Sunday, February 24, 2008

Special Pleading at Work

"Does restricting 'eminent domain'--the power of government to seize private property--harm economic growth? A new report from the Institute of Justice looks at the evidence and concludes the answer is no. ... But one constant since Kelo v. New London has been the refrain, echoed by developers and politicians alike, that eminent domain is necessary for redevelopment. ... The verdict: So far there has been no discernable hit to economic activity from the restriction of eminent domain, even in those states with the broadest reforms. ... Developers love eminent domain because it's easier to snap up land when government forces owners to sell-no unpleasant dickering over price, etc. Local politicians likewise believe they are best positioned to pick winners and losers and to shape the future of their cities. ... If a project cannot proceed without government interference, it is reasonable to ask whether it it worth putting the hamfist of government on the scales at all", editorial at the WSJ, 30 January 2008.

Why is anyone surprised with this? About 23 years years ago, there was a group of Democratic politicians known as the "Atari democrats" who pushed various government schemes to select high-tech winners and subsidize them. It struck me that that's the stock market's job. Why did those "geniuses" think they were more capable of doing that then the market? Similarly for eminent domain.

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