Tuesday, October 09, 2012

NY Sun: Inflating Money Unconstitutional?

Another thought provoking editorial by the New York Sun (in part):
It’s going to be illuminating to see whether the government appeals the big ruling on judges’ pay that was handed down last week at Washington. The case is called Beer v. United States. The Sun has written about it here and the editor of the Sun here. The plaintiffs are Judge Peter Beer and a rainbow coalition of some of the most distinguished judges on the federal bench. They have just won a ruling that prohibits Congress from suspending a system of automatic pay increases designed to protect their honors from inflation.

The United States Court of Appeals for the Federal Circuit, sitting en banc, handed down the ruling on Friday. The ruling . . . [is] one of the most important cases of our time. The reason is that it has to do not only with the question of need for Congress to keep its promises and the need to attract a first class judiciary but also the question of constitutional money.
. . .
The idea that a dollar could be worth a different number of grains of silver or gold at the end of a contract than it meant at the beginning of a contract would have horrified George Washington and nearly all of the other Founders (Benjamin Franklin, a printer, had a vested interest in paper money). So would the idea that the dollar would be permitted to decline over a decade to but a sixth of the number of grains of gold at which it was valued at the start of a decade. That is what has just happened in America.

The court deciding Beer didn’t get into legal tender per se. But the legal tender question is the elephant in the courtroom, so to speak. If a dollar can’t be diminished for judges — that is, if the legal tender laws are not good enough for judges — why should they be good enough for the rest of us? If they are not good enough for the contract between the government and judges, why should they be good enough for contracts between private parties?
. . .
We don’t know whether the Supreme Court will be asked to hear an appeal of Beer. If it is asked, it may decline. But if the nine are asked to take a final look at the case, the question for them to start thinking about is less the promises of Congress — although breaking such a promise is enough of a diminishment for us — and more about the meaning of money. The fact is that Americans are just as upset about the harm being done to them by fiat money as the judges are.


MAX Redline said...

Interesting, TD - thanks for bringing this up! Though it's questionable as to whether or not fiduciary policy has, in fact, attracted a first-class judiciary (see: 9th US Circus Court of Appeals), the question raises broader issues.

I find it especially irksome that minimum wages in Washington and Oregon are now among the highest in the nation - and those folks aren't judges - while wages in general remain flat or slightly below inflation.

When working in a high-skill occupation some years ago, when the automatic bumps in min. wage were approved, I mentioned to a co-worker that if we waited a few years, we could earn as much as we currently made by doing no more than sweeping floors at Wal-Mart.

T. D. said...

Max, thanks for your encouragement and always informative comments. I haven't been online much recently because a lot has been going on in the family, but that should slow down soon.

MAX Redline said...

Hope all goes well for you and yours; love your posts but fully understand precedence. Best!

T. D. said...

Thanks, Max. You're a good man.