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The Ghost of Chief Justice Charles Evans Hughes Gets a Second Chance

Tuesday, July 3, 2012

The parallels between these New Deal laws, particularly the National Industrial Recovery Act, and ObamaCare practically write themselves.

Few commenters on the Supreme Court’s decision on ObamaCare accept that a legal thinker as sophisticated as Chief Justice John Roberts could really believe that the law should be upheld under Congress’s taxing power. In any case, if the Court was going to go baying off down the taxing power track, the issues needed much more analysis than the throw-away treatment they got in the course of the litigation.

So the question is, what was Roberts up to?

One common analogy is that Roberts channeled Chief Justice John Marshall, who used Marbury v. Madison (1803) to cement the Supreme Court’s right to assess the constitutionality of actions by other branches of government while affirming the actual actions taken in the case at hand. It is a plausible hypothesis, as Roberts joined the dissenters in limiting government power under the Commerce Clause before he reversed field and upheld the law as an exercise of the taxing power.

Other suggestions are less legally Machiavellian, such as that Roberts must have been blackmailed or “gone off his meds.”

So let me note another precedent that might have moved Roberts to his split-the-baby decision: The 1935 Gold Clause, Schechter Poultry, and other New Deal cases.

By 1938, the Court pretty much withdrew from the business of limiting the power of the executive and legislative branches over the economy.

In the first, Congress had nullified promises of payments in gold, which were common in both private contracts and government bonds at the time, and the question was the constitutionality of this action. It was a genuine constitutional crisis, with President Franklin D. Roosevelt on deck with a draft of a radio address explaining why he would refuse to recognize the decision if the Court threw out the law.

Chief Justice Charles Evans Hughes spoke for the majority in a 5-4 decision. After some ringing statements about the sanctity of government promises and the impossibility of the government ever repudiating them, he upheld the repudiation. The ground was that the government had also made it illegal for a citizen to hold gold, so the bondholder could not have received gold in payment, so he had suffered no loss.

The dissenters shredded this reasoning pretty thoroughly, but the crisis was averted for the moment.

Just months later, Schechter Poultry ruled that the National Industrial Recovery Act was unconstitutional. The same day as Schechter, the Court struck down (also 9-0) the Frazier-Lemke Mortgage Act, a creature of Louisiana demagogue Huey Long, and in following months other New Deal legislation went down too. Included in the casualties was the Agricultural Adjustment Act, held to be an unconstitutional extension of the taxing power.

The National Industrial Recovery Act was terrible. It passed without serious analysis during the 1933 legislative bacchanal known as “the Hundred Days.” Some laws were not only unread before passage, they were unwritten, consisting only of drafts with marginal notes. The Act represented a triumph of special-interest capture of government, as businesses adopted the law’s codes to prevent price cutting and competition. It smacked of fascism. It was tyrannical, unworkable, and a ready butt for public jokes. The Roosevelt administration should have scrapped the program, but this would have required a confession of error, which was unthinkable.

The Agricultural Adjustment Act was of similar ilk, passed in haste to help big farmers and food processors, a law under which, says J.R. Dunn:

For two years, in a country where hunger was a serious problem ... the federal government at a cost of over $700 million plowed under fields of grain, slaughtered and condemned over 6 million pigs, and burned the entire southern cotton crop, sending masses of destitute blacks fleeing north in search of simple survival.

Both laws were, deservedly, in serious political trouble. (See Cushman, pp. 241-43.) Then, the Supreme Court invalidated them, with Hughes writing the opinion in Schechter, and voila! The cases became and remain the symbol of the stubborn old order fighting back against the heroic warriors of the New Deal. Forgotten was the fact that the Supreme Court was unanimous in knocking down the National Industrial Recovery Act. The NIRA’s blue eagle symbol and the Agricultural Adjustment Act’s dead pigs ceased to be electoral albatrosses and became the symbols of democracy besieged. Alive, the laws were political liabilities; dead, they were great assets, and Roosevelt went on to his electoral sweep in 1936. By 1938, the Court pretty much withdrew from the business of limiting the power of the executive and legislative branches over the economy.

ObamaCare cannot be made rational, workable, or intelligible, and is a delicious (to Republicans) promise of an endless stream of outrages.

The parallels between these New Deal laws, particularly the National Industrial Recovery Act, and ObamaCare practically write themselves. The latter is a complex and incoherent law drafted in haste and secrecy, written largely by the healthcare industry to promote its own profits by bringing more people into a government-administered system open to capture and looting. It is defended by an administration trapped by the imperative of defending its handiwork. The product is a Rube Goldberg regulatory system that cannot be made rational, workable, or intelligible, and is a delicious (to Republicans) promise of an endless stream of outrages.

Undoubtedly, Chief Justice Charles Evans Hughes had the normal quota of regrets in his life–the big one must have been that if he had been nicer to California Senator Hiram Johnson in 1916, Hughes would have beaten Woodrow Wilson for the presidency, and the history of the world in the 20th century would have been quite different. But Schechter and its siblings must have been a major regret, because the long-term cause of constitutional government might well have been better served if the administration had been forced to keep eating its own dog food.

Hughes did not really have a choice because the National Industrial Recovery Act was just too awful, as the Court’s unanimity demonstrated. (The vote on the Agricultural Adjustment Act was closer, 6-3, and other cases presented their own legal complexities.) But when Hughes did have a choice, as in the Gold Clause cases, he split the baby, trying to assert a broad principle while using the fine print to let the government have its way in the particular situation.

The National Industrial Recovery Act was terrible. Some laws were not only unread before passage, they were unwritten, consisting only of drafts with marginal notes.

Perhaps there is a ghostly link among past and present chief justices, and the shade of Hughes whispered to Roberts, “I had no choice in Schechter, but you do have a choice in ObamaCare, and the taxing power argument isn’t total nonsense, just as the monetary power in the gold cases wasn’t total nonsense. So give a ringing endorsement to the principle that Commerce Clause power is limited, and then use the taxing power to give the people what they voted for, good and hard. Don’t give the administration a martyr.”

“You could say explicitly,” the shade might have added, that “It is not [the Court’s] job to protect the people from the consequences of their political choices.” [Sebelius, Roberts opinion, p. 8.]

“Besides,” Hughes could have ruminated, “This Commerce Clause business is a sideshow. The real engines of the Special Interest State are the taxing and spending powers, and by addressing the Medicaid part of the ObamaCare litigation–the part no one can understand because it is so detailed–you can put a check on that. Finally, by resting the decision on the taxing power you can re-focus attention on that issue, and perhaps get a debate going similar to what Randy Barnett and his friends triggered over the Commerce Clause.”

So Roberts is taking abuse, but maybe he is kicking back on his patio with a bust of Hughes in front of him, enjoying a cold one. And if you want to be really conspiratorial, maybe the dissenters in ObamaCare brought over the keg.

James V. DeLong is the author of a new book Ending ‘Big SIS’ (The Special Interest State) and Renewing the American Republic. He can be reached at SpecialInterestState@gmail.com.

FURTHER READING: DeLong also writes “It’s Not a Welfare State, It’s a Special Interest State,” “Can Government Be Limited?” and “Does the Constitution Make You a Cash Cow?” Michael Barone contributes “ObamaCare Survives, but Political Playing Field has Changed.” John Yoo discusses “Chief Justice Roberts and His Apologists.” Thomas P. Miller says “The Healthcare Law Fight Isn't Over.”

Image by Darren Wamboldt / Bergman Group

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