Political And Socioeconomic Inequality In The U.s.: Who Governs?

Re the issue of the necessary and proper clause, I think Chief Justice Marshall said it well back in 1819 in McCulloch v. Maryland, a case upholding the power of Congress to create a national bank which is bedrock in U.S. Constitutional law:
In considering this question, then, we must never forget that it is a Constitution we are expounding.
Although, among the enumerated powers of Government, we do not find the word "bank" or "incorporation," we find the great powers, to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. The sword and the purse, all the external relations, and no inconsiderable portion of the industry of the nation are intrusted to its Government. It can never be pretended
Page 17 U. S. 408
that these vast powers draw after them others of inferior importance merely because they are inferior. Such an idea can never be advanced. But it may with great reason be contended that a Government intrusted with such ample powers, on the due execution of which the happiness and prosperity of the Nation so vitally depends, must also be intrusted with ample means for their execution. The power being given, it is the interest of the Nation to facilitate its execution. It can never be their interest, and cannot be presumed to have been their intention, to clog and embarrass its execution by withholding the most appropriate means. Throughout this vast republic, from the St. Croix to the Gulf of Mexico, from the Atlantic to the Pacific, revenue is to be collected and expended, armies are to be marched and supported. The exigencies of the Nation may require that the treasure raised in the north should be transported to the south that raised in the east, conveyed to the west, or that this order should be reversed. Is that construction of the Constitution to be preferred which would render these operations difficult, hazardous and expensive? Can we adopt that construction (unless the words imperiously require it) which would impute to the framers of that instrument, when granting these powers for the public good, the intention of impeding their exercise, by withholding a choice of means? If, indeed, such be the mandate of the Constitution, we have only to obey; but that instrument does not profess to enumerate the means by which the powers it confers may be executed; nor does it prohibit the creation of a corporation,
Page 17 U. S. 409
if the existence of such a being be essential, to the beneficial exercise of those powers. It is, then, the subject of fair inquiry how far such means may be employed.
It is not denied that the powers given to the Government imply the ordinary means of execution. That, for example, of raising revenue and applying it to national purposes is admitted to imply the power of conveying money from place to place as the exigencies of the Nation may require, and of employing the usual means of conveyance. But it is denied that the Government has its choice of means, or that it may employ the most convenient means if, to employ them, it be necessary to erect a corporation. On what foundation does this argument rest? O n this alone: the power of creating a corporation is one appertaining to sovereignty, and is not expressly conferred on Congress. This is true. But all legislative powers appertain to sovereignty. The original power of giving the law on any subject whatever is a sovereign power, and if the Government of the Union is restrained from creating a corporation as a means for performing its functions, on the single reason that the creation of a corporation is an act of sovereignty, if the sufficiency of this reason be acknowledged, there would be some difficulty in sustaining the authority of Congress to pass other laws for the accomplishment of the same objects. The Government which has a right to do an act and has imposed on it the duty of performing that act must, according to the dictates of reason, be allowed
Page 17 U. S. 410
to select the means, and those who contend that it may not select any appropriate means that one particular mode of effecting the object is excepted take upon themselves the burden of establishing that exception.
The creation of a corporation, it is said, appertains to sovereignty. This is admitted. But to what portion of sovereignty does it appertain? Does it belong to one more than to another? In America, the powers of sovereignty are divided between the Government of the Union and those of the States. They are each sovereign with respect to the objects committed to it, and neither sovereign with respect to the objects committed to the other. We cannot comprehend that train of reasoning, which would maintain that the extent of power granted by the people is to be ascertained not by the nature and terms of the grant, but by its date. Some State Constitutions were formed before, some since, that of the United States. We cannot believe that their relation to each other is in any degree dependent upon this circumstance. Their respective powers must, we think, be precisely the same as if they had been formed at the same time. Had they been formed at the same time, and had the people conferred on the General Government the power contained in the Constitution, and on the States the whole residuum of power, would it have been asserted that the Government of the Union was not sovereign, with respect to those objects which were intrusted to it, in relation to which its laws were declared to be supreme? If this could not have been asserted, we cannot well comprehend the process of reasoning
Page 17 U. S. 411
which maintains that a power appertaining to sovereignty cannot be connected with that vast portion of it which is granted to the General Government, so far as it is calculated to subserve the legitimate objects of that Government. The power of creating a corporation, though appertaining to sovereignty, is not, like the power of making war or levying taxes or of regulating commerce, a great substantive and independent power which cannot be implied as incidental to other powers or used as a means of executing them. It is never the end for which other powers are exercised, but a means by which other objects are accomplished. No contributions are made to charity for the sake of an incorporation, but a corporation is created to administer the charity; no seminary of learning is instituted in order to be incorporated, but the corporate character is conferred to subserve the purposes of education. No city was ever built with the sole object of being incorporated, but is incorporated as affording the best means of being well governed. The power of creating a corporation is never used for its own sake, but for the purpose of effecting something else. No sufficient reason is therefore perceived why it may not pass as incidental to those powers which are expressly given if it be a direct mode of executing them.
But the Constitution of the United States has not left the right of Congress to employ the necessary means for the execution of the powers conferred on the Government to general reasoning. To its enumeration of powers is added that of making
"all
Page 17 U. S. 412
laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States or in any department thereof."
The counsel for the State of Maryland have urged various arguments to prove that this clause, though in terms a grant of power, is not so in effect, but is really restrictive of the general right which might otherwise be implied of selecting means for executing the enumerated powers. In support of this proposition, they have found it necessary to contend that this clause was inserted for the purpose of conferring on Congress the power of making laws. That, without it, doubts might be entertained whether Congress could exercise its powers in the form of legislation.
But could this be the object for which it was inserted? A Government is created by the people having legislative, executive and judicial powers. Its legislative powers are vested in a Congress, which is to consist of a senate and house of representatives. Each house may determine the rule of its proceedings, and it is declared that every bill which shall have passed both houses shall, before it becomes a law, be presented to the President of the United States. The 7th section describes the course of proceedings by which a bill shall become a law, and then the 8th section enumerates the powers of Congress. Could it be necessary to say that a legislature should exercise legislative powers, in the shape of legislation? After allowing each house to prescribe
Page 17 U. S. 413
its own course of proceeding, after describing the manner in which a bill should become a law, would it have entered into the mind of a single member of the convention that an express power to make laws was necessary to enable the legislature to make them? That a legislature, endowed with legislative powers, can legislate is a proposition too self-evident to have been questioned.
But the argument on which most reliance is placed is drawn from that peculiar language of this clause. Congress is not empowered by it to make all laws which may have relation to the powers conferred on the Government, but such only as may be "necessary and proper" for carrying them into execution. The word "necessary" is considered as controlling the whole sentence, and as limiting the right to pass laws for the execution of the granted powers to such as are indispensable, and without which the power would be nugatory. That it excludes the choice of means, and leaves to Congress in each case that only which is most direct and simple.
Is it true that this is the sense in which the word "necessary" is always used? Does it always import an absolute physical necessity so strong that one thing to which another may be termed necessary cannot exist without that other? We think it does not. If reference be had to its use in the common affairs of the world or in approved authors, we find that it frequently imports no more than that one thing is convenient, or useful, or essential to another. To employ the means necessary to an end is generally understood as employing any means calculated to
Page 17 U. S. 414
produce the end, and not as being confined to those single means without which the end would be entirely unattainable. Such is the character of human language that no word conveys to the mind in all situations one single definite idea, and nothing is more common than to use words in a figurative sense. Almost all compositions contain words which, taken in a their rigorous sense, would convey a meaning different from that which is obviously intended. It is essential to just construction that many words which import something excessive should be understood in a more mitigated sense -- in that sense which common usage justifies. The word "necessary" is of this description. It has not a fixed character peculiar to itself. It admits of all degrees of comparison, and is often connected with other words which increase or diminish the impression the mind receives of the urgency it imports. A thing may be necessary, very necessary, absolutely or indispensably necessary. To no mind would the same idea be conveyed by these several phrases. The comment on the word is well illustrated by the passage cited at the bar from the 10th section of the 1st article of the Constitution. It is, we think, impossible to compare the sentence which prohibits a State from laying "imposts, or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws," with that which authorizes Congress "to make all laws which shall be necessary and proper for carrying into execution" the powers of the General Government without feeling a conviction that the convention understood itself to change materially
Page 17 U. S. 415
the meaning of the word "necessary," by prefixing the word "absolutely." This word, then, like others, is used in various senses, and, in its construction, the subject, the context, the intention of the person using them are all to be taken into view.
Let this be done in the case under consideration. The subject is the execution of those great powers on which the welfare of a Nation essentially depends. It must have been the intention of those who gave these powers to insure, so far as human prudence could insure, their beneficial execution. This could not be done by confiding the choice of means to such narrow limits as not to leave it in the power of Congress to adopt any which might be appropriate, and which were conducive to the end. This provision is made in a Constitution intended to endure for ages to come, and consequently to be adapted to the various crises of human affairs. To have prescribed the means by which Government should, in all future time, execute its powers would have been to change entirely the character of the instrument and give it the properties of a legal code. It would have been an unwise attempt to provide by immutable rules for exigencies which, if foreseen at all, must have been seen dimly, and which can be best provided for as they occur. To have declared that the best means shall not be used, but those alone without which the power given would be nugatory, would have been to deprive the legislature of the capacity to avail itself of experience, to exercise its reason, and to accommodate its legislation to circumstances.
Page 17 U. S. 416
If we apply this principle of construction to any of the powers of the Government, we shall find it so pernicious in its operation that we shall be compelled to discard it. The powers vested in Congress may certainly be carried into execution, without prescribing an oath of office. The power to exact this security for the faithful performance of duty is not given, nor is it indispensably necessary. The different departments may be established; taxes may be imposed and collected; armies and navies may be raised and maintained; and money may be borrowed, without requiring an oath of office. It might be argued with as much plausibility as other incidental powers have been assailed that the convention was not unmindful of this subject. The oath which might be exacted -- that of fidelity to the Constitution -- is prescribed, and no other can be required. Yet he would be charged with insanity who should contend that the legislature might not superadd to the oath directed by the Constitution such other oath of office as its wisdom might suggest."
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As for First National Bank of Montgomery v. Jerome Daly, aka the Credit River Case, that case decided by a justice of the peace in Minnesota is not good law. The bank appealed then ext day, and the decision was nullified on grounds that a justic of the peace did not have the power to make such a ruling. the bank appealed the next day, and the decision was ultimately nullified on the grounds that a justice of the peace did not have the power to make such a ruling. As a Utah Distric court explained A U.S. District Court in Utah in 2008 explained, similar arguments have "repeatedly been dismissed by the courts as baseless" and "courts around the country have repeatedly dismissed efforts to void loans based on similar assertions." Tuttle v. Chase Home Finance, LLC et al., U.S. District Court for the District of Utah, Oct. 26, 2008. In a subsequent case involving an appeal from the criminal conviction of Mr. Daly, the Eighth Circuit dismissed as "utterly frivolous" his " thesis is that the only 'Legal Tender Dollars' are those which contain a mixture of gold and silver and that only those dollars may be constitutionally taxed".
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Re your second point, citing United States v. Orleans as authority does not seem to be in point. The case had nothing directly to do with the Fed, but instead concerned the issue of a personal injury claim made under the Federal Torts Claims Act. A father was alleging that the federal government was responsible for an injury sustained by his son on an outing sponsored by a local community action funded by the federal Office of Economic Opportunity. The court said no, on the basis of its interpretation of Congress's intent under the FTCA. The Court said: "To convert the local executors of a locally planned program or project which receives conditional federal funding into federal employees distorts well-established concepts of master and servant relationships and extends the meaning of the Federal Tort Claims Act beyond the intent of Congress". To cite this as authority bearing on the legal status of the Fed is really reaching.

On that note, I wish you a Merry Christmas, and will resume further communication after the holiday.

 

You did not answer the question. You were asked to explain the necessity of having a private corporation print money out of thin air and then lending it to us at interest. The money wasn't real, but the interest paid is. What, in your opinion, makes such a scam necessary and proper? Explain why the inclusion of a middleman (Federal Reserve) who will profit from the money it never had in the first place is necessary and proper when the Treasury can print it up just as well, and interest free.

And concerning the court case in which the First National Bank of Montgomery vs Jerome Daly, nothing in the Constitution of the United States limits the jurisdiction of that Court, which is one of original Jurisdiction with right of trial by Jury guaranteed. No question as to the Jurisdiction of that Court was raised by either party at the trial. Both parties were given complete liberty to submit any and all facts to the Jury.

No complaint was made by Plaintiff that Plaintiff did not receive a fair trial. The Plaintiff admitted that he knew of no United States Statute or Law that gave him the authority to lend money that didn't exist and to charge interest on it.

If you are aware of the case that the plaintiff later filed and won and was granted the sum he sued for during the first trial, you will need to provide something to substantiate that claim.

Also, when it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated in court that it was “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.

http://www.wlf.org/Upload/legalstudies/legalopinionletter/102309Fleschert_LOL.pdf

According to the results of the limited audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.
The following is a list of loan recipients that was taken directly from page 131 of the audit report:
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the “too big to fail” banks, the Fed also paid them over 600 million dollars to help run the emergency lending program. According to the GAO, the Federal Reserve shelled out $659.4 million in “fees” to the very financial institutions which caused the financial crisis in the first place.

 

Apparently you didn't get my previous message (Post #77) that I'd deal with these issues after Christmas. I'm getting ready for company and looking forward to a peaceful holiday celebrating my Savior's birth. May you share in the joy and good spirit of the season. Meerry Christmas and all the best in "17.

 

And yet, here you are.

I'm here to share information. You are not necessary to that process.

Also, there is nothing that you needed to be saved from, except the idea that you need to be saved.

 

This is from 2010:

The public debt is now over $13 trillion, or over $40,000 for every man, woman, and child in the U.S. The value is $200,000 per person if the unfounded debt is included. Through no action of his own, or even an opportunity to reject the imposition, every resident of the United States has become obligated for a debt—for life—that cannot be relieved. It is manifestly clear that an obligation of $40,000 can only be visualized as an unrestricted claim on the future earnings of the citizenry. The citizen has been reduced to an indentured servant, or slave, compelled to work for the company store and still face an ever increasing amount of debt. There is no possible relief. If the earnings of a citizen are properly subject to confiscation by taxation, the government can take the entirety and return what pittance Congress in their largess may bestow. A nation of sovereign people has been reduced to haves and have-nots; the middle class has been eliminated.


If the Fed retained all of the securities, the public would quickly complain that interest payments (approximately $400 billion annually) are of no benefit and the inflationary pressure would also be obvious. The Fed therefore wants to sell a major portion of the securities so it has arranged with the Treasury department to act as auctioneer for selling to the Primary Dealers. The PD submit sealed bids. Since the security has a fixed face value and interest rate, the higher the bid, the lower the interest rate for the buyer.


The Primary Dealers are branches of the huge international banks/finance centers. Seven Wall Street agencies include Bank of America, Citigroup, J.P. Morgan, Morgan Stanley, Goldman, Jefferies, and Fitzgerald. Foreign agencies of Barclays, HSBC, Credit Suisse, UBS, Deutsche, BNP Paribas, RBS, Daiwa, Mizuho, Nomura, and RBC of Canada are also included. Whether these are the entities that Bloomberg is attempting to identify by FOIA as recipients of bail-out funds that is now in the 2nd Circuit Court of Appeals remains to be seen.

http://thedebtweowe.com/rip-off-by-the-federal-reserve
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This from a previous posts answers the question of who the recipients of the bailout were as a result of that FOIA request.

According to the results of the limited audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.

The following is a list of loan recipients that was taken directly from page 131 of the audit report:
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion

 

Christmas festivities have settle down. I’m back and ready to share information. Like you, I don’t think you’re necessary to that process—although I have the feeling not many others are interested in what we share. I dialogue with you the way I do Mormons and Jehovah’s witnesses who knock on my door. I’m willing to give them a polite hearing, but ready to shut the door if they get too obnoxious. And I don’t need to be saved; I’m probably as saved as I’ll ever be already.

So much to catch up on. Let’s start with the low hanging fruit: your Post#83.

 

A justice of the peace court is a court of original but limited jurisdiction. It functions as a small claims court and a criminal trial court for petty offenses, mainly traffic cases. It is not a court of record, meaning that any appeal to a higher court is de novo, as though the trial below never happened. Nothing in the Constitution of the United States says anything about them, because they are state courts. They occupy the lowest rung of the state judiciary in states that still have them. Minnesota has since abolished the office except for marriage officiation, but at the time the case was decided (1968) the Minnesota Legislative Manual stated:“Justices of the peace have jurisdiction over actions arising within a county when the amount involved does not exceed $100 for civil cases, and when the punishment or fine does not exceed $100 or three months' imprisonment in criminal cases." They could also handle larger civil actions where the parties consent, just like Judge Judy on TV. The J.P.’s are not required to have law degrees, nor much in the way of formal education. Judge Martin Mahoney was not a lawyer but a farmer before being elected to his position. From these facts, it is obvious that such an official has no jurisdiction to interpret the United States constitution or to declare state or federal laws unconstitutional.

But that is exactly what he tried to do. He acknowledged in his opinion that his decision may have run afoul of Minnesota law and the state constitution, but went on to say that if so, the Minnesota state law and constitution were unconstitutional under the U.S. Constitution. No amount of fulmination and table pounding can obscure that fact that Mahoney had exceeded his authority under Minnesota law. That is simply obvious, and it is absurd to try to argue otherwise.And that’s exactly what subsequent courts found. The Minnesota Supreme Court declared the proceedings in the justice court in the underlying matter null and void in Zurn v. Northwestern National Bank. 284 Minn. 573, 170 N.W.2d 600 (Minn.1969). Another case brought by Mr. Daly involving the same legal argument, Daly V. Savage State Bank , 285 Minn. 503, 171 N.W.2d 218 (1969) led to the same result. Citing these cases, a federal court admonished a plaintiff not to cite any decision under Judge Mahoney questioning the validity of federal currency or the Constitutionality of the Federal Reserve Act, “nor may she cite any opinion or decision as authoritative which no longer has authoritative status. “Sneed v. Chase Home Fin. LLC, 2007 U.S. Dist. LEXIS 46536, 2007 WL 1851674 (S.D. Cal. June 26, 2007).

Mr. Daly was apparently a real sleaze ball, even by lawyerly standards. He borrowed money from a bank to buy lakeside property, and then tried to prevent repayment of the debt and block the bank's repossession after mortgage foreclosure by arguing that the bank's extension of credit was unlawful, thereby relieving him of his obligation to repay the debt or return the property. Can you imagine what would have happened his argument was accepted and it did become authority for other cases? He tried a similar argument with the IRS and the state tax commission, and was subsequently convicted of tax evasion. In rejecting his appeal, the Eighth Circuit remarked that Daly’s “apparent thesis is that the only 'Legal Tender Dollars' are those which contain a mixture of gold and silver and that only those dollars may be constitutionally taxed…is clearly frivolous”. He was also convicted of conspiracy to defraud the United States under 18 U.S.C. section 371, fifteen counts of willfully aiding and assisting in the preparation of false individual income tax returns under Internal Revenue Code section 7206(2), and one count of aiding and abetting the making of a false statement to the United States government under 18 U.S.C. sections 2 and 1001. In a state action in which he was disbarred from legal practice, In re Jerome Daly, 291 Minn. 488, 189 N.W.2d 176 (1971) the court said that Daly’s “persistent and continuing attacks on our national monetary system can hardly be regarded as zealous advocacy or a good-faith effort to test the validity of repeated decisions of courts of record. For, as found by the referee, up to the time of his findings and recommendations respondent had avoided payment of any Federal income tax for 1965 and subsequent years on the asserted ground that he has not received gold and silver coin and, therefore, had no earnings that were taxable” Judge Mahoney also faced disciplinary action for contempt for ignoring the jurisdiction of a higher court , but he died in a boating accident, suicide, or murder before the case came up for hearing That should settle it!

I realize this case is a cause célèbre for the AltRight, the so-called patriot movement, tax resisters, Posse Comitatus, and other assorted elements of the lunatic fringe, in whose ranks the late Mr. Daly and Judge Mahoney seem to fit. But the argument is stupider than Pizzagate, and demonstrates an abysmal ignorance of the law and our judicial institutions.

 

These statements are artfully drawn and deceptive. The jurisdiction of the j.p court was not in issue at the trial, because it was only after the trial in his verdict and post verdict order that Judge Mahoney made his controversial jurisdictional claim to be able to declare state and federal law unconstitutional. The conclusions of law and cases cited in the judge’s opinion were not lawful determinations of the jury, because juries are authorized only to make determinations of fact. The fairness of the trial was not in issue, since it was the judge’s verdict and opinion that were ultra vires. And it was not the plaintiff’s responsibility to know about the statutory basis for his authority to lend money. That matter is simply irrelevant. Again, bringing these matters up shows ignorance of basic facts about the American judicial system.

 

I don’t think that’s what it said at all. The Board said that the information requested were not “records of the Board” under FOIA because they were housed in one of the 12 Reserve regional Banks, namely the Federal Reserve bank of New York (FBNY). As I explained in an earlier post, the Board, which makes decisions for the system is a full-fledged federal independent regulatory commissions which are federal agencies within the meaning of the Administrative Procedure Act o 1946. The 12 Federal Reserve regional Banks have some powers that are distinct from the Board’s, and are organized like private corporations, each separately incorporated with its own board of director with private funding. So the Fed tried to dodge the FOIA request by saying the records didn’t really belong to it but belonged to the FBNY, which it alleged was not a federal agency. The judge obviously didn’t buy the argument.

 

I was going to say the same to you, as it is rare that someone will take a break from a debate with me by stating that they will be celebrating the birth of their savior. Jehovah's Witnesses do that . . .

 

Re all those big numbers you list, ain’t they mindboggling? To paraphrase the late Senator Dirkson, a trillion here, a trillion there soon adds up to big money! Bush’s Treasury Secretary stepped before the TV cameras and told us, in effect, that if we needed to bail out all those failed banks or, remember that nice economy we love… We bent over. What would have happened if we didn’t? Who’s to know? I suspect a depression at least as bad as the Great Depression of the ‘30s, although the recession we had anyhow in 2008 as a result awas bad enough. But instead of losing our shirts, as we did in 2008, we might have lost our pants and underwear as well. Congress debated this and came to the conclusion that TARP was necessary. And it’s galling, I admit, that those bankers who were responsible came out, for the most part, with little or no damage to themselves and a lot of damage to us. More disturbing are the noises Republicans are making about lifting the regulations that were put in place to keep another such crisis from happening again. https://newrepublic.com/article/85384/republicans-attack-financial-reform
Democrats were the ones responsible for putting these restrictions in place. So there does seem to be a difference. And if the banks were cool with both parties, they wouldn’t be lobbying to repeal this legislation. People who are afraid of big banks running amok should be more careful who they don’t vote for.

 

If you are aware of the case that the plaintiff (First National Bank of Minnesota) later filed and won and was granted the sum he sued for during the first trial, you will need to provide something to substantiate that claim.

 

You're talking about the six hundred billion dollar bailout. I'm talking about the sixteen trillion dollars given to financial institutions that was revealed after a partial audit of the Federal Reserve. Are you aware of the difference?

 

These are simple questions. I will assume that you are out researching that sixteen trillion dollars. In the meantime, my wife is bugging me to watch a Tom Hanks movie. It is our way of celebrating the birth of movies.

 

In response, let me now consider the fourth point on my previous post #77 that I left hanging before Christmas, the allegation that “the Fed operates largely in secret, with no significant limits to its ability to print up money arbitrarily and lend it to us at interest”. This characterization of the Fed’s “money making” powers and secrecy are exaggerated. The Fed is probably the most powerful administrative agency in Washington, but it doesn’t “print up money" arbitrarily, and there are significant though loose constraints on its operations. The Fed itself, of course, does not print money. That’s done by the Bureau of Engraving and Printing in the Department of the Treasury. The Fed does decide how much of it to put into the economy, thereby determining its value. This is done electronically in the form of bookkeeping entries that expand the deposit accounts that banks hold at the Fed. Most money is created by the commercial banks through loans, but they are constrained by the reserve requirements set by the Board of Governers. The FED's primary control is raising and lowering short term interest rates.

These decisions, however, can’t legally be “arbitrary and capricious ”, and must be in keeping with the Fed’s statutory responsibilities to achieve maximum employment, stable prices, and moderating long-term interest rates. The Board of Governors is an administrative agency under the Administrative Procedure Act, and is thus required to base its determinations on substantial evidence, to follow notice and comment rulemaking procedures stipulated in the Act, including publication in the Federal Register. Yes, the FOMC holds its meetings on interest rates in secret and releases reports three months later which are not verbatim transcripts. Given the impact that a raised eyebrow, cough, frown, smile, or twitch might have on international markets, the Fed has to be careful. Remember Chairman Greenspan's "irrational exuberance" remark? The Board is audited annually by accountants Deloite and Touche using generally accepted accounting principles (GAPP), although not as throughly as in the private sector. We’ve seen from the link you furnished, the Board is subject to the Freedom of Information Act’s disclosure requirements. The Fed also operates under the general constraints of the U.S. Constitution, including the Fifth Amendment due process clause. All Governors,as well as the Chair and Vice-Chair are appointed by the President, subject to Senate confirmation, and the Board approves changes in the discount rate and reserve ratios. The Board is also subject to Congressional oversight by the House and Senate Banking Committees. In addition, the Fed is constrained by informal but real constraints of “principled norms” like the Taylor Rule and Bagheot’s dictum, http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=4731&context=lcp and its perceived need to accommodate the monetary policy of the incumbent U.S. President. http://digitalcommons.calpoly.edu/cgi/viewcontent.cgi?article=1098&context=econ_fac

 

It all depends on whether or not the alternatives would be any better. But let’s not use the term “necessary and proper”. That phrase from Art. I, Sec. 8, clause 18 has been well-litigated in a long line of cases dating from McCulloch v. Maryland in 1819, involving Congress’s power to establish a central bank, as I explained at considerable length in .. “The Supreme Court has broadly interpreted this clause for the purpose of granting Congress the implied power to enact any law that is reasonably designed to achieve an express constitutional power.” https://definitions.uslegal.com/n/necessary-and-proper-clause/
http://constitution.findlaw.com/article1/annotation44.html Any attempt to interpret it narrowly as meaning “essential” and not broadly as meaning “appropriate or convenient” as determined by Congress is an exercise in futility. As long as there is some rational basis for it and Congress has opted for it, it is “necessary and proper” within the meaning of Art, I, sec, 8, clause 18.

So is there a rational basis for using a central bank to create our money instead of the alternatives, which I think fall into two general categories: "hard"commodities-based currency like the gold standard favored by defendant in the Credit River case and Ron Paul’s book End the Fed; or a non-banking governmental authority like the Treasury Department or the “New Liberty Congress” favored by Perry and Fusek in The Two Faces of Money? Let’s look first at why Congress decided to create the Fed, and then look at its pros and cons relative to those alternatives.

Congress created the Fed in1913 in an attempt to deal with a series of financial crises, the most recent of which was the so-called Bankers Panic of 1907, which bankrupted many state and local banks. The Fed was established to establish more effective supervision of banking in the United States, to furnish an elastic currency to standardize and stabilize the monetary system and to provide a means of rediscounting commercial paper. Since then its functions have broadened to be the vehicle for monetary policy in the U.S.—i.e., “actions that determine the size and rate of growth of the money supply, which in turn affects interest rates, through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault (bank reserves). The goals are to promote maximum employment, price stability, and moderate long-term interest rates. Before the Fed was created, there were over 30,000 different currencies in the United States, some backed by gold and silver, some by government bonds. Often banks didn’t have enough money to cover withdrawals. The Board of Governors was set up as an Independent Regulatory Commission in an effort to insulate it from undue political influence.

Meanwhile, the United States began departing from the gold standard, starting in 1934 to discourage gold hoarding and then carried forward by Nixon in 1971 to deal with stagflation. This development contributed to the situation where banks were viewed as creating money “out of thin air.”

One alternative to the Fed, put forward by its critics, is a return to the gold standard, or something like it, in which paper dollars would be convertible to gold, silver or other "hard" commodities. The theory is that if we then did away with the Fed, we’d have “real money”. We could say of that : Been there, done that. We got off the gold standard for a reason—because it didn’t work. The very kinds of people who don’t like banks, the Populists, were up in arms against it. You may have read about William Jennings Bryan's “Cross of Gold Speech.” Perry and Fusek do a good job of explaining the problems with it. “because the value of individual commodities fluctuate and are subject to monopoly control, they can’t serve as a stable means of control”. The gold market can have large movements in a day, contributing to currency volatility. In a gold based system, the money supply is determined by the gold supply, and can’t be adjusted to changing economic conditions.

They argue instead for direct “government” control of our money, by which they seem to mean control by an agency directly subject to the control of our elected representatives. We would then, they say, have no public debt. But they acknowledge that we might have inflation “unless attention is paid to the principles of money science.” Ah, there’s the rub. The system is more vulnerable to inflation than the Federal Reserve. In countries where politicians control monetary policy, the government can spend without consequence, because the monetary authority is typically used to print money directly to purchase government debt—leading to runaway inflation. And to expect politicians to pay attention to “the principles of monetary science” is like expecting alcoholics and drug addicts to pay attention to the principles of temperance. Without the checks and balances provided by the Federal Reserve, it would be too easy for Congress just to print more money and keep taxes low, leading to runaway inflation. The Fed exists to prevent politicians from messing with the money and financial system.

So far, the only people who seem to be up-in-arms about the Federal Reserves (present company excepted, of course) strike me as charlatans, lightweights and/or flakes. That would include Ron Paul, who has given infomercials for financial huckster Porter Stansberry, who was found by a Maryland Court to have defrauded thousands of investors in a previous scam. His current pitch is that the currency crisis will soon result in the imminent collapse of the U.S economy and imposition of martial law, but if we buy Stansberry’s Blueprint for Survival and invest in a hard assets hedge fund we can make it through.

Other noteworthy contributions to Fed conspiracy theory include radical right John Birch Society’s Allen and Abraham, None Dare Call It Conspiracy which argues that the Fed is part of an international conspiracy to run up the national debt to destroy America; Mary M.Davison’s The Profound Revolution and The Secret Government of the United States, linking the Fed to a plot to bring about the New World Order, Anti-Smite and Holocaust denier Eustace Mullins’ The Federal Reserve Conspiracy and The Secrets of the Federal Resrve, claiming that an international cabal of Rothchild central bankers is behind it all; and an assorted bunch of End Times preachers like Pat Robertson’s The New World Order linking the Bank to the Anitchrist and the Apocalypse. And then we have your Perry and Fusek, who are frankly out of their league in dealing with the subject.

These are some of the reasons I tend to favor the status quo and am not convinced that the problem is the “one big thing” that dwarfs others and makes voting in our elections futile. I am also persuaded that in a representative democracy, it’s mainly up to our elected officials in Congress and the Presidency to weigh the pros and cons of policy choices, and if they seem to be on the wrong track, to vote against them. While banks and other fat cats do have a disproportionate share of political influence, elections do matter. The repeal of Glass-Stiegel legislation in 1999 contributed to the financial crash of 2008, and Republicans in Congress are making noises against Dodd-Frank.

 

Did the auditors find that the sixteen trillion dollars went missing, or was inappropriately spent? If not, then what's the issue? You know what they say about "assume". Enjoy your wife and movie. I've shot my wad on this issue, and won't be jumping through further hoops!

I've presented an extensive history of the case, and subsequent higher court pronouncements on Mr. Daly. What is your point? How do you think this has any bearing on the absurdity of your trying to show that a renegade lawyer and j.p.'s decision has any bearing on the Fed or the money system? CASE CLOSED.

 

In view of the fact that you attempt to support your claims with court cases, I fully expected you to provide reference to the court case in which the plaintiff (First National Bank of Minnesota) later filed and won and was granted the sum he sued Daly for during the first trial. You said that that verdict was overturned. You were asked to provide reference to that fact. Your failure to provide it is telling.

 

Did Congress authorize the creation of sixteen trillion dollars to give to large financial institutions? Who paid for that created expenditure. What was done with that sixteen trillion dollars?