The Great Herbalife Corner Of 2013…??
August 15, 2013
Peripheral Central Banks Go In Reverse
September 9, 2013

Tangled Up In Court…

From 1860 to 1865, 11 states effectively told the Federal Government, “We disagree with your laws—if you try to enforce them, we’ll shoot back.” It took over 4 years of war before the Federal Government forced them to follow the laws. While unsuccessful, you sure have to admire their sense of pluck.

Yesterday, I read the following article in the New York Times

I will repeat a few key paragraphs;


JEFFERSON CITY, Mo. — Unless a handful of wavering Democrats change their minds, the Republican-controlled Missouri legislature is expected to enact a statute next month nullifying all federal gun laws in the state and making it a crime for federal agents to enforce them here. A Missourian arrested under federal firearm statutes would even be able to sue the arresting officer.

The law amounts to the most far-reaching states’ rights endeavor in the country, the far edge of a growing movement known as “nullification” in which a state defies federal power…

….Adam Winkler, a professor of law at the University of California, Los Angeles, who follows nullification efforts nationally, said that nearly two dozen states had passed medical marijuana laws in defiance of federal restrictions. Richard Cauchi, who tracks such health legislation for the National Conference of State Legislatures, said: “Since January 2011, at least 23 states have considered bills seeking to nullify the health care law; as of mid-2013 only one state, North Dakota, had a signed law. Its language states, however, that the nullification provisions ‘likely are not authorized by the United States Constitution.’ ”

What distinguishes the Missouri gun measure from the marijuana initiatives is its attempt to actually block federal enforcement by setting criminal penalties for federal agents, and prohibiting state officials from cooperating with federal efforts. That crosses the constitutional line, said Robert A. Levy, chairman of the libertarian Cato Institute’s board of directors — a state cannot frustrate the federal government’s attempts to enforce its laws.


The good news is that there won’t be wars over this stuff—the bad news is that our country is increasingly becoming ungovernable.

What makes a good law and what makes a bad law? Here is the 13th amendment;

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2. Congress shall have power to enforce this article by appropriate legislation.


It is a good law not only because of the ideals that it espouses, but because of the concise manner in which it is written—43 words—that’s it. There can be no doubt at all as to what is meant by this law. What is also clear is what is not said. There is no talk about compensation for slaves or former slave owners. There is no mention of future rights of slaves. All it says is that slavery is banned—done. There can be no more debate on the topic.

So what is a bad law? The Affordable Care Act (Obamacare) is somewhere between 906 pages and 2,409 pages (if you want to read all the indexes, tables, headings and footnotes). It seems to clock in at 418,779 words, though that’s also unclear (do you include the headers and footnotes??).

Now, I don’t aim to pick a fight with Obamacare—at least not in this piece. Instead, I want to point out that no one can even agree on how many pages are in the document (go and Google the topic yourself), how will anyone ever agree with what it says? It is almost certain that multiple different rules contradict each other multiple times? How can you enforce this law—except arbitrarily. How can anyone ever hope to comply with the law? What businessman has the time to read a stack of paper that is about 7 feet tall if you include all of the regulations and rulings? For that matter, how did any congressman find enough time to read this before voting on it?

My hunch is that hundreds of lobbyists shoved their pet project into the law and then walked away—having never read the other segments. Congressmen were just happy it was done and they could focus on something else. This law will slowly be picked to pieces and be impossible to implement—already, “at least 23 states have considered bills seeking to nullify the health care law”

Imagine if the 13th amendment started off with a 50 page definition of slavery that is open to wide interpretation. Then, there was a dollop of subsidies to pet industries from Union States, 200 pages on how the law would be enforced with varying penalties, then some appropriations bill, etc.  Would slavery have ever ended?  How can you enforce a law that makes no sense?

The guys who drafted the 13th amendment were very precise, because they wanted the law to be effective. Modern laws are the opposite—I fear that they make the country ungovernable as everyone heads to the courts. The precedent is now set. You can almost be sure that blue states will nullify whatever is passed when we have the next Republican President.

There is only one real solution to this problem–The Federal Government has to recede and let states go back to setting their own laws. There will be states that allow certain things and don’t allow other things. Americans can then choose the state that fits their identity. The other option is that we all become lawyers, spend our lives in the courtrooms and argue about which laws we will follow and not follow.

Investment implications? None immediately. People often ask me what I think the outlook for America is in 30 years. I have one answer—Argentina. We are going to be a bankrupt country, full of potential, with politicians that prefer to remain in power, rather than govern.

Categories: Comments On Events
Positions Mentioned: none

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