Seeking cooperation in a polarized climate, President Barack Obama called on Congress Tuesday to act quickly on bipartisan measures that would extend tax breaks for small businesses and help startup companies raise money. He said he would sign the legislation “right away.”

Obama plans to include a series of business measures that have been percolating in Congress in his 2013 budget proposal later this month to flesh out a year-old initiative to give entrepreneurs incentives to expand their businesses or start new ones.

Obama made his remarks during a Cabinet meeting at the White House. He noted that for the first time, the head of the Small Business Administration, Karen Mills, was participating as a full member of the Cabinet.

“It is a symbol of how important it is for us to spur entrepreneurship, to help startups, to move aggressively so that we can assure more companies that create the most jobs in our economy are getting a leg up from various programs that we have in our government,” Obama said.

The White House legislative agenda for small businesses includes permanently eliminating tax rates on capital gains for investments in small businesses and a one-year extension on the ability of all businesses to immediately deduct all of the costs of equipment and software purchases.

The Obama administration also is seeking a new 10 percent tax credit for small businesses that add jobs or increase wages in 2012. In addition, the legislation would make it easier for new startup companies to raise money and to go public. It also would expand a government small business investment program from $3 billion to $4 billion.

“The president has made small businesses and particularly startups a key aspect of his economic growth agenda because he understands how much the newest and fastest-growing small businesses drive job growth in our economy,” said Gene Sperling, director of the White House National Economic Council.

Obama said the Department of Homeland Security also is seeking ways to change the visa process to attract foreign-born entrepreneurs and high-skilled immigrants to invest in the United States or start new businesses.

The measures are modest by comparison to Obama’s 2009 economic stimulus or to last year’s jobs bill. But they borrow from past Obama initiatives and from bipartisan legislation that has either already passed in the House or is being proposed in the Senate.

Obama’s package includes proposals offered in the Senate by Democrat Chris Coons of Delaware and Republican Marco Rubio of Florida, and another plan by Republican Jerry Moran of Kansas and Democrat Mark Warner of Virginia.

White House officials would not disclose the total cost of the president’s package, but Sperling said it would be more than covered by proposals to reduce tax expenditures and by closed loopholes the administration will call for in its 2013 budget.

With the presidential election set to become the main political preoccupation of 2012, the White House initiative is designed to take advantage of cooperative attempts by Republicans and Democrats to find modest remedies to spur the economy. Most of those efforts have been overshadowed by congressional bickering, the Republican presidential primary and Obama’s growing attention to his re-election.

The proposals come a year after the administration launched a consolidated effort to spur new startup businesses with a high-profile White House event featuring scores of entrepreneurs, some of whom offered testimonials to the job creation possibilities that new businesses can bring to the economy.

Besides the tax breaks, a central element of the Obama package is to assist new entrepreneurs by making it easier for them to raise money, reducing taxes on their startup expenses and removing securities barriers for new companies that have gone public.

“Our small business agenda has a specific focus on removing the barriers that have for too long blocked startups and entrepreneurs from getting the financing they need to accelerate their growth and hiring,” Sperling said.

One of the Obama provisions would increase the amount of money that can be raised through small public offerings that don’t require companies to undergo an extensive Securities and Exchange Commission registration process. The limit for such “mini public offerings” would increase from $5 million a year to $50 million. The House passed similar legislation last year.

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The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlookpublished today by the CBO.

At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.

“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent,” said CBO, “mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”

The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three.

“The pace of the economic recovery has been slow since the recession ended in June 2009, and the Congressional Budget Office (CBO) expects that, under current laws governing taxes and spending, the economy will continue to grow at a sluggish pace over the next two years,” said CBO. “That pace of growth partly reflects the dampening effect on economic activity from the higher tax rates and curbs on spending scheduled to occur this year and especially next. Although CBO projects that growth will pick up after 2013, the agency expects that the economy’s output will remain below its potential until 2018 and that the unemployment rate will remain above 7 percent until 2015.”

According to the CBO report, federal tax revenues equaled $2.302 trillion in fiscal 2011, and will increase to $2,523 trillion in fiscal 2012, $2,988 trillion in fiscal in 2013, and $3,313 trillion in 2014.

As a percentage of GDP, according to CBO, federal tax revenues were 15.4 percent in fiscal 2011, and will be 16.3 percent in 2012, 18.8 percent in 2013, and 20.0 percent in fiscal 2014.

In dollar terms, the anticipated increase in federal tax revenue from fiscal 2011 ($2.302 trillion) to fiscal 2014 ($3.313 trillion) is $1.011 trillion. That is an increase of 43.9 percent.

From just 2012 to 2014, the increase in federal tax revenues from $2.523 trillion to $3.313 trillion equals $790 billion—or 31.3 percent.

The anticipated percentage increase in federal tax revenue is not only large when calculated in dollar terms but also when calculated as a share of GDP. The jump from 15.4 percent of GDP in fiscal 2011 to 20.0 percent of GDP in fiscal 2014 equals an increase of 29.8 percent. The jump from 16.3 percent in fiscal 2012 to 20.0 percent in fiscal 2014 equals an increase over two years of 22.7 percent.

Federal tax revenues have averaged “about 18 percent of GDP for the past 40 years,” according to CBO. So, in the next two years federal tax revenues will rise from a level that is below the modern historical average to a level that is above it.

“Conscience is the most sacred of all property.”

James Madison

Yet another aspect of the American Affordable Care Act has caused the Obama Administration to come-a-cropper with the United States Constitution. The act has already inspired a dense thicket of law suits over its individual mandate provision that forces people to buy insurance or pay a penalty tax for not so doing. Recently, Health and Human Services Secretary, Kathleen Sibelius, has added more fuel to the legal bonfire that has erupted over ObamaCare.

The law entails that all health plans provide “preventive services” free of charge. This previously included the sorts of things you would want to have to prevent disease. This would include child vaccinations, physical check-ups and other practical medical services that wise people would want from time to time. Now Kathleen Sibelius has decided to add contraception to include RU-486. Secretary Sibelius issued the following news release.

Today the department is announcing that the final rule on preventive health services will ensure that women with health insurance coverage will have access to the full range of the Institute of Medicine’s recommended preventive services, including all FDA -approved forms of contraception. Women will not have to forego these services because of expensive co-pays or deductibles, or because an insurance plan doesn’t include contraceptive services.

(www.hhs.gov)

Archbishop Timothy Dolan had previously made his concerns about this plan known to President Obama in a personal audience with the president at the White House. He had been informed that the Obamacare mandate would not be forced upon the various services and schools run by The American Catholic Church.

However, like most of what Barack Obama promises, this guarantee came with an expiration date. That expiration date was 20 January 2012. Secretary Sibelius explains below.

After evaluating comments, we have decided to add an additional element to the final rule. Nonprofit employers who, based on religious beliefs, do not currently provide contraceptive coverage in their insurance plan, will be provided an additional year, until August 1, 2013, to comply with the new law.

Timothy Dolan responded to this obvious betrayal in language that was about as forceful as you could expect to hear from a man of the cloth. He explains how the decision has now forced The Catholic Church to start funding insurance coverage for abortions and sterilizations as of 1 August 2013.

On Friday, the administration reaffirmed the mandate, and offered only a one-year delay in enforcement in some cases — as if we might suddenly be more willing to violate our consciences 12 months from now. As a result, all but a few employers will be forced to purchase coverage for contraception, abortion drugs and sterilization services even when they seriously object to them. All who share the cost of health plans that include such services will be forced to pay for them as well. (See individual mandate).

I’m not a Catholic. On a very limited, personal level, I have no skin in this particular power-struggle. But then I stop and realize the fact that our current, statist administration has once more done rough and intentional violence to the fundamental precepts of the US Constitution and its accompanying Bill of Rights. The First Amendment thereof reads as follows.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

(HT: Wikipedia)

Catholics are bound by the Law of Moses expressed in The Decalogue not to commit murder. The Catholic Church considers an unborn child a fully-corporate, living human being. Abortion, kinetic or chemical, terminates this life and hence violates the Sixth Commandment of the Ten. Paying for this act to take place (by buying insurance or paying the penalty fee for not providing the insurance) would make the Church morally culpable for every one of these murders that occurred under the auspices of an ObamaCare-approved employer insurance plan. Sec. Sibelius has just ordered the Catholic Church to directly violate a fundamental precept of their faith.

To understand where to go from here, the church will have to ask itself a lot of questions. Do they actively enforce a moral law, or do they just dress a guy up in a clown-suit on Sunday and pass around the collection plate? Do they limit their activities to legalistic challenges and then accept any ruling that goes against their stated doctrine on when human life begins? Do they change church doctrine to appease Barack Obama and NARAL?

If they do enforce a moral law and they will not change it in search of political consensus, does The American Catholic Church shut down in protest and put The United States under interdict until our government changes its regulatory course? Or if they don’t believe they are directly subsidizing the murder of unborn children through their compliance with the mandates of ObamaCare, do they now believe in Leprechauns? Such are the questions that the power-hungry statists have posed to one of the oldest religious organizations on the face of the planet.

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President Barack Obama wears his decision to rescue General Motors and Chrysler three years ago as a badge of honor, a move to save jobs in an industry that helped create the backbone of the middle class more than a half-century ago.

For Obama, the auto bailout is a case study for his efforts to revive the economy and a potential point of contrast with Republican Mitt Romney, who opposed Obama’s decision to pour billions of dollars into the auto companies. The president’s campaign views the auto storyline as a potent argument against Romney, the son of a Detroit auto executive who later served as Michigan governor.

If Romney wins the GOP nomination, expect to hear a lot about the car industry.

“The American auto industry was on the verge of collapse. And some politicians were willing to let it just die. We said no,” Obama told college students last week in Ann Arbor, Mich. “We believe in the workers of this state.”

Obama was expected to visit the Washington Auto Show on Tuesday, giving him another forum to talk about GM and Chrysler, along with the administration’s attention to manufacturers and efforts to boost fuel efficiency standards. The White House has taken every opportunity to highlight its efforts to rebuild the auto industry, pointing to GM’s reemergence as the world’s largest automaker and job growth and profitability in the U.S. auto industry.

As the industry was collapsing in the fall of 2008, the former Massachusetts governor predicted in a New York Times op-ed that if the companies received a federal bailout, “you can kiss the American automotive industry goodbye.” Romney said the companies should have undergone a “managed bankruptcy” that would have avoided a government bailout.

“Whether it was by President Bush or by President Obama, it was the wrong way to go,” Romney said at a GOP presidential debate in Michigan in November. Romney said the nation has “capital markets and bankruptcy — it works in the U.S. The idea of billions of dollars being wasted initially, then finally they adopted the managed bankruptcy. I was among others that said we ought to do that.”

Both the Bush and Obama administrations found themselves in uncharted territory in the fall of 2008 and early 2009. GM and Chrysler were on the verge of collapse when Congress failed to approve emergency loans in late 2008. Bush stepped in and signed off on $17.4 billion in loans, requiring the companies to develop restructuring plans under Obama’s watch.

The following spring, Obama pumped billions more into GM and Chrysler but forced concessions from industry stakeholders, enabling the companies to go through swift bankruptcies. Obama aides said billions in aid — about $85 billion for the industry in total — was necessary because capital markets were essentially frozen at the time, meaning there was no way for GM and Chrysler to fund their bankruptcies privately.

Without any private financing or government support, they argued, the companies would have been forced to liquidate.

Three years later, Obama is trying to turn the tough decision into a political advantage in Ohio and Michigan, which Obama carried in 2008 and where unemployment has fallen of late. During last week’s State of the Union address, Obama said the auto industry had hired tens of thousands of workers, and he predicted the Detroit turnaround could take root elsewhere.

Yet Obama’s poll numbers in places like Ohio and Michigan remain in dangerous territory, under 50 percent, and the auto industry argument carries some inherent risks.

A Quinnipiac University poll in Ohio released Jan. 18 found Obama locked in a virtual tie with Romney in a hypothetical matchup, with about half the voters disapproving of Obama’s performance as president. A poll in Michigan released last week by Lansing-based EPIC-MRA found 48 percent supporting Obama and 40 percent backing Romney in a potential matchup.

Republicans say the bailout still remains unpopular and the government intervention was hardly a cure-all. “The industry was bailed out but a lot of people lost their jobs,” said David Doyle, a Michigan-based Republican strategist.

In a nation still soured on bailouts, the government owns more than a quarter of GM. The Treasury Department estimates the government will lose more than $23 billion on the auto bailout: GM is trading at $24 a share, well below the $53-per-share mark needed for the government to recoup its investment in the company.

Romney, facing attacks from Democrats on his work at private equity firm Bain Capital, has tried to use the GM and Chrysler cases to insulate himself against charges his firm gutted companies and fired workers. “How did you do when you were running General Motors as the president?” Romney said in a December debate. “Gee, you closed down factories. You closed down dealerships. And he’ll say, well I did that to save the business. Same thing with us, Mr. President.”

Obama, Vice President Joe Biden and others say the decision, while unpopular, saved an estimated 1 million jobs throughout the Midwest and say the industry is coming back.

As a result of the restructuring, the companies can make money at far lower U.S. sales volumes than in the past. Industry analysts predict U.S. sales will grow by at least 1 million this year over last year’s 12.8 million units as people replace aging cars and trucks. And North American operations at GM, Chrysler and Ford are thriving, boosting their companies’ earnings — all signs that Democrats say will make the difference in the Midwest.

“I don’t know how any reasonable person can fail to acknowledge that this rescue plan worked and the country has benefited,” said former Ohio Gov. Ted Strickland, a Democrat.

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When it comes to connecting with average Americans, President Barack Obama tops Mitt Romney by 16 points. About 55 percent of registered voters believe Obama understands the problems of average Americans compared with 39 percent for Romney, a Washington Post-Pew Research Center poll found.

The former Massachusetts governor fared slightly better than his main opponent for the Republican presidential nomination. Former House Speaker Newt Gingrich was viewed as understanding the problems of average Americans by 36 percent of those polled.

Just over 40 percent of those polled Obama doesn’t understand the problems of average Americans, compared with 48 percent for Romney and 51 percent for Gingrich.

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Remember Obama’s two-year salary freeze he imposed on federal workers?  Well, as part of his FY 2013 budget, Obama plans to end the pay freeze and offer salary increases to federal workers.  It is in this context that CBO published a report showing that federal workers still earn more than their counterparts in the private sector.

While it is clear that many federal workers (but not all) work hard for their money, it is also clear that they should not be earning more than those who pay their salaries.  It is simply unsustainable for government workers to be earning more than their counterparts in the private sector.

Yesterday, CBO published a report showing that on average, government workers are paid more than those in the private sector with similar jobs and qualifications.  Here are the pertinent findings of the report:

• Overall, federal civilian employees receive total compensation 16% higher than their private-sector counterparts;
• Federal civilian employees receive 2% more in cash wages than private-sector employees;
• The most significant advantage comes in the form of benefits, where federal civilian employees enjoy a 48% advantage over their private-sector counterparts.  Also, workers with no more than a high school education enjoyed the largest advantage over their private-sector counterparts.  The only workers who fare better in the private sector are those with post-graduate degrees.  Obviously, even with the generous benefits package for government workers, there is a limit to how much one can make.  That inherent limit affects the most educated workers.

This is something lost on those who opposed Wisconsin Governor Scott Walker’s public sector compensation reforms.  Walker’s major reforms included requiring teachers to contribute 5.8% into their pensions (instead of 0%) and all public employees to pay 12.6% of their health-care premiums.  The average private-sector worker with similar education, qualifications, experience, and salary, would walk over glass for those benefits.  Yet, the union goons blew up Madison for a month because their benefit package wasn’t 100% free.

The same thing holds true on a federal level.  Average benefits were 72% higher for federal employees with no more than a high school education than for their private-sector counterparts.  We are slated to spend over $1 trillion just on civilian federal workers’ pensions over the next 10 years.  It is these unlimited benefits for federal workers that are more costly and unpredictable than higher wages.  CBO notes that they are hard to quantify and predict in the long run.

How in the world can the taxpayers, many of whom receive no pension, support such a scheme?  The federal workforce needs to transition from a defined-benefit retirement system to a defined-contribution system.  The private-sector might serve as a good example for such reforms.

Last week’s State of the Union address was a sad and pathetic affair, full of transparent rhetoric and demagoguery, brimming with incandescent hypocrisies, variegated with an expansive assortment of half-truths and lies, palled by a mediocrity that almost seemed intentional, detached from reality like an unmoored hot-air balloon that slowly ascends to the heavens, stuffed with dense and infuriating arrogance, and draped over our nation like a several-sizes-too-small coat with promises and ideas rendered diminutive in the shadow of the historical moment.

All this was clear last Tuesday night. And yet somehow over the past week, the address actually grew worse.

The president’s speech was less a factual information session about the current American condition than it was a mawkish parade of political images and symbols, meant to make us identify with the president’s vision and feel at safe harbor with his leadership. It was less a speech than a play, lavish with props and masquerading actors tasked with immersing the audience in an alternate version of reality. But over the past week, key scenes of the drama have fallen apart. The president now looks less like a seasoned political actor than like Quince at the end of A Midsummer Night’s Dream, farcically fumbling his lines.

One of the supporting thespians was the Indiana-based electric car battery-maker Ener1, whose subsidiary EnerDel received a $118.5 million grant under the stimulus bill. EnerDel was also showered with more than $4 million in federal gifts under the Bush Administration. The scrappy little green boutique was meant to symbolize the flowering benefits of the sort of business-government handshaking that the rest of the civilized world calls “crony capitalism.” “In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries,” Obama declared last Tuesday.

Precisely two days later, Ener1 filed for Chapter 11 bankruptcy. The company had been an encore actor in the president’s campaign theatrics. Almost one year ago, Vice President Joe Biden visited the Ener1 facilities, effervescent about the administration’s promise to airlift 1 million electric cars onto the road by 2015. That pledge has since crashed on the shoals of reality and the cardboard prop that is Ener1 has blown over.

Watching Ener1 fold, it’s hard not to recall that last great monument to the progress of the green revolution: Solyndra. President Obama lauded that company in his 2010 State of the Union and it promptly imploded last year. One imagines executives at Pepsi placing urgent phone calls to the White House, encouraging the president to mention Coca-Cola in next year’s address. If you’re employed by a business receiving checks from the Department of Energy, you may want to dash off a few copies of your résumé this afternoon.

But the star of the State of the Union show, the leading lady, was Warren Buffett’s Secretary. “Right now, Warren Buffett pays a lower tax rate than his secretary,” Obama declared. “Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else — like education and medical research; a strong military and care for our veterans?” So central was Warren Buffett’s Secretary to the performance, she attended as the special guest of the president and belle of the ball, standing in the audience as a quiet testament to the grinding, Dickensian class divide that darkens the backstreets and alleys of modern America.

Warren Buffett’s Secretary was played by Debbie Bosanek, who is Warren Buffett’s actual secretary, and who makes between $200,000 and $500,000 per year, according to the calculations of Paul Roderick Gregory over at Forbes. It was a brilliant dramatic portrayal. While Bosanek herself is a creature of the upper classes, she effortlessly slipped into the part of Warren Buffett’s Secretary, a downtrodden proletarian exploited by the tax code, reminiscent of Peggy Olson in Mad Men.

This, by the way, presents a knotty conundrum for progressives. If Gregory’s deductions are correct, then Bosanek is likely a member of that charter club known as the “wealthiest 2%,” a coven of blackhearted plunderers and blue-blooded aristocrats that looted the country for all it was worth in 2008. Progressives have demanded higher taxes on the wealthiest 2%, yet hailed Bosanek as an overtaxed hero. They’ve blamed the wealthiest 2% for all the nation’s ills, but hoisted up this secretary as an emblem of justice in the class wars. Well, which is it? Should we add her image to theTwo Minutes Hate tape, or no? And should we raise her taxes? Lower them? Maybe we should just raise everyone’s taxes.

The overarching themes pervading the president’s State of the Union drama were America’s greatness and stifling inequality. America was great when it allowed for the president’s accomplishments, like killing Osama bin Laden. But when it came to the president’s failures, most notably three years of a doldrums job market, it was all the fault of that yawning canyon of economic class. Wealthy Americans — for whom Debbie Bosanek’s membership application is still pending — were cast as the villains, cackling all the way to their banks with insufficiently punitive Treasury receipts.

The only solution was to sock it to them, specifically with a 30% net tax on millionaires. This (along with solar batteries) was the Big Idea, the great glowing light bulb of the president’s address. And according to an analysis by the Fiscal Times, it would raise $30 billion in revenue — and that’s assuming that the sledgehammer of adding yet another tax didn’t further stall the economy. Of course, $30 billion isn’t immaterial, but the Tea Party Caucus could cut that much from the federal budget during a bad hangover. Meanwhile, the national debt is $15.2 trillion.

And Democrats have already booby-trapped the tax code for the wealthiest Americans. With current tax rates set to expire at the beginning of 2013, taxes on capital gains will shoot up from 15% to 20%. And thanks to a pernicious little slice of the Obamacare legislation, taxes on capital gains will further increase to almost 24% in 2013. All this will happen unless the federal government takes action to prevent it. It’s piquantly fitting, isn’t it? If the president wants to see tax rates tighten for millionaires, his easiest course is simply to get reelected.

But I regret that I’ve disposed of two paragraphs trying to refute the president’s numbers when the numbers are nugatory here. Obama is fully aware that his tax increase would do little to arrest the deficit and less to catalyze the economy. His purpose is to blacken the wealthy into villains and portray himself as the eminently reasonable hero; to siphon all the laws and details of politics and economics into a simple, dramatic dichotomy and cast himself on the side of good. He is, with total self-awareness, jousting with phantoms and trying to bring the rest of us along for the ride. It may make for a spectacular show, but at the end of the day, that’s all it is: cheap lines and theatrics cluttering the stage floor.

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Maybe President Barack Obama is so excited about his bid for re-election that he inflates his administration’s prowess in creating jobs, saying during an online interview that his administration has toted up more than 22 million.

Uh, check that: He meant 3 million, he noted, quickly covering his gaffe.

“We’re starting to see some signs that the economy is picking up. We created 22 million jobs over the last . . . or . . . 3 million jobs over the last 22 months,” the president stammered during the interview on Monday.

As of January, the Labor Department reported that the unemployment rate has dropped to 8.5 percent in conjunction with the actual statistic — 3.2. million new private-sector jobs — created during the past 22 months.

http://www.youtube.com/watch?v=no3DtOP2eQQ

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n November 14, 2011, the Supreme Court agreed to review the constitutionality of President Obama’s health-care act. The central question is, What limits does the Constitution — specifically, the Commerce Clause — impose upon the federal government’s exercise of power? This health-care act is the defining legislation of the president’s term, and the issue of limited government is at the very heart of the debate between Obama and his opponents. The political, economic, and constitutional stakes are very high. These arguments before the Court will provide a dramatic — and perhaps even decisive — backdrop for the 2012 election.

Constitutional crises of this magnitude are not without precedent. Indeed, the seeds of this case can be found in the court battles of the 1930s and 1940s, as Franklin Roosevelt’s New Deal legislation challenged traditional constitutional bounds. Supported by record congressional majorities, FDR and his fellow Democrats passed a blizzard of programs designed to alleviate the economic hardship of the Great Depression — and to alter the very fabric of the U.S. capitalistic system.

The 1932 Democratic platform, largely written by the party’s 1924 nominee, John W. Davis, was a clear statement of conservative, Jeffersonian principles, but FDR abandoned this platform during his first hundred days in office. So radical were the changes that by 1935, conservatives — Democrats and Republicans alike — agreed with Davis when he wrote, “If the structure of this Government is to be preserved, the courts must do it.”

As conservatives looked in desperation to the judiciary for relief, Davis was their logical leader. A highly esteemed former solicitor general under President Wilson, former ambassador to Great Britain, former president of the American Bar Association, and senior partner at one of New York’s premier law firms, Davis commanded respect from all quarters of the political and legal spectrum. As a founder of the bipartisan, anti–New Deal Liberty League in 1934, Davis repeatedly wrote to his supporters, “I believe in the Constitution of the United States; I believe in the division of powers that it makes. I believe in the right of private property, the sanctity and binding power of contracts; the duty of self-help. I am opposed to confiscatory taxation, wasteful expenditure, socialized industry, and a planned economy controlled and directed by government functionaries. I believe these things to be inimical to human liberty and destructive of American ideals.”

Sensing the gravity of the crisis, Davis seized every opportunity and expertly wielded every legal weapon at his disposal to thwart the New Deal. Publicly labeling the Agricultural Adjustment Act (AAA) “a bribe to farmers,” he signed the amicus curiaebrief and successfully led the fight that ultimately resulted in the court’s 6–3 ruling that the AAA was unconstitutional. He successfully opposed the Public Utility Holding Act in the lower courts and led the fight against it within the American Bar Association. Davis personally argued the unconstitutionality of the Frazier-Lemke Bankruptcy Act and the National Labor Relations (Wagner) Act before the Supreme Court.

When Roosevelt responded to these courtroom defeats by setting forth his infamous court-packing scheme in 1937, it was Davis who advised the New Deal’s congressional opponents in defeating the measure. By the late 1930s, he had earned the New Dealers’ enduring enmity, and he wore with pride their sobriquet, “Public Enemy Number One.”

During the course of these battles, Davis repeatedly warned that “paternalism fastens its grasp upon the country, and, little by little, the practice of local self-government fades away. Baptize a scheme, even the most fantastic, with a high-sounding and attractive title, and it will elicit the public support.” Of the failure to limit government, he admonished, “Nothing but mischief, to my way of thinking, can come from any government attempting tasks which lie beyond its power to accomplish.” Ever clear about the indivisibility of property rights from human rights, Davis contended, “The two are not antagonistic. History furnishes no instance where the right of man to acquire and hold property has been taken away without the complete destruction of liberty in all its forms.”

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