The Supreme Court and FDR's Power-Grab

How great a chance do we have to overthrow ObamaCare in the courts? To answer that question, we need to look into that bleak pit of falsehood and mendacity that America's left would like us to ignore at all costs: the historical record.

We need to look at the original effort to nationalize the American economy, the one attempted by Obama's model, Franklin D. Roosevelt, by means of the New Deal. FDR was never quite clear about what he wanted to do. He was clear about the goal, but not about how to get there. Not unlike Obama, he left that problem to various retainers -- in this case, the members of the Brain Trust.

The two key Brain Trusters were Adolf Berle and Rexford G. Tugwell. Both men were professors at Columbia, and both were of one mind concerning the solutions to America's economic problems: collectivism, centralization, and state control.

Berle was the author (with economist Gardner Means) of "The Modern Corporation and Private Property," an influential economics text still read today. According to Berle, the American corporation had gone out of control and could be tamed only through government intervention. Tugwell had traveled to the USSR and fascist Italy and liked what he saw. Of Mussolini's Italy, he said, "It's the cleanest ... most efficiently operating piece of social machinery I've ever seen. It makes me envious." So overwhelmed was he that he was moved to put his feelings into poetry:

I have gathered my tools and my charts.
My plans are finished and practical.
I shall roll up my sleeves... and make America over.

That was the mentality that oversaw the establishment of the Roosevelt administration's major effort at overcoming the Depression, the National Recovery Authority. The NRA was the core organization intended to lead the United States back to prosperity. It also embodied the first serious attempt at the socialization of American society.

The NRA organized industries, from the largest corporation down to the shabbiest mom & pop store, into trade associations called "code authorities." Businesses were asked to accept a government-established "blanket code" of practice covering minimum wages, maximum hours, the abolition of child labor, and a commitment against raising prices. Each industry would then be allowed to write its own code governing operations and marketing.

What went unmentioned, then and later, was the fact that the NRA was adapted almost entirely from "corporatism," the economic system of Italian fascism. Italian industry was divided into state-run "corporatives", which set hours, wages, working conditions, and industrial policy, the same as the code authorities. (Curiously, coming from a die-hard anti-cleric such as Mussolini, the concept was originally Catholic.) Mussolini considered the corporate state to be a "third way" between capitalism and socialism, providing all the benefits of government control with none of the drawbacks of expropriation as practiced in the USSR. Tugwell and Berle appeared to agree.

Much in the way of the amusing, obnoxious, and appalling went on under the NRA (including the hiring of an American Duce to run the thing, Nuremberg-type torchlight parades to celebrate its debut, and the establishment of a secret police force in New York to ferret out violators). Detailed accounts can be found in Jonah Goldberg's Liberal Fascism and Amity Shlaes' The Forgotten Man. But what is of interest to us is what occurred when the NRA collided with the Supreme Court.

The proximate cause of the encounter was a gaggle of sick chickens. The Schecter Poultry Corporation was a New York company run by four brothers. In the summer of 1934, the Schecter brothers ran afoul of the NRA's Red Guards and were arrested for violating the Live Poultry Code. Among the numerous violations was a count of selling "unfit chickens." The Schecters were found guilty on eighteen counts with the verdict upheld on appeal. The brothers then took the case to the Supreme Court.

Arguments for the defense included a claim that the NRA code system represented an unconstitutional delegation of congressional power to the presidency. Chief Justice Charles Evans Hughes, who wrote the court's decision, agreed. The totalitarian nature of the NRA, in which the code system attempted to direct the entire national economy, represented, according to Hughes, "Delegation run riot." Justice Hughes added that the emergency conditions of the Depression did not provide grounds for expansion of government powers, and that the Schecters' company, limited as it was to the metro New York area, was an intrastate business not subject to regulation by Congress under the commerce clause. The decision was unanimous, a relatively rare event in a Supreme Court that was as ideologically divided as our current bench (along with conservatives like the chief justice, the Hughes court also featured liberals such as Louis Brandeis and Benjamin Cardozo).

The Schecter decision marked the end of the NRA, already tottering due to corruption, incompetence, and sheer unworthiness to exist. All the same, the Sick Chicken decision infuriated FDR to the point that he lost all perspective -- a rarity in his case -- and went after the court personally. In short order, he concocted his infamous "court-packing" scheme, in which all justices over 70 would be doubled with a shadow justice who would share in their decisions and counter their votes. This blatant power-grab marked the sole occasion in which the Roosevelt administration courted serious unpopularity.

By this time, Berle, perhaps sensing which way the tide was turning, had left government. But Tugwell had shifted from industry to agriculture by way of the Agricultural Adjustment Administration (AAA), another New Deal colossus intended to do for farming what the NRA had done for business. Tugwell's plans for the AAA involved an adaptation of the Soviet method of confiscation, in which food crops were taken at gunpoint from any group the Kremlin wanted to starve out. But rather than straightforward democide, Tugwell was hoping to shake up agricultural markets by restricting supply through confiscating excess production and destroying it as waste. The cash to pay for this effort was to be raised by taxing commodities processors (a procedure that should sound familiar to fans of ObamaCare).

Over a two-year period, while millions of Americans went hungry, the federal government spent over $700 million confiscating grain, slaughtering livestock, dumping milk, and burning textile crops (including the entire southern cotton crop, an action that sent tens of thousands of starving blacks on the highways headed north).

This process, despite obvious shortcomings, might have continued as long as the health care insurers...sorry, commodities processors...were willing to play the game. But one, run by a man named Butler, was not. Declining to pay the tax, Butler instead took the government to court.

Butler won all the way up the line, with the feds appealing at every step. That game ended once again before the Supreme Court, with Justice Owen J. Roberts finding for Butler on much the same grounds as the Schecter decision -- that the federal government was acting far outside its legitimate constitutional role. Shortly afterward, the AAA disappeared into the same twilight as the NRA.

Tugwell was at the moment involved in applying another Soviet innovation to American life: the use of population relocation to shift the urban poor to remote rural districts. Sanity prevailed before this nightmare could unfold, with the program scaled back to the establishment of "greenbelt communities" for the resettlement of poor farmers, a program of particular interest to Eleanor Roosevelt. One such community, Arthurdale, was actually constructed, under the management of none other than Rex Tugwell. The man who had set out to "remake America" ended up overseeing one of Eleanor's hobby projects.

The Supreme Court's record in response to attempts to nationalize the U.S. economy is consistent and points in one direction. The Butler decision has been undermined over the decades to a degree that it can no longer serve as a precedent. But the court's conclusions remain clear: The Supreme Court does not care for top-down attempts to restructure American society. The court opposes federal takeover of entire industries, no matter what the purpose. It similarly frowns on end-runs around the Constitution in support of such efforts. Far from simple empiricism derived from case law, the court's stance appears to be based on principle. The court knocks these efforts down not because the chickens got sick or Tugwell screwed things up, but because they violate the very foundations upon which American society and government are built. As the court sees it, when the Constitution places limits on the degree and nature of government intervention, it means exactly that. It is not simply wordplay that can elided by a cleverly written law or Obama speech.

Courts change, and the Roberts court of today is not the Hughes court of 1936. But the Roberts court stands as the most centrist of any Supreme Court bench since that of Charles Evans Hughes himself. The days of the Warrens (Earl Warren/Warren Burger, and tell me history has no sense of humor after taking that in), in which the court acquiesced to or supported the interventionist tendencies of the other branches, are over. The focus of power, both intellectual and judicial, lies with the court's center-right members. The intellectual powerhouses sit on that side. The court's liberals are mediocre, ineffectual, or tired. They exhibit little in the way of crusading fervor, merely a fading inclination to defend past gains. Much as they might wish to take part in pushing forward Obama's agenda, such a role remains well beyond their grasp. We can be confident that the question of the constitutionality of ObamaCare will receive a full and rational hearing from this court. While we must still keep our powder dry and our teapots boiling, there is reason to hope for a legal remedy.

J.R. Dunn is consulting editor of American Thinker and will edit the forthcoming Military Thinker.

See also: Constitutional separation of powers 'a real drag'

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