Liberty. Economics. Common Sense. These are the guiding posts for this blog, and we hope, for the way most of us live our lives. This blog comes to the conclusion that the proper direction for society is one of personal liberty, both economic and political, and limited government that follows sound economic policy.

This blog will offer economic analysis on many political issues of the day along with political theory from time to time. The major inspirations for this blog are writers and thinkers like John Locke, Adam Smith, David Ricardo, Alfred Marshall, F.A. Hayek, Milton Friedman and James Madison among others.

Friday, August 13, 2010

Property Rights Fall Through New York's Nets

The New Jersey Nets basketball team announced that they will change their name when they move into their new stadium. Why is this significant? Well, the fact that they’re changing their name isn’t significant at all. What is significant, and it’s a shame and an outrage that it has gone largely unnoticed or uncared by the media and public at large, is that the land the stadium is to be built on was taken through eminent domain.

The stadium is part of a larger commercial development that includes high-rise office and residential towers. The ruling granting the eminent domain is outrageous – outrageous! This is a clear violation of the 5th Amendment, which clearly states, “No person shall be…deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

The issue thus becomes what does “public use” mean? Since the disastrous case of Kelo v. New London, the courts have come to interpret “public use” to mean “public purpose” and indeed it’s exactly this misinterpretation that the New York Court, in its foolish decision, chose to use:
“…the proposed land use improvement project will, by removing blight and creating in its place the above-described mixed-use development, serve a ‘public use, benefit or purpose’…”

They continue:
“…while the State Constitution, literally read and in its early construction, permitted the taking of property only for ‘public use,’ ‘public use’ had since come to be understood as entailing no more than a dominant public purpose.”

Grrr. No, it hasn’t! Damn you Kelo! The Founders had a very clear idea on the vision for their new country. The Constitution is only about 10 pages, but they left 400 pages of Federalist Papers and volumes of other writings to leave little doubt as to what the Constitution means. The Constitution is purposefully simple and direct. It means what it says it means. When the Founders say “public use”, they don’t mean “public purpose”. If they meant “public purpose”, they would have said “public purpose”! As James Madison says in Federalist No. 62:
“It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; that no man who knows what the law is today can guess what it will be tomorrow.”

Because they knew the Constitution would be basically inaccessible if it contained the detail found in the Federalist Papers, it was intentionally left simple and concrete with the understanding that people would refer back to original intent when interpreting it.

So how do we know that the original intent of the Founders was to hold private property in an almost sacred light? Well, they tell us. First, their inspiration for government becomes clear when we understand who they looked to as their mentors. The Declaration of Independence verges on plagiarism of John Locke, who wrote extensively of the importance of private property and the government’s duty to protect it.

More clearly, Madison himself clearly explains the government’s role in protecting private property in his work “Property”. He says:
“Government is instituted to protect property of every sort; as well that which lies in various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his.”

And further:
“That is not a just government, nor is property secure under it, where the property which a man has in his personal safety and personal liberty, is violated by arbitrary seizures of one class of citizens for the service of the rest.”

Very clearly, the Founders did not intend that private property could be taken to achieve a “public purpose”. “Public purpose” is such a nebulous concept that virtually any reason could be considered as achieving a “public purpose”. If private property can be taken for a public purpose, then it ceases to become an inherent and unalienable right and therefore government has no duty to protect it. Once we are not secure in our property, we are not secure in our life or our liberty either. Private property is the lynchpin that holds it all together. Indeed, if our private property rights are undermined, the Constitution becomes meaningless.

As if that’s not outrageous enough, the court took an almost glib attitude in this case, as if they weren’t debating a person’s very livelihood, as if they weren’t gambling with the foundation of our entire way of life. The court states:
“…it is indisputable that the removal of urban blight is a proper, and, indeed, constitutionally sanctioned, predicate for the exercise of the power of eminent domain. It has been deemed a ‘public use’ within the meaning of the State's takings clause….and is expressly recognized by the Constitution as a ground for condemnation. Article XVIII, § 1 of the State Constitution grants the Legislature the power to ‘provide in such manner, by such means and upon such terms and conditions as it may prescribe . . . for the clearance, replanning, reconstruction and rehabilitation of substandard and insanitary areas’…"

First of all, urban blight is not an “indisputable” reason to take away a person’s property, but even if it were, if guarding against blight is necessary for the “clearance, replanning, reconstruction and rehabilitation of substandard and insanitary areas”, that would fall under the state’s police power and thus it wouldn’t be a taking.

Either 1) the property can be put to better use if it serves a “public purpose”, or 2) it is dangerous to the health, morals and safety of the community and thus under the authority of the police power. By trying to argue both fronts shows the state doesn’t really have a good reason to take the property and they are hoping nobody will notice if they build the strongest case possible by throwing the entire arsenal at it.

In what would be almost comical if it weren’t so serious, they undermine their own strategy:
“Petitioners, of course, maintain that the blocks at issue are not, in fact, blighted and that the allegedly mild dilapidation and inutility of the property cannot support a finding that it is substandard and insanitary within the meaning of article XVIII. They are doubtless correct that the conditions cited in support of the blight finding at issue do not begin to approach in severity the dire circumstances of urban slum dwelling described by the Muller court in 1936, and which prompted the adoption of article XVIII…”

So the Appellate Court basically says that they don’t consider the area blighted, and therefore not subject to condemnation, but they defer completely to the lower courts and the legislature:
“…judges may substitute their views as to the adequacy with which the public purpose of blight removal has been made out for that of the legislatively designated agencies; where, as here, "those bodies have made their finding, not corruptly or irrationally or baselessly, there is nothing for the courts to do about it, unless every act and decision of other departments of government is subject to revision by the courts’…”

It’s a sad day indeed when a court fails in its most basic duties of judicial review and instead punts on such an important issue. This ruling is a failure all the way around. And just to add insult to injury, the court recognizes it is continuing a tradition of dangerous precedent and opening the door to moral hazard but seeks to rationalize it away:
“There is no reason to suppose that serial condemnation litigation will now become the order of the day.”

Right. That’s what they said about the Kelo case and look how far we’ve fallen since.

When the New Jersey Nets have their home opener to kick off the 2011-2012 season, there will be plenty of celebration. Unfortunately, when the people dance, they will have their fellow citizens’ property rights under their feet. When our government fails to protect the basic liberties of the minority it has failed in its most basic duty. I for one will not be celebrating.

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