This is a hard truth and is difficult to actually process. But what we think is more important to grasp is that our responsibility for causing the crisis is just the flipside of the truth that we hold the power – indeed the duty – to make a course correction.
Having spent time in Congress, I am just as disillusioned as the next guy with the idea that there is some political solution to the situation that has any realistic prospect of succeeding. Every member of Congress knows that whichever Congress actually passes financial reforms that shut off the flow of money from D.C. will be fired. And politicians tend to want to keep their jobs.
The solution we need and can implement is not merely a political one. It has to be a structural one. It requires us to close the constitutional loopholes that allowed the feds to move beyond their proper, limited authority and initiate programs, engage in spending, and create agencies that are way outside federal jurisdiction under the original meaning of the Constitution.
The way we can realistically do this is through an Article V convention for proposing amendments to the Constitution. This is a state-initiated, state-led, and state-controlled process for proposing amendments that don’t sit well with the power-hungry elitists in D.C. It requires two-thirds of the state legislatures (34 states) to pass applications for a convention to propose amendments on a given topic. States then appoint and instruct delegates to represent them at the convention. Any proposals that garner support from the majority of the states (on a one-state, one-vote basis) are then submitted to the states. Proposed amendments must be ratified by three-fourths of the states (38 states) in order to become part of the Constitution.
There is already a massive, nationwide effort underway to trigger an Article V convention for the states to consider proposing a series of very limited amendments that impose fiscal restraints on D.C., limit its power and jurisdiction, and set term limits for federal officials – including federal judges.
It’s called the Convention of States Project, and it has made huge strides in just a few years. Six states have already passed their applications. Approximately thirty-four more will take up the issue this year. Over 1.2 million people are engaged at some level—from volunteer leaders in all 50 states to Facebook followers.
The project has been endorsed by some of the greatest statesmen, economic experts, and legal minds in the country, including Sen. Marco Rubio, Governor Greg Abbott, Thomas Sowell, Mark Levin, Michael Farris, Randy Barnett, Robert P. George, Chuck Cooper, and countless others.
Imagine what America would be like if Congress’s taxing and spending power could only be used in relation to its specifically enumerated powers in Article I, as originally intended.
Imagine if we had a robust, functioning federal system again, with the states deciding the lion’s share of the policies that govern their citizens rather than doing the bidding of Washington, D.C. as it holds their citizens’ tax dollars hostage.
Imagine if businesses and industries weren’t assaulted on every side by rules and regulations being crafted by unelected bureaucrats in ivory towers at a rate of over 80,000 new pages a year.
America could be, again, what the Founders intended and designed: a constitutional republic suited for a free, industrious, self-governing people.
Once we do realize that a natural disaster is coming, we take the concrete, necessary steps to prepare for it and protect the lives and property in its path. It must be no different with the national financial crisis we see on the horizon.
We must repair our constitutional levees by mobilizing the states to forcibly impose discipline on a fiscally irresponsible Washington, D.C. And we must ensure that this self-made storm can never be re-created.
Learn more and get involved in the Solution as Big as the Problem, at Convention of States Action. Senator Coburn can be contacted at [email protected].
Some Thoughts on a Convention of States
The Convention of States Action website has a great deal of information, and I encourage you to look it over carefully. But let me give you some of the highlights. One of the criticisms is that a Convention of States could be a “runaway” convention. That is not the truth. To call an Article V convention, the states must all pass the same very specific legislation, which limits the agenda of the convention. The convention that is currently being proposed is not meant to deal with a social agenda; it is all about fiscal constraints and process.
What might come out of it would be a series of proposed amendments, such as a balanced budget amendment, a term limit amendment, a definition of what the “general welfare” clause of Article I of the Constitution actually means, and other amendments that would reduce the power of the federal government in favor of the states on fiscal and operating matters.
But a proposed amendment is just that, a proposal. It then has to be approved by the legislatures of 38 states. That is a tall order. I can see from looking at the proposed agenda for this Convention of States that among the amendments that would be proposed there are some that I would enthusiastically endorse and some about which I would be a little bit reluctant.
It is supposed to be difficult to amend the Constitution. That was by design. I can see a balanced budget amendment possibly getting passed by 38 states, but some of the other proposals might have more difficulty. The states would have the ability to pick and choose among the amendments. They would not have to adopt all in order to get one. That is the genius of the structure of the Article V convention.
When you talk, as I have, to the people who are driving this process, you see that they understand the need for any major change in the budget-control process to be phased in over time. You couldn’t make the shift in just one year.
Term limits might have a more difficult time getting through some state legislatures, but I think the amendments to allow the states more control over their internal operations might have a great deal of bipartisan support in many states.
By its very nature, Congress is not going to discipline itself. If there is going to be any discipline, it will have to come from the states taking back control from Washington DC.
Right now, many of you are looking at the federal government and wondering, “Where’s the crisis? Why the urgency?” When the markets are in turmoil in a few years, when unemployment is high and rising, when Boomers who have retired can make almost nothing on their savings or investments, there is going to be a crisis and a demand for real change. I hope we don’t waste that crisis.
The Convention of States Action organization needs your help. If you would like to get involved, they can put you in touch with the people who are already active in your state. As with any project this big, they need money; and in a year when we are going to spend billions on the political process, a few extra million invested here could actually make a difference. And when you meet or contact your state legislators, give them a heads-up on the Convention of States and tell them it’s something we need to do. Get them thinking about it now, as they will likely be voting on it – if not this year then next year.
This convention won’t be convened in time to help us avoid the next recession, but it can help change the economic reality of the recovery, and maybe that is the best we can realistically hope for. But the best we can more optimistically hope for is that Congress and the new president will see that the Convention of States process is beginning to snowball and decide together to go ahead and do the right thing.
Dallas, Houston, Abu Dhabi, Raleigh, SIC, and Lemonade Day
I will be speaking in Dallas on April 28 for the 14th annual Commerce Street Bank Conference. Then the next week I will again speak in Dallas for the seventh annual Inside Retirement conference, May 5-6. They have a great lineup of speakers, but I am most excited about getting to hear and maybe even speak to my personal writing hero, Peggy Noonan. I will admit that I’m a total fan boy of anything she writes. Then the following week I fly down to Houston to speak at the S&P Dow Jones Art of Indexing conference on May 10. The conference is for financial advisors and brokers who are trying to understand how to manage risk while maximizing returns in the current environment.
I will be in Abu Dhabi the third week of May and then come home and almost immediately go to Raleigh, North Carolina, to speak at the Investment Institute’s Spring 2016 Event. I’m looking forward to hearing John Burbank and Mark Yusko (who will also be at my own conference the same week) and then being on a panel with them. Afterward, I make a mad dash for the airport, arrive back in the Dallas late Monday night, and start to prepare for the Strategic Investment Conference, where upwards of 700 of my closest friends will gather to discuss all things macroeconomic and geopolitical. It is really going to be a great week.
On a fun but also quite serious note, as many longtime readers are aware, I’ve spent a bunch of time researching and thinking about the jobs of the future. One conclusion I've reached is that in our globalized, UBER-controlled, task-oriented marketplace, raising kids to understand entrepreneurship and financial literacy is of crucial importance. A really good friend of mine in Dallas (and a reformed hedge fund manager), Reid Walker, agrees with me and is co-founder of Lemonade Day Greater Dallas.
Lemonade Day is all about teaching kids these important lessons by encouraging them, with the support of caring adults, to open their very own businesses: lemonade stands. The kids who get involved are paired with mentors who help them to put together a business plan, get a loan from a local business or bank based on that plan, and then actually sell the lemonade and pay back the loan, keeping the profits. Here in Dallas last year I found all sorts of businessmen, investors, and other financial types working with the kids, who present their business plans at the Dallas Federal Reserve.
Lemonade Day, which was founded in Houston nine years ago, has spread to more than 58 cities across the US and is expanding around the world, with over 220,000 kids participating last year. It’s not too late for you to register your child and join the movement on Saturday, May 7th. And if you go to the website and don’t see your city involved, then maybe you should pick up the baton and see about starting to train the next generation of entrepreneurs. The photo below is from a recent Lemonade Day, with your humble analyst, Reid Walker, and Danielle DiMartino Booth surrounded by some of the kids who participated in Dallas.
It really is about building the future.
It is time to hit the send button. Recently, I haven’t been finishing the letter until later in the weekend, but this Friday afternoon I actually polished it off and sent it to the editing team. If I hurry I can make a movie or at least a fun dinner. So let me tell you to have a great week and move on down the road! And in the mood for a little nostalgia may want to watch a very young Kenny Rogers and the First Edition. This was from his TV show Rollin’ on the River in the early ’70s. Hard to believe he is now 77. Where have the years gone?
Your hoping we can turn things around analyst,
John Mauldin is editor of Mauldin Economics' Outside The Box.
This article was originally published at Mauldin Economics.