Henry Lamb
Rand is right!
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By Henry Lamb
May 26, 2010

Rand Paul told MSNBC's Rachel Maddow that he thought the Civil Rights Act might have gone too far when it required private businesses to serve all comers. He said he supported the Civil Rights Act, that government had every right to require non-discrimination in public facilities, but the government should not have the power to dictate to whom private business owners must provide services.

An individual who uses his own resources to invest in a risky business should have the absolute right and authority to decide to whom he will provide services. Rand said he detested racism in any form, and thought it would be foolish for a business owner to refuse to provide services to individuals simply because of skin color, but nonetheless, as a private business owner, he should have the right to refuse service, if he so desired.

Suddenly, "Rand is the Klan's Man," according to a sign carried by a person who must be too dense to digest what Rand actually said. Others too, including much of the media and the progressive blogs, jumped on Rand's comments with idiotic comments that completely misrepresented Rand's statements.

There are two lessons here for Kentucky's young Republican Senate nominee: it is not politically expedient to give opponents any unnecessary targets; and when opponents jump on a statement, never ever back away from it.

The issue in question is whether the government's Constitutional authority to regulate interstate commerce or the authority to provide equal justice under the law can be stretched far enough to require that the owners of a private business provide services to whomever the government, rather than the business owner, decides.

There is no question that the law requires businesses to serve all comers. The question is whether this power is granted to Congress by the Constitution or not. Rand Paul says he thinks it does not. He is right. There is no reading of Article 1, Section 8 that justifies the government dictating to whom a business owner must provide services.

Is there a comparable power for Congress to dictate to private home owners that home owners must admit anyone who knocks on the door? Of course not. A person's home is his castle; ownership means that the owner has the authority to exclude or admit anyone the owner not the government chooses.

A person's business is his private property, an extension of his person. As such, the owner not the government should have the authority to exclude or admit anyone the owner chooses.

In a free market, a willing buyer should be able to purchase from a willing seller on terms that both find acceptable. When the government decides to whom a seller must sell, it becomes less than a free market.

When government decides to whom the seller must sell, and the terms upon which a sale must be made, as it did under the 1977 Housing and Community Development Act and the Clinton- era expansion under the Community Reinvestment Act, the free market is distorted to the point that disaster is inevitable.

Government intervention into the marketplace is the root cause of the housing bubble and the subsequent crash of the financial institutions that traded on the faulty mortgages guaranteed by the federal government. Finger-pointing anywhere other than directly toward government's intervention in the marketplace is misguided.

It is absolutely true that the free market denied mortgages to large segments of the community, especially to that segment of the community that lacked the income and credit worthiness to make the payments required by the mortgage.

Had the market been left alone, there would not have been a housing bubble or the subsequent disaster that still suppresses the economy. Moreover, the people who were denied mortgages, and houses, would have known what they had to do to earn a mortgage, and could have done what was necessary or not.

Private entrepreneurs might well have seen the demand for "specialized" sub-prime mortgages, and created an instrument that did not require the federal government's guarantee. It would surely have been at a higher interest rate, or would have required a more substantial down payment, but that is the price of the product. Willing buyers could buy or not.

When government yields to the people who want the government to force the market to provide an outcome that the market will not provide on its own, sooner or later, all the people will have to pay for the government intervention.

The less government is involved in the marketplace, the more vibrant, efficient, responsive, and prosperous the market is. Conversely, the more involved the government is in the market place, the more sluggish, expensive, and susceptible to corruption it is.

The people who carry signs condemning Rand Paul, and the people from Obama on down who insist on saddling the market with more regulations and government control, are people who can't see that the immediate "feel-good" of a government-guaranteed mortgage is an opiate that must inevitably be followed by a painful loss and withdrawal.

As America chooses its future this fall, Rand Paul's philosophy should be the litmus test that qualifies every candidate. The economic crisis the nation is suffering is the direct result of the absence of Rand's philosophy in government, and the relentless, expanding intervention of the government into the market place.

© Henry Lamb

 

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