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Special Report

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It is typical for governments to change the "project" or purpose of land use many times once it has been taken through eminent domain. In fact, this was the case in Kelo.

Justice Sandra Day O'Connor noted in her eloquent dissent describing the shifting justifications for the land grab in New London, Connecticut: "Parcel 4A is slated, mysteriously, for 'park support.' At oral argument, counsel for respondents conceded the vagueness of this proposed use and offered that the parcel might eventually be used for parking."

The Senate language isn't ironclad, but its broad ban on funds being used "in conjunction with" eminent domain for economic development would at least put some necessary burdens in using these new funds to help confiscate land.

All in all, if this new language is what ultimately passes, there will be virtually nothing stopping states and localities from using the federal housing grants to help themselves to confiscate housing.

HOW DID THESE property rights protections get removed? That's somewhat of a mystery.

Barney Frank may not be a friend of property rights, but then neither is Treasury Secretary Paulson, who, according to press accounts, convinced President Bush not to veto the bill. Just after Bush nominated Paulson to head Treasury, Competitive Enterprise Institute adjunct scholar Steve Milloy warned that Paulson "has demonstrated little respect for private property rights."

Milloy noted that as head of Goldman Sachs, Paulson spent shareholders' money to support environmental groups' efforts to stop forestry on a piece of land in Tierra Del Fuego, Chile. After this pressure, the Chilean landowner was forced to sell the land to -- who else? -- Goldman Sachs. For this reason and others, Milloy urged the Senate to reject Paulson's nomination, as did the Competitive Enterprise Institute.

Because of the House changes, the Senate has to pass the bill one more time before it goes to the President. This slighting of property rights from the earlier Senate bill cannot be ignored.

Otherwise, the U.S. may repeat the tragedy of '50s and '60s "urban renewal," where the "federal bulldozer" of government housing programs literally made people homeless.

If that happens, you ain't seen a meltdown yet!

topics:
Hank Paulson, Environment, Books, Law, Supreme Court