Friday, October 30, 2009

UPDATED: Overriding the Will of America: Democrat Mel Watt destroys HR 1207, Bill to Audit the Fed

The Clover Helix
www.thecloverhelix.blogspot.com
Friday, October 30, 2009

This was just released onto the wire tonight and it is utterly disgusting. Select the link below to Bloomberg News. Representative Mel Watt has been bought and paid for by the banking interests (three of his top campaign contributors are Bank of America, Wachovia, and the American Bankers Association).

If this doesn't convince you to move your money to a credit union or to begin banking at home, nothing will.

Federal Reserve Policy Audit Legislation ‘Gutted,’ Paul Says

November 23, 2009 UPDATE: FED rage boils over on Capitol Hill

The Fallacy of Economic Stimulus: The Most Efficient mode for Economic Destruction

The Clover Helix
www.thecloverhelix.blogspot.com
Friday, October 30, 2009

In today's hard economic times it's difficult to accept what the national media and the government want you to believe about the nation's economy, and impossible if you have ever studied Austrian Economics.

Currently there is a brewing controversy over the effectiveness of the Federal government's "Cash for Clunkers" program (see here). The current author supports the view of the government's opponents on this issue. Clearly, the government has become very sensitive to the issue of their effectiveness. Furthermore, the Federal government issued a report today claiming that the economic stimulus package saved or created 640,000 domestic jobs at a cost of $150 billion dollars. This government-issued report was intended to demonstrate the effectiveness of the government's economic stimulus program (see here).

What is not emphasized is that this amounts to $234,375 for every job created or saved, not including the interest on the money borrowed or the inflation that this new money will inevitably create for the rest of the country. The average American wage is $41,334. Think about that a moment. The free market, if left alone, would have recovered and provided 3,630,000 people with jobs for a year in the productive portion of the economy using the same money! However, these jobs are now permanently lost through this "stimulus" and instead we are left with 640,000 mostly government-sector (non-productive) jobs. The government doesn't consider this future job destruction because their loss is never actually seen by the public, but they can be accounted for.

How so? The $150 billion must be repaid, and in the words of late economist Henry Hazlitt "public works means taxes", and if the government can't pay through taxes it will do it through inflation (monetary debasement). Either policy destroys public-sector productivity and job growth because every dollar collected by the government is another dollar not invested in job growth. Therefore $150 billion of future taxes is worth 3,630,000 private sector yearly incomes lost over the duration of repayment, and that's not counting the interest or the inflation which cost us even more job growth. In essence, for every new stimulus job created, 5.6 productive future year-long incomes are wiped out. How long can the nation continue in this way?

Even more ominously, the government intends to spend another $637 billion of borrowed money to create or save new jobs over the next year or so. Simply put, we can't borrow our way to prosperity and our United States, like Rome and Athens, is going to learn this lesson the hard way.

Tuesday, October 20, 2009

Blaming the victim: Were over-extended, low-income Americans responsible for the subprime debacle ?

The Clover Helix
October 20, 2009
www.thecloverhelix.blogspot.com

Three years after the economy began unwinding the American real estate bubble and the associated subprime mortgage financial mess, data now shows that faulting low-income borrowers for the crisis is inappropriate and misguided. Rather, it seems that that the onus falls on housing speculators, lending institutions, the United States Federal Reserve Bank (FED), and large Wall Street securities firms who were privy to the risks but nonetheless marched their unwitting investment clients into the storm anyway.

To understand these issues (and why the common hard-working American is innocent of this crisis), we must understand what a subprime mortgage is. Essentially, mortgage-backed securities are loans issued to borrowers that are secured by real estate. Also, these loans are used to finance the purchase a of home or property, though sometimes these loans are used for "pulling out" equity (value of the home minus the loans against it) without having to sell the real estate. An equity line-of-credit is a common example of this. The down-payment made by the home-owner provides the lender with a buffer should property value fluctuations drop the home value below the loan amount (negative equity). Furthermore, the down-payment invests the borrower in the mortgage. It is common for lenders to also require the purchase of mortgage insurance to defray the risks should the property enter negative equity and go into default. When an appropriate down-payment is provided by a borrower possessing good credit-worthiness who also possesses the ability to repay the terms of the loan, the lender is able to issue a loan to the borrower. This loan can then be pooled with other mortgages and sold on the secondary market to investors who are looking for "prime" or "A" paper debt securities. Two of the largest secondary market purchasers of mortgage paper are the Federal National Mortgage Corporation (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) better known as Fannie Mae and Freddie Mac, respectively. The secondary market can then either play the role of investor or they may package these mortgage pools into debt securities (bonds) that can be sold to private and public investors across the world.

Prime loans have been commonly issued by lenders for the purchase of real estate for many years. Interest rates are usually determined via market forces (though the Federal Reserve's [FED] price fixing of interest rates distorts this reality) and default risk is adjusted through the duration of repayment (term), interest rate, and loan-to-value (LTV) ratio (generally 80-90%). A short-term, low-LTV prime loan is considered the safest mortgage loan of all and commands a low interest rate, whereas a thirty-year prime loan with a higher LTV commands a much higher interest rate. It's a simple risk vs. return reciprocity.

In 1968, the United States Government chartered the Government National Mortgage Association (GNMA), better known as Ginnie Mae, a government-owned company. Ginnie Mae was originally founded to provide an investor market for mortgages issued to low-income home buyers with marginal credit histories, and small down payments (typical LTV is about 97%). Strict limits on maximum loan amounts and by disallowing investment properties eliminated many would-be speculators from their mortgage portfolio. Furthermore, Ginnie Mae loans are insured by the U.S. Federal Government against default making them virtually risk-free mortgage securities for investors. GNMA also purchases the famous "dollar-down" Veteran's Administration (VA) loans used by military personnel. Because of these government loan guarantees and the strict lending guidelines, Ginnie Mae mortgages receive an A or prime paper rating despite the increased default risk posed by the borrowers.

Ginnie Mae provides the loan programs that many in the financial news has mis-classified as "subprime" due to their tenuous employment or credit-problems. That these loans represent speculator-free prime paper assets is documented in the paragraph above, but this fact is gratuitously overlooked by the media. That Ginnie Mae borrows aren't the cause of the financial crisis is demonstrated by the following two graphs. The first graph shows the value of $10,000 invested in Ginnie Mae bonds over the past five years (interest payments excluded). We can see that Ginnie Mae investors were tarred and feathered (wrongly) from 2005 through 2008 by feverish selling of Ginnie Mae mortgage-backed securities in an attempt to divest from the mortgage debacle. However as the late 2008 financial crisis unfolded, Ginnie Mae mortgage-backed securities were reassessed by investors as safe-haven investments and Ginnie Mae securities recovered their losses and now trade at a premium, handsomely rewarding patient investors.

The second graph shows the value of $10,000 invested in the market-weighted total U.S. bond market, which includes Fannie Mae and Freddie Mac securities. A comparison of these two graphs shows the out-performance of Ginnie Mae securities relative to the overall bond market. From this we can conclude that Ginnie Mae borrowers were not the source of the so-called toxic assets that were so vehemently decried by politicians and economists on news networks and on major financial websites. If so, the markets would reflect this in the pricing of Ginnie Mae securities.



So if Ginnie Mae's borrowers aren't the source of the toxic assets, then who were these subprime borrowers and what constitutes a subprime mortgage? A subprime mortgage is a loan issued by a private lender to a borrower who presents a greater-than-average risk of loan default or even risk of loss of investor capital. These risks include not securing mortgage insurance against the loan, accepting very high LTV ratios, qualifying borrowers who don't demonstrate strong ability to comply with the lender's terms or possess good credit worthiness, and/or borrowers who don't intend to occupy the property. The risks associated with these subprime loans is commensurately higher, and in some cases these loans are assigned as "A-" or lower paper. The highest risk loans carry the stigma of "junk" status. Securities backed by these loans trade at significant discounts to their prime paper counterparts and carry higher interest rates due to their higher risk.

Historically, subprime mortgages were issued to borrowers who had suffered bankruptcy (or some other credit-catastrophe) but could afford to make a large down-payment and had a reliable revenue stream, or had good credit but had little down-payment. However, during the recent housing bubble, subprime mortgages were used by housing speculators to purchase unoccupied properties for little or no money down with the goal of eventually "flipping" the property at a profit to another buyer (usually another speculator). Because the FED had lowered interest rates to historic lows, subprime paper became relatively cheap and lending institutions began issuing subprime loans en masse. Eventually, subprime paper traded nearly at parity with prime paper. Prime loans were more difficult for good borrowers to obtain than subprime loans were, and the banks were happy to sell it to them so long as the secondary market was available to buy up all the subprime paper.

If lenders were issuing so much subprime paper and the secondary market was happy to accept these loans, then what would be the problem if the investors suffered for taking on this risk? The issue is that investors were unaware that they were buying much, if any, subprime paper. How so? Bond-rating institutions and financial securities dealers had reasoned that the speculative frenzy that existed during the bubble had permanently increased housing values at such a rate that making low/no down payment loans to subprime borrowers had made them a low risk investment because real estate prices were rising so fast that immediate positive equity was built into the security. Therefore, subprime loans were reasoned to be as safe as prime loans as long as prices rose and were sold to investors as "A" paper. This creates an obvious moral hazard and in this way the nation's toxic assets were born and distributed to the balance sheets of private investors, banks, and retirement funds across the world. Of course when the housing market stagnated and then began to fall, the speculators dumped their houses back on the market or let them go into foreclosure, bringing the whole Ponzi scheme to a dreadful end. Because many of these mortgages were not covered by mortgage insurance (as many of these loans were uninsurable) bond-holders were exposed to all of the losses. Banks, retirement funds, and individuals who owned large, highly leveraged mortgage portfolios were wiped out. Institutional bankers who created the moral hazard were bailed-out at taxpayers expense.

Had investors been aware that the mortgage securities they owned contained significant amounts of these toxic assets they would have objected to this financial fraud and would demanded appropriate repricing of these securities and jail time for account executives who fraudulently sold them. Today, many of these investment bank executives are receiving multi-million dollar performance bonuses. However, if the secondary market had not been unwittingly buying the subprime paper, there may have been no subprime debacle at all.

The actions of the FED alongside major financial firms such as insurer AIG, Goldman Sachs, Bear-Stearns, and the rest is questionable at best, criminal (even treasonous) at worst. For discussions of their roles in this worldwide securities fraud, watch videos and articles by Matt Taibbi (here) at Rolling Stone and market commentator Max Keiser (part 1 and part 2). One thing we can be assured of is that it wasn't America's hard-working home buyers who brought this catastrophe upon us, but rather the investment banks, central planners, and the speculators who should bear the brunt of these losses.

Wednesday, September 16, 2009

The American President is Shielded from Direct Policy Questioning

The Clover Helix
September 16, 2009
www.thecloverhelix.blogspot.com

On September 15, 2009, the House of Representatives voted to rebuke Republican Representative Addison Graves "Joe" Wilson for yelling “you lie!” during President Obama’s speech on Health Care reform before a nationally televised joint session of Congress. This resolution of disapproval, which passed 240-179 largely along party lines, was essentially an enforcement of a long-standing tradition prohibiting direct public questioning, and particularly heckling, of the President.

Though Representative Wilson’s infamous outburst has drawn the ire of much of the media, we must understand that the President had no intention of fielding questions from our representatives concerning his health care proposals after the speech. Unfortunately, communication with the U.S. President works like television: the president speaks and the People listen with no opportunity for reciprocity. The discussion is then carried into the media outlets or congressional “town-hall” meetings where politicians push their positions and spin public outrage as being the result of partisan propaganda. References to swastikas and Nazi Germany are rapidly used by both politicians (i.e. comments made by Speaker of the House Nancy Pelosi) and the public (as occurred at Representative Barney Frank’s town hall meeting) in assessment of each others agendas. However, the Office of the President (the source of the debate) is largely shielded from direct confrontation by either the Public or their Representatives.

Most Americans are aware that in Britain the Prime Minister is required to appear before the parliament where they can be questioned directly on virtually any national issue and the Prime Minister is expected to respond to these questions. Currently, the U.S. Constitution requires no forum by which the Congress or the People may directly debate the executive branch’s policies or authority, and does not require a public response from the President. If such a provision existed, outbursts of frustration, such as Joe Wilson’s, would likely not occur; rather a productive public discussion with the President may have ensued.

It’s critical that the office of the President publicly answer our representative’s questions concerning our nation’s domestic and foreign policies. As such, it was critical that former President George W. Bush be publicly questioned concerning our national policies on torture, war, the September 11th events, dollar devaluation, bailouts, the Patriot Act as well as scores of other issues. Unfortunately this public discourse never occurred. Perhaps a constitutional amendment ought to be proposed to rectify this problem and require the Congress and/or the state governors to directly and publicly discuss America’s policies with the President.

Tuesday, September 8, 2009

Our New America: A Retread of the Old Prussian Paradigm

The Clover Helix
www.thecloverhelix.blogspot.com
Tuesday, September 8, 2009

“Is the any thing whereof it may be said, ‘see, this is new?’ it hath been already of old time, which was before us.” Ecclesiastes 1:10

Anybody even marginally acquainted with world history is aware that Prussia came to be one of the most regimented militaristic nations the world had seen since the height of ancient Sparta. Located in what is now Germany and western Poland, Prussia’s military tradition found them deeply involved in virtually every major European conflict from the 13th century through World War I. Prussian citizens were rigorously trained to achieve economic and military supremacy for the State. These values were so imprinted upon the national psyche that the citizenry was willing to sacrifice their lives, and the lives of their families, to achieve these ends. Legendary for their courage and frequent success on the battlefield, conscripted Prussian subjects and Germans alike were frequently rented to foreign powers by Prussian rulers to fight in foreign wars. Financially, Prussia had little in the way of natural resources and, as such, became a manufacturing economy whereby they were able to influence foreign markets across the world. At the end of the Franco-Prussian War (1870-71) Germany became a unified nation under Prussian leadership. A permanently mobilized Prussia (and later Germany) took on the mantle of a new Sparta in every sense: militarily, socially, economically, and politically. Intimidation, complex military alliances, and war were the foreign policy.

It has been well documented that the seeds for America’s modern education system was taken directly from Prussia’s scientifically-engineered public educational program during the 1840’s and 1850’s, and that these seeds blossomed in America’s new research-based university system (another Prussian contrivance) during the late 19th and early 20th centuries. Since that time, the intellectual consciousness of the United States has been irretrievably altered and the nation has since emerged as a financial, political, military, and academic power whose influence extends to virtually every point on planet Earth. Though the post-Progressive Era of the United States has been referred to by some writers as the New America due to the proliferation and implementation of “progressive” (Prussian) ideas, it’s clear that the post-World War II era has seen their grand fulfillment. For a splendid discussion of this transformation and the resultant consequences for the United States, read John Taylor Gatto’s essay "The Underground History of American Education: An Intimate Investigation into the Prison of Modern Schooling."

Besides the wholesale entrenchment of Prussian-style education, America has adopted many other Prussian state concepts. Concerning our New American foreign policy, consider this description of 18th century Prussia by historian Thomas Macauley: “The King carried on warfare as no European power ever had, he governed his own kingdom as he would govern a besieged town, not caring to what extent private property was destroyed or civil life suspended. The coin was debased, civil functionaries unpaid, but as long as means for destroying life remained, [the King] was determined to fight to the last.” This Prussian way of life has found a new place in America.

Prior to the Spanish-American War (1898), whenever the United States became engrossed in any kind of international conflict, it would raise a military force, purchase weapons and equipment, carry out the war, and then disarm. It had been widely accepted that America’s fully-armed citizenry (militia) could repel an attack on the homeland until an army could be organized to expel the invader and, if possible, launch a counterattack. This was the classic model for American self-defense. This changed when the American battleship USS Maine unexpectedly exploded in Spanish Cuba, an event that was attributed as an act of Spanish terrorism. The United States government seized the opportunity and the American military routed Spanish forces across the world. Ultimately, the Treaty of Paris was signed and Cuba, the Philippines, Puerto Rico, Guam as well as worldwide military prestige were handed to the United States. America had used the tragedy of the USS Maine to assume Spain’s position as a world power and establish an empire of its own. Today, most Americans aren’t even aware that Cuba and the Philippines had once been parts of the United States for almost fifty years.

After the Spanish-American War, the United States began to invest in new battleships to patrol its far-flung possessions. Additionally, the army was only partially reduced, yet the American people perceived that the country had largely disarmed. Any foreign invasion would have to come by sea, and Americans felt prepared for such an event. As a consequence, when World War I erupted in 1914, Americans had no interest in getting involved in the war as Germany simply was not perceived as a mortal threat to the United States.

Getting America into the war required a string of maritime catastrophes, beginning with the sinking of the HMS Lusitania in 1915 by the German Navy. However, it took almost two years of intense political lobbying to convince the U.S. Congress to declare war on Germany and her allies as most Americans were not convinced that these tragedies were sufficient cause for involvement. In retrospect, America’s interest in getting involved was more likely to gain participation in the negotiation of any peace compromise. In the end, Prussia was split up and replaced by the Weimar Republic. Angry and humiliated by the World War I armistice, hyperinflation, and the Great Depression, Germans created a new Republic and a fully-armed and mobilized Third Reich was born. Yet again, except for a formidable Navy, a growing regular Army, and the fledgling Army Air Corps, the United States appeared to disarm after the war.

The period from 1918 through 1941 would be the last time that the United States would be a relatively disarmed nation as the final remnants of Jefferson’s noninterventionist America were finally destroyed when the Imperial Japanese Navy dramatically attacked Hawaii in 1941. When World War II originally broke out in September of 1939, public opinion was similar to World War I: decidedly neutral. Americans had readily found fault with the positions of both the Allies and the Germans and, still being mired in the Great Depression, it was clear that the U.S. couldn’t afford to fight a war. Despite this public opinion, the U.S. government quickly froze Japanese assets and suspended fuel shipments while providing financial and military aid to England and China, Japan and Germany’s wartime enemies. In hindsight, had the U.S. government maintained a truly neutral position the attack on Hawaii may never have happened. Nevertheless, this surprise attack on American soil transformed our republic from a free society to one in perpetual fear of foreign attack. Since December 7th, 1941, the United States has maintained a fully-armed and technologically advanced land, sea, and air invasion force, the power of which the world has never before seen. Japan’s reward for their surprise attack was punctuated by nuclear attacks on two cities handing them a humiliating defeat. None of Japan's wartime allies have returned as major military powers since.

America’s transformation to a military megapower has become complete. Since World War II the United States has been involved in virtually every major conflict, constructed bases in countries that are decidedly anti-American, and intervened in global financial markets. America even began to fight wars on behalf of foreign governments. To avoid the perception of renting out U.S. troops to foreign countries, the nation currently pays for the privilege of defending Europe, Israel, Japan, South Korea, Taiwan, Kuwait, and Saudi Arabia out of its own treasury. America finances this policy though increased personal income taxation, money borrowed with interest from the very countries it is defending (even some borrowing from her enemies), and continual printing and debasement of the U.S. dollar via the Federal Reserve Bank (an institution modeled after Prussia’s Reichsbank). In the Korean and Vietnam conflicts, the United States government even conscripted unwilling citizens to fight for these foreign governments, a complete reversal of American policy since 1941; yet a very Prussian concept.

Thomas Jefferson said "[c]onquest is not in our principles. It is inconsistent with our government." Obviously, a major paradigm shift has occurred since the days of Jefferson. In September 1902, Canadian writer Beckles Willson wrote in the preface of his book The new America: a Study of the Imperial Republic the following: "In 1892 to have adumbrated the present role of America in Welt politik would have excited derision. Since that date, we have, however, seen an American Empire arise; alien and distant races now bow the knee to the American ruler. America's accents,though brusque and untrained, are beginning to be heard respectfully in the concert of nations." Willson uses the interesting term Welt politik (translated from German means world policy), an official German policy term that sought Germany's place in the sun commensurate with its rising industrial strength, primarily through creation of a colonial empire to rival those of other powers.

How has the United States government been able to keep its citizenry from objecting to these sweeping policy changes? Again we look back to Prussia where John Taylor Gatto tells us that during the 18th and 19th centuries “[e]very existence was comprehensively subordinated to the purposes of the State, and in exchange the State agreed to act as a good father, giving food, work, and wages suited to the people’s capacity, welfare for the poor and elderly, and universal schooling for children.” Keep this in mind when the government is offering “free” government services (i.e. health care, social security) while expanding its undeclared wars in Iraq, Afghanistan, and Pakistan.

Thursday, August 20, 2009

The American Electoral College Operates Unconstitutionally

The Clover Helix
www.thecloverhelix.blogspot.com
Thursday, August 20, 2009

The use of the Electoral College for the election of the U.S. President and Vice-President has been controversial from its inception (See Federalist 55 and 68). Many have called for the abolition of the Electoral College in favor of a popular vote or other elective method. Because the Electoral College bestows a disproportional measure of electoral influence on smaller states, and these same small states would have to ratify any change, the prospect of having it eliminated via constitutional amendment is very small. However, a review of the Constitution reveals that the modern method for determining the number of Electors in the Electoral College has been conducted unconstitutionally. We can effectively address some (but not all) of the short-comings associated with the Electoral College should the Electoral College be applied constitutionally. To my knowledge, this is the first time this issue has been raised. Bear with me as I demonstrate this point by reviewing relevant sections of the Constitution.

The Constitution clearly specifies state representation in Congress:

“The number of Representatives shall not exceed one for every thirty thousand, but each State shall have at Least one Representative;” Article I, Section 2, Paragraph

“Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State excluding Indians not taxed.” Amendment 14, Section 2

As seen in these two passages, the number of U.S. Representatives is equal to the population of the States (“excluding Indians not taxed”) divided by 30,000. In 2000, the population of the United States was found (via decadal census) to be 280,849,847. Therefore, by Article I, Section 2, Paragraph 2, 9,362 seats in the House of Representatives would need to be allocated for apportionment amongst the States. Here we encounter our first problem: the House of Representatives is currently composed of 435 voting members, not the 9,362 or so the Constitution calls for. This low number is due to the passage of Public Law 62-5 in 1911 and, later, the Reapportionment Act of 1929, which limited the voting membership of Congress to 435 members. These two acts of Congress have dubious constitutionality and interesting discussions of them and the politics that brought them about are easily found on the internet (e.g. www.thirty-thousand.org). Certainly, these acts do not usurp the Constitution’s provisions (cited above) mandating that the States be entitled to considerably larger House memberships. Today, the States are relinquishing their legally allotted seats in accordance with these federal statutes. Whether this congressional membership practice is constitutionally permissible or ethical is another matter and is not pursued further in this article.

“The Senate of the United States shall be composed of two Senators from each State, [chosen by the Legislature thereof], for six Years; and each Senator shall have one Vote.” Article I, Section 3, Paragraph 1 (Bracketed text changed by the 17th Amendment)

Membership of the Congressional Senate, which is fixed at two Senators per State, regardless of population size, was not affected by Public Law 62-5 or the Reapportionment Act of 1929. As such, the constitutionality of the membership of the 100 Senators is not disputed. I now address the allotment of the Electors in the Electoral College. Read these excerpts carefully.

“Each state shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress;” Article II, Section 1, Paragraph 2

“The Electors shall meet in their respective states and vote by ballot for the President and Vice President,”. Amendment 12

“A number of Electors of President and Vice President equal to the whole Number of Senators and Representatives in Congress to which the District would be entitled if it were a State, but in no event more than the least populous state;”. Amendment 23, Section 1

Clearly, it was the original intent of the Constitution for each state to vote for the President and Vice-President in proportion to its representation in Congress. Thus, the number of Electors has been assumed to be equal to the total membership of both Houses of Congress (435 Representatives and 100 Senators), plus three Electors allocated to Washington, D.C., totaling 538 Electors. This is a false assumption.

Note that Article II, Section 1, Paragraph 2 declares that each “state shall appoint…a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress;”. The ‘shall’ here indicates that the States are required to appoint the full number of Electors (no more and no less) to which that state may be entitled. How many Representatives are the States entitled to? Per Article I, Section 2, Paragraph 2, States are entitled to one representative per 30,000 people. Furthermore, we know that this entitlement was not altered by either Public Law 62-5 or the Reapportionment Act of 1929. Again, the States have simply chosen to send fewer than the requisite number of Representatives to which they are entitled, in accordance with those federal statutes (perhaps unconstitutionally). Additionally, the constitutional text makes no mention of summing the House membership of each State with its Senators for establishing the College, but rather instructs each State to furnish a number of Electors that is dependant upon the number of Representatives that State is entitled to, plus the Senators. This is a very different measure. Essentially, the number of Electors selected to the Electoral College is not dependant upon the number of Representatives and Senators seated in the Congress (as is currently assumed), but rather the number is equal to the maximum number of Representatives and Senators allotted per Article I, Section 2, Paragraph 2, regardless of whether they have been seated in Congress or not. Hence, the Constitutional number of Electors apportioned amongst the States should be considerably larger (9,479) than the fixed number that is currently used (538).

The advantage afforded smaller states over larger states by the Electoral College, due to their senatorial representation, was intended to diminish as the population of the country increased over time. It is clear that the Framers of the Constitution were well aware that the House membership was poised to increase rapidly, as evidenced by James Madison in Federalist 55. To address this issue, “Article the First” became the first proposed amendment to the Constitution (as a yet un-adopted and open portion of the Bill of Rights), which proposed computational algorithms that were set to adjust the ratio of population per Representative as the population increased. The purpose of this Amendment was to prevent the House of Representatives from deteriorating into a mob when the country grew to a very large population. Unless the Constitution is properly amended, the number of Electors in the constitutional Electoral College is slated to continue increasing into the tens of thousands, whereas the currently unconstitutional Electoral College stands to disenfranchise the nation’s voters well into the future.

Interestingly, the U.S. presidential election results for 2000 would still have been awarded a very narrow electoral victory to George W. Bush (by approximately 100 electoral votes) had a constitutional Electoral College been employed. This reveals another major problem with the system: States vote as a block and do not apportion their Electors between the candidates. If States were required to constitutionally apportion their Electors according to the popular vote, then a more democratic electoral system would come into being.