Bachman’s challenge to each man  — “What in the Constitution could you point to, to give authority to the Treasury’s extraordinary actions that have been taken?” — made in Tuesday’s hearing before the House Financial Services Committee has been criticized as if she were asking the two men sitting behind a table if they were wearing pants. In this land of the free and home of the brave, some find it “inappropriate” to point out the emperor has no clothes.

When Geithner responds to Bachmann’s question with the constitutional justification, “Oh well, the Congress legislated in the Emergency Economic Stabilization Act a range of very important new authorities,” he is, as post-hearing analysis of Bachmann critics claim, essentially citing congressional authority enumerated in Article I, section 8 of the U.S. Constitution. How ironic.

Article I, section 8 is tagged the “Enumerated Powers” clause. Article I, section 8 is the clause conservatives and constitutional scholars point to as evidence that the Constitution limits the power of government to those actions specifically listed therein. To use the Enumerated Powers clause to justify a range of “important new authorities” for the Treasury Department is ludicrous on its face, not to mention it’s the wrong section of the Constitution to be looking at.

Article I, section 1 of the Constitution — the first clause after the Preamble — states, “All legislative Powers … shall be vested in a Congress” — not a Treasury Department or a Federal Reserve System. The words “all” and “shall” are significant. In a legal sense, those words preclude Congress selectively discriminating among legislative powers, retaining some for itself and delegating others to the executive branch. But as Geithner makes clear creating new authorities for the Treasury Department is precisely what the TARP and EESA legislation does.

The constitutionality issue has to do with the Congressional authority to delegate legislative power, and Geithner and Bernanke’s defense that their actions are constitutional because they were granted by Congress are as valid as a claim to keep stolen property received from a thief.

As have many bastardizions of Constitution, the demise of the legislative exclusivity of Congress was spawned in the New Deal Era when the Supreme Court created the notion that Congress could constitutionally delegate powers if it legislated “an intelligible principle” that defined the extent of legislative authority delegated. Since that action, not a single statutory program has been invalidated for lack of a “intelligible principle,” which demonstrates the dangers and consequences of misinterpreting the Constitution as a “living document”.

The “intelligible principle” given to the Treasury Department under TARP was “to purchase … troubled assets for the purpose of providing stability to and preventing disruption in the economy and the financial system” — a pretty vague “intelligible principle” that even so has been pretty much ignored by the Treasury Department as TARP money has so far been allocated for anything but purchasing troubled assets. The EESA “intelligible principle” is even more dubious: Asset purchases can be made “on such terms and conditions determined by the Secretary.”

By any criteria of rational judgment, even considering the thread of Supreme Court cases that have steadily eroded the exclusive legislative authority of Congress, the bundle of bailout legislation is a questionable constitutional delegation of legislative authority. Bachmann pressing that point was prudent, not audacious; the incoherent responses and misapplication of the Constitution by Geithner and Bernanke would be audacious were they not so pathetic.

On March 18 through 22, I spent some time at a convention on the North Shore, held for people who write about skiing, snowboarding and winter generally to talk about their work, swap stories, and ski and snowboard at Lutsen Mountains.

Over the next few weeks I’ll be offering up some observations I gleaned about economics and public policy from the conference.

Today, the hat.

Though winter is on its way out, I’m still wearing a knit cap I received in the conference goodie bag.

This beanie hat works just fine. It keeps my head warm, it (almost) fits, and it looks good.

The hat is produced by Wintergreen Northernwear

, of Ely, Minnesota. And that latter fact, I guess, is
supposed to make me feel good.

After all, the company web site says “We take great pride in being one of the largest private employers in a small remote town where jobs are scarce but garment-making talents and pride in workmanship are in
abundance. We’re one of the last full-line outdoor clothing makers in the U.S.”

That may explain why the beanie on my head sells for $40.00, while REI sells what appears to be a comparable one for $30.00, and Amazon.com sells it for $20.00. This cheaper model is, in the words of REI,
“imported,” which probably means that it was made in Bangladesh or the Dominican Republic, or some other country where wages are a fraction of those in Ely.

Is this bad? Some people say yes. But does it make any sense for Americans to try to outhustle people working on third-world wages? Buying Ely-made clothing may make you feel an authentic patriot, a supporter of the Iron Range, someone who strikes a blow for “community” and against the global economy and impersonal
corporations.

But it also means that you’ve given up the opportunity to buy a hat AND spend the $10 or $20 on another business. We might say that you’ve paid a locality premium for a single product.

I suppose that’s fine. People pay for more than the utilitarian value of products all the time. (With baseball season coming up, think of those Minnesota Twins jerseys you’ll start seeing around the office.)

But it’s not without costs, which I’ll discuss next week.