Liberty Maven

Indeed, that’s the question we at Liberty Maven have been asking all along.  What about the Constitution?  Isn’t this illegal?  Hello???  Of course we could count on Ron Paul to point out that not only would any bailout be disastrous, but the federal government is not permitted to intervene in such a way.  But for the most part we didn’t even hear the word Constitution muttered while our representatives scrambled to “do something”.  William J. Watkins, Jr. wrote commentary on TheTownTalk.com asking all the right questions….

Congress’ powers are enumerated in Article I, Section 8 of the Constitution. A number of specific powers are listed (e.g., coining money, establishing a post office, raising armies), but nothing is mentioned about intervening in private markets and managing large portfolios of assets. According to James Madison, the powers of Congress were carefully enumerated so that the federal government “can only operate in certain cases.” Unfortunately, over the years Congress has become so used to exercising plenary authority that no one even discusses the basis of its power to act. Questions of constitutionality were not raised by congressional leaders, the mainstream media, or by the presidential campaigns of John McCain and Barack Obama. The people’s fundamental law received the silent treatment.

Enumerated powers aside, the national debate also ignored the bailout plan’s lack of standards for directing the broad grant of discretion to the Treasury Secretary. Under separation of powers principles, legislative power typically cannot be exercised by members of the executive branch or the judiciary. The Supreme Court, however, permits some delegation by Congress. But with this act, the Secretary of the Treasury is given czar-like power over a large segment of the private market.

Americans should be concerned that a constitutional discussion was completely absent from the national debate about the bailout package.

Undoubtedly, the bailout package will have long-term effects on the American economy. The greatest impact, however, is the loss of any real constraint on government power. If the Constitution is not consulted or debated when the government seeks to acquire and manage billions in private assets, then we may safely assume that there are no limits on Congress’ powers. Untrammeled government authority — not economic stabilization — will be the lasting legacy of this Wall Street bailout.

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