Oct 132010
 

President Obama isn’t the first politician to have to stare a massive foreclosure crisis in the face.

The last time foreclosures loomed so large in the economy and the national consciousness was during the Great Depression, when farmers and homeowners were losing their land in massive numbers.

Several states passed laws including moratoriums on foreclosure. Not because the banks couldn’t prove they owned the farms, or because they screwed up the paperwork. The moratoriums were implemented in recognition that the country was in an economic emergency and that having so many people lose their homes was bad for the country.

Minnesota passed such a law in 1933. After a judge allowed a couple to postpone foreclosure, the building and loan association that owned the mortgagee challenged the law. The firm appealed to the Supreme Court, contending that law was a violation of the Contracts Clause of the Constitution. But in its  landmark ruling in Home Building v. Blaisdell, the high court upheld the law. By a 5 to 4 vote the court ruled that the contracts clause wasn’t absolute and it didn’t outweigh the rights of the states to protect the vital interests of its citizens. In dissent, Associate Justice George Sutherland warned that the ruling would be just the beginning of further erosion of the contracts clause.

Chief Justice Charles Evans Hughes, an appointee of President Herbert Hoover, wrote the majority opinion. Hughes wasn’t some ivory-tower judge but a seasoned and fascinating Republican politician who had served as two-term governor of New York, with a record for establishing a public service commission, as well as pushing through labor law and insurance reform. He ran unsuccessfully for president against Woodrow Wilson before serving his first stint on the Supreme Court before running for president. After a stretch as secretary of state under President Calvin Coolidge, he was in and out of private life before President Hoover appointed him chief justice in 1930.

Though liberals gave him a hard time in his confirmation hearing, he often provided a swing vote in favor of the New Deal on a highly contentious court. But Hughes also repeatedly tangled with Roosevelt, voting against the constitutionality of the National Recovery Administration and opposing FDR’s court-packing scheme.

What do we get from this excursion into history? There’s some comfort in knowing the country has grappled with these tough times and issues before and survived. But it’s hard to encounter a figure like Hughes and not wish that some of his courage and unpredictability could rub off on our current crop of leaders, who seem so timid and tame by comparison, and who seem to have forgotten that protecting the vital interests of citizens isn’t just a matter of bailing out banks and tax cuts for the rich and hoping some of the booty will trickle down to the rest of us.

About Martin Berg

Martin Berg, WheresOurMoney.org editor, is a veteran journalist.

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