There has been a lot of discussion about President Obama’s nomination of Judge Sotomayor to the Supreme Court of the United States. There has been much persnickety analysis of a few remarks she made at a conference, and one or two decisions she made, including the fact that her decisions as a Court of Appeals judge have been overturned more often than not by the Supreme Court itself. The big question is whether she will stick to the law or be an activist judge, which means that she will want to make law and public policy from the bench.
The reader may ask, “What does this have to do with economics?” The answer is, a lot. The economic system never operates in a vacuum, but is part of a three-legged stool, the other two legs of which are a religious-moral system and a legal system. These three legs of the stool operate together to form the character of any country. Since we are discussing law, let us take an example of the economy of a country trying to operate a free-market economic system, but where the courts are corrupt. There will always be disputes in business. People understand agreements in different ways, interpret contracts, especially the more complex ones, differently, and, of course, some people are downright dishonest. Instead of taking matters into one’s own hands, business people take the matters in dispute to an impartial court for a decision. But if the courts are corrupt, it means that they will decide for the one who bribes them, or the one with the political connections, or in favor of friends and relatives, rather than according to the law. This corruption limits the amount of risk that the business operator is willing to take, because, if something goes wrong, there is no sure legal remedy. Countries with this type of court system tend to live in primitive economic conditions for that reason.
Any country that to expects to have a prosperous economy needs citizens who respect the rule of law, and courts that will adjudicate disputes according to that law. Judges who legislate from the bench, that is, who decide not according to the law but according to what they would like to see, destroy the confidence in the courts needed to operate business successfully, not to mention the penal law system.
But do not take my word for it. The great Constitutional scholar (a non-lawyer, I might add, and don’t get me started on lawyers’ ignorance of the Constitution) Dr. George Carey of Georgetown University wrote an article many years ago, bringing us back to the intent of the framers of the Constitution regarding Article III of the Constitution, the judicial article. All legal decisions must take into account right off the bat the intentions of those who wrote the article or statute in question. The words of the article or statute cannot be understood reliably by using the words themselves, because words are susceptible to a variety of meanings. Therefore, any legal scholar or judge who is competent goes to what the authors of the law intended to accomplish by the law in question. In interpreting the Constitution of the United States, there is a hierarchy to be used in ascertaining the meaning of any section. After the words themselves, there come the debates in Constitutional Convention, and after that, the most thorough, authoritative explanation of the document, the series of newspaper articles written by three of the Founding Fathers, called The Federalist, written under the pseudonym “Publius,” the intention of which was to explain the provisions of the new Constitution to those who had objections. Dr. Carey points out that in discussing the ability of the Supreme Court to overturn statutes, liberals never refer to the preeminent Federalist on the subject—Federalist 78. Why is this?
First of all, Publius tells us, we must understand that the Constitution is “fundamental law.” This means that it is foundational. The Constitution is an official expression of the will of the whole people, hence it begins, “We, the People of the United States . . . .” Statutes, law passed by legislatures, while binding, are the will of the representatives of “We, the People of the United States . . . .” In a conflict of laws between a statute and the Constitution, the Constitution must prevail. The Constitution itself does not speak of the ability of the Supreme Court to overturn statutes, but Federalist 78 tells us that limitations of the power of the legislative branch “can be preserved in practice no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void” (my emphasis). The word “manifest” means “evident to the senses,” and “tenor” means an exact copy. In this case it means the literal words of the document (Black’s Law Dictionary). Publius notes that in order for the Court to declare a statute unconstitutional, there must be an “irreconcilable variance” between the two.
Publius goes on to say that “The courts must declare the sense of the law; and if they should be disposed to exercise will instead of judgment, the consequence would equally be the substitution of their pleasure to that of the legislative body” (emphasis in the original).
How does one keep the courts from doing just what Publius says that they should not do? He continues: “To avoid an arbitrary discretion in the courts, it is indispensable that they should be bound down by strict rules and precedents which served to define and point out their duty in every particular case that becomes before them” (my emphasis). In other words, these strict rules and precedents, coupled with the clearly spelled out functions of the Supreme Court Publius noted above, should make the judicial the “least dangerous branch.” In terms that the layman can more easily understand, perhaps, the “trappings” of the court, i.e., the judicial robes, the wigs (in England), the wood-paneled courtrooms, the respect that the judges are shown—all of these tend to make the judges, if you will, “high priests” of the law, designated to protect the law, not to substitute their own will for either the Law (the will of the people) or legislation (the will of the legislators). But this is just what judicial activism is—a substitution of the will of the judge for that of the people as expressed in the Constitution, or the will of their representatives as expressed in legislation. If there is no irreconcilable variance between the fundamental law and the statute, then the Court has no business changing anything. If the judge disagrees with a policy of the legislature, the place to discuss that is in the legislature, not the Court. If the judge does not like a provision of the Constitution, the way to change that is through the amendment process, which is spelled out clearly in Article V.
Of course, this assumes that the judges believe that the manifest tenor of the Constitution IS fundamental law with the meaning the Founders intended it, and not their version of it. If a judge thinks that the Constitution is a “living document,” he or she clearly intends to insert his or her meaning of it (his or her will) into their interpretation of it. You have to wonder what these judges learned in law school. This is why I always wondered if lawyers were the best candidates for judgeships. Law schools generally train you only in case law. “The law is what the Supreme Court says it is,” was a famous statement by a judge, which shows that basically the last case, even if deviating from the Founders’ intent, is the meaning of the Constitution. However, good graduate schools of political science teach law too; the difference is that the Ph.D.s from those schools are not practitioners, but are much better read than most lawyers, meaning that they generally have actually read the original documents related to the founding, as well as studied English law, from which much of our law derives. I remember that at a pro-life conference, a paper was given by a very good pro-life Federal prosecutor, but he was challenged by a famous legal scholar, Walter Berns, who had a Ph.D. in Political Science with a concentration in law. The question was about the trend of the court cases in the life questions. Dr. Berns made a fool out of the prosecutor; not only did he have better Constitutional theory, showing great erudition, but even outdid the prosecutor on the case law. (Oh, you got me started.)
So, I ask the sitting judges and the senators who are to discuss the confirmation of Judge Sotomayor, what standards will you use to judge her qualifications: those of the Founding Fathers as seen in Federalist 78, or some other standards?
I am sure that readers of this blog are familiar with the recent episode relating to the supposed Catholic university of Notre Dame inviting President Obama, the most pro-abortion president in history, to be the commencement speaker and receive an honorary Doctor of Laws degree.
There are a number of things to be said about all of this. For example, the argument was made that we have to hear the other side of the story. Can anybody really say that any Notre Dame students have not heard the various arguments both for and against abortion in at least one course in their academic career? If so, Notre Dame is really running a kindergarten under false pretenses. Even I got both sides of the arguments at the Catholic university I attended, and abortion was not even legal yet. Secondly, the academic freedom argument says that in a university setting, professors have the right to express various aspects of a subject, or else academic discourse will be hampered. There are a number of problems with this argument, but the one that is relevant here is that academic freedom applies to classroom instruction, not to public speeches, especially by politicians, which, by their very nature, are open to discussion in the public forum; in fact open to public disputation, which is exactly what the protesters were doing at the university.
It is this latter situation which lends itself to an economic analysis. Giving the president of Notre Dame some credit, it probably was the board of trustees which invited president Obama to the campus, never thinking that that decision would be the source of such controversy. By and large, Catholic universities run by religious orders have given up control of their institutions by putting mostly laypersons on the board, most of whom are there because of the large amounts of money they can contribute and get their friends to contribute. But this means that, assuming the invitation to President Obama was not Father Jenkins’ idea, Father Jenkins is faced with the following dilemma: waffle in justifying the invitation, which he personally opposes and was outvoted on, or resign. He obviously did not quit, so he had to waffle; he had to try to fit the invitation of the radically pro-abortion Obama into the clearly stated principles of the university. This could only be done by using the above stated arguments.
There are then two economic sides to this situation. President pinnochi-obama said the he wants to cut down on the number of abortions, and in that he agrees with Notre Dame. But does he? It is simple supply-demand and price. Obama is in favor of funding abortion, both here and abroad. Giving government money to abortion clinics allows them to charge less for abortion. If the price goes down, the demand goes up. Therefore the policies of Obama will actually increase abortions. The fact that the remaining crowd at Notre Dame were wildly enthusiastic of his speech tells me that either the so-called Catholic Notre Dame is not doing its job of teaching in accord with the Catholic faith AND natural law, and/or the people there were stupid. In either case, it leads me back to the kindergarten analogy I mentioned above.
Next, there is the old expression that there is no such thing as bad publicity. We are in economic hard times. The Notre Dame website recognizes this, but says it will not freeze pay, let people go or freeze spending. Nevertheless, the possibility that prospective numbers of applicants will decline might be worrisome to the administration. Now, what Catholic institution was the subject of lengthy discussions, articles and coverage in the media recently? Only one—Notre Dame University. It got more free publicity in the past few weeks than even its football team can get for it. And who will be attracted to Notre Dame as a result of this free publicity? Pro-abortion, pro-Obama fans, both Catholic and non-Catholic. Considering the audience at graduation, both the graduates and their guests, this is not surprising. On the other hand, my employer, Christendom College, had Father Pavone and Dr. Jude Dougherty, both famous orthodox Catholics and foes of abortion. My undergraduate alma mater, St. John’s University in New York, run by the Vincentian Fathers, had Immaculee Ilibagiza, a Catholic Rwandan genocide survivor, who has been on EWTN. Neither Christendom nor St. John’s got any free, big national publicity from these speakers and degree recipients, even though they got some in certain circles. But if you wanted a real Catholic education based on who got honorary degrees, which would you pick: Notre Dame? Or would you pick Christendom and St. John’s? All those who believe that Notre Dame is the pre-eminent Catholic University in the United States need to think this out again. So Notre Dame waters down its commitment to our Faith, yet cries all the way to the bank. The rest of us must earn our money the old-fashioned way—we earn it—by pleasing God.
I have never listened to the Glenn Beck radio show, but I have enjoyed watching his television show, first on CNN Headline News, and, more recently, on Fox News Channel. I also agree with almost everything he says on that show, and I am impressed with his guests, especially, but not exclusively, the economists. However, today he blew it!
Glenn has been recommending the book Animal Spirits by two economists, Robert J. Shiller and George Akerlof. Now, Glenn has been complaining for months, ever since the original bailout during the Bush administration, about excessive government spending, and has been properly championing the idea that the free market can get us out of this economic mess. Since the Obama administration took over, Glenn has also ratcheted up his criticism of government spending, and the Federal Reserve’s printing of money, which economists call creation of credit ex nihilo, i.e., out of nothing.
So, what is with Animal Spirits? In the interest of full disclosure, I have not read the book, but now I do not have to. Shiller and Akerlof were on the Glenn Beck television program today. In his book The General Theory of Employment, Interest and Money (1936, p. 161), Keynes tells us that almost all of our economic activities are not a result of studying a situation, and estimating the probabilities of success or failure, but merely “animal spirits,” by which he means “a spontaneous urge to action rather than to inaction.” This is akin to what former Federal Reserve Chairman Greenspan called “irrational exuberance.” According to what Shiller and Akerlof said on the show, our current economic problems are caused exactly by these animal spirits, which make people make business decisions based on emotional factors such as “confidence” or “trust.” In addition to this, according to them, the only remedy to this “animal spirits” situation is, wait for it . . . fiscal policy (i.e., government deficit spending) and monetary policy (i.e., creation of credit ex nihlo by the Federal Reserve).
What nonsense! To make things worse, Glenn Beck, who has been complaining for months about government deficit spending and the Federal Reserve’s printing of money, thought that this was a great idea and a great book, recommending it to all his viewers.
The truth is that economics is a science and we know exactly what has caused the economic crisis we are in—government deficit spending and creation of credit ex nihilo by the Federal Reserve. (I have written about this in other articles in this blog.) These activities send false signals to entrepreneurs and other business people regarding prices and costs, and they make bad decisions. The fact that Freddie and Fannie were in the government’s pocket made things even worse, as well as the Community Reinvestment Act, which threatened banks with penalties if they did not lend to minority potential borrowers even if they were unqualified.
This whole scenario was predicted long ago by Ludwig von Mises in his Theory of Money and Credit, which was originally published in German in 1912, and also, more recently by Jesus Huerta de Soto, in Money, Bank Credit and Economic Cycles, originally published in Spanish in 1998, long before the current crisis erupted. It is a shock that Glenn Beck, a fierce opponent of government tampering with the economy, has now become the Dr. Frankenstein of the resuscitation of Keynes!
This week, President Obama submitted his budget to Congress. The budget called for 3.6 trillion dollars in government spending; that’s $3,600,000,000,000. He was proud of his work because, he said, he cut $17 billion dollars in government programs, which he said is “real money.” Now, to you and me, $17 billion is a lot of money; but to the Federal budget, it is a real drop in the bucket. Obama’s cuts in programs are ½ of 1% of this budget, or, .005 of the budget. Put another way, the total spending in the Obama budget is $11,613 for every man, woman and child in the United States. The cuts in programs comes to $54.84 for every man, woman and child in the United States. To put this is real terms that everyone can understand, even a Congressman, the spending in government programs is less than one year’s tuition, room and board at Christendom College. The alleged savings of $54.84 will not buy even ONE standard micro-macroeconomics textbook, the price of which usually runs over $100.
Suppose we couple this with the FULL national debt. The national debt clock says that the regular national debt is $11.3 trillion dollars. The unfunded mandates from Social Security, Medicare and other entitlements, coupled with the official national debt, add up to more than $55 trillion dollars—CURRENTLY. How much of the $3.6 trillion dollars will the Federal Government be able to fund with taxes? The national debt after the 2010 fiscal year is expected to be over $12 trillion dollars (see http://www.federalbudget.com
). The chart at the above site seems to show that the increase in the budget deficit will be more than $1 trillion dollars. For the sake of argument, let us assume a conservative $1 trillion increase in the national debt (ignoring an increase in entitlements). This will be an increase of $3,226 for every man, woman and child in the United States.
The current interest on the national debt, that is, the tax money we spend to holders of United States government bonds, many of which are held by China, to fund the government accumulated deficits, is $412 billion per year, and climbing. So the interest on the national debt part of the budget alone is $1,329 for every man, woman and child in the United States.
Josef Stalin said that the death of one man is a tragedy; the death of millions is a statistic. Of course, we are not speaking about death here, but do you really think that these numbers are merely statistics? Someone will have to pay for these debts. Every year the interest on the profligate spending of the Federal Government, which, by the way, you the voters, many of whom are Catholic, approve, grows. Suppose the interest you had to pay on your house and/or car grew in this way. How many extra jobs would you have to get to keep up with the payments? When you had no more time to work, then what? Would your whole family have to work, even the little kids? Would you be able to leave your wife and kids any inheritance? How much would you be able to give to charity?
If these trends continue, the ordinary people will have very little money to live beyond a very low standard. This will not happen necessarily in this generation, but what about your children and grandchildren? We are mortgaging their future so that we can be taken care of by a paternalistic government which is more than willing to exchange votes in the short term to ravage the wealth of the nation like a plague of locusts. Where is the outrage? Where even is the common sense? Where did our morality go, that we can stick our progeny with our debts?
The time—722 B.C. The place—Israel, the northern kingdom of the Holy Land, with its capital in Samaria. The event—conquest of the northern kingdom by the Assyrians.
Israel had been plagued by a line of kings who had abandoned the Lord as had the whole land of Israel. They had accepted the gods of the surrounding peoples, and their morals had fallen to an all-time low. The prophet Hosea describes it this way:
There is no faithfulness, no love
No acknowledgement of God in the land.
There is only cursing, lying and murder,
Stealing and adultery;
They break all bounds,
And bloodshed follows bloodshed.
The prophet’s condemnations go on and on. Then God says through the prophet’s mouth: “Hear this, you priests! Pay attention you Israelites! Listen, O royal house! This judgment is against you . . . .”
The judgment was that the King of Assyria invaded Israel and after a three-year siege, captured the place, took away 27,000 of its people to Assyria and populated the area with Assyrians. The Israelites never returned!
The time—586 B.C. The place—Judah, the southern kingdom of the Holy Land, with its capital in Jerusalem. The event—the capture of the southern kingdom by the Babylonians.
Oddly enough, the same religious and moral decline occurred in Judah as had occurred in Israel. The prophet Isaiah says:
See how the faithful city
has become a harlot!
She was once full of justice;
Righteousness used to dwell in her--
but now murderers!
Your rulers are rebels,
companions of thieves;
they all love bribes
and chase after gifts.
They do not defend the cause of the fatherless;
The widow’s case does not come before them.
Therefore the Lord, the Lord Almighty,
the Mighty One of Israel declares:
Ah, I will get my relief from my foes
and I will avenge myself on my enemies.
I will have my turn against you;
I will thoroughly purge away your dross
and remove your impurities. (Is 1:21 and 23–25)
The Prophet Jeremiah tried to warn the country, but prophesied:
The Lord said to me, “From the north disaster will be poured out on all who live in the land. I am about to summon all the peoples of the northern kingdoms,” declares the Lord.
Their kings will come and set up their thrones
in the entrance of the gates of Jerusalem;
they will come against all their surrounding walls
and against all the towns of Judah.
I will pronounce my judgments on my people
because of their wickedness in forsaking me,
in burning incense to other gods
and in worshipping what their hands have made.
Things had gotten so bad that King Manasseh even returned to human sacrifice in the Temple itself! The prophet Jeremiah tried to do penance to avert God’s punishment. He put an iron yoke on himself and preached to the people to show what slaves they had become. But they had him scourged and put into prison.
The result of this abandoning of God by Judah was the invasion by the Babylonians, the destruction of the Temple, and the exile of her citizens to Babylon which really began in 605 and ended in 539 B.C., when the Jews were allowed to return to their homeland.
These two events are not mere historical curiosities. They are real historical and theological events which contain a great deal for us to learn. The United States was founded as a Christian nation (though not Catholic, the country had, over the years, a great many Catholics in it and has been influenced by them). In a similar vein, no one from the 1600s onward would even think of allowing the things to go on that we learn of now every day. Rampant illegitimacy, the sexual revolution, birth control and abortion, publicly extolled homosexuality, the commonality of divorce, and 22 million Catholics who have left the faith over the last few decades. This is not to mention the anti-life Catholic politicians that seem to be a dime a dozen today, and a president who is the most pro-abortion president we have ever had, and a socialist to boot.
The pattern is clear. It is similar to that of both Israel and Judah. Adherents of the true faith at the time, they slowly drifted away. Things got more outrageous until eventually God had to abandon them to their enemies.
But the reason God did this is very instructive. Look at what God told the prophet Ezekiel:
Again the word of the Lord came to me: “Son of man, when the people of Israel were living in their own land, they defiled it by their conduct and their actions. . . . So I poured out my wrath on them because they had shed blood in the land and because they had defiled it by their idols. I dispersed them among the nations, and they were scattered through the countries; I judged them according to their conduct and actions. And wherever they went among the nations they profaned my holy name, for it was said of them, “These are the Lord’s people, and yet they had to leave his land.” I had concern for my holy name, which the house of Israel had profaned among the nations where they had gone. (Ex:36, 16–21, my emphasis)
Notice that God punished the chosen people because of His holy name. His people were acting like they were not his. The United States, founded on a Christian basis, slowly but surely has moved away from its Christian foundations, and many Catholics have cooperated in this betrayal. On the basis of this whole situation—the defection of the holy land, the exile, now the ebbing away of beliefs and morals in the United States—what are we to conclude? Is it possible that the problems we have are all coincidence: radical Islam, confusion at home, attacks on Christianity worldwide, our economic problems and the growing statism in the country?
Next time, I will take a look at the twentieth century. In the meantime, it would be beneficial for the reader to prayerfully read the books of the Bible which refer to these events discussed in this section: the books of Isaiah, Jeremiah Ezekiel, Hosea, and 2 Kings.
This line from an old pizza commercial brings up an exercise in one of my management courses when studying for my MBA. What you had to do is think for a while about what you would like your epitaph to say about you. I never thought about it this way. Another way to put this exercise is to ask, “What kind of a person are you? How do you want people to remember you?”
The Catholic Church focuses a lot on sin, and rightly so. Catholics examine their consciences, or should examine their consciences, frequently. But much of what is contained in a list of sins to be checked against our thoughts and actions leaves a lot under the radar. Pope John Paul II has contributed, along with some phenomenologists such as Max Scheler and St. Teresa Benedicta of the Cross (Edith Stein), to examining personhood, and there are many Catholics who may or may not be sinners according to the list in the books, of which I cannot judge, but they fall short in their personhood.
The reason for this is that we generally see personhood as a static concept. We say that the unborn baby is a person, and so it is. But it is in an undeveloped stage. The personhood requires development, and the development of personhood requires that we open our hearts to others, that we have empathy, that we see ourselves as the image of the persons of the Blessed Trinity, who are known to us as complete self-giving. In short, personhood is the gift of ourselves to others.
Unfortunately in my experience, I have run into many Catholics, some of whom have professed themselves to be exemplary, who have been very short on personhood. They are self-centered, arrogant, intellectual bullies, unable to empathize, paranoid and uncaring. These folks have persecuted me and others seemingly for no other reason than that it makes them feel superior.
These things not only have spiritual consequences but economic as well. The reason that we were asked to perform this exercise in a management class is so we can examine how we treat others. Being mean and hard on others is not just plain anti-personhood for the actor himself, but it is discouraging to employees, customers, suppliers. Surgeons are notoriously compatible with this non-person model, and I wonder how many medical students have decided not to specialize in surgery due to the arrogance of those who are supposed to teach and guide them. Mean teachers, and we all have probably had experience with this, discourage academic performance. And how many mean confessors have dissuaded penitents from returning to confession. I have been mistreated by many priests, nuns and lay Catholics so that it is a miracle that I still have my Faith. (My wife says that we cannot take it out on Jesus for the faults of his followers.)
Interestingly enough, the people who do these things may not even really know that they do them, because they never truly examined their personhood—that is, how much empathy do they have, how much self-gift are they. Ultimately, John Paul says, man is meant to give and receive love, and real love is not the “love” that is mean “for the beloved’s own good.” Love is the self-giving that we see in the Trinity. It requires humility, kindness, empathy, long-suffering, “living with” another.
Take the case of entrepreneurs. The myth about them is that they do what they do for money. The truth is that they never do what they do for money, and if someone does entrepreneurial activity just for the money, they will fail. Entrepreneurs take risks, raise money, usually from relatives and friends, and work their fingers to the proverbial bone with virtually no return for years, for the thing in itself; because society needs it; because it will make man’s work easier; because it needs to be done. This is true self-giving. They could be much more comfortable at a desk job, pushing papers, working 9 to 5, but instead, they go through all of this so that our lives will be better. This does not mean that they are perfect in their interpersonal relations, but if they do not have a well-developed personhood, their task will be much harder, because no one will want to work with them.
So let us all examine ourselves from the viewpoint of the epitaph. How do you want to be remembered? “Here lies Fred—a mean, backstabbing, selfish, overbearing, arrogant, inhuman creep.” Or, “Here lies Fred—the most kind, generous, self-giving, hard-working, caring person one could ever meet.” The choice is yours.