SCOTUS Finds Acorns

Lost in the hubbub over more politically charged recent SCOTUS decisions are two that they got right.

The first was a FDR relic designed to artificially inflate raisin prices, thereby ensuring profits for raisin producers. Under the program, the government takes a portion of each year's raisin crop, which it then destroys or dumps overseas. This raises prices - and hence profits - for California raisin growers, free market be damned.

Thirteen years ago the government tried to take 47 percent of farmer Marvin Horne’s raisins and give him nothing in return. Horne fought back, arguing that the confiscation was an uncompensated taking of private property under the Fifth Amendment’s Takings Clause. Today, on his second trip to the Supreme Court, Mr. Horne’s claim was vindicated by eight justices.

For a case about raisins, Mr. Horne’s plight has generated a fair amount of attention... Perhaps this is because Mr. Horne’s adversary, a New Deal-era government agency called the Raisin Administrative Committee (RAC), is so inherently comical and head scratching. It’s the New-Deal case that took almost 80 years to bring, and, like so many of President Franklin Roosevelt’s crazy schemes, a majority of justices found it had severe constitutional problems.

The RAC is a group of 46 raisin growers and packers (and one “member of the public”) that meets in an office in Fresno, California. There they decide how many raisins they must take off the market in order to keep the price of raisins artificially high. If it weren’t ratified by the government, such a meeting would undoubtedly be an illegal collusion to raise prices under the Sherman Antitrust Act.

If the RAC requests a farmer’s raisins, then the farmer must give them up and he is guaranteed nothing in return...

Kind of like taxes, but paid with raisins instead of dollars.

The RAC is the product of a 1937 law called the Agricultural Marketing Agreement Act (AMAA). The AMAA was the consequence of the antiquated economic thinking of the New Deal, much of it directly pushed by President Franklin Roosevelt himself. Roosevelt strongly believed in the power of government-created cartels to fix perceived problems with the free market.

That kind of thinking is the cause of so many of our problems. It also is a factor in the next SCOTUS decision.

A divided Supreme Court on Monday dealt a significant blow to the Obama administration's environmental agenda, invalidating a rule that would limit the release of mercury and other pollutants from power plants.

"We hold that EPA interpreted unreasonably when it deemed cost irrelevant to the decision to regulate power plants," Justice Antonin Scalia wrote in the court's majority opinion.

"No regulation is “appropriate” if it does significantly more harm than good."

Only a government agency would consider cost "irrelevant."

Bottom line - even nine blind hogs can occasionally stumble across a couple of acorns... or raisins.