Force_Shift_1913_and_1936

= **Leadership and Liberty**  = = = = **America’s Force Shift**  =

March 4, 1913 – Inaugural address: President Wilson said his administration was time for a change and it was time to use the federal government in many other ways. As a result of 1913 events, Americans today pay higher taxes, fight with burdensome and costly government regulations, and enjoy much less freedom as debt and government dependence has increased. Every 100 years (give or take a decade or so) nations go through a major world shift…either a freedom shift or a force shift. A force shift is when government expands power and individual freedom decreases. In 1776 America went through a freedom shift. In 1913, America went through a force shift. Today, America is going to begin another world shift…either a freedom shift, or another force shift.

In 1913, there were two Constitutional amendments and a new federal law that decreased power of the states and individuals and increased the power of the federal government.

The 16th amendment allowed the federal government to levy an income tax. The Constitution had prohibited such a tax in the provision that said no direct taxation. The main source of revenue for the federal government before 1913 was import tariffs. Sales of western lands and taxes on various products were also sources. The states were able to provide funding to the federal level as well when necessary. Before 1913, the federal government had a small budget and only spent in areas specifically enumerated in the Constitution – only in areas where the states were not competent on their own. Progressives sold it to the people saying only the wealthiest would pay and the rate would be very low. Why does this matter?It takes power away from the states and gives it to the federal government – the states could withhold funding if the feds passed laws the states didn’t like…now the federal government takes money directly from the people.A.K.A. à federal government increases in power, states lose power, the people lose freedom.

The 17th amendment changed the method of elected senators to the direct election of senators, or that the people in each state will elect senators. Senators were originally chosen by state legislatures (state legislatures were elected by the people). The Founders made it like this to have a check and a balance against federal power – Senators were responsible to their state and would only pass laws for the good of their state. Progressives justified this amendment change saying it improved democracy and gave the people more power. The House was always elected by the people and naturally was more willing to increase government spending (people naturally vote for who will give them more and therefore more spending becomes necessary). The Senate was always the frugal chamber…limited spending since chosen by the states…the states gave the federal government money (before 16th amendment)…if senators increased spending, that spending would have to come from the states…states would be upset if wasteful spending. The Senate became more like the House – increased spending and taxes – promised more stuff to the people. Might sound good that we get to elect our Senate, but a deeper analysis shows federal government gained power, states lost power, and people would lose freedom since this increased reliance on the government à now the House and Senate both promise more spending for the people…people will vote on whose spending will benefit them the most, which increases government-reliance. Original intent was for the states and federal government to be equal in power…today, the federal government is much more powerful. It also took away a check on the power between the House and Senate.

In 1913, the third aspect that created America’s movement into a force shift was the Federal Reserve Act, which set up the Federal Reserve System, or the central bank of the United States. What is sound money?Money based on something valuable such as gold or silver.What is fiat money?Money not based on anything of value.Why do the rich get richer in bad economic times (today)?Wealthy invest in sound items; everyone else saves their fiat money….what do I mean??? Wealthy people have more real estate, gold, silver, and other items that increase in value while the rest of us have fiat money in a bank, which devalues. Which type does the Federal Reserve put out?Fiat. How does government power increase?Bigger government (pushed by Wilson) requires government to borrow money more easily and print money at will – did this then and do this now Have you noticed prices going up?It’s because the Fed continues to print more money and it’s not backed by anything sound.Why?Government has continued high spending and borrowing more on its own credit to continue big government spending.Why?Government-reliance will keep getting big spenders re-elected.More taxing, borrowing, and printing of money became easier…1913 was a banner year for big government…today it’s normalMore Americans today accept our debt and high spending as normal since it’s been done for decades…increasing almost every year.

The year 1936 was also a key year in which the force shift was solidified. There were two important Supreme Court cases that would forever change America in terms of federal government power. The 1913 force shift transitioned the federal government into a national government and two major 1936 Supreme Court cases allowed the national government to expand its size, power, and its spending.

How did Congress get such an expansion in power? There were two major Supreme Court cases in which the Supreme Court opened the door for federal government expansion of its authority. Schechter Poultry Company v. United States 1935: This case was nicknamed the "sick chicken case." It got to the Supreme Court because the federal government was regulating the chicken processing industry. One provision of the regulations said that when companies bought chickens, they couldn't separate healthy and sick chickens - they had to buy the whole lot. The Schechter Company was prosecuted for violating this rule. It went through the federal court system. The FDR Administration said there were two parts in the National Industrial Recovery Act that justified the law through Congress's power to regulate interstate commerce - the code that governed the processing of chickens and the minimum wage and hour regulation for employees of the company. The case question was does the Commerce Clause give Congress the power to regulate chicken processing and set a minimum wage for companies? The Supreme Court ruled that the federal law was unconstitutional basically saying that if the federal government were allowed this power, then the federal government would have almost unlimited power. This was the correct interpretation of the Commerce Clause - that the federal government doesn't have unlimited power, that Congress can't create a centralized government, and there is to be no conflict with state power. So, what went wrong? The Supreme Court got it right by defining interstate commerce as the start of shipping to the end of shipping. The problem came when the Supreme Court said Congress can regulate those things that DIRECTLY IMPACT interstate commerce. The outcome of the Schechter Case was that laws that were previously unconstitutional could now be interpreted as constitutional since Congress could now regulate things that directly affect or impact interstate commerce. Congress's power, from this Supreme Court decision, was no longer tied to regulating ONLY interstate commerce. If an action directly impacted interstate commerce, now Congress could regulate that action. Congress would, therefore, start to use the Commerce Clause using the new direct affects test controlling things that were meant to be state jurisdiction. NOW, Congress just has to show that a law impacts commerce, even if such a law doesn't deal with the physical shipping of a good across state lines. Since this case, the number of federal regulations over business has increased year by year.

The other clause that led to a major expansion of the government is the General Welfare Clause. Was this clause intended to allow the Congress to tax and spend on anything? The key question is can Congress spend on projects that go beyond the enumerated powers or was spending to be limited to the enumerated powers. In 1936, the Supreme Court ruled on the key case United States v. Butler 1936. It all began with the Agricultural Adjustment Act, which planned to limit farm products in order to raise prices on farm goods. There was a tax on food processing companies and the money would be used to pay farmers not to grow crops. Is Congress able to do this? Can Congress tax and spend in this manner based on the General Welfare Clause? What was the original intent? This debate was held between James Madison and Alexander Hamilton. Madison believed federal taxing and spending had to stay within the enumerated powers whereas Hamilton believed the federal government could go beyond the enumerated powers. Joseph Story was a Supreme Court justice from 1811 to 1845. He wrote a treatise on the meaning of the Constitution in which he sided with Alexander Hamilton on this matter. The 1936 Butler Case used the Story rejection of Madison's view and the Supreme Court in 1936 opened the door for massing spending and entitlements. FDR's justice department also used quotes from some of the Founding Fathers who sided with Hamilton and even Daniel Webster as well as States' Rights advocate John C. Calhoun.

How could John C. Calhoun have supported the Hamilton view that the federal government could tax and spend beyond the enumerated powers? The major history of Calhoun is that he was an ardent states' rights advocate believing that the states could even declare a federal law unconstitutional during the Nullification Crisis under President Andrew Jackson. Calhoun argued time and time again for the states to conduct their own matters and for the federal government to stay out of state affairs. So how could Calhoun support the Hamilton view? The answer is in the full text of what Joseph Story wrote. Story wrote that the General Welfare Clause was not meant to give Congress power to spend on anything. If they could, then the Constitution would be meaningless. The original intent was that the federal government could NOT spend on what the states were competent enough to handle on their own. NOT spend on anything the Congress wanted.

This is why Hamilton's view was supported by a guy like Calhoun - because both believed the federal government could tax and spend beyond the enumerated powers ONLY if it was on a matter that the states were not competent enough to handle on their own. The early debate was in the early 1800s over the U.S. purchasing the Louisiana Purchase. The enumerated powers don't allow this purchase - buying territory. This is where the debate over the General Welfare Clause came up. States are denied the power of entering a treaty with a foreign nation so the states can't make such a purchase, but making this purchase isn't an enumerated power. The Louisiana Purchase was allowed by the General Welfare Clause because the states weren't competent enough to do this on their own (actually the states weren't allowed based on the Constitution). Story noted that the first vote at the Constitutional Convention was that the national government could only act in cases where the states were incompetent, a view held by Washington and Hamilton and an area Calhoun certainly agreed.

The ruling in the Butler Case said Congress could go beyond the enumerated powers, citing Hamilton, Story, and Calhoun, but the Supreme Court left out the part about only in areas were the states were not competent. This Supreme Court interpretation in Butler went beyond original intent and since the Butler Case, the federal government taxes and spends far beyond the enumerated powers and far beyond what the states are competent enough to do on their own. The states are competent enough to handle education, transportation, and welfare. However, the federal government spends a lot in these areas. The federal government handles military and space exploration - areas the states aren't competent enough to handle. Today, Congress spends a lot of money and puts forth mandates to control schools in states as well as highways, welfare, and many other areas that were intended to be state powers. When the federal government does this, it forces the states to pass laws to comply with the federal mandates. This has been allowed by the Supreme Court.

As a result of the Supreme Court not protecting the original intent of the Constitution, the U.S. Congress since the Great Depression has been able to tax and spend dramatically to the point where we have a massive government with decreasing personal liberty and a debt that is out of control. This all could and would have been avoided if the U.S. government stayed in the lines of the original intentions of our Founding Fathers. Ever since 1936, federal spending has increased each year (some administrations increased spending more than others, but the spending has increased every year since 1936).

Why does this all matter? Why is it all relevant today? We’re ready for another World Shift – do you want a freedom shift or another force shift?Most want freedom.What’s needed for a freedom shift?(1) A wise citizenry – citizens need to understand freedom, our Founders, and original intentions; citizens need to realize gov’t-reliance = loss of freedom…the more we rely on gov’t, the less freedom we have. Most don’t recognize a problem until freedom is lost (ask citizens who experienced takeovers by tyrannical dictators). (2) An entrepreneurial spirit – understanding that hard work can pay off; understanding we all have a genius within us; since 1913 wealth and success have been demonized more than held up; think about what we’ve learned in history – America’s growth came largely from entrepreneurship. Nations that embrace business, earning wealth, and earning success are more free than ones that don’t. (3) Voracious readers – most don’t read or like to

read; citizens in the Founding era read everything starting with the Bible but also read gov’t documents; today we rely on what our politicians or media tell us are in laws; we don’t read “the fine print.” A wise citizenry and free comes from citizens actually involved in maintaining their freedom. In a force shift, citizens allow others to tell them what to do and what to think. A freedom shift is times when citizens self-educate, are eager for knowledge, and are informed. Nations rise in prosperity and power as innovation, independence, and giving grow and nations grow in freedom.When government tries to force innovation, we lose creativity,When government tries to force independence in areas, it increases dependence.When government forces giving, we lose the value of real charity.If you want a freedom shift…be a leader, a reader, and an independent thinker.We WILL go through another shift…it WILL be either freedom or force…WE THE PEOPLE get to make that choice, but many will continue with what they know as “normal” even though freedom is decreasing and gov’t power is increasing.

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