Steve Forbes: Don't Junk Property Rights

Forbes ^ | December 28, 2004 | Steve Forbes

[RWR8189]

More From Steve Forbes Audio: Steve Forbes on Sky Radio

In the coming months the U.S. Supreme Court will issue two critical rulings on property rights, which are the bedrock of a vibrant, free-enterprise economy. They are rooted in the principle of equality before the law, whereby the least of us can be protected from the most powerful. This is what enables an entrepreneur to start a business--not to mention create a whole new industry--that may challenge existing powerful business entities and not have it effectively seized or gobbled up by those already-existing bigcorporations. Under our Constitution the government can't seize what you own (even while providing "fair market" compensation) unless it is for a public project, such as constructing a highway.

In recent years, however, local and state governments around the country have been misusing this right of eminent domain. In essence, they're seizing individuals' homes and small businesses to aid developers or big companies. Governments say all this is done for the "public good" because the moves increase property values and, thus, government revenues. They also supposedly aid "job creation." In a Michigan case, for instance, Detroit and the state of Michigan seized private property to help General Motors build a new manufacturing facility. In Kansas the State Supreme Court approved of a locality's taking individuals' private property for the construction of a Target distribution center. Developers love this abuse of condemnation powers because they avoid having to negotiate with possibly recalcitrant business- and homeowners.

But the trashing of property rights ultimately means less economic progress and is a threat to our basic freedoms because it gives governments untrammeled powers that inevitably will be perverted for political favorites. Whoever has the power has the "rights." This is manifestly not what constitutes government based on the principles of liberty and equality before the law. Why should a small homeowner have his house seized for the benefit of a large corporation? More to the point, why should politicians take what you own--if you don't wish to sell--to help another private party get richer?

Too often in these cases the victims lack the political clout to protect themselves in the face of a raw exercise of political power. The Institute for Justice, a nonprofit, public interest law firm, has found that in recent years local governments have taken or threatened to take by force more than 10,000 homes or small businesses to further private economic development. And that apparently is the tip of the iceberg. (The best way to promote development, by the way, is to cut taxes and antigrowth regulations, as well as to improve local schools.)

Another abuse of even longer standing, of course, is local rent control. Capping what a property owner can receive in rent for an apartment or house decreases the market value of that building. Cities and towns proclaim that controls are a public good, yet they don't compensate the owners for their economic losses.

As with the misuse of condemnation powers, rent control perversely hurts the very people it is supposed to help. New York City, for example, is chronically short of housing, and rents are outrageously high. Many New York apartments are "rent stabilized." It's no surprise that developers prefer to build condominiums or cooperatives, which they can sell outright. Such sales give them real profits--or at least the prospect of gains--and none of the risks of poli-ticians forcing them to charge rents that are not economical. Chicago, in contrast to New York City, has no rent control, and it has abundant hous-ing for all levels of income earners. Free markets work when politicians allow them to.

The condemnation case the Supreme Court will be hearing is Kelo v. the City of New London (Conn.). There the government is aiding a private corporation to seize the homes of Susette Kelo and others to build a hotel, high-priced condos, an office building and other projects to complement a major pharmaceutical company. New London is strapped for cash and figures the project will help it out of its fiscal straits.

Fifteen state supreme courts have ruled on the issue of this perverse exercise of the power of eminent domain. Nine have decreed that government powers cannot be used to help private developers in this way; six have deemed it to be within the law's purview.

In the second property rights case, the state of Hawaii put a cap on the amount of rent that oil companies can charge their service stations. A federal court has recently ruled that form of rent control as being unconstitutional, saying that such a cap discourages investment and therefore leads to fewer independent dealers. If the Supreme Court upholds this finding, then rent control in New York City and elsewhere could very well fall by the wayside. Many politicians are up in arms, believing that the "public interest" should be whatever they want it to be. Voters may have a better understanding. Oregon, one of the bluest of the blue states, saw voters overwhelmingly pass an initiative that permits property owners to force government to compensate them for losses resulting from environmental or zoning rules.

The Supreme Court can strike a blow for liberty--and for our future well-being and progress--with these two cases.

[stopem]

So what he's basically saying is he is against rent control.

[calcowgirl]

ping

[farmfriend]

Rights, farms, environment ping.
Let me know if you wish to be added or removed from this list.
I don't get offended if you want to be removed.

[RockinRight]

I like Forbes, but never thought he could become President.

So-I say we go for Mark Sanford instead. A combination of Reagan, Gingrich, and Forbes.

[Dat Mon]

"The Institute for Justice, a nonprofit, public interest law firm, has found that in recent years local governments have taken or threatened to take by force more than 10,000 homes or small businesses to further private economic development. And that apparently is the tip of the iceberg. (The best way to promote development, by the way, is to cut taxes and antigrowth regulations, as well as to improve local schools.)"

Excellent and important article by Forbes.

Forbes is echoing a common theme that is relevant to many different socio-economic-political discussions on this forum

To summarize....note how the nexus between bog government and big money / political contributers is shaping government policies and legislation at all levels.

Instead of politicians doing the correct thing to help ALL business, large and small, by reforming and lowering taxes, reducing burdensome regulations, and instituting tort reform, politicians are giving payback goodies to individual businesses and their owners under the table.

[crz]

Polititions-just another name for Mafia. Except they havent resorted to hit man yet..or have they?

I wonder if we could find some who are not on the take in some way shape or form.

[xzins]

Forbes is correct on both issues. If I don't want to sell my property, and it is not for an absolutely public work, then those wishing to buy my property should have to negotiate with me.

[sergeantdave]

The crooked, thieving politicians and judges have redefined the 5th amendment from "public use," such as building roads and ports, to "public good." Public good is nothing more than the American version of the communist "common good."

The "common good" can be defined as anything a socialist wants it to mean, from seizing your property as a de facto government nature preserve to stealing your business and giving it to a larger business.

We are quickly heading down the road to a fascist society, where private property will be controlled by unelected judges and bureaucrats dictating what you can and cannot do with the property you paid for with your money.

We have a situation now where property can be taken for the most ridiculous reasons and government thieves suffer no consequences.

If Castro landed at Miami and tried to steal it, he'd soon be meeting various Air Force squadrons and Marine and Army divisions. I see no difference between a foreign invader stealing property and an American judge or bureaucrat doing the same through fiats and dictates.

Word is out that the Bush administration will back the Poletown decision in the SC, allowing local governments to steal private property and give it to another private owner. Poletown, essentially, laid people’s private property before unknown political winds, where ownership is perpetually subject to the government’s belief that another private party could use a piece of property “better.” If the president supports this theft, he has lost my support.

The Michigan SC reversed the Poletown ruling back in July.

“We overrule Poletown,” the Court wrote, “in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law.”

This statement indicates that Michigan’s highest court has rediscovered its constitutional and traditional role as interpreter of law, not creative writer of law. I expect no less from the federal judges and politicians.

In 2006, every RINO POS - national, state and local - must be challenged in the primaries and thrown out of office. It's time to retake our party from the smarmy garbage in the GOP who are more worried about what a left wing editorial says about them than their own constituents.

I've had it. I'm taking back my heritage.

[Dat Mon]

"Polititions-just another name for Mafia. Except they havent resorted to hit man yet..or have they? "

Im not so sure of that. There was LBJ...and the sewar of politics he arose from in Texas.

And theres stories about a little state called Arkansas, home of one of our greatest presidents!

[crz]

Oh ya..I forgot all about those two..heh heh.

You know, I think I got more respect for a common hooker than I do for a politition. I mean, whats a politition do? They sell favors at whatever cost to whoever. At least with a prostitute you get something in return, even if its STDs, you get something. LOL.

[snowsislander]

This and the United Nations article make two excellent articles posted today from the pen of Mr. Forbes.

[B4Ranch]

the United Nations article ????

Do you have a link?

[GovernmentShrinker]

I don't have the link, but just search on "Forbes". The gist of it was that the UN should be kicked out of NYC and forced to move to some third world hell-hole. I've been saying that for a long time. Steve is a good guy -- too bad he lacks the charisma to get elected President; maybe VP?

[snowsislander]

Sorry, it is more accurately a NewsMax summary of a Forbes article.

[not2worry]

Mr. Forbes certainly addresses the important issues that I am concerned about.

Senators McCain and Lott are p*ssing in the wind as far as I am concerned.

If they think their recent public brain cramps appeal to me now or in 2008 they are sorely mistaken.

[B4Ranch]

re; Senator McCain

http://www.namvets.com/Reading/john_mccain_is_no_war_hero.htm

[B4Ranch]

Thanks

[not2worry]

Thanks for the article. It was interesting reading.

IMHO, McCain and Kerry have no interest in the MIA's. The only thing they are interested in is their egos.

The Village Voice had an interesting article in February of this past year on just how bogus the Congressional Committee on which both of these Veterans served and it's a crying shame what they have done (or should I saw not done) for our men and women serving the the Armed Services of the United States of America.

[anymouse]

BTW, if you click to the sourced Forbes article, their web site tries to install spyware. Probably not a good idea to let it do so.