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Infrastructure Bills Do Not Lead To Recovery, Only Increased Federal Control

This article was originally published by Brandon Smith of Alt-Market.us at The Birch Gold Group. 

The concept of infrastructure stimulus has been hyped for decades as a kind of cure-all for economic decline. The propaganda runs parallel to the narrative of the “savior” of the Great Depression, Franklin Delano Roosevelt. In fact, one cannot examine the presidency of FDR without being bombarded with one-sided worship of infrastructure spending and the “New Deal.”

The New Deal is often credited in left-leaning literature as being the singular cure for the depression, and FDR by extension has been handed messiah status among leftists. The New Deal is supposedly proof that massive socialized federal and central bank interventions through public works programs is economic ambrosia. So, it’s not surprising that nearly every president since the Great Depression has argued for an unprecedented infrastructure bill when faced with economic collapse. A large portion of the public on both sides of the aisle has been trained to think these programs will save us.

Biden, in particular, has made historic stimulus spending the very first platform of his administration, and consistently cites FDR and Lyndon Johnson as patron saints of his infrastructure bill. If it worked for them, then obviously it will work for him… right?

Actually, the New Deal wasn’t a great deal

In reality, the public works and welfare programs of FDR in particular had very little to do with the ending of the Great Depression. In fact, the New Deal actually made the situation worse.

Roosevelt’s own Treasury Secretary, Henry Morgenthau, lamented on May 6th, 1939 after two full terms of FDR’s presidency and stimulus programs that the New Deal was a complete failure. He stated to fellow Democrats during a session of the House Ways and Means Committee that:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!”

High unemployment and declining living standards were an epidemic in the U.S. throughout the 1930s and well into World War II. The Census Bureau outlines the dismal state of the financial system and the U.S. consumer throughout this period in its “Historical Statistics of the United States.” By 1939 the stock market had crashed on multiple occasions, car sales imploded by 30%, business closures increased by 50%, and real estate foreclosures were still near record highs. The New Deal had achieved minimal benefits of limited scope, but not much else. For the average American, it was as if nothing had changed in a decade.

That said, for certain major companies and big banks, the gains were incredible. Companies like General Electric, IBM, Proctor and Gamble, and JP Morgan saw endless profits during the Great Depression while buying up smaller competitors for pennies on the dollar. Those companies involved in public works programs siphoned government money like a black hole while very little trickled down to American workers. All in all, the Great Depression was a windfall for the corporate elite as wealth was consolidated and centralized into fewer and fewer hands.

So we have to ask, if the New Deal was a failure and did nothing to solve the depression problem, what did solve it? Some historians and journalists suggest the beginning of World War II and increased defense spending saved America. This is incorrect. As noted by Robert Higgs, the U.S. standard of living continued to decline throughout World War II. It was not the beginning of the war that saved America, but “After the war, genuine prosperity returned for the first time since 1929.”

How the U.S. led the world out of the war

The U.S. was one of the only industrialized nations on the planet that had been left mostly untouched by the destruction. Because of this, all other nations had to turn to the U.S. for manufacturing during the long rebuilding process. In Europe, this process carried on well into the 1950s. The U.S. had very little competition, so much so that the U.S. dollar’s reserve status increased to the point of complete dominance. If you wanted access to manufactured goods, you had to trade with the U.S. and to trade with the U.S., you had to have a stockpile of U.S. dollars.

What I see today is a change in the flow of global commerce – in the opposite direction from the post-war era. Yes, trillions of dollars in stimulus measures have created a short-term reversal of the pandemic collapse. In fact, there is much evidence to suggest the economy is overheating. Price inflation is becoming rampant in numerous sectors.

In the meantime, U.S. Treasuries are being dumped by foreign investors and the dollar is in decline. Central banks are now dumping the dollar, decreasing their reserves to the lowest level since 1995.

China is now the world’s largest manufacturing base, leaving very little major industry on U.S. soil. In the background, globalists are calling for a “Great Reset” of the world economy that would centralize monetary policy even further and create the foundation of a cashless society built on a digital reserve currency system.

What’s the massive infrastructure spending really about?

I believe, according to the evidence as well as past failures like the New Deal, that Biden’s infrastructure plans will accelerate the U.S. collapse instead of reversing it. The U.S. GDP might increase, but only because it is calculated to include almost every dime the government prints out of thin air and spends. Production of fiat money is not the same as real production within the economy.

Trillions of dollars in public works programs might create more jobs, but it will also inflate prices as the dollar goes into decline. So, unless wages are adjusted constantly according to price increases, people will have jobs, but still won’t be able to afford a comfortable standard of living. This leads to stagflation, in which prices continue to rise while wages and consumption stagnate.

Another Catch-22 to consider is that if inflation becomes rampant, the Federal Reserve may be compelled (or claim they are compelled) to raise interest rates significantly in a short span of time. This means an immediate slowdown in the flow of overnight loans to major banks, an immediate slowdown in loans to large and small businesses, an immediate crash in credit options for consumers, and an overall crash in consumer spending. You might recognize this as the recipe that created the 1981-1982 recession, the third-worst in the 20th century.

In other words, the choice is stagflation, or deflationary depression.

Finally, I would point out that there may also be an ulterior motive for the deluge of federal dollars into state economies through public works. Currently, Conservative states are increasingly willing to risk the consequences of returning to business as usual, regardless of federal mandates. Resistance is building against pandemic-related restrictions.

Red states are also seeing a far superior financial recovery when compared to blue states. Blue states have sabotaged themselves with lockdowns while red states have remained more open. However, the Biden Administration is hell bent on keeping pandemic restrictions in place nationwide

What if infrastructure spending plans are designed to trap red states into compliance with future covid mandates? What if the goal is to bribe these states with trillions in stimulus, but only if they submit to federal authority? I suspect that Biden’s public works bill is partially intended to be a blue state bailout, and money will be withheld from any conservative state that refuses to conform to lockdowns.

Only time will tell what the true agenda is, but this much is undeniable given the facts at hand: Biden’s plan is either an act of desperation, a deliberate attempt to pull the rug out from under the U.S. dollar and the economy to jump-start the globalist reset or a scheme to lock state governments into obedience over pandemic restrictions.

Whatever else Biden’s “New New Deal” is, it is certainly NOT a plan for economic recovery.

The post Infrastructure Bills Do Not Lead To Recovery, Only Increased Federal Control first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

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Ginsburg’s own words fire back at Democrats threatening to pack Supreme Court with liberal justices

In retaliation for President Donald Trump filling a Supreme Court vacancy just months before Election Day, Democrats are threatening to expand the high court and pack it with liberal justices once they regain control of the White House and Senate.

But even Ruth Bader Ginsburg, the respected Supreme Court justice who died Friday, thought court-packing is not a good idea.

What did Ginsburg believe?

In an interview with NPR last July, Ginsburg made herself clear: Nine justices on the Supreme Court works for the United States.

“There is no fixed number in the Constitution. So this court has had as few as five as many as 10. Nine seems to be a good number and it’s been that way for a long time,” Ginsburg said.

In fact, Congress is responsible for establishing the number of justices on the Supreme Court. The guidelines of one chief justice and eight associate justices was made law in the Judiciary Act of 1869.

But there have been attempts to change the composition of the court. Former President Franklin Delano Roosevelt attempted to pack the court with justices favorable to his political ideology with the Judicial Procedures Reform Bill of 1937 after parts of the New Deal were ruled unconstitutional. His effort ultimately failed.

Ginsburg bluntly told NPR that Roosevelt’s attempt at Supreme Court reform “was a bad idea.”

I have heard that there are some people on the Democratic side who would like to increase the number of judges. I think that was a bad idea when President Franklin Delano Roosevelt pack the court. His plan was for every justice who stays on the court past the age of 70, the president would have the authority to nominate another justice. If that plan had been effective, the court’s number would have swelled immediately from nine to 15, and the president would have six appointments to make.

You mention before the quote of appearing partisan. Well, if anything would make the court appear partisan then it would be that, one side saying, “When we’re in power we’re going to enlarge the number of judges so we’ll have more people who will vote the way we want them to.”

“So, I am not at all in-favor of that solution to what I see is a temporary situation,” Ginsburg added.

As TheBlaze reported, Ginsburg also advocated for filling a Supreme Court vacancy in an election year, a prospect Democrats are now furiously fighting.

“There’s nothing in the Constitution that says the president stops being president in his last year,” Ginsburg said in 2016 after Antonin Scalia’s sudden death left the Supreme Court with just eight justices less than one year before the election.

“Eight is not a good number,” she later said.

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The Great Gold Robbery of 1933

It has been 87 years since the federal government, on the spurious grounds of fighting the Great Depression, ordered the confiscation of all monetary gold from Americans, permitting trivial amounts for ornamental or industrial use.

This happens to be one of the episodes Kevin Gutzman and I describe in detail in our book, Who Killed the Constitution? The Fate of American Liberty from World War I to George W. Bush. From the point of view of the typical American classroom, on the other hand, the incident may as well not have occurred.

A key piece of legislation in this story is the Emergency Banking Act of 1933, which Congress passed on March 9 without having read it and after only the most trivial debate. House Minority Leader Bertrand H. Snell (R-NY) generously conceded that it was “entirely out of the ordinary” to pass legislation that “is not even in print at the time it is offered.”

He urged his colleagues to pass it all the same: “The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation.”

Among other things, the act retroactively approved the president’s closing of private banks throughout the country for several days the previous week, an act for which he had not bothered to provide a legal justification. It gave the secretary of the Treasury the power to require all individuals and corporations to hand over all their gold coin, gold bullion, or gold certificates if in his judgment “such action is necessary to protect the currency system of the United States.”

The Emergency Banking Act reached back in time to amend the Trading with the Enemy Act of 1917, which had originally been intended to criminalize economic intercourse between American citizens and declared enemies of the United States. One provision of the act granted the president the power to regulate and even prohibit “under such rules and regulations as he may prescribe … any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency … by any person within the United States.” In 1918, the act was amended to extend its provisions two years beyond the conclusion of hostilities, and to allow the president to “investigate, regulate, or prohibit” even the “hoarding” of gold by an American.

After those two years elapsed, people generally assumed that the Trading with the Enemy Act had passed into desuetude. But the Supreme Court later explained that the act’s provisions were not limited merely to World War I and the two years that followed — it “stood ready to meet additional wars and additional enemies” and could be called into service once again under those circumstances. (Little did anyone suspect in 1917 that these “additional enemies” would turn out to be the American people themselves.)

As amended by the Emergency Banking Act of 1933, the Trading with the Enemy Act no longer said that simply “during time of war” could the president prohibit the export of gold or take action against “hoarding” (i.e., holding on to one’s money). Now these actions could be taken during time of war or “during any other period of national emergency declared by the President.”

A month later, claiming authority from the Emergency Banking Act and its amendment to the Trading with the Enemy Act, the president ordered all individuals and corporations in America to hand over their gold holdings to the federal government in exchange for an equivalent amount of paper currency. The paper currency they were receiving in exchange for the gold had always been redeemable in gold in the past, so few saw anything amiss in this coerced transaction, and most trusted the government’s assurances that this was somehow necessary in order to combat the Depression.

Only later would they discover that they weren’t getting that gold back, and that the paper dollars they were being given in exchange would be devalued. Soon only foreign governments and central banks would be able to convert dollars into gold — and even that link to gold would be severed in 1971.

On June 5, 1933, at the behest of the president, Congress took the next step, passing a joint resolution making it illegal to “require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby.” Any provision in a private or public contract promising payment in gold was thereby nullified. Payment could be made in whatever the government declared to be legal tender, and gold could not be used even as a yardstick for determining how much paper money would be owed.

For the next six months President Roosevelt pursued an erratic monetary course. Every day a new gold price was declared, on a basis no one could figure out. Private lending in effect came to a halt, with the value of the dollar in constant flux amid the prospect of ongoing devaluation.

As Senator Carter Glass (D-VA) put it, “No man outside of a lunatic asylum will loan his money today on a farm mortgage.” And thus the government could triumphantly announce that since the private sector was cruelly depriving Americans of credit, it would have to step in and provide relief.

Meanwhile, Senator William Borah was assuring his countrymen that when it came to the nation’s monetary system, “there is no limitation upon the power of Congress. It is not circumscribed in any respect whatever. It is given full and plenary power to deal with that subject; and therefore it is the same as if there were no Constitution whatever.”

Borah also tried to argue that “when an individual takes an obligation payable in gold” he does so “with the full understanding that the Government may change its monetary policy at any time and that he must accept whatever the Congress says at a particular time shall constitute money.”

The general rule (to which there are occasional exceptions) that no senator should ever be listened to on anything holds here: the power of Congress over money is in fact very limited. It has the power to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”

Coining money simply refers to the process of taking a precious metal, converting it into coins, and stamping those coins with an indication of their metal content. The power to regulate the value of money does not involve a power to dilute the value of money by inflation, an absurd and self-serving rendering. Regulation of the value of money is a power of declaration and comparison, whereby some monetary standard is compared to other coins in circulation and an exchange rate for these various kinds of currency established according to the amounts of precious metals (with due allowance for the distinct values of different precious metals) in each.

In other words, if Congress were to declare by statute what the prevailing market exchange rate between gold and silver was, and thus to “regulate” gold and silver coins vis-à-vis one another — or, more precisely, vis-à-vis the Spanish silver dollar that constituted the American monetary standard — then it would be properly exercising its constitutional power, which consists of nothing more than this.

That is why this power appears in the same clause with the power to “fix the Standard of Weights and Measures,” which involves the measurement of fixed standards in order to assure uniformity throughout the nation. That power does not give Congress the power to declare that one-tenth of a pound shall now be declared a pound, but to take an already-existing standard and codify it.

Every single monetary statute enacted from the ratification of the Constitution until the 1930s understood the congressional power to regulate the “value” of money not in the sense of declaring money to possess some arbitrary value that suits the whims of politicians or central bankers, but in the sense of establishing the relative values of gold and silver coins in terms of the ever-shifting relative values of those metals on the free market. (Needless to say, the market is perfectly capable of doing this on its own.)

Moreover, the “dollar” was not an arbitrary term at the time the Constitution was drafted. In the late 18th century, everyone knew what the “dollar” referred to: the silver Spanish milled dollar, which was in widespread use in the United States. The Constitution twice refers to the dollar — in Article I, Section 9, Clause 1 (a clause that everyone understood to involve a tax on the import of slaves), and in the Seventh Amendment (which protected the right to a jury trial in civil cases involving at least twenty dollars).

If the dollar had been something that Congress could manipulate at will, or if “dollar” had been merely a generic term to refer to whatever Congress should arbitrarily choose to recognize as currency, the South would never have accepted that clause — or the Constitution itself. Congress might have manipulated the dollar so as to make the tax on slave imports prohibitively expensive. It could also have effectively abolished trial by jury in civil cases by making twenty “dollars” an astronomically high amount of money.

The Court never pronounced upon the constitutionality of the gold seizure (for reasons we speculate on in our book), the legality of which it simply took for granted. The cases it chose to hear involved the cancellation of gold clauses in public and private contracts. Known as the Gold Clause Cases, Norman v. Baltimore & Ohio Railroad Co.Nortz v. United States, and Perry v. United States were argued in January 1935 and decided the following month. In each case Chief Justice Charles Evans Hughes wrote the opinion for the Court; Justice McReynolds composed a single dissent that he applied to all three.

The Court declared in the first two cases that the federal government had been entitled to cancel all private contracts in gold. The perpetuation of gold clauses would have amounted to the “attempted frustration” of “the constitutional power of the Congress over the monetary system of the country…. [T]hese clauses interfere with the exertion of the power granted to the Congress.” Not a stitch of evidence existed for any aspect of this argument.

Perry, the third case, involved a man who had purchased in gold a US bond that was payable in gold, and was seeking payment either in gold or in the equivalent in paper currency. Since the government intended to pay in depreciated dollars, he believed he was receiving far less than he was entitled to under the terms of the bond. The bond’s face value was $10,000 in gold. In the inflated dollars of post-gold-standard America, it would have taken nearly $17,000 in paper currency in order to satisfy what the government had contracted to pay him.

The Court declared that the plaintiff was indeed entitled to his gold, since the government had an obligation to live up to its promises. But in not paying him his gold, the government wasn’t really wronging him, since gold was now illegal to hold. In other words, if the government paid him in gold, it would then have to confiscate that gold from him anyway since holding gold was against the law.

Speaking for the minority, Justice McReynolds declared:

Just men regard repudiation and spoliation of citizens by their sovereign with abhorrence; but we are asked to affirm that the Constitution has granted power to accomplish both. No definite delegation of such a power exists; and we cannot believe that the farseeing framers, who labored with hope of establishing justice and securing the blessings of liberty, intended that the expected government should have authority to annihilate its own obligations and destroy the very rights which they were endeavoring to protect. Not only is there no permission for such actions; they are inhibited. And no plenitude of words can conform them to our charter.

To the argument that the bondholder had suffered no damage in being denied payment in gold since it was now illegal for people to own gold, the dissent replied: “Obligations cannot be legally avoided by prohibiting the creditor from receiving the thing promised…. There would be no serious difficulty in estimating the value of 25.8 grains of gold in the currency now in circulation.”

The contract to pay in gold having been broken, the holder was at least morally entitled to receive in currency not just the nominal amount of the bond but an amount in paper dollars equivalent to what he would have earned if the payment could have been made in gold. “For the government to say, we have violated our contract but have escaped the consequences through our own statute, would be monstrous. In matters of contractual obligation the government cannot legislate so as to excuse itself.” Suppose a private individual tried to do the same thing, “secreting or manipulating his assets with the intent to place them beyond the reach of creditors.” Any such attempt “would be denounced as fraudulent, wholly ineffective.”

“Loss of reputation for honorable dealing,” the dissent concluded, “will bring us unending humiliation; the impending legal and moral chaos is appalling.”

By the 1970s the federal government had once again permitted Americans to hold gold coins. But when it came time to actually mint them again, it made sure that gold coins could never circulate and displace the constantly depreciating paper currency printed by the US government: the law required that such coins could circulate with a face value only a tiny fraction of their market value.

The full story of the gold confiscation is actually much worse than this, and we tell it in Who Killed the Constitution? What this episode teaches us is not so much that we need to “return to the Constitution,” though that would be an improvement over what we have now, but rather that pieces of paper that governments themselves interpret cannot be expected to prevent governments from doing what they think they can get away with.

Lysander Spooner once said that he believed “that by false interpretations, and naked usurpations, the government has been made in practice a very widely, and almost wholly, different thing from what the Constitution itself purports to authorize.”

At the same time, he could not exonerate the Constitution, for it “has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist.” It is hard to argue with that.

Note: This article was originally published on Aug. 13, 2008 at Mises.org. It is republished here under a Creative Commons 4.0 License

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FDR’s Tyrannical Gold Confiscation

Sometimes people say, “I guess we’ll just have to have a major economic or monetary crisis to wake people up and cause them to want a sound monetary system.”

There is one big problem with that refrain, however: A crisis or emergency oftentimes induces people to move in the opposite direction —in the direction of tyranny and oppression.

That’s because in a major crisis or emergency, people get afraid, so afraid that they are willing to sacrifice their liberty for the pretense of “safety” or “security” that government officials are offering them.

Of course, the trade is always sold as being “temporary.” As soon as the crisis or emergency is over, government officials say, they promise to restore the rights and liberties of the people.

A good example of this phenomenon took place in 1933, when President Franklin Roosevelt issued an executive order commanding every American to deliver his gold coins to the federal government. It would be difficult to find a better example of dictatorship and tyranny than that.

After all, gold coins and silver coins had been the official money of the American people for more than 125 years. That was the official money established by the Constitution, which gave the federal government the power to “coin” money, not “print” money. The Constitution had also expressly prohibited the states from making anything but gold tender and silver coins legal tender.

America’s gold-coin, silver-coin standard

After the Constitution called the federal government into existence, gold coins and silver coins were issued by the U.S. government. It was the soundest monetary system in history. By forsaking paper money and issuing sound, credible gold coins and silver coins, the U.S. government was precluded from plundering and looting people through inflation and monetary debasement for more than a century. America’s gold-coin, silver-coin standard was a major contributing factor of the tremendous increase in economic prosperity and people’s standard of living, especially in the late 1800s and early 1900s.

Some college professors today teach their students that the “gold standard” was a monetary system in which paper money was backed by gold. Nothing could be further from the truth. There was no paper money. The official money of the American people, as established by their Constitution, consisted of coinage — e.g., gold coins and silver coins.

The Constitution permitted the federal government to borrow money. Such loans came in the form of federal bills, notes, and bonds. Sometimes people used these debt instruments to transact business. But everyone knew that they were all promises to pay money — i.e., promises to pay gold and silver — not money themselves.

The Fed and the Great Depression

In 1929, after a decade of extreme monetary manipulation by the Federal Reserve, which had been called into existence in 1913, the stock market suffered an enormous collapse, an event that led to the crisis and emergency known as the Great Depression.

It was that major crisis and economic emergency that Roosevelt seized upon to confiscate the gold-coin holdings of the American people. For some reason, he chose not to also confiscate their silver coins.

Notice something important about FDR’s action: The Constitution, which provided for a gold-coin, silver-coin monetary system, can only be amended through the process outlined in the Constitution. Roosevelt did not go through that process. Instead, he simply used the emergency to justify his nullification of the Constitution by executive decree. His action is a perfect example of how crises and emergencies can result in tyranny and oppression.

If an American failed to comply with Roosevelt’s order, he was subject to being targeted by federal officials with arrest, prosecution, a felony conviction, and fine and imprisonment. While there were no doubt some Americans who refused to comply and kept their gold hidden, most Americans dutifully complied with FDR’s command.

In return, they received Federal Reserve debt instruments. The problem, of course, was that while those debt instruments had previously promised to pay money (i.e., gold or silver), now they were irredeemable. That is, they now effectively promised to pay nothing.

Moreover, shortly after people turned in their gold, Roosevelt intentionally devalued the debt instruments that people were now holding in relationship to gold. In one fell swoop, he had imposed enormous financial losses for the American people.

Why did Americans go along with this revolutionary and illegal transformation of their monetary system and this tyrannical and communist-like nationalization of their gold holdings? One simple reason: The crisis had made them deathly afraid. And when people are overly afraid, they are willing, even eager, to trade away their liberty for the “safety” and “security” that public officials are offering them.

The welfare-warfare state

No doubt many Americans convinced themselves that once the crisis or emergency was over, federal officials would restore their gold-coin, silver-coin standard. It never happened. Federal officials were able to use their new paper money standard to finance the ever-burgeoning expenses of the welfare-warfare state way of life that FDR was introducing to America.

Gradually, as a result of the debasement of paper money from ever-increasing inflation of the money supply, silver coins were driven out of circulation. Today, while Americans are once again permitted to own gold (at least for now), the official money of the American people remains paper money, notwithstanding the express terms of the Constitution.

With his gold-confiscation scheme, FDR taught Americans a valuable lesson: Emergencies and crises are the time-honored way that people are induced to sacrifice their rights and liberties at the hands of their own government.

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Today in History: FDR Issues Executive Order Creating American Concentration Camps

On this date in 1942, Franklin Roosevelt signed the infamous executive order 9066, authorizing the War Department to establish military zones that would serve as internment camps for Japanese and Italian Americans.

After the United States entered World War II, the president felt that the presence of foreign nationals could not be tolerated in time of war, and would produce seditious and rebellious behavior:

“Now, therefore, by virtue of the authority vested in me as President of the United States, and Commander in Chief of the Army and Navy, I hereby authorize and direct the Secretary of War, and the Military Commanders whom he may from time to time designate, whenever he or any designated Commander deems such action necessary or desirable, to prescribe military areas in such places and of such extent as he or the appropriate Military Commander may determine, from which any or all persons may be excluded, and with respect to which, the right of any person to enter, remain in, or leave shall be subject to whatever restrictions the Secretary of War or the appropriate Military Commander may impose in his discretion.”

Under the policy, 120,000 people were summarily rounded up and placed into captivity, separated from their families, homes, property, and livelihood for long lengths of time.

Cruelly reminiscent of anti-Jewish programs enacted by the Third Reich in Germany, Roosevelt’s decree was a clear-cut violation of the Fifth Amendment guarantee to life, liberty, and property. The order was also imposed by executive decree, bypassing Congress and appearing as the command of an all-powerful monarch.

President Roosevelt engaged in efforts to relocate citizens by issuing a secondary decree, Executive Order 9102, which specifically established the War Relocation Authority. The new federal institution was bestowed the power to forcibly seize and relocate individuals into the camps.

Rather than reversing this heartless transgression, the federal courts gave the policy legal credence. Demonstrating the complicity of the federal judiciary in the exploit, the court ruled that Roosevelt’s actions were wholly constitutional in the 1944 case of Korematsu v. United States.

The majority opinion, written by Justice Hugo Black, stated that the court was unable to conclude that it was beyond the war powers of Congress and the president to confine people of Japanese ancestry to the designated “war areas.” This assertion was made despite the fact that the Constitution confers no such power to either branch.

Nevertheless, Black wrote that the president’s new agency could not be reprimanded despite its loose criteria for determining whether individuals were “disloyal,” and thus subject to such exclusion, relocation, and confinement. In the judge’s estimation, internment was necessary to protect against means of unproven espionage. In considering the actions to intern citizens, Black wrote that “we cannot – by availing ourselves of the calm perspective of hindsight – now say that, at the time, these actions were unjustified.”

Justice Frank Murphy vehemently dissented to the opinion of the majority, and condemned “the abhorrent and despicable treatment of minority groups by the dictatorial tyrannies which this nation is now pledged to destroy.” Murphy correctly added that the exclusion policy went “over the very brink of constitutional power.”

Individuals must not be deprived of their constitutional rights, he wrote, despite the government’s concerns for security. Murphy recognized the reason for the Fifth Amendment’s existence and understood that a despotic condition would arise if the government ignored it. Without regard to Murphy’s warning, the Supreme Court ruled in favor of the federal program by a margin of six to three – giving a judicial seal of approval for Roosevelt’s treacherous internment program.

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How Federal Programs Helped Rich White People and Corporations Steal Land from Poor Black Farmers

A lot of people believe that the federal government is a friend to liberty because it protected African-Americans against discrimination in the 1960s. But research shows that this was the exception to the rule, at best. Centralized authority, including the federal government, has historically brutalized minority populations.

When it comes to civil rights, the conventional narrative goes like this: African Americans were enslaved and then suffered extreme discrimination until the federal government stepped in during the 1960s and passed the Civil Rights Acts to protect them.

This narrative paints centralized-government as the hero. And while the Civil Rights Acts did extend protections to black people and hastened the end of the Jim Crow era, this kind of federal action to protect minorities is actually an anomaly. More often than not, the U.S. federal government has enacted and enforced policies that have facilitated discrimination and worse.

To begin with, National power was the tool of slavers. From the moment the Constitution was ratified forward, southern slavers relied on federal power and centralized authority to maintain the legal framework for slavery. It also depended on federal power to enforce the fugitive slave clause, even as free northern states appealed to their state sovereignty to protect their black citizens. Up until the end of the War Between the States, federal power was vigorously applied for the benefit of slavers to preserve their institution and protect their ‘property.’

And after the war, federal power continued to benefit those who would discriminate on the basis of race – particularly when it came to land ownership.

A recent article in The Atlantic chronicles how federal agriculture policy enabled rich white landowners and big corporate agribusiness interests to steal land owned by black people.

As The Atlantic put it, “A war waged by deed of title has dispossessed 98 percent of black agricultural landowners in America.”

Black landowners have lost 12 million acres of farmland over the last century. You might think this happened back in the dark depths of our past, but it didn’t. The losses mostly occurred in living memory – primarily from the 1950s onward. According to the former president of the Emergency Land Fund, black farmers lost in the neighborhood of 6 million acres of land from 1950 to 1969. According to The Atlantic, much of this land theft was accomplished under the authority of law.

“The land was wrested first from Native Americans, by force. It was then cleared, watered, and made productive for intensive agriculture by the labor of enslaved Africans, who after Emancipation would come to own a portion of it. Later, through a variety of means—sometimes legal, often coercive, in many cases legal and coercive, occasionally violent—farmland owned by black people came into the hands of white people. It was aggregated into larger holdings, then aggregated again, eventually attracting the interest of Wall Street.”

The Atlantic called this “a silent and devastating catastrophe, one created and maintained by federal policy.” [Emphasis added]

Federal agriculture policy was the key to this transfer of land ownership. During the New Deal era, the federal government took an increasing amount of control over American agriculture. By the 1950s, the feds regulated virtually every aspect of America’s farm economy and had almost complete control over farm credit. Wealthy white landowners and big agriculture conglomerates took advantage of this system and slowly divested thousands of African American farmers of their land.

It started with President Franklin D. Roosevelt’s “life raft for agriculture” – the Farm Security Administration.

“Although the FSA ostensibly existed to help the country’s small farmers, as happened with much of the rest of the New Deal, white administrators often ignored or targeted poor black people—denying them loans and giving sharecropping work to white people.”

In 1945, the Farmers Home Administration, (FmHA) replaced the FSA. According to The Atlantic, “The FmHA quickly transformed the FSA’s programs for small farmers, establishing the sinews of the loan-and-subsidy structure that undergirds American agriculture today.”

There is no denying that African Americans suffered from racism. But you shouldn’t lose sight of the fact that government actions gave racists their power, from Jim Crow laws at the state and local level to federal farm policy that enabled white people to dispossess black Americans of their land.

In 1961, President John F. Kennedy’s administration created another federal program known as the Agricultural Stabilization and Conservation Service. (ASCS.) This agency worked alongside FmHA to provide loans to farmers, which works very differently from how it works now, where the programs help farmers in certain areas finance agriculture equipment and machinery and it even spans to cover things like Kubota Tractors for Sale and much more specialized equipment. The Atlantic described how these federal programs came to dominate agriculture in the U.S. with disastrous results for black farmers. As The Atlantic points out, the members of committees doling out money and credit established by these federal programs were elected locally, during a time when black people were prohibited from voting.

“Through these programs, and through massive crop and surplus purchasing, the USDA became the safety net, price-setter, chief investor, and sole regulator for most of the farm economy in places like the [Mississippi] Delta. The department could offer better loan terms to risky farmers than banks and other lenders, and mostly outcompeted private credit. In his book Dispossession, Daniel calls the setup ‘agrigovernment.’ Land-grant universities pumped out both farm operators and the USDA agents who connected those operators to federal money. Large plantations ballooned into even larger industrial crop factories as small farms collapsed. The mega-farms held sway over agricultural policy, resulting in more money, at better interest rates, for the plantations themselves. At every level of agrigovernment, the leaders were white.” [Emphasis added]

White government officials and bureaucrats were in a perfect positions of power to help their white buddies add to their landholdings. According to The Atlantic, USDA audits and investigations revealed that “illegal pressures levied through its loan programs created massive transfers of wealth from black to white farmers.”  Investigations by the United States Commission on Civil Rights reportedly uncovered “blatant and dramatic racial differences in the level of federal investment in farmers.” The FmHA provided much larger loans for small and medium-size white-owned farms, relative to net worth than it did for similarly sized black-owned farms. The report said the FmHA policies “served to accelerate the displacement and impoverishment of the Negro farmer.”

The Atlantic provides anecdotal evidence revealing how unscrupulous people used these federal programs for their own benefit.

“In the 1950s and ’60s, Norman Weathersby, a Holmes County Chevrolet dealer who enjoyed a local monopoly on trucks and heavy farm equipment, required black farmers to put up land as collateral for loans on equipment. A close friend of his, William Strider, was the local FmHA agent. Black farmers in the area claimed that the two ran a racket: Strider would slow-walk them on FmHA loans, which meant they would then default on Weathersby’s loans and lose their land to him. Strider and Weathersby were reportedly free to run this racket because black farmers were shut out by local banks.

“Analyzing the history of federal programs, the Emergency Land Fund emphasizes a key distinction. While most of the black land loss appears on its face to have been through legal mechanisms—“the tax sale; the partition sale; and the foreclosure”—it mainly stemmed from illegal pressures, including discrimination in federal and state programs, swindles by lawyers and speculators, unlawful denials of private loans, and even outright acts of violence or intimidation. Discriminatory loan servicing and loan denial by white-controlled FmHA and ASCS committees forced black farmers into foreclosure, after which their property could be purchased by wealthy landowners, almost all of whom were white. Discrimination by private lenders had the same result. Many black farmers who escaped foreclosure were defrauded by white tax assessors who set assessments too high, leading to unaffordable tax obligations. The inevitable result: tax sales, where, again, the land was purchased by wealthy white people.”

Of course, racism was also rampant in the private lending sector, particularly in the deep South. Still, there were always bankers who were either free from the scourge of racism or cared more about the color of money than the color of skin. But as The Atlantic alludes to, federal loan programs dominated the market and squeezed out many private lenders. In a system free from government monopolization, there almost certainly would have been more available credit with better terms available for black farmers.

The bottom line is that the existence of federal government programs, coupled with racism, allowed black people’s land to be stolen from them. Racism alone couldn’t have accomplished this without government power to make it actionable.

The widespread notion that centralized national power is good for minorities is a myth. Centralized power has never been friendly toward minorities. From the Jews in Germany, to the Ukrainians in the U.S.S.R, to the Armenians in the Ottoman Empire, to Africans in the United States, centralized governments have historically oppressed minorities and sometimes worked to exterminate them.

The Civil Rights Act notwithstanding, history shows that the U.S. federal government has by-and-large followed the historical pattern by facilitating, both directly and indirectly, slavery and discrimination.

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