1913

"Unfortunately, the further you run from your sins, the more exhausted you are when they catch up with you. And they do."
--Dalton Russell (Inside Man)

In no year was more damage done to liberty in the United States than 1913. Newly elected President Woodrow Wilson was quick to add to the foundation of the Progressive Era that Theodore Roosevelt had built. Wilson's contributions were whoppers.

Although the Sixteenth Amendment was ratified a month before Wilson took office, Wilson had strongly supported it. The Sixteenth Amendment gave the federal government the power to tax individual incomes. This opened a huge resource stream to central government that was not previously available. Markets for political favor via wealth redistribution could now be made on a much larger scale. Today, this is a multi-trillion dollar market.

A month after Wilson took office, the Seventeenth Amendment was also ratified--also with Wilson's strong endorsement. Article 1, Section 3 of the Constitution assigned the power to elect US senators to each state legislature. The wisdom of this is that the longevity of senators' tenures were tied to the defense of their states' interests rather than to federal interests. The Seventeenth Amendment changed the process, opening senatorial elections to popular vote. This has eroded balance of power between federal and state governments because people tethered to federal government programs are more likely to vote in federal government lackeys rather than strong supporters of state interests.

In December of 1913 the Federal Reserve Act was signed into law. Politicians understand that the power to tax is limited by citizens' tolerance for having their property forcefully taken from them by government. If government's appetite for economic resources exceeds its power to tax (and it always does), then a central bank with authority to print cash offers the perfect confiscatory weapon. Instead of taxing property directly, government uses the freshly minted cash to claim economic resources, leaving less resources and more currency for the citizenry at large. Inflation is often called 'the invisible tax' because people have difficulty recognizing its confiscatory effect on their wealth.

It is inconceivable that the federal government could have grown into its Leviathan state today without these three events. For lovers of freedom, 1913 was a very bad year.

One hundred years later, we pay a steep price for that misfortune.