{"id":13819,"date":"2024-06-01T17:01:15","date_gmt":"2024-06-01T17:01:15","guid":{"rendered":"https:\/\/lonecandle.com\/?p=13819"},"modified":"2024-06-01T17:01:17","modified_gmt":"2024-06-01T17:01:17","slug":"the-supreme-court-decides-not-to-trigger-a-second-great-depression","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=13819","title":{"rendered":"The Supreme Court decides not to trigger a second Great Depression"},"content":{"rendered":"\n

“The Supreme Court<\/a> delivered a firm and unambiguous rebuke to some of America\u2019s most reckless judges on Thursday, ruling those judges were wrong to declare an entire federal agency unconstitutional in a decision that threatened to trigger a second Great Depression<\/a>.<\/p>\n\n\n\n

In a sensible world, no judge would have taken the plaintiffs arguments in CFPB v. Community Financial Services Association<\/em><\/a> seriously. Briefly, they claimed that the Constitution limits Congress<\/a>\u2019s ability to enact \u201cperpetual funding,\u201d meaning that the legislation funding a particular federal program does not sunset after a certain period of time.<\/p>\n\n\n\n

 The implications of this entirely made-up theory of the Constitution are breathtaking. As Justice Elena Kagan points out in a concurring opinion in the CFPB<\/em> case, \u201cspending that does not require periodic appropriations (whether annual or longer) accounted for nearly two-thirds of the federal budget<\/a>\u201d \u2014 and that includes popular programs like Social Security, Medicare, and Medicaid.<\/p>\n\n\n\n

Nevertheless, a panel of three Trump judges on the United States Court of Appeals for the Fifth Circuit \u2014 a court dominated by reactionaries<\/a> who often hand down decisions that offend even the current, very conservative Supreme Court \u2014 bought the CFPB<\/em> plaintiffs\u2019 novel theory and used it to declare the entire Consumer Financial Protection Bureau unconstitutional<\/a>.<\/p>\n\n\n\n

In fairness, the Fifth Circuit\u2019s decision would not have invalidated Social Security or Medicare, but that\u2019s because the Fifth Circuit made up some novel limits<\/a> to contain its unprecedented interpretation of the Constitution. And the Fifth Circuit\u2019s attack on the CFPB still would have had catastrophic consequences for the global economy<\/a> had it actually been affirmed by the justices.<\/p>\n\n\n\n

That\u2019s because the CFPB doesn\u2019t just regulate the banking industry. It also instructs banks on how they can comply with federal lending laws without risking legal sanction \u2014 establishing \u201csafe harbor\u201d practices<\/a> that allow banks to avoid liability so long as they comply with them.<\/p>\n\n\n\n

As a brief filed by the banking industry<\/a> explains, without these safe harbors, the industry would not know how to lawfully issue loans \u2014 and if banks don\u2019t know how to issue loans, the mortgage market could dry up overnight. Moreover, because home building, home sales, and other industries that depend on the mortgage market make up about 17 percent of the US economy, a decision invalidating the CFPB could trigger economic devastation unheard of since the Great Depression.<\/p>\n\n\n\n

Thankfully, that won\u2019t happen. Seven justices joined a majority opinion in CFPB<\/em> which rejects the Fifth Circuit\u2019s attack on the United States economy, and restates the longstanding rule governing congressional appropriations. Congress may enact any law funding a federal institution or program, so long as that law \u201cauthorizes expenditures from a specified source of public money for designated purposes.\u201d”<\/p>\n\n\n\n

https:\/\/www.vox.com\/scotus\/24158216\/supreme-court-cfpb-clarence-thomas-community-financial<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

“The Supreme Court delivered a firm and unambiguous rebuke to some of America\u2019s most reckless judges on Thursday, ruling those judges were wrong to declare an entire federal agency unconstitutional in a decision that threatened to trigger a second Great Depression.
\nIn a sensible world, no judge would have taken the plaintiffs arguments in CFPB v. Community Financial Services Association seriously. Briefly, they claimed that the Constitution limits Congress\u2019s ability to enact \u201cperpetual funding,\u201d meaning that the legislation funding a particular federal program does not sunset after a certain period of time.<\/p>\n

The implications of this entirely made-up theory of the Constitution are breathtaking. As Justice Elena Kagan points out in a concurring opinion in the CFPB case, \u201cspending that does not require periodic appropriations (whether annual or longer) accounted for nearly two-thirds of the federal budget\u201d \u2014 and that includes popular programs like Social Security, Medicare, and Medicaid.<\/p>\n

Nevertheless, a panel of three Trump judges on the United States Court of Appeals for the Fifth Circuit \u2014 a court dominated by reactionaries who often hand down decisions that offend even the current, very conservative Supreme Court \u2014 bought the CFPB plaintiffs\u2019 novel theory and used it to declare the entire Consumer Financial Protection Bureau unconstitutional.<\/p>\n

In fairness, the Fifth Circuit\u2019s decision would not have invalidated Social Security or Medicare, but that\u2019s because the Fifth Circuit made up some novel limits to contain its unprecedented interpretation of the Constitution. And the Fifth Circuit\u2019s attack on the CFPB still would have had catastrophic consequences for the global economy had it actually been affirmed by the justices.<\/p>\n

That\u2019s because the CFPB doesn\u2019t just regulate the banking industry. It also instructs banks on how they can comply with federal lending laws without risking legal sanction \u2014 establishing \u201csafe harbor\u201d practices that allow banks to avoid liability so long as they comply with them.<\/p>\n

As a brief filed by the banking industry explains, without these safe harbors, the industry would not know how to lawfully issue loans \u2014 and if banks don\u2019t know how to issue loans, the mortgage market could dry up overnight. Moreover, because home building, home sales, and other industries that depend on the mortgage market make up about 17 percent of the US economy, a decision invalidating the CFPB could trigger economic devastation unheard of since the Great Depression.<\/p>\n

Thankfully, that won\u2019t happen. Seven justices joined a majority opinion in CFPB which rejects the Fifth Circuit\u2019s attack on the United States economy, and restates the longstanding rule governing congressional appropriations. Congress may enact any law funding a federal institution or program, so long as that law \u201cauthorizes expenditures from a specified source of public money for designated purposes.\u201d”<\/p>\n

https:\/\/www.vox.com\/scotus\/24158216\/supreme-court-cfpb-clarence-thomas-community-financial<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[617,790,2035,217,165,1213,236,551,528],"class_list":["post-13819","post","type-post","status-publish","format-standard","hentry","category-article-share","tag-bureaucracy","tag-courts","tag-depression","tag-economics","tag-economy","tag-judiciary","tag-regulation","tag-regulations","tag-supreme-court"],"_links":{"self":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/13819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13819"}],"version-history":[{"count":1,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/13819\/revisions"}],"predecessor-version":[{"id":13820,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/13819\/revisions\/13820"}],"wp:attachment":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}