to know, and know well.

Bringing order out of chaos
By 1787, the men and women who had fought and sacrificed for independence from the British empire had come to realize that the political independence won with so much blood and suffering was in danger of being lost because the young nation remained economically and financially dependent on England and other powers and princes of Europe. How to make the new nation strong enough to survive the repeated attempts of British, and other European oligarchs to destroy by intrigue, subterfuge, or outright force of arms (as in 1812) the "silly experiment in self-government"?

It is difficult to realize today, but at the time there was great concern and despair that the Revolutionary War had been fought in vain. The inability of the states to cooperate under the Articles of Confederation had led to a condition of national financial and monetary paralysis. �Labouring parties, differing views and jarring Interests were the sum of our politicks,� Massachusetts attorney general and later governor James Sullivan wrote to Rufus King in June 1787. (King would soon be a delegate to the Constitutional Convention, and one of the signers). From Mount Vernon, George Washington, with mounting unease, monitored the rampaging discord and chaos through a wide-flung correspondence with former Continental Army officers and other public leaders. Reluctantly, Washington came to realize that he would not be able to live the life of a private citizen at Mount Vernon � his country needed him to once again to reach out a steady and determined hand, and bring order out of chaos.

Drawn reluctantly into public affairs again, Washington began to assist setting in motion the Constitutional Convention. The failure of the Confederation to erect and maintain a strong central government able to overcome the centrifugal forces of the various states and sections, needed to be corrected. More importantly, a structure of government had to be devised that could create, nurture, and direct a functioning national economy powerful enough to make the United States truly master of their own destiny, economic as well as political.

Washington was president of a company working on a pet project of his: the design and construction of a canal around the Great Falls of the Potomac River. Even with Washington�s enormous influence, his Patowmack Company had been unable to get the governments of Maryland and Virginia to cooperate on the canal. As Washington and his allies saw it, the country clearly would benefit by improving the navigability of the rivers and harbors of the country, Nay, more: such internal improvements were absolutely necessary for the development and expansion of the country�s economic interests. Improved river navigation, improved harbors, and improved roads all were needed to bring the produce of the farms and the output of the manufactories to markets, foreign and domestic. More important, improved communications would tie together the country by tamping down local and regional narrow interests with a more widespread national outlook and self-identity. (One of Washington's most important reforms of the army during the War had been to dilute the local outlook of the of the state regiments by stressing the national character of the Continental Army.)
But in the chaos of states competing against each other for their own commercial interests, projects of national importance were repeatedly underfunded, or not funded at all, and sometimes even politically sabotaged. This state of affairs sorely vexed Washington. His experiences in command of the Continental Army had taught him, painfully and repeatedly, that seemingly super-human exertions were required to achieve any level of cooperation and active support from the states on matters of national importance.

The first few years in command, Washington had at least found sympathetic ears in Congress, but eventually he found not even that much. The inability of the Continental Congress to force the states to cooperate or even address the needs of the Continental Army resulted in such discord and rancor that Washington had practically given up asking the Congress for anything by the end of the war. Instead, he came to rely almost entirely on the support brilliantly engineered by financier Robert Morris, who went into debt many times over, advancing funds he raised in his own name to pay the troops and procure supplies. Washington also came to depend on the alliance with France, carefully and adroitly managed by the American minister in Paris, Benjamin Franklin. The Continental Army was never larger than 17,000 men, and was sometimes as few as 4,000. French support would eventually result in 9,000 French troops on American soil. In addition, France supplied Washington�s army, and navy, with immeasurable amounts of weapons and ammunition, naval supplies, and even entire warships (such as John Paul Jones� Bon Homme Richard). The cost to France has been estimated to be over one billion livre.

Simply put, his experience as commander of the Continental Army had taught Washington that the states could not be trusted to keep the national picture in view. As the Articles of Confederation proved over and over again to be wholly inadequate to framing that national picture, Washington and his correspondents came to feel ever more strongly that a much stronger union of the states was needed. Almost every single officer that had served under him during the War shared Washington�s views on these matters. (Historical side-note: Opponents of the Constitution would later twist this fact in an attempt to portray the Society of the Cincinnati, a formal organization of Washington�s officers (somewhat like today�s American Legion) as an aristocratically inclined secret society intent on using the Constitution as a subterfuge to create a military dictatorship with Washington at its head as Commander in Chief.) Here, for example, is a letter Washington wrote to Benjamin Harrison, (a Virginia delegate to the Continental Congress from 1774 to 1777 and a signer of the Declaration of Independence, whose great grandson of the same name would become President, in 1889) dated 18 January 1784:
The disinclination of the individual States to yield competent powers to Congress for the F�deral Government�their unreasonable jealousy of that body & of one another�& the disposition which seems to pervade each, of being all-wise & all-powerful within itself, will, if there is not a change in the system, be our downfall as a Nation. This is as clear to me as the A, B.C.; & I think we have opposed Great Britain, & have arrived at the present state of peace & independency, to very little purpose, if we cannot conquer our own prejudices. The powers of Europe begin to see this, & our newly acquired friends the British, are already &; professedly acting upon this ground; & wisely too, if we are determined to persevere in our folly. They know that individual opposition to their measures is futile, & boast that we are not sufficiently united as a Nation to give a general one! Is not the indignity alone, of this declaration, while we are in the very act of peace-making & conciliation, sufficient to stimulate us to vest more extensive & adequate powers in the sovereign of these United States? For my own part, altho' I am returned to, & am now mingled with the class of private citizens, & like them must suffer all the evils of a Tyranny, or of too great an extension of f�deral powers; I have no fears arising from this source; in my mind, but I have many, & powerful ones indeed which predict the worst consequences from a half starved, limping Government, that appears to be always moving upon crutches, & tottering at every step.
The Constitutional Framework
How was the call for the Constitutional Convention issued? An often overlooked fact is that the Constitutional Convention was called from a September, 1786 convention in Annapolis which had in turn been called to find a way to get the states to cooperate in furthering Washington�s Potomac canal project, and other issues crossing state boundaries. The Annapolis convention concluded a stronger central government than that provided in the Articles of Confederation was needed in order to provide a national impulse and direction to the economic and transportation development of the continent's resources, and so directed all the states to select delegates for a convention in Philadelphia the following year.

Thus, the very formation of the government of the United States was directly the result of the need for imposing a strong national direction to economic development. But, today, many people operate under the mistaken impression that the Constitution and the Federalist Papers (the 85 editorials written by Alexander Hamilton, James Madison, and John Jay in their effort to win popular support in New York for ratification) provide little or no direction for national economic policy. An excellent short book I highly recommend is The Great Challenge: The Myth of Laissez-Faire in the Early Republic, by Frank Bourgin (1989, George Braziller Inc., New York, NY; 1990, Harper & Row, New York, NY). Bourgin shows that the Constitution was carefully crafted to give the national government the authority and the power to intervene forcefully in the economic life of the new nation. In the Foreword, Arthur Schlesinger wrote that Bourgin�s dissertation,
represents an act of intellectual liberation from the laissez-faire myth so long cherished and propagated by those who profit from laissez-faire policies. It enriches our national traditions by reminding us of the long established role of government as an instrument to promote the welfare of the people.
Laissez-faire is an idea developed by the French physiocrats in the late 1600s and later picked up and more fully explicated by Adam Smith in the 1770s (yes, we were fighting for independence from the ideas of Adam Smith, among other things British). Laissez-faire economic theory posits that the workings of private individuals in a free market better allocates society�s resources than top-down government direction. Therefore, the markets should be free of state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies. (Note that organized labor unions are regarded by these economic ideologues as a monopolistic impediment to the free workings of the market. So you see that the wrong-wing hatred of organized labor today arises directly from the wrong-wing clinging to British economic doctrines that are actually contrary to the actual origins of the American economy. They are trying to prevent reality from interfering with their theory!) Today, economists also call this body of thinking �neo-liberalism� (and the use of the term has almost always incited confusion and even hostility on progressive and liberal forums such as this, by a few people who simply are not familiar with the meaning of the term, and erroneously believe it is disparaging political liberalism.)

As Bourgin writes on pages 34-35:
Laissez-faire did not fit the purposes of the Constitution makers, for it was against the laissez-faire policy of the confederation that the Constitution was struck. In the words of James Wilson, one of the leaders of the convention, �The great fault of the existing Confederacy is its inactivity. It has never been a complaint against Congress that they have governed overmuch. The complaint has been that they have governed too little. To remedy this defect, we were sent here.� The manner in which the detailed powers of the national government were written into the Constitution, their number, their phrasing, and the circumstances attending thereto�all this indicates that the convention members were fairly of one mind to create a vigorous instrument of government capable of standing beside any foreign power in unity, stability, and power.
As Bourgin relates, there was indeed debate in the Convention over whether or not to give explicit powers to the new government bearing on the economy. Franklin wanted to have an explicit clause on building post roads and canals. Madison wanted to add to Franklin�s clause an express power to grant charters of incorporation to accomplish such projects. Unlike today, it was common at the beginning of the republic to hold corporations strictly accountable to very narrow objectives embodied in their charters. A corporation established to build a road was expected to build a road, and not also undertake cotton cloth manufacturing. Today, of course, corporate conglomerates engaged in many different economic activities is the norm. General Electric is still thought of as a manufacturer of industrial and consumer electrical goods, but it also builds jet engines, and over half its revenues and profits come from financial activities, not manufacturing. Such a company in the early 1800s would have met with widespread public suspicion and hostility.

Up until the Civil War, corporate charters were issued for very specific purposes -- such as to build roads, canals, bridges, ports, and railroads. And often, the purposes had to be accomplished in very specific time frames or the charter of incorporation would lapse and the corporation would cease having a legal existence. It was not unusual for a state to revoke a corporate charter if the corporation did not fulfill the purpose for which it was incorporated. For example, the Sunbury and Erie Railroad, chartered by Pennsylvania in 1837, was never able to actually begin construction, and after the state had given it an extension of time, the company was dissolved by state government fiat and its property confiscated and given to the Pennsylvania Railroad. (Sunbury is located near the confluence of the north and west branches of the Susquehanna River.) As another example, the Franklin Railroad received an unusual dual charter from Maryland and Pennsylvania in 1832, to construct a railroad from Chambersburg, Penn., 27 miles south to Hagerstown, Maryland. The company went bankrupt within a couple years, but was operated by the bankruptcy receiver until 1852, when the Commonwealth of Pennsylvania determined that the thin-flat, bar-rail on which the horse-drawn cars rode had become unsafe to operate on, and ordered that the company either disband, or relay the road with heavy T-rail to allow the running of steam locomotives. A very direct and heavy-handed interference of the government in the market!

Implied versus enumerated powers
At this point, we need consider a complex Constitutional issue. Specifically, we confront the issue of whether the Constitution limits the powers of the national government by a strict enumeration of powers (the wrong-wing view) or, alternatively, the Constitution only provides a listing of general powers, each of which implies further powers the government can use to carry out the enumerated powers.

Historically, the wrong-wing position of enumerated powers has been a minority position that has been repeatedly but narrowly rejected in a number of Supreme Court decisions. The enumerated powers interpretation would cripple the national government and return us to the chaos and discord of the Articles of Confederation. The importance of this issue�of implied versus enumerated powers�is that the entirety of our modern social welfare net, and much of the regulatory state, erected in the New Deal and since, including environmental protection and consumer safety regulations, rests on the foundation of implied powers. We need to understand what is at stake when wrong-wingers are talking about enumerated powers: it is a direct attack on the very structure and purpose of the national government. Let the wrong-wingers win this argument of implied versus enumerated powers, and the entire legal basis of Social Security, environmental protections, business regulations, and much more, is swept away.

This is why the creation of the conservative Federalist Society was such a master-stroke: it is subversion of the framework of government through judicial reinterpretation. If wrong-wingers today are allowed to win this debate, it will usurp over two centuries of American legislation and jurisprudence and destroy the idea of majority rule. Bourgin shows that the Convention spent little time considering the enumerated powers list: it was left up to the Committee on Detail, and accepted by the Convention with little discussion and only one change. �If it were intended,� Bourgin writes, �that we regard the enumerated powers... as a deliberate attempt to fix the federal authority within carefully defined limits, it seems hardly likely that so little care and debate would have been allotted to their construction.� Bourgin�s conclusion is that the delegates thought the list of powers was sufficiently wide that it was unnecessary to try to think of every single activity the government might need to undertake in the future and list it. This view is bolstered, Bourgin notes, by the work of Walton H. Hamilton and Douglas Adair, in their book The Power to Govern (New York, NY: Norton, 1937. My abridged and annotated edition is available on Amazon as a Kindle ebook, here ). Bourgin writes:
Some light on the question of the intended scope of federal authority may be revealed by examining the meaning of the term commerce, included within the enumerated powers� In their careful study of the contemporary uses of the term commerce, Hamilton and Adair come to the conclusion that commerce was chosen advisedly as having the most comprehensive meaning of any of the alternative terms; commerce served the catholicity of uses that would be forced on it.
Bourgin then proceeds to quote Adair and Hamilton:
� there is everywhere in evidence an intent to endow the general government with the power to formulate a policy for the national economy, a power which is to extend to trade, manufactures, the staples of agriculture, internal improvements, and the creation of corporations. A broad grant of power was to be given to Congress in a clean-cut clause of the utmost brevity. If possible, a single key word must here�as elsewhere in the Constitution�be made to tell the story. It was of no avail to bother with manufacture or production, words of such narrow confine, even if set down in clusters, could only have made up an irregular verbal fragment. A more comprehensive term�such as business or industry�was not for many decades to become available. The choice was narrowed to traffic, trade and commerce. Traffic would not do; it was lowly in origin and clearly headed for vulgar verbal company. Trade was too specialized in meaning and too barren in larger implications to serve the occasion. Commerce excelled in the larger breadth and range, the greater dignity and prestige which attached to it. And commerce alone had competency for so high a verbal duty.�
On this issue, Bourgin explains that a comparison of the Constitution with the Articles of Confederation,
is important in evaluating the commonly held but erroneous view that the framers of the Constitution was limiting the powers of the federal government rather than extending them. Enough powers were granted the new government to fashion a new national economy out of the thirteen separate economies. The government was given the authority to establish uniform commercial regulations, in effect to create a single unobstructed national area of free trade. Power was given in the most general terms �to coin money� and �regulate the value thereof��a grant as broad as the contemporary knowledge of pecuniary exchange allowed.
The fight over incorporating a national bank
The first major battle over the enumerated versus implied powers began over the question: did this particular phrase of the Constitution about money give the national government the power to charter a bank? Washington had selected as his Secretary of the Treasury Alexander Hamilton, who had served as Washington�s most trusted and most important aide during the War. Only if you have read a good biography of either man can you form any idea of the close bond and high esteem between the two. One biographer of Hamilton went so far as to summarize Hamilton�s role in the Washington administration as that of prime minister. But Hamilton�s place in the history of American economic development places him above all the other Founders. In 1879, Henry Adams wrote about Hamilton:
The true ground of Hamilton�s great reputation is to be found in the mass and variety of legislation and organization which characterized the first Administration of Washington, and which were permeated and controlled by Hamilton�s spirit. That this work was not wholly his own is of small consequence. Whoever did it was acting under his leadership, was guided consciously or unconsciously by his influence, was inspired by the activity which centred in his department, and sooner or later the work was subject to his approval. The results�legislative and administrative �were stupendous and can never be repeated. A government is organized once for all, and until that of the United States fairly goes to pieces no man can do more than alter or improve the work accomplished by Hamilton and his party.
The Life of Albert Gallatin, by Henry Adams. Published 1879, by J. B. Lippincott & Co. Text from the online version made available by Project Gutenburg.
In his 2004 biography of Hamilton, Ron Chernow writes:
The American Revolution and its aftermath coincided with two great transformations in the late eighteenth century. In the political sphere, there had been a repudiation of royal rule, fired by a new respect for individual freedom, majority rule and limited government [here note the mention of limited government in the context of a repudiation of royal (autocratic) rule]. If Hamilton made distinguished contributions in this sphere, so did Franklin, Adams, Jefferson, and Madison. In contrast, when it came to the parallel economic upheavals of the period�the industrial revolution, the expansion of global trade, the growth of banks and stock exchanges�Hamilton was an American prophet without peer. No other founding father straddled both of these revolutions�only Franklin even came close�and therein lay Hamilton�s novelty and greatness. He was the clear-eyed apostle of America�s economic future, setting forth a vision that many found enthralling, others unsettling, but that would ultimately prevail. He stood squarely on the modern side of a historical divide [of economic history] that seemed to separate him from the other founders.
There was never any doubt as to Hamilton�s views on the roles of the central government versus the states and their relatives strengths: in the Constitutional Convention, Hamilton was so strongly for so robust a national government�arguing for a life term for the President, and state governors to be appointed by the national government�that Jefferson, Madison, and others came out of the deliberations convinced that Hamilton was a closet monarchist. As our first Secretary of the Treasury, it was Hamilton who designed and set in place the basic building blocks for the American economy under the new system of government: a customs service; a system of government revenues based on various tariffs and taxes; a revenue service that included the creation of the Coast Guard (not so much to guard against foreign invaders, as to crack down on smugglers and tax evaders); and the establishment of public credit. These, and other measures discussed below, were outlined in five reports Treasury Secretary Hamilton wrote for the Congress. These reports formulated the basic structure of the U.S. economy, a structure which has been modified, especially during the New Deal, but which remains largely intact.
It was Hamilton�s proposal for the creation of a Bank of the United States that touched off a firestorm in the House of Representatives, leading to the first major fight over the issue of implied versus enumerated powers. The fight came down to this: Could the national government grant a corporate charter? No such power was explicitly mentioned�enumerated�in the Constitution. Since it was not, did that not mean that it was therefore a power reserved to the states, as expressed in Article Ten of the Bill of Rights?

The leader of the enumerated powers interpretation was Secretary of State Thomas Jefferson, who enlisted the aid of James Madison in launching a series of open and covert attacks on Hamilton, and his influence with Washington. Jefferson argued that since the power to create a bank was not expressly and explicitly stated in the Constitution, the proposed charter for a Bank of the United States was unconstitutional. Using an astonishing amount of political intrigue and subterfuge, Jefferson was able to make the Bank a major national issue. President Washington therefore requested Hamilton and Attorney General Edmund Randolph, who sided with Jefferson, and to write reports explaining and justifying their respective positions regarding the government�s power to create the bank.

The details of this historic pivot point are given by Ron Chernow on pages 350 to 355 in his excellent biography of Hamilton. Chernow writes that Hamilton
told Washington that, if adopted, "principles of construction like those espoused by the Secretary of State and the Attorney General would be fatal to the just and indispensable authority of the United States." Then, in blazing italics, Hamilton trumpeted his main theme: "Now it appears to the Secretary of the Treasury that this general principle is inherent in the very definition of government and essential to every step of the progress to be made by that of the United States: namely that every power vested in a government is in its nature sovereign and includes by force of the term a right to employ all the means requisite and fairly applicable to the attainment of the ends of such power." If Jefferson's and Randolph's views were upheld, "the United States would furnish the singular spectacle of a political society without sovereignty or of a people governed without government." Hamilton waved away complaints that the Constitution did not explicitly mention a bank: "It is not denied that there are implied as well as express powers and that the former are as effectually delegated as the latter." To argue, as did Jefferson, that all government policies had to pass a strict test of being "absolutely necessary" to the performance of specified duties would paralyze government. How could one say with certainty what was absolutely necessary? Hamilton pointed out that, in setting up the Customs Service, he had overseen construction of lighthouses, beacons, and buoys, things not strictly necessary, but useful for society all the same. He was drafting a rationale for the future exercise of numerous forms of federal power. The Bank of the United States would enable the government to make good on four powers cited explicitly in the Constitution: the rights to collect taxes, borrow money, regulate trade among states, and support fleets and armies. Jefferson wanted to deprive the federal government of the power to create any corporations, which Hamilton thought could cripple American business in the future. At the time, few corporations existed, and those mostly to build turnpikes. The farseeing Hamilton perceived the immense utility of this business form and patiently explained to Washington how corporations, with limited liability, were superior to private partnerships. In the end, his bank argument was predicated not only on interpretation of the Constitution but on his reading of history: "In all questions of this nature, the practice of mankind ought to have great weight against the theories of individuals." After writing this magisterial defense, Hamilton packed it off to Washington before noon on Wednesday, February 23. The next day, Washington studied the opinion and, despite lingering doubts, was sufficiently impressed that he did not bother to send it to Jefferson. The day after that, he signed the bank bill.
Washington, as James Flexnor�s 1994 biography is entitled, was the indispensable man. More than anyone else except Benjamin Franklin, Washington embodied the critical civic trait of public virtue that two scholars of the Revolutionary period, Bernard Bailyn and Gordon Wood, have identified as one of the keystones of the republican theory of government. (There are other scholars, but Bailyn and Wood I have read, and heartily recommend them.) That this was no mere hagiography is shown that in the election year of 1793, when Jefferson and Hamilton were the bitterest enemies, they both agreed that Washington must serve a second term as President, and both beseeched him accordingly.
It was never certain that Washington would yield to such entreaties and submit to a second term. Our first President was heartily sick and tired of public life, and wanted more than anything to retire with Martha to the peace and solitude of Mount Vernon. But Hamilton and Jefferson and many other correspondents and advisers to Washington realized, that the first two administrations of the new government would cast it almost beyond remolding. The actions Washington took now, the decisions he made now, the precedents he established now, would set the course of the republic for untold generations to come. Washington was fully conscious of this solemn historic stage and his crucial role on it, and eventually accepted the necessity of serving a second term.

So, as far as I�m concerned, what Washington decided regarding this issue of enumerated powers versus implied powers is by far the best guide to what the Founders intended�not the squawking of the Anti-Federalists so vogue among the wrong-wing now. Not the denunciations, peregrinations, and machinations of Jefferson and Madison, who�be it noted�both later became President themselves and found the enumerated powers doctrine not just embarrassing but downright unworkable. Here is the simple fact that wrong-wingers simply cannot get around, and will desperately avoid unless you shove it in their face: the most important of the Founders, the Founder who was the indispensable man, George Washington, decided in favor of Hamilton�s doctrine of implied powers.

Reverberating through history
The decision by Washington to adopt and support Hamilton�s interpretation of implied powers has reverberated down to this day. Without Hamilton�s interpretation of implied powers, the U.S. government would look significantly different than it does today. Chernow explains that
Hamilton's plea for the bank had a continuing life in American history, partly from the influence it exerted upon Chief Justice John Marshall. When Daniel Webster made oral arguments for the Second Bank of the United States in the landmark case of McCulloch v. Maryland in 1819, he quoted Hamilton's 1791 memo to Washington on the necessary-and-proper clause. In words that distinctly echoed Hamilton's, Marshall said that necessary didn't mean indispensable so much as appropriate. Repeatedly in American history, Hamilton's flexible definition of the word necessary was to free government to handle unforeseen emergencies. Henry Cabot Lodge later referred to the doctrine of implied powers enunciated by Hamilton as "the most formidable weapon in the armory of the Constitution ... capable of conferring on the federal government powers of almost any extent." Hamilton was not the master builder of the Constitution: the laurels surely go to James Madison. He was, however, its foremost interpreter, starting with The Federalist and continuing with his Treasury tenure, when he had to expound constitutional doctrines to accomplish his goals. He lived, in theory and practice, every syllable of the Constitution. For that reason, historian Clinton Rossiter insisted that Hamilton's "works and words have been more consequential than those of any other American in shaping the Constitution under which we live.�
As another lawyer, William Pinkney, argued before the Supreme Court, also in McCulloch v. Maryland:
It was impossible for the framers of the constitution to specify prospectively all these means, both because it would have involved an immense variety of details, and because it would have been impossible for them to foresee the infinite variety of circumstances in such an unexampled state of political society as ours, forever changing and forever improving. How unwise would it have been to legislate immutably for exigencies which had not then occurred, and which must have been forseen but dimly and imperfectly. The security against abuse is to be found in the constitution and nature of the government, in its popular character and structure. The statute book of the United States is filled with powers derived from implication.
The decision in the case was unanimous, and it was written by Chief Justice Marshall:
A Constitution, to contain an accurate detail of all the subdivisions of which its great powers will admit, and of all the means by which they may be carried into execution, would partake of the prolixity of a legal code, and could scarcely be embraced by the human mind.
Moreover, Marshall was not content to merely render the decision. He felt it necessary to directly discuss and dismiss the arguments in favor of the enumerated powers interpretation, noting that  �the baneful influence of this narrow construction� would render �the Government incompetent to its great objects��

One of the Associate Justices that sat on the Marshall court was Joseph Story. A little over two decades after the McCulloch decision, in 1833, Justice Story published a three volume work, Commentaries on the Constitution, that I believe remains the single most important legal guide to interpreting the Constitution. In Sections 1,238 to 1,289, Story dealt with the issue of implied powers, and it is well worth reading the entirety of Story�s discussion on the subject. In the interest of brevity, I will here quote only two key sentences:
� 1238. The plain import of the clause is, that congress shall have all the incidental and instrumental powers, necessary and proper to carry into execution all the express powers.� � 1250. The motive for its insertion doubtless was, the desire to remove all possible doubt respecting the right to legislate on that vast mass of incidental powers, which must be involved in the constitution, if that instrument be not a splendid pageant, or a delusive phantom of sovereignty.
For the next two centuries, the Supreme Court would make limited and narrow applications of the implied powers doctrine. Not until 1936, when it was deciding the constitutionality of the various programs and measures of the New Deal, did the Court finally issue a clear, unambiguous declaration in support of Hamilton�s and Story�s interpretation. Ironically, the Court, in United States v. Butler, 297 U.S. 1, 65 (1936), struck down the Agricultural Adjustment Act of 1933. But by inserting into its decision a clear endorsement of the implied powers doctrine, the Court was signaling a major shift: it had become more willing to accept that the First Great Depression required more robust interventions into the economy by the national government than ever before.
Since the foundation of the Nation, sharp differences of opinion have persisted as to the true interpretation of the phrase. Madison asserted it amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress. In this view, the phrase is mere tautology, for taxation and appropriation are, or may be, necessary incidents of the exercise of any of the enumerated legislative powers. Hamilton, on the other hand, maintained the clause confers a power separate and distinct from those later enumerated, is not restricted in meaning by the grant of them, and Congress consequently has a substantive power to tax and to appropriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. Each contention has had the support of those whose views are entitled to weight. This court has noticed the question, but has never found it necessary to decide which is the true construction. Mr. Justice Story, in his Commentaries, espouses the Hamiltonian position. We shall not review the writings of public men and commentators or discuss the legislative practice. Study of all these leads us to conclude that the reading advocated by Mr. Justice Story is the correct one.
The greatest danger of more Federalist Society jurists reaching the Supreme Court, and of the conservative and libertarian drive to call to have state legislatures call a Constitutional convention, is the chaos and terror that will inevitably result if our national government is crippled by subjecting it to the enumerated powers doctrine. 

Climate Grief

Below is a pretty good description of what the author calls "climate grief"�the crushing realization that everything at all lovely...