Only Criminals Use Honest Money

[mawilson 2,133]

We currently use money to symbolize the value of a weeks work.

By printing more money, the Federal Reserve devalues your work. The value of your work

is not the same today as it was two months ago.

Since 1913, the dollar has lost 95% of its value.

[mRx 16]

Which again, is all fine and dandy. I have never been mesmerized by pieces of paper (or my plastic card). However, they are easy to carry around and can be transferred to others for things that I either need or want. What then is the external equivalent of the 'cigarette'? Because, in prison, that is the barter system at work.

It's not a barter system. Cigarettes are "money" in prison. They represent a commodity that is accepted for trade by anyone.

[I AM NOT THAT GUY 5,715]

Which again, is all fine and dandy. I have never been mesmerized by pieces of paper (or my plastic card). However, they are easy to carry around and can be transferred to others for things that I either need or want. What then is the external equivalent of the 'cigarette'? Because, in prison, that is the barter system at work.

It's not a barter system. Cigarettes are "money" in prison. They represent a commodity that is accepted for trade by anyone.

http://www.visajourney.com/forums/index.ph...=200258&hl=

[Peikko 1,575]

We currently use money to symbolize the value of a weeks work.

By printing more money, the Federal Reserve devalues your work. The value of your work

is not the same today as it was two months ago.

Since 1913, the dollar has lost 95% of its value.

I am quite aware that monetary value is manipulated. I also get regular reviews and necessary financial increments to offset devaluation. Hence, I can buy much more now with my disposable income than I ever could have if I was working in the job I have now in 1913.

[Peikko 1,575]

Which again, is all fine and dandy. I have never been mesmerized by pieces of paper (or my plastic card). However, they are easy to carry around and can be transferred to others for things that I either need or want. What then is the external equivalent of the 'cigarette'? Because, in prison, that is the barter system at work.

It's not a barter system. Cigarettes are "money" in prison. They represent a commodity that is accepted for trade by anyone.

Fair enough, but can you answer the bigger question? While it's all fine and dandy to be ever so outraged that the financial system can be manipulated by government (who knew?) what could a more equitable replacement be? Some kind of universally recognized valuation system is required to operate a market system.

[mawilson 2,133]

Fair enough, but can you answer the bigger question? While it's all fine and dandy to be ever so outraged that the financial system can be manipulated by government (who knew?) what could a more equitable replacement be? Some kind of universally recognized valuation system is required to operate a market system.

We could start by reinstating unto Congress its original constitutional right to print and determine the value of money:

Article 1, Section 8:

"Congress shall have the power to coin money and regulate the value thereof."

This power was unconstitutionally delegated to the Federal Reserve by an act of Congress in 1913.

[one...two...tree 2,762]

Fair enough, but can you answer the bigger question? While it's all fine and dandy to be ever so outraged that the financial system can be manipulated by government (who knew?) what could a more equitable replacement be? Some kind of universally recognized valuation system is required to operate a market system.

We could start by reinstating unto Congress its original constitutional right to print and determine the value of money:

Article 1, Section 8:

"Congress shall have the power to coin money and regulate the value thereof."

This power was unconstitutionally delegated to the Federal Reserve by an act of Congress in 1913.

But they do, in effect...

While the Federal Reserve is an independent institution, it is still accountable to Congress. The Constitution gives Congress the power to coin money and set its value. Congress delegated this power to the Federal Reserve in the 1913 Federal Reserve Act, but still maintains oversight authority. Under the Humphrey-Hawkins Act of 1978, the Federal Reserve must submit a report on the economy to Congress by February 20 and July 20 of each year. The Chairman of the Federal Reserve Board of Governors, is called to testify on the report before Senate and House Committees.

http://www.thisnation.com/question/033.html

[I AM NOT THAT GUY 5,715]

Fair enough, but can you answer the bigger question? While it's all fine and dandy to be ever so outraged that the financial system can be manipulated by government (who knew?) what could a more equitable replacement be? Some kind of universally recognized valuation system is required to operate a market system.

We could start by reinstating unto Congress its original constitutional right to print and determine the value of money:

Article 1, Section 8:

"Congress shall have the power to coin money and regulate the value thereof."

This power was unconstitutionally delegated to the Federal Reserve by an act of Congress in 1913.

But they do, in effect...

While the Federal Reserve is an independent institution, it is still accountable to Congress. The Constitution gives Congress the power to coin money and set its value. Congress delegated this power to the Federal Reserve in the 1913 Federal Reserve Act, but still maintains oversight authority. Under the Humphrey-Hawkins Act of 1978, the Federal Reserve must submit a report on the economy to Congress by February 20 and July 20 of each year. The Chairman of the Federal Reserve Board of Governors, is called to testify on the report before Senate and House Committees.

http://www.thisnation.com/question/033.html

Congress has no executive authority and can only act through legislation and oversight.

[mawilson 2,133]

But they do, in effect...

While the Federal Reserve is an independent institution, it is still accountable to Congress. The Constitution gives Congress the power to coin money and set its value. Congress delegated this power to the Federal Reserve in the 1913 Federal Reserve Act, but still maintains oversight authority. Under the Humphrey-Hawkins Act of 1978, the Federal Reserve must submit a report on the economy to Congress by February 20 and July 20 of each year. The Chairman of the Federal Reserve Board of Governors, is called to testify on the report before Senate and House Committees.

http://www.thisnation.com/question/033.html

Steven,

Accountable in theory, not in practice. The Fed can act with a great deal of independence from

Congress and the Executive branch. They do not operate under Congressional supervision.

The Fed has enacted several new programs to address the financial system's crisis including the

Term Asset-Backed Securities Loan Facility (TALF), the Mortgage Backed Securities Purchase

Program, and a number of other emergency lending programs that are not subject to

Congressional oversight.

Dennis Kucinich has introduced legislation that would allow, for the first time, the government

to audit and oversee the Federal Reserve's response to the economic crisis.

"The Federal Reserve has been operating in a governmental netherworld, free from scrutiny

or oversight. We know the Fed has printed and loaned trillions of dollars, but we don't know

where the money went. This bill will finally provide some transparency."

[one...two...tree 2,762]

But they do, in effect...

While the Federal Reserve is an independent institution, it is still accountable to Congress. The Constitution gives Congress the power to coin money and set its value. Congress delegated this power to the Federal Reserve in the 1913 Federal Reserve Act, but still maintains oversight authority. Under the Humphrey-Hawkins Act of 1978, the Federal Reserve must submit a report on the economy to Congress by February 20 and July 20 of each year. The Chairman of the Federal Reserve Board of Governors, is called to testify on the report before Senate and House Committees.

http://www.thisnation.com/question/033.html

Steven,

Accountable in theory, not in practice. The Fed can act with a great deal of independence from

Congress and the Executive branch. They do not operate under Congressional supervision.

The Fed has enacted several new programs to address the financial system's crisis including the

Term Asset-Backed Securities Loan Facility (TALF), the Mortgage Backed Securities Purchase

Program, and a number of other emergency lending programs that are not subject to

Congressional oversight.

Dennis Kucinich has introduced legislation that would allow, for the first time, the government

to audit and oversee the Federal Reserve's response to the economic crisis.

"The Federal Reserve has been operating in a governmental netherworld, free from scrutiny

or oversight. We know the Fed has printed and loaned trillions of dollars, but we don't know

where the money went. This bill will finally provide some transparency."

Interesting. I had no idea about Kucinich's legislation. I'll read into it more.

[mRx 16]

But they do, in effect...

While the Federal Reserve is an independent institution, it is still accountable to Congress. The Constitution gives Congress the power to coin money and set its value. Congress delegated this power to the Federal Reserve in the 1913 Federal Reserve Act, but still maintains oversight authority. Under the Humphrey-Hawkins Act of 1978, the Federal Reserve must submit a report on the economy to Congress by February 20 and July 20 of each year. The Chairman of the Federal Reserve Board of Governors, is called to testify on the report before Senate and House Committees.

http://www.thisnation.com/question/033.html

Steven,

Accountable in theory, not in practice. The Fed can act with a great deal of independence from

Congress and the Executive branch. They do not operate under Congressional supervision.

The Fed has enacted several new programs to address the financial system's crisis including the

Term Asset-Backed Securities Loan Facility (TALF), the Mortgage Backed Securities Purchase

Program, and a number of other emergency lending programs that are not subject to

Congressional oversight.

Dennis Kucinich has introduced legislation that would allow, for the first time, the government

to audit and oversee the Federal Reserve's response to the economic crisis.

"The Federal Reserve has been operating in a governmental netherworld, free from scrutiny

or oversight. We know the Fed has printed and loaned trillions of dollars, but we don't know

where the money went. This bill will finally provide some transparency."

Personally, I like Ron Paul's legislation more. Paul's bill applies not only to audits of emergency lending programs (like Kucinich's bill), but it's a general audit of the Fed, covering substantially more of the Fed's operations.

Either way, enacting legislation allowing the government to oversee the actions of the government is not really the solution that we need (9/11 Commission), however it is a step in the right direction. Hopefully, it'll create a spark of reason in the lawmaker's head that the real problem is fiat money; not who creates it, or who oversees it.

The Federal Reserve's charter needs to be repealed, not audited, and definetely not replaced with another paper-issuing agency.

[scandal 951]

the real problem is fiat money; not who creates it, or who oversees it.

Matt, just out of curiosity, what do you think is the natural, sustainable growth rate of the US economy?

GDP growth of 2%? 3%? 4%? More ? Less? Don't know, don't care?

Do you think it should be a policy objective of the US government to try to maintain the maximum possible sustainable growth rate and employment while limiting inflation?

Most American voters do feel that is a vital objective when they vote representatives to office. Americans do expect their government to responsibly encourage sustainable economic growth.

Perhaps you don't feel the government should have any opinion whatsoever on the subject of the economy-- you take laissez faire to the extreme. That's your right,but don't expect to find very many people agreeing with you. You'll be in a lonely minority indeed.

On the other hand, If you do agree with those basic policy goals, just how do you propose to achieve them with a gold-backed currency when the physical reserves that can be held in deposit obviously cannot grow at a compounded rate of 3 or 4% year over year, endlessly. Given that money supply will need to increase at a rate comparable to the quantity of goods & services exchanged, your Fort Knox depository has to grow at that same rate. This is unsustainable over the long term - it's the basic law of compounding rates.

[mRx 16]

the real problem is fiat money; not who creates it, or who oversees it.

Matt, just out of curiosity, what do you think is the natural, sustainable growth rate of the US economy?

GDP growth of 2%? 3%? 4%? More ? Less? Don't know, don't care?

Do you think it should be a policy objective of the US government to try to maintain the maximum possible sustainable growth rate and employment while limiting inflation?

Most American voters do feel that is a vital objective when they vote representatives to office. Americans do expect their government to responsibly encourage sustainable economic growth.

Perhaps you don't feel the government should have any opinion whatsoever on the subject of the economy-- you take laissez faire to the extreme. That's your right,but don't expect to find very many people agreeing with you. You'll be in a lonely minority indeed.

On the other hand, If you do agree with those basic policy goals, just how do you propose to achieve them with a gold-backed currency when the physical reserves that can be held in deposit obviously cannot grow at a compounded rate of 3 or 4% year over year, endlessly. Given that money supply will need to increase at a rate comparable to the quantity of goods & services exchanged, your Fort Knox depository has to grow at that same rate. This is unsustainable over the long term - it's the basic law of compounding rates.

uscandual,

You fail to take into consideration one very vital point; the purchasing power of money. Money is no different than any other economic good or service. It's real value fluctuates in comparison to other commodities. When prices are low, the real value of money is higher. Inversely, when prices are high, the real value of money is lower. That's why I always get a kick out of how people get so excited and happy over rising prices, values, and wages. It's not a sign of real economic prosperity. It's a sign of weakening value of your money; False prosperity.

The supply of money doesn't need to keep up with the supply of goods and services--Innovation, technological advances, labor productivity advances, and cost-cutting competitive business all lead to higher economic surplus; this abundance of goods in direct comparison to the scarce specie-currency in existence will lead to increases in real value of money.

Take this simplistic example: In the reality TV show Survivor, the host Jeff Probst holds a Survivor auction about midway through the season. Each person is given an envelope of $500 dollars and they bid on pizza, beer, hamburgers, and other tastes of home for the malnourished contestants. Regularly, a brownie would go for $100, steak and fries for $400, and a plate of pizza and beer $500. Bearing this in mind, what would be the result if instead of $500 dollars, each contestant is given $250. Naturally, the bids will be lower, as there are less dollars chasing the same amount of goods. The real value of the dollar is higher than it was when $500 dollar envelopes were given to each contestant.

(Big Survivor fan, in case you couldn't tell)

So, no I don't think it should be a policy objective of the Federal government to interfere in our economy in order to bring about higher economic surplus, or attempt to manipulate a certain percentage of sustained growth-- For ironically, their interference hinders the maximum economic surplus that can be sustained through unobstructed free and peaceful voluntary exchange.

Again, Paul Krugman and his devout constituents cannot possibly create a greater economic growth than entrepreneurs bound by incentive.

But, by aggressive open-market security purchases and discount window lending, they can raise our wages, prices, and home values by diluting our real purchasing power; which of course is neither representitive of growth or prosperity.

I think if Americans knew this, then my views wouldn't be shared by such a lonely minority.

[scandal 951]

Matt, I'm willing to pursue this discussion a bit further, if you are.

May I ask, what is your educational background? Do you have a degree in economics? Graduate training? You seem awfully sure of yourself. Just suppose we all followed down your path. Suppose you could convince us all that we should just shut down the Federal Reserve, the IRS, all the federal government functions you believe should not exist. Can you guarantee us ... I mean with 100% certainty ... that life will be better? People will be happier and more prosperous? That's pretty bold, don't you think? No doubts whatsoever, eh? It's all empirically tested and guaranteed to work? Well, all right then!

For full disclosure - My academic training is in math, physics and computer science. And my professional experience is in IT (software development, management, project management). For about a decade now I have been working in companies on either buy side or sell side of the markets, or at ISVs developing trading apps and market data systems. So I know the trading community pretty well, and most of what I've come to learn about economics is derived from reading analyst reports, books, and the business section of the newspaper. In short- I think I'm a pretty smart guy who can figure stuff out, though I'm largely self taught on our subject matter here and by no means an expert.

I do try to keep an open mind. I'm not saying I have this all figured out. I am willing to consider your point of view, or anyone's as long as they are civil and rational and make sense. I do shy away from radical overhauls of the system. By and large - it works. And it's been working for quite a long time. Perfect? Of course not! Just look at this mess we got into. We've had failures here in all dimensions - government regulators, industry self-regulation, bond rating agencies, mortgage underwriting guidance, investment bank conflicts of interest, and most of all -- out and out greed by everyone from homeowners to bankers who lost all sight of moral hazard. We need fixes. But do we throw the baby out with the bathwater?

Your objection seems to be principled - that the system itself is fundamentally wrong and needs to be broken apart and rebuilt. You seem to trust the market to solve every problem, and see no role for non-market solutions. I on the other hand don't think the system is fundamentally wrong. And I do think there are cases where the market is not sufficient on its own. It either requires the hand of government to regulate it and provide a level playing ground. Or it needs an agency to act as lender of last resort, or purchaser of last resort. Or in some cases it needs government to actually supply a good or service that the market is unwilling or unable to provide.

It seems like you really would prefer to take down our entire system right down to the foundations. You don't believe in pretty much any of the government institutions we have from what I can tell. From your other postings (not just on this thread) I gather that you would abolish any taxation or pretty much any government role at all. For example - do you believe that the private sector should have built our highway infrastructure? Could the vital Eisnenhower Interstate program have been left in private hands with no government role?

Regarding currency - you write:

The supply of money doesn't need to keep up with the supply of goods and services--Innovation, technological advances, labor productivity advances, and cost-cutting competitive business all lead to higher economic surplus; this abundance of goods in direct comparison to the scarce specie-currency in existence will lead to increases in real value of money.

Ok, so let me get this straight. In year A, the economy produces X amount of goods and services. In year B (let's say 10 years, 20 years, 50 years after year A) --goods and services are now Y. Assuming, say a 3% annual growth rate in GDP over, say, 25 years - Y = (1.03)^25 X = 2.09X. So you've doubled the GDP in 25 years. And you've quadrupled it in 50 years. And on and on. Presumably also your population is increasing over time as well. So there are more producers and consumers, more goods and services to be produced and consumed. But if the "scarce specie" cannot be double and quadrupled, just how are these consumers supposed to buy all these G&S? And how are the producers supposed to invest in more equipment and plant?

This was fundamentally the problem that John Law tried to address by a credit-based system of money. At great disasterous consequences, of course. I'm not saying Law got the solution right. But he certainly identified a valid problem! Fundamentally- the problem remains. There is only just so much gold in the ground able to be mined and set aside as reserves. Also, note that the only reason that gold (or other scarce specie) has any value is because people decide it does. It's not magic - since you like Survivor - if you were starving on a desert island, and you could choose the nourishment of crawling bugs to keep you alive, or a brick of gold, which one will suddenly lose all its value? The gold, of course.

The other factor that I think is missed in your discussion is the time value of money. Investments. Money is not just used in exchange for goods. Your Survivor example (simplistic, even you acknowledge that) only considers the bartering process of exchange. But we expect more from money than just the ability to trade. We want to be able to keep it for future use, and we recognize the time-value of saving our money. That time value means we expect a return, we expect our money to be at work for us when we lend it out to others (bonds) or use it to purchase equity in a profitable enterprise (stocks). Your Survivor participants don't care in a static exercise if they're given $250 or $500 if the goods that can be bought are the same at that moment in time. But if those participants are trying to invest their money with an eye to increasing future returns, so that their future purchasing power will be maximized, they will be rather annoyed if the money supply is artifically capped at some fixed value, thereby preventing their ability to grow their initial investment.

[mRx 16]

Wonderful post, uscandual!

I'm not sure I can quantify my educational background, as I have no formal degree. As far as formal education goes, I am pretty close to the point at which I can transfer to a university as a junior; at which point I plan to pursue a major in accountancy and eventually a CPA (so, no I don't have a piece of paper to back up my words). Most of my education consists of books, journals, and papers.

I hardly consider myself an expert or a professional by any means, nor is it my intention to convert others to my way of thinking. I am just fascinated by economics. If I come off as awfully sure of myself, that is also not my intent. Like you, I try to remain open-minded, and welcome different points of view. This forum would be quite bland without the flavorful mix of opinions.

I've done by best to extract your critical points:

the system itself is fundamentally wrong and needs to be broken apart and rebuilt. You seem to trust the market to solve every problem, and see no role for non-market solutions.

As a fan of Austrian economist Ludwig von Mises, I see economics as the division of Human Action. Any economic situation, regardless of complexity can be deduced to it's core of human action. In Human Action, Mises wrote:

Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange.

This, in my humble opinion, is the very soul of economics, and a law that I consider axiomatic, and a priori. (meaning that it takes no prior knowledge to learn--just as breathing)

So while I think any program which attempts to blockade this universally applicable law is futile, I don't define the blockade as the system; for the system is: (one last Mises quote)

[M]ans purposive aiming at the attainment of ends chosen, whatever these ends may be.

I believe that empirical studies of economics are time wasting, as again, economic science is a priori epistemologically deduced. So, empirical testing is insignificant in the economic realm, as the "what" is of minimal importance; the why is what counts. There exists no perfect individual. Humans make errors, so using their errors to somehow formulate a trend or a universal law of a margin of error are in vain. The importance is that human's do not make errors in the knowledge that they are making error-- or more simply put, humans are purposeful.

do you believe that the private sector should have built our highway infrastructure?

I believe they could've accomplished it with far more efficiency than the publicly-funded, privately operated companies did. When a project needs to be forced by government like Eisenhower's Interstate program, I question really how much do we really benefit by it, what do we lose, and would an alternative been more efficient, and better? Obviously, as I'm sure you're well aware of, every subsidy dollar that the government grants to a company, is a dollar that must first be taken from the private sector, which is one less dollar used to bid for scarce resources.

Infrastructure can, and has had great results when an entrepreneur, in the confines of cost and benefit, attempts to create a profit and better his condition. Plenty of privately funded roadways and railways were completed (and to a greater degree of efficiency than government funded internal improvement programs) in early America. James Hill, CEO of Great Northern Railway is a prime example that private dollars can build infrastructure far more efficiently and profitably than subsidized infrastructure projects ever could. The 1700 mile track, brought to you by the vision of entrepreneur James Hill, is in no small part, responsible for the fresh vegetables and produce found in your local supermarket daily.

You may wonder, "why are the omni-intelligent masterminds of government unable to create a system of prosperic infrastructure that surpasses what we can achieve freely?"

The answer is quite simple, I think. When government invests, the money invested is not it's own-- it did not exchange it's labor for those precious dollars, nor will it face consequence if it's investments are in error. On the other hand, when you or I invest, we have something to lose. Those dollars are ours, and we are in no hurry to haphazardly give it as capital to a company whose ventures we deem unprofitable. This helps explain how, through primarily private investment, the Great Northern Railway experienced such success in comparison with subsidized alternatives. The vision of Mr. Hill was deemed to be the best available investment opportunity of private dollars, and through the un-affilliated collusion of investors, it proved true.

I'm not about to propose that our Interstate system wasn't a good investment; it was. I could not imagine where we would be without a vast and intricate system of transportation; I only wonder.... How much better could it have been?

if the "scarce specie" cannot be double and quadrupled, just how are these consumers supposed to buy all these G&S?

As I previously said, the real value of money fluctuates in comparison with G&S. As an example to isolate money, take for an example a simple economy, producing two goods--prostitutes and beer. Assume that this is a direct exchange economy, there are no Federal Reserve Notes, and where the value of the prostitute is measured in bottles of beer, and the value of beer is measured in hours of prostitution services. Where, beer is the money used to purchase prostitution, and prostitution is the money used to purchase bottles of beer. Assume now, that technological advances and innovations enable beer producers to mechanize their labor, doubling output, while maintaining the same cost (a parallel can be drawn here to the technological advances experienced throughout the 1900's). How will these technological advances effect the real value of prostitution service, as money, in the purchase of bottles of beer? Certainly, the real value will go up, as there are more beer bottles chasing the same amount of prostitution (or more money(beer) chasing the same amount of goods(prostitution)). In this example, prostitution was money.

From this simple, yet accurate example, we can deduce that there would be no practical need for the government to artificially create more prostitution. For each prostitution service is more valuable than before in relation to the additional bottles of beer in the economy-- it has become a scarcer commodity than it was before. By this, we can see that, as the amount of beer increases in the economy (increase in goods), we don't need an increase in prostitution service (money), to enable the everyday purchasing of beer; for the prostitution services real value rises in comparison to beer, enabling the purchasing of more beer.

Of course, prostitution as a money is a very outlandish concept, and would never come to be--for economically, the increase in value of prostitution would mean that less prostitution is required to purchase a single beer. But, prostitution is not an easily divisible commodity, like gold, a real money. So, back to the question, there is no need to increase the money supply to keep up with increased production of G&S, as money will gain value in relation to the increases in G&S, decreasing the price of G&S.

I've done my best to explain the utility of money while having direct references to prostitutes and beer.

Also, note that the only reason that gold (or other scarce specie) has any value is because people decide it does. It's not magic - since you like Survivor - if you were starving on a desert island, and you could choose the nourishment of crawling bugs to keep you alive, or a brick of gold, which one will suddenly lose all its value? The gold, of course.

No doubt; Gold would lose every bit of it's utility in a desert island hypothesis. But as you've realized, what the commodity is--is irrelavent. That people ascribe a value to this, is relevant. In a state of starvation, I'd ascribe value to anything that can sustain basic life. In a normal economy, through thousands of years of economic exchange, gold has been seen as a universal money, for it's scarcity, divisibility, and uniformly-created nature.

if those participants are trying to invest their money with an eye to increasing future returns, so that their future purchasing power will be maximized, they will be rather annoyed if the money supply is artifically capped at some fixed value, thereby preventing their ability to grow their initial investment.

I'm very aware of the time preferences associated with money; as I'm aware of the indispensible value of investment. But you must understand that the money supply is not artificially capped at a specific value, but at a specific supply, and it's not artificial, it's the nature of scarcity.

To bring it back to those who first invested their scarce capital in Mr. Hill and his railway vision, as his operation became immensely successful and profitable, the real value of the initial investment gained value, as more individuals ascribed value to his operation.

Finally, as far as the role of government in our lifes, I don't really believe it should be totally abolished. There are some aspects of society which I am not able to fathom without government.

For example, it is difficult to imagine a nation of individuals without a standing military. Although property rights should be enforced by the individual--the collective enemy can easily overpower the individual. Therefore I question--Would the individuals, united for a common defense of property rights, be able to mobilize quickly enough and become a collective counterforce? I seriously doubt it.

I believe in a government that protects the rights of it's citizenry--not inhibits peaceable trade, enacts laws limiting rights, or grants additional rights to certain favored groups.