Constitutional Authority 2

Friends,
A few days ago I started a series looking at what I call “extra-constitutional” federal departments. Today I would like to continue that discussion by looking at the Department of Labor. As with the last Discourse, I will link Article 1, Section 8 of the Constitution here for your reference.

The Department of Labor came into being under Present Taft in 1913 with the enactment of The Organic Act of the Department of Labor. Prior to this enactment labor issues were under the purview of the Department of Commerce and Labor; this act split the two. “The purpose of the Department of Labor shall be to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment. [Public Law 426-62]” The mission statement of DOL is:

The Department of Labor fosters and promotes the welfare of the job seekers, wage earners, and retirees of the United States by improving their working conditions, advancing their opportunities for profitable employment, protecting their retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and tracking changes in employment, prices, and other national economic measurements. In carrying out this mission, the Department administers a variety of Federal labor laws including those that guarantee workers’ rights to safe and healthful working conditions; a minimum hourly wage and overtime pay; freedom from employment discrimination; unemployment insurance; and other income support.

This sounds great, giving the impression of a kindly grandfather making sure all of the kids play nicely together. But what happens when one of the kids is able to gain more influence over grandpa then the other kids, and what happens when grandpa allows that influence to make a difference in his judgment? You then have the same relationship as the US government (grandpa) and labor and management (kids). They will do all of this benevolent work on a budget of $10.5B with 16,848 full-time employees.

Let’s take a look at one situation in particular. With enough research I could undoubtedly fill a few volumes on the subject of union corruption but I will just look at the most recent one.

Last year the Bush administration advocated and initiated the bailout of the auto industry. This package has evolved a number of times in the last year, so many times that I am not sure I have the complete picture but I will try to put some of the larger pieces together.

As of 13 June of this year, the United Auto Workers’ health care fund was set to receive 17.5% of General Motors; the government was set to receive 60%; the Canadian government was set to receive 12.5%. That leaves only 10% for the only legitimate claimants to the company, the bond holders. I'm not going to give a blow-by-blow account of the rape and pillaging of the largest auto company in America by the government, but rather concentrate on the macro role played in this travesty by Big Federal Government (I’ll call it BFG), the DOL, and the UAW.

Looking at the DOL mission statement above, how does that square with participating in the destruction of a viable company like General Motors. There are three major players here; the BFG, the DOL, and the UAW. BFG forced the downfall of GM by placing unreasonable restrictions on auto manufacturing over a period of decades, causing the price and complexity of cars to skyrocket. I’m sure there may be a more regulated industry than the auto industry, but one does not come immediately to mind. These regulations cover everything from air bag safety requirements to tire manufacturing specifications, bumper crash survival rates, and gas mileage. Just managing the compliance paperwork alone must be a major cost of doing business.

The DOL is supposed to be looking out for the workers. Where was their advocacy to keep the company viable? I have not found any place where they have performed this function. They have taken on the mantle of surrogate for the UAW against the “big mean management team.” Where has DOL worked to ensure GM’s viability? This is the only way the workers will be able to maintain their jobs. Remember, if GM closes their doors, millions of people are out of work.

So, now we have a situation where we are throwing $10.5B at an agency of BFG that seems to be working for the destruction of jobs. Also, where in the Constitution is BFG given the authority to take such a hand, heavy or light, into matters of free enterprise? It is a historical fact that when BFG sticks its fingers into a situation, it invariably heads south; just ask the folks at Mustang Ranch (you can Google that one).

Why is DOL working so hard to paint big GM as such bad guys; because their masters at UAW have told them to do so. The unions hold such an iron grip over the DOL that they are sure to get their way; thus they will be receiving a big chunk of GM. But wait, remember BFG’s propensity to screw things up? With their 60% and given their track record, GM should be out of business within two years (I'm being generous here; I don’t think it will take that long). Where is the workers’ advocacy in this situation?

The DOL has not only existed in an extra-constitutional framework, it has actively worked to put American workers out of work. This is another BFG department that needs to go away and let the marketplace work. An adjunct to this is for BFG to let the marketplace determine the regulations placed on the industry. One lesson that BFG has never learned is that the consumer will ultimately determine what features they want and what they do not want.

As always, I welcome your comments and discussions.

Dan

Constitutional Authority #1

Friends,
It is time for me to get back up on my soap box. Not a day goes by that this administration and its stooges in Congress don’t make my blood boil. Whether it is the “stimulus package” or the federal government taking over our health care or Attorney General Holder giving consideration to prosecuting the former administration for their decisions, it all boils down to one issue. Where is the constitutional justification for any of their actions?

The more I look at this administration as well as administrations for the past 80 years (and I am being generous) I realize that most, if not all of our economic problems have come as a direct result of the federal government violating its constitutional authority. In this series of Discourses let’s concentrate on just the establishment and operation of what I call extraconstitutional cabinet-level departments. First, I suppose that we should determine which departments are authorized, expressly or by implication, by the Constitution.

I would submit that Treasury, State, Justice, War (now Defense), and Commerce are authorized or implied by the Constitution; there might also be a case for the Department of Interior. I have linked Article I, Section 8 of the Constitution here. This article details the powers of the Congress. You may want to open it in order to refer to it while I go through this discussion.

The first extraconstitutional department I will discuss is the Department of Housing and Urban Development (HUD) which came into being during the FDR administration with the enactment of the U.S. Housing Act of 1937. HUD was elevated to cabinet-level by the Department of Housing and Urban Development Act of 1965 during the Johnson administration. The stated mission for HUD “is to increase homeownership, support community development and increase access to affordable housing free from discrimination.” I discussed Our Uncontrollable Debt in December of last year.

Being the simple-minded soul that I am, I have to ask, “Why?” What happened to working toward homeownership? Before you get all riled, I know that in years-gone-by discriminatory lending and home sales practices existed and may still today; but there are free market forces that can and should deal with that. Much of the current financial folly we are enjoying now is a direct result of “making” people eligible for homeownership when they just hadn’t gotten there on their own. What happened to good old American work ethic? What happened to the concept of setting your goals and working toward them? Why is the federal government in the business of business anyway? As a friend of mine is want to query, if you are not a homeowner, what are you? You are a renter. Is that bad? I don’t think so. Someone owns that house or apartment and is living the American dream. If you think it is easy being the owner of a rental unit, just ask those who do. If you don’t want to be a renter why do you have to have a department of the federal government behind you pushing you into a mortgage you can’t afford? If you want homeownership badly enough you go out there and work for it.

This great county has grown because individuals worked. At first it was just to subsist. Then as they worked harder they began to realize that their efforts could pay off and make their lives even better than just subsistence. Is this an easy path? No, but nothing worth the pride of ownership is easy. That is what makes one stick his chest out and say, “I worked for that and I earned it.” Where is the pride in saying “HUD got me this house”?

Looking at the Constitution and the enumerated powers, I do not see any place that allows the federal government to manipulate the marketplace for any group or for any reason. This interference in the marketplace is a very sharp overreach of constitutional authority.

The current budget for HUD is $41.5B. That is money that comes from people who have worked for that dream of homeownership. I can think of a lot more productive ways to spend that money, such as paying down our enormous debt. I can think of a lot more productive ways for people to earn their way into homeownership than working the federal bureaucracy to get a home. Working toward homeownership puts productivity in the community. Achieving that goal and purchasing that home means that someone earned a wage when the home was built, or the prior owner is going into another home that someone had to build. That is the way of economics.

By my way of thinking, if people have achieved the dream of homeownership or they are working toward it, that is good for the state and community in which they live. Doesn’t that make it a state issue? The states and municipalities should be more in tune with the individual citizens than the federal government. Why, then, is the federal government trying, and succeeding, to assume the duties of the states and local communities? While they are doing this, it is a continual degradation of states’ rights and responsibilities; a place the federal government has no business visiting.

This Discourse is very high-level and not in depth. That would take much more time and space to cover. These highlights should be enough to start you thinking.

This is the first in a series of Discourses discussing the gross assumption of power by the federal government. Hopefully, it will encourage a renewed interest in taking our communities and states back which, in turn, will give us our country back.

As always, your comments and discussions are welcome.

Dan