Friday, April 24, 2009

McCulloch vs Maryland II

All I need to do is say "Supreme Court case" in class and eyes roll back in heads and the drone of snores permeates the room. Face it, unless you are some sort of pre-law pseudo-geek, the memorization of obtuse precedents from a hundred or more years ago is boring stuff.

Take McCulloch vs Maryland. It occurred very early in the history of our Republic. It laid the ground work for the effective dismantling of the anti-federalist influence in our Constitution. It expanded the power of the Federal government at the expense of individuals and the states. It was the beginning of the slide into big, bigger, biggest government.

The idea was that the feds came into Maryland and set up a bank. That would reasonably be viewed as unfair competition for the free enterprise concept of private banking. How can you compete with the guys who print the money and don't have a profit motive? The state of Maryland jumped into the fray and said, if you do have a bank, you'll have to pay business taxes to the state just like every other bank. The federal government said, "Yes, we can!"

The outcome of the case was that, despite the enumerated powers of the Constitution saying nothing about banks, the federal government could do it. And, furthermore, the federal government was immune from local taxation. A two-fer for federal government power.

Now read this:

Get Your O-Card

Think the issue through. Do you see McCulloch vs Maryland writ very much larger? A government credit card in your wallet means non-profit competition for the very banks they ostensibly are trying to rescue. It means the death of large entities like AmEx, MasterCard and VISA who will simply be undercut until they are gone.

But, look beyond the immediate disaster to the real future. If your government is your credit card company they now hold your very life in their hands. They know who you are, where you are, what you earn, how much you are worth, who you work for, and what you buy--they've got the book on you in greater detail than they ever had. The last vestige of privacy and individualism is gone.

Now they control credit approval for every purchase you make. Want to buy a new pickup or SUV? Sorry, disapproved. Pick the hybrid Prius or Volt, you'll slide right through. Want a gun? Ooops, my bad. They were already outlawed. But, you get the idea.

Then keep in mind that "spread the wealth" promise. Do you like the progressive income tax concept? Apply it to credit card rates. How about a monthly "fairness" charge against your card to help the homeless, support a welfare mom, or fight for the environment? And for the low/no income crowd, how about a monthly fill-up for your credit card courtesy of Uncle Sam?

But, Slate thinks it's a reasonable idea. They point out the Europeans just love it. Yeah, that explains it so well.


MagiK said...

Ed, I have been quoting you and links to your blog at a place that I freqent where we do a lot of debate, we have a mix of Liberals, and Conservatives and your recent posts have just been too accurate and important to not have them seen by as many people as possible. I Always put the links to your blog with the parts I cut and paste. I hope you dont mind, I will remove those posts if you do not want them there.

steveH said...

Not just a bad idea, a really, really, really Bad Idea(tm).

After a while, undercut the private-sector competition, ending up with most or all other credit card alternatives gone.

Not far from there to shutting off service to any customer they don't like, for whatever reason.

Ask a lefty if they'd really to see, say, something like another Nixon administration wielding that much power over individuals' finances.

If they're honest, you could see them go pale...