There Is No U.S. Constitutional Right To Free Enterprise So The Fed Should Aggressively Target Real Growth

A Benjamin Cole post

Like it or not, the U.S. Supreme Court has often ruled in favor of intensive federal and state and local intrusion and control over free markets.

  • Property can be zoned, or downzoned by local government. No building 60-story condo towers in the seaside City of San Clemente, Ca., a GOP hotbed, for example.
  • Property can taxed at will; in Texas the local assessor’s office can up-zone property and apply higher taxes accordingly.
  • Numerous trades require a license to practice, think law, or real estate brokering, or example.
  • The federal government can and does tell a wheat grower how much wheat to grow.
  • The federal government mandates 10% of “gasoline” sold national be ethanol.
  • The federal government can and does outlaw the import of sugar.
  • The federal government can legalize the private seizure by eminent domain of land for private profit, as in case of the Keystone pipeline.
  • The federal government can create a professional (mercenary) permanently mobilized federalized military, and lay taxes upon productive citizens for that purpose.
  • Cities or states can outlaw push-cart vendors, prostitution, gambling, or racing pigeons. Or they can legalize the consumption of alcohol—there is no “right” to consume alcohol.

Of course, I have only scratched the surface here.

Why This Exercise?

In a democracy, we see voters, interest groups and public officials can do just about anything they want. Free enterprise has nothing to do with it. You can holler about free enterprise—tell it to the U.S. fuel-ethanol industry, now deeply entrenched.

So, if central banks suffocate economies in their exalted mission to bring about no inflation, how will voters and lobby groups react? They will vote to shield themselves, or vote for special privileges.

In contrast, if there are chronic labor shortages, how will voters react to free enterprise?

Central banks cannot suffocate political economies into compliance with free-market ideals. But they are trying.

5 thoughts on “There Is No U.S. Constitutional Right To Free Enterprise So The Fed Should Aggressively Target Real Growth

  1. Imagine the confusion if your title and last two sentences had been stated forcefully by one of the debate participants yesterday.

    Trump:

    “There Is No U.S. Constitutional Right To Free Enterprise So The Fed Should Aggressively Target Real Growth! Central banks cannot suffocate political economies into compliance with free-market ideals. But they are trying!!!”

    I’d pay good money to see the reaction to that.

    • Tom Brown–thanks for reading. Yes, GOP’ers believe in free enterprise but not in their particular neighborhood, profession or industry. I did not even mention the VA (a federal social welfare program for former federal employees).
      But the Dems are no better.

  2. Why is China so reluctant to devalue? Could someone please provide a more thorough explanation than this?

    “This relief is blocked – for now – because it would risk other nasty side-effects. Chinese companies have $1.2 trillion of US denominated debt. A yuan devaluation would anger Washington and risk a beggar-thy-neighbour currency war across Asia, with lethal deflationary effects.”

    – Ambrose Evans-Pritchard

    http://www.telegraph.co.uk/finance/economics/11756858/Capital-exodus-from-China-reaches-800bn-as-crisis-deepens.html

  3. Because a devaluation is an admission of failure. And China’s Communist Party cannot fail. The Party is omnipotent. RGDP growth is a minimum of 7% and cannot be anything lower.

    Seriously, NGDP growth has recently halved from around 15% to 8% or lower. It just must be causing immense strains and stresses. They should devalue. However, that US$ debt will be a burden. The central bank’s US$ assets may have to be mobilised to help out.

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