The Progressive Era, Excerpt, American Liberty

The following is an excerpt from Douglas V. Gibbs' next book, soon to be on bookshelves, A Promise of American Liberty.

Before the War Between the States, it was The United States Are.  Afterward, it became The United States Is.  Federal Supremacy began to be applied at every level.  A national system was emerging, and the autonomous sovereignty of the States was being choked out of existence.  To punish the Confederate States for seceding, the federal government used the power of centralization to force them into compliance.

It was during the period shortly after the War Between the States, the Reconstruction Period, that the incorporation doctrine truly began to take shape.  If the federal government could “guarantee” one’s rights through judicial activism, the sovereignty of the States would finally become compromised so that they would be reduced to nothing more than provinces who were subservient to the all-powerful federal system.

As socialism continued to spread through Europe, the United States was not able to escape Marx’s global reach.  Influenced by the socialists of Europe, the progressive era began to take shape in the United States during the late 1800s.  By the turn of the century, the progressive movement was in full swing.

The rise of progressivism after the beginning of the new century was accompanied by concerns about the large national debt that remained with the United States as a result of the Spanish-American War, and the growing social inequality between the rich and the poor.  The idea that there should be a tax that “soaks the rich” began to take root among progressives of both major parties.  The Democrats took to progressivism more than the Republican Party, and the progressives of the Democrat Party were looking for a way to embarrass the conservative arm of the GOP so that they could gain some traction in the next election.

With social unrest rising among the population, a Democrat proposed the Bailey Bill with the express hope the Republicans would reject it.  The theory was that after the Republicans rejected the bill, the Democrats could then point a finger at the Republicans, claiming for political purposes that the Republicans were in cahoots with the corrupt wealthy corporate types.  A Republican rejection of the Bailey Bill, which would have imposed an income tax on the rich, would serve as proof of such an alignment between the Republicans and the wealthy.  The slogan used by proponents of the Bailey Bill was “soak the rich,” a direct call to tax people they considered to be profiteers, a class of plutocrats they claimed were in collusion with the Republicans.

The conservative Republicans knew what the progressives of the Democrat Party were up to, and launched a counter move.  They proposed a constitutional amendment that would impose an income tax on the rich, and when the States refused to ratify the amendment, the Republicans would use that failure to ratify the amendment as proof that the people, through their State legislatures, were against the idea of a new income tax.  In turn, that would defeat the Bailey Bill.  After all, how could Congress approve an income tax against the rich through the Bailey Bill after the people and States rejected a constitutional amendment that would have done the very same thing?

The proponents of the 16th Amendment promised that if it was ratified the income tax would only be imposed on the top 5% wage earners, it would be voluntary, and it would be temporary.

The progressives of the Republican Party rallied behind the proposed amendment, and the Secretary of State announced the amendment was ratified on February 12, 1913.

In the beginning, only 5% of the people were required to submit tax returns.  Many of the rich, however, avoided the tax with charitable deductions, and other creative strategies.

During the Great Depression Franklin Delano Roosevelt saw the income tax as a way to vastly increase revenue, and initiated a policy of withholding from “all” wages and salaries, not just the highest incomes enjoyed by the rich.   Rather than the rich paying the tax at the end of the year, the tax was collected at the payroll window before it was even due to be paid by the taxpayer.  This style of collection shifted the tax from its original design as a tax on the wealthy to a tax on the masses, mostly on the middle class.

In addition to violating the original intent of Article I, Section 9 prohibiting direct taxation, the income tax also opposes the 4th Amendment which requires that a citizen’s privacy be protected.  An income tax enforced by the Internal Revenue Service violates the privacy of the home, business, personal papers and personal affairs of the private citizen.  Since the tax is based on wages, as well as income, the IRS has the task of making sure everyone pays his fair share.  This task is physically impossible without prying into the private papers, private business and personal affairs of individual citizens.

Since the ratification of the 16th Amendment, there have been questions about whether the proper number of State ratification votes were ever achieved.  Despite the argument by some researchers that the 16th Amendment was never properly ratified by the requisite three-fourths of the States, and that politicians of the day were aware of the discrepancy, Secretary of State Philander Knox fraudulently declared ratification.  Some may suggest that he did so under the urgings of wealthy bankers like J.P. Morgan.

The same year the 16th Amendment created the income tax, the Federal Reserve was also created.  The Federal Reserve is not a federal agency, and is actually a privately owned corporation owned by a secret group of international bankers.  The Federal Reserve holds a monopoly on the creation of money in the United States.  Whenever the U.S. Government needs money it borrows the money from the Federal Reserve.  The Federal Reserve gladly loans that money because doing so results in a good profit for the bankers.

The Federal Reserve is not the first central bank, but it is the longest lasting.  The First Bank of the United States in 1791, created by Alexander Hamilton, became a system of control over the American economy shortly after the ratification of the U.S. Constitution, and was, as described at the time by Thomas Jefferson and James Madison, “an engine for speculation, financial manipulation, and corruption.”

In order to properly function, a central bank needs a collection of large sums of money from the people to pay off the interest on the money the government borrows.  The creation of the income tax provided that opportunity.

The Federal Reserve Act surrendered control of the monetary system to the international banking cartel and guaranteed the eventual abandonment of the gold standard.  The Federal Reserve's debt-based money guaranteed the enslavement of every American under a crushing debt burden.  The Federal Reserve guaranteed the ability of the international banking cartel to confiscate wealth through artificially created boom-bust cycles.

The result is that the U.S. Government, and the bankers in charge of the Federal Reserve, can manipulate the economy simply by the amount of money they decide to pump into the system.  The more debt-based money that is pumped into the system, the greater the rise of inflation rates.  A reduction of the printing of money then results in a recovering economy.  Government spending, in relation to the national debt, has a direct impact on the economic cycles we experience.  The more the government borrows, the more fiat money is pumped into the system.  The result is increased inflation, and a stalled economy.  Cutting spending results in less money being borrowed, which then returns value to the dollar, and in turn reduces the level of inflation while encouraging capitalism to thrive.

The welfare system was created to compensate for the damage to the American Economy caused by the Federal Reserve and the income tax.

The 16th Amendment allows for the taxation on income from whatever source derived, which gives Congress, for the most part, carte blanche to tax at will, while giving the IRS the power to do all of the things the founders specifically disallowed the federal government from doing.  This invasion of privacy, without due process, will continue as long as the 16th Amendment remains in force.

The income tax is in line with the Marxist philosophy of destroying a capitalist society by steeply graduating taxes on income and applying heavy levies upon the estates of people when they die.

The same year the 16th Amendment was ratified, and the Federal Reserve Act was signed, the States also ratified the 17th Amendment.

The Founding Fathers originally established a number of checks and balances during the creation of the federal government in the hopes of providing enough safeguards to protect the people from an ever expansive, tyrannical, consolidated central government.  The separation of powers between the three branches of government, and between the federal government and the States, was an integral part of these protections against tyranny.  However, not all of the checks and balances put in place were obvious, nor are all of the checks and balances taught to us during our school years.

Historically, legislatures established as bicameral contained two houses that were different from each other.  In Rome, the assembly was by and for the people, and the senate was populated with representatives for the wealthy and powerful.  In Britain their parliament also has two different and unique houses.  The House of Commons was established to represent the common citizen, and the House of Lords is the legislative voice of the nobles.

In the United States, however, the republican form of government based on a system of We the People and autonomous sovereign states was not designed to give power to nobility or the rich and powerful.  In the U.S. the first House of Congress, as with other systems, is a voice of the people.  For that reason, the members of the House of Representatives have always been democratically elected into office.  The second House of Congress, however, was originally established as being the voice of the States.  To achieve this dynamic, the State legislatures were tasked with appointing the Senators to their six year terms, rather than the people democratically electing them.

The dynamics of the American bicameral congress were established in a manner similar to the rest of the federal government; with the intent of preventing any part of government from having access to too much power.  Too much power in any one part of the system could be dangerous, and this includes too much power in the hands of the people.

The general population, just like the government, cannot be fully trusted with absolute power.  To prevent the danger of too much power residing in any part of government, power needed to be divided as much as possible so as to keep it under control.  Too much power in the hands of anybody has the potential of being a dangerous proposition.

The United States is not a democracy.  All of the voting power was not given directly to the people.  The voting power was divided to ensure the Republic was protected from the mob-rule mentality of democracy.

The people were represented indirectly by the States in the U.S. Senate, and by the States appointing the Senators, the method of appointment allowed State’s interests to be represented in the U.S. Congress.

Since they were appointed by the State legislatures, the Senators looked at the political atmosphere in a different manner than the members of the House of Representatives.  Members of the House of Representatives, as persons directly voted into office by the people, focus their concerns on what they believe the people’s concerns are.

The Senate, prior to the Seventeenth Amendment, functioned in a very different manner than it does today.  When the Senators were appointed by the State legislatures they were expected to abide by the wishes of the State legislators.  The Senators were expected to be a representative for what was best for their States; State’s Rights, State Sovereignty, and protecting the States not only from a foreign enemy, but from a domestic enemy, should the federal government become the potential tyranny that the Founding Fathers, and especially the Anti-federalists, feared a central government could become.

The States having representation in the federal government through the U.S. Senate was also another way that checks and balances were applied to the system.  The House of Representatives represented the people, and the Senate represented the States.  Through this arrangement, it gave the people the ability to check the States, and the States the ability to check the people, and together they checked the Executive.

The States could not get too far without the people through the House of Representatives approving a senatorial proposal.  The people could not get much done without The States through the U.S. Senate agreeing with a proposal that originated in the House of Representatives.  The executive branch could get little done without both the people and the States approving of it.  However, if the President did not like what the people and the States were trying to accomplish, he could veto the bill.  If the people and the States felt the legislation was important enough, they could override that veto with two-thirds of a vote in both Houses.

Looking at it in another way, a bill would be approved by both the people and the States before it went to the President to become law.  This gave the Executive and both parts of the legislative branch the opportunity to approve or disapprove potential laws.

In 1913, the Seventeenth Amendment changed the originally intended dynamics of the American form of government.  The amendment removed the States’ representation from U.S. Government proceedings.  The Seventeenth Amendment changed the appointment of the Senators from that of the State legislatures to that of the direct vote of the people.  As a result, the protection of State Sovereignty was removed, and in its place was inserted ideology, and the willingness of Senators to buy the votes of individual voters through gifts from the treasury in a manner that was already emerging from the House of Representatives.

 The Seventeenth Amendment also changed how a vacant seat in the U.S. Senate would be resolved.  The governors of the States, should the legislatures allow such, may make temporary appointments until a special election takes place.  The State legislatures may change these rules as they deem necessary, such as requiring an immediate special election instead of allowing the governor to temporarily appoint a replacement.  This leaves most of the power regarding filling vacancies in the hands of the State legislatures.

Massachusetts, during the reign of Democrat governors, used the rule that if there was a vacancy in the U.S. Senate, the governor could appoint the new Senator to complete that term of office.  When Mitt Romney, who was a Republican, was governor, the Democrat dominated legislature feared a Republican appointment should one of the Massachusetts Senators die, so they changed the rule to require an immediate special election, fully confident the people would put another Democrat into office should one of the seats be vacated.  The Massachusetts legislature even overrode a veto by Governor Mitt Romney to accomplish their rule change.

Romney did not run for reelection in 2006, and his gubernatorial term in Massachusetts ended January 4, 2007.

he new governor of Massachusetts in 2007 was Deval Patrick, a Democrat.  When Senator Edward “Ted” Kennedy passed away August 25, 2009, since the State of Massachusetts had a Democrat governor, the Democrat-led legislature hurriedly changed the rule to enable the governor to appoint the new Senator as had been allowed before Mitt Romney was governor, just in case the people could not be trusted.

The appointed Democrat Party senator held the seat until a special election in January of 2010 that pitted Republican Scott Brown against Democrat Martha Coakley.  To the surprise of the entire nation, Scott Brown won the election, sending tremors through the political establishment, which included the Democrats losing a filibuster-proof majority in the U.S. Senate.  Brown was defeated in 2012 by Democrat Elizabeth Warren, returning the Senate Seat back to the Democrats when she took office on January 3, 2013.

The real damage caused by the ratification of the Seventeenth Amendment was that State representation in the Congress was removed.  Senators, after the ratification of the Seventeenth Amendment, would be voted into office by the vote of the people, making the U.S. Senate more like the House of Representatives, eliminating a very important check and balance, and making the United States more like a democracy and less like the Republic the Founders originally intended.

The people, fooled by a relenting rallying cry of “The will of the people,” and a common belief that the leaders of the States could not be trusted to appoint a worthy individual, and were instead being bought off by wealthy special interests, demanded that the federal government be changed into something more like a democracy.  As the progressives desired, and planned, the American form of government moved closer to a democracy with the Seventeenth Amendment.

The Progressive Era ended with the end of the Woodrow Wilson presidency.  President Warren Harding, and then his successor, Calvin Coolidge, used constitutionally based principles to pull America away from a recession, and begin prospering again despite the recent end of the first World War.  When Coolidge took office, he reduced taxes and federal regulations, and what followed was one of the most prosperous decades in American History, the Roaring Twenties.  In 1928, running on the popularity of Coolidge, Republican Herbert Hoover won the presidency, keeping the Grand Ol' Party (GOP) in office.  Hoover, however, was not as conservative as his predecessors, and a year into office was slammed by the Great Depression - an economic collapse caused by the overprinting of currency by the Federal Reserve, and worsened by the Smoot-Hawley Tariff Act.  Hoover's dismal presidency opened the door for the progressives to get back into the White House in 1932, launching the presidency of Franklin Delano Roosevelt that would span over a decade.  FDR introduced the New Deal (which extended the Great Depression in the United States by seven years).  During his presidency, FDR also sent United States Troops into a second World War.

-- Political Pistachio Conservative News and Commentary