Saturday, January 12, 2013

President Richard Nixon, President Barack Obama, The Imperial Presidency, and the Debt Limit

Richard Nixon, Barack Obama, The Imperial Presidency, and the Debt Lmit

President Richard Nixon was born 100 years last Wednesday. You missed that celebration, didn't you? Arthur Schlesinger, Jr. published his famous book, The Imperial Presidency, 40 years ago in 1973. You mat also have missed the book, although you know the phrase.

Schlesinger’s thesis was that the nation’s presidents progressively accumulated power in the Presidency, often through the pretense of fighting a war. The usurpation of power exceeded their constitutional powers. The more power they had, the more arrogant they became, demonstrating Lord Acton’s maxim “Power corrupts, and absolute power corrupts absolutely.”

President Lyndon B. Johnson was imperious, but the book was aimed at President Nixon.

Liberals never liked “Tricky Dickie,” and they had ample grounds to complain of his Presidency: Watergate in all its manifestations, Executive Privilege, dismissal of the Special Prosecutor, the break in of Daniel Ellsbergs’ psychiatrist office, the bombing of Cambodia and Laos, the ground invasion of Cambodia, the enemies list, the Pentagon Papers, Dirty Tricks, the Plumbers, domestic spying, wire tapping American citizens, the invasion of the tax records of opponents, and the impoundment of appropriated funds.

Any act of President Nixon that seemingly expanded or abused, rather legal or not, the power of the President was vigorously attacked by his opponents and magnified by the media.

President Nixon resigned before being voted out of office.

President George W. Bush was accused of resurrecting the Imperial Presidency, but President Obama has clearly done so.

President Obama, the Constitutional Law Professor, expressed his views on the Constitution in a 2001 Chicago TV interview: “But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the Founding Fathers in the Constitution, at least as it has been interpreted, and Warren Court interpreted in the same way, that guarantees the Constitution is a charter of negative liberties.”

President Obama, the Constitutional Law Professor, must have missed the Supreme Court decisions, and those of appellate and district court judges, that vastly expanded the rights of African Americans. He neglected the decisions that struck out segregation and protected the rights of minorities. He never mentioned the decisions that limited the powers of the government.

President Obama has made it clear that if Congress does not advance his agenda, then he will do so by executive orders and administrative decisions.

The Senate blocked Cap and Trade – no problem; the EPA will shut down the nation’s coal plants.

Congress failed to enact the Dream Act. He did it through Homeland Security.

He believes in Gay Marriage – again no problem; he refused to defent the Defense of Marriage Act in court. Rather he believed in it or not, it is the law of the land as enacted by Congress. He could have waited for the Supreme Court to strike it down, but that is uncertain.

He granted about 1,200 waivers to ObamaCare, mostly as political favors.

President Nixon had Dirty Tricks. President Obama has Chicago Rules.

President Nixon asserted executive privilege. President Obama asserted executive privilege to avoid disclosing embarrassing details about Fast and Furious. The details will emerge, as with Watergate, but not until after reelection.

He rewrote the obligations of student loans to curry the youth vote.

Vice President Biden has claimed President Obama will issue executive orders on gun control if Congress doesn’t act. There are some actions he can take, such as with imports, but any general restrictions will run afoul of the Second Amendment. There’s that pesky Constitution again.

The real test will come in a few months, when the Treasury will exceed its borrowing authority. President Obama has empathically stated that he will not negotiate with Congress on the debt extension.

Either he reaches an agreement with the House Republicans, or the nation theoretically goes over the debt cliff.

Unless he acts unilaterally.

He has two alternatives: act pursuant to the 14th Amendment to unilaterally increase the debt ceiling or have the Treasury Department issue a trillion dollar coin to the Federal Reserve.

The 14th Amendment provides the “validity of the public debt of the United States … shall not be questioned.” The problem with this argument is that the government has enough revenue to cover the debt. It would be short of funds to cover other spending accounts.

Under an obscure statute, the Treasury has the authority to issue platinum coins and place a value on them. Thus, it could place a fictitious $1 trillion dollar value on the coin, which would just about cover the current budget deficit.

Either recourse will be devastating to the United States. The strength of our currency is not based on underlying assets, such as gold or silver, but on “the full faith and credit” of the United States.  Lose that, and the dollar will enter into a free fall and inflation will set in.

Oops, how you checked the supermarket lately? The price of food has risen while the size or quantity dropped. That’s inflation.

So too with the price of clothes! More inflation.

The price of gas has more than doubled during his administration, and is rising again. Rising energy prices ripple through the economy.

Oil is traded in dollars; the more the dollar falls, the higher the price per barrel of oil.

Second, any debt issued by the federal government will be constitutionally suspect because of the lack of Congressional approval. Interest rates will shoot up with the currency again being devalued.

Inflation and rising interest rates are a major threat to the United States. The Federal Reserve Bank is currently purchasing $85 billion monthly of Treasury and mortgage securities.

Let me rephrase that. The Fed is printing $85 billion monthly in unsecured monies. That is a catalyst for inflation.

The reason prices are rising is because the government is printing money.

The Fed is in danger of losing control of interest rates. Rising interest rates and inflation will be deadly for our precarious economy.

Will President Obama take that risk? How imperial will his Presidency be?

Both Presidents Nixon and Obama won commanding reelections. Will President Obama follow President Nixon's course?

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