The New Deal policy of confiscating a portion of raisins from farmers every year in order to drive up prices to consumers has been previously discussed here, here, and here.

The Wall Street Journal provides more background on this foolishness that is being considered in the Supreme Court today: The Incredible Raisin Heist / A property-rights challenge to federal marketing orders hits the Supreme Court.

(Cross-post from my other blog, Outrun Change.)

I’ve been wondering what the Raisin Administrative Committee does with all those raisins after they are surrendered by the farmers. Editorial points out the government may sell the raisins on the open market, ship them overseas, or just give them away.

I have to find someone far brighter than me to explain how selling the raisins or giving them away stabilizes prices. Seems that would drop prices to what would otherwise be equilibrium or even lower.

The WSJ editorial outlines the progress of the case through the federal courts. I promise you this is a paraphrase of the editorial and not the outline of a dystopian political novel I’ve been mulling over.

A farming couple raising raisins decided not to surrender 306 tons of their raisins in 2004 (30% of their crop) and 47% in 2003. They sued the federal government claiming that was an unconstitutional taking of property without compensation.

Seems like a slam dunk case to me.

Silly me.

A three judge panel in the 9th circuit (where else?) said this constitutes a voluntary participation in the program because the farmers choose to enter interstate commerce to sell their raisins. I guess the learned judges figured they could have instead sold 1,000 tons (or 2,000,000 pounds) of raisins from the front lawn of their farm-house. I suppose another option is they could have sold them at the local farmers market.

An appeal to the full court resulted in the withdrawal of that opinion to be replaced by a decision they would have to pay a fine and then request a refund. The Supreme Court said no, the 9th Circuit must actually address the issue.

The 9th Circuit then created a creative interpretation that the takings clause only applies to land. Not personal property, not intellectual property, not contract rights. Just dirt.

Think about that. The allegedly educated judges decided that the federal government can take from you, without compensation, anything you own other than your real estate. I infer the judges would allow you to be compensated for the buildings attached to the dirt.

These Olympics-worthy intellectual gymnastics leave us commoners in a dangerous place:

Under the Ninth Circuit’s logic, why couldn’t the government demand that an auto company hand over 20% of the cars off its production line to give to the poor or sell overseas? How about pharmaceuticals or iPhones to maintain stable prices or serve another regulatory purpose?

You just have to believe me that I’m not making this up.


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