Sunday, May 23, 2010

Rand Paul, the CRA, and the Commerce Clause

After what happened on Thursday night's Rachel Maddow interview, I must say I was a bit perplexed. I read the interview carefully, read the criticism of Rand and read libertarian publications to see the reaction. I was one of many who supported Rand Paul for his coherent and even, I would say eloquent, condemnations of TARP, the stimulus plan, healthcare reform and bailouts of banks in general. The Tea Party became a movement where I saw Rand as being an articulate spokesman for an increasingly massive protest movement. A populist movement even, without racism, even if its opponents were sure that there were in fact racist undertones everywhere. Rand was an authentic spokesman, moreover, not just another political opportunist who at one point in time had (supposedly) held their nose and voted for all of these things, many of which Republicans under George W. Bush proposed initially, frequently in the name of "economic stability", that catch-all logic to which no retort is possible since Nobel-prize winning economists such as Paul Krugman says it's so.

So, to go back to the interview, I was stunned, miffed really, at why the Civil Rights Act became a question, and as to why Rand would answer the way he did. My first reaction was, like others I began to discuss (argue vehemently) with, was that he was arguing Barry Goldwater's point that business should make its own decisions. I saw that Reason and other libertarian publications gave a tepid defense at best of Rand, and frequently cited that, as Julian Sanchez writing in Newsweek wrote, a "large net gain" was accomplished via the Civil Rights Act. Okay, I agree, many things were apparently gained by the CRA, but even acknowledging that there is 'net' gain is also to acknowledge that there were things lost. I was not born during that period. I was born in Kentucky but I was never victim of racial discrimination. I saw a lot of bigotry, and religious discrimination (believe it or not!), but I never saw overt racism. I know there was segregation, but it was always hard for me to imagine the South that was depicted in the Civil Rights marches, and I must say I have always been happy those days of segregation are behind us. But still, what was lost?

Let's look at Rand Paul and where he comes from for a moment before going any further. Everyone knows that he is the son of Rep. Ron Paul by now, and that Ron Paul has been an important libertarian, and that his signature issue is to attack the Federal Reserve, currently with an 'audit the Fed' bill which has gained traction in the House. Rand Paul's initial involvement in politics was largely via the Anti-Tax movement. He agrees with his father on many issues, but has been concerned with taxes in Kentucky on a local level, and became a well known local figure on that issue. Now I am unfamiliar with all of the factors that would have made him leave the sidelines, ditch his private practice clinic, and jump into politics. I'm sure both healthcare reform and the prospect of higher taxes had a great deal to do with it. But asking exactly what people's underlying motivations for starting such a quixotic quest for a Senate seat (not a House seat mind you, launching for the first time for a Senate seat), is something well worth asking. You have to 'know in your heart' you're right to make such a venture. There is a lot to put at risk in a bid for the Senate without any establishment backing.

So now we are back to the what was lost question. When the CRA was passed in 1964, Title II was swiftly put into effect with the other 9 Titles. As expected, the Supreme Court received lawsuits from the private sector, deciding one major case by a hotel chain (Heart of Atlanta Motel v US / 1964) and one major case (Katzenbach v. McClung / 1964) by a small barbeque outlet. Both decided against the businesses in question and in favor of the power of the Federal Government to regulate small business. But this was certainly not the first application of the Commerce Clause, used to find in favor of the USG in both cases, the first was nearly 30 years earlier. As Rand Paul said in another less controversial interview, just before the election, "It didn’t start last year. I think it started back in 1936 or 1937, and I point really to a couple of key constitutional cases… that all had to do with the commerce clause." The case he is citing is the 5-4 decision (West Coast Hotel vs Parrish / 1937) in which the government was found to have the power to impose minimum wage law during the Depression.

The Commerce Clause question has not gone away. Some of the more than 30 states will likely challenge Healthcare Reform on the Commerce Clause, since it forces citizens to purchase a product from a private company. As Constitutional scholar Randy Barrett writes, the individual mandate is imposing the power of the Federal Government via the Commerce Clause for economic inactivity. That is the point where we are today in the world of 'economic' or 'property rights' libertarianism, which I think is at a stage of far greater deterioration than perhaps other types of defense of negative rights. So the question of what the Federal Government may do with our private property is still prescient, but just barely, to the point where most Democratic legislators when even asked about the issue simply rolled their eyes.

Be that as it may, Paul made a major gaffe in starting the question with the CRA. Few items are considered to be more untouchable. If you were going to attack the Commerce Clause strategically, you could start by trying to reverse the Court decisions which found that the government can force a farmer not to raise grain for their personal consumption, thus impacting Depression-era forced grain buys (Wickard v Filburn / 1942). Why not get down into some Kentucky populism and call it the Roe Filburn Act, hit one out of the park for that old farmer who just wanted to raise wheat for his chickens and had the government step in and slap him around? But don't go towards the CRA. There are other very fair questions as to whether the CRA is still needed to maintain desegregation, and it's fair to point out that Jim Crow laws were imposed by States to force private establishments to segregate. For example, in Kentucky it was illegal to sell alcohol to blacks and whites on the same premises, building permits on the same premises for blacks and whites were prohibited (zoning regs), companies were forced to build separate bathrooms for black and white employees and railroads were forced to segregate passengers. These were not private initiatives to segregate, they were public ones. But Rand Paul failed to point this out, so I strike it up as a gaffe.

At the same time, the tepid response of libertarians in Rand's defense does deserve analysis. It probably boils down to the fact that libertarians have been riding the crest of a wave, and so get ticked off when someone makes a gaffe in this way. But, in all fairness, navigating the theoretical intricacies of libertarianism to create an electable platform is much more difficult than posting articles pointing out the boorishness of government and inconsistencies in its logic. Libertarianism has been afforded the luxury of never having to govern. If it is going to do so, it's going to have to explain that these are fair arguments, and defend people who come to the forefront. But it may also have to do with the fact that many libertarians in the movement today are social libertarians first and economic libertarians second. They like to cite economic reasons why they are right, but defending property rights is somewhat like on a chessboard, where first and second amendment are the king and queen, while property rights are mere pawns. They are fragile, undermined by court rulings, and for the most part hard to defend. So there are much fewer resources spent on defending them.

The fact that Rand Paul comes from the Anti-Tax movement means that they are among the first he defends, and given the economic climate and the menace of higher taxes, against political analyst's odds he may succeed in mobilizing economic populists in Kentucky to defend them. But it doesn't change the reality that property rights today are against the ropes, and that the government does pretty much what it wants with our money, and tells us to impose pretty much any regulation it wants, with any logic it wants. No lists of enumerated, limited exceptions such as Free Speech, the holy grail which McConnell has strategically championed. We shall see what happens in November to Paul and the rest of the 'Tea Party' movement and its candidates, but if the result is more Scott Browns, you can kiss your hard earned cash goodbye, movement or no.

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Nick Sorrentino is the Editor of The Liberty and Economics Review and CEO of a social media management company.