September 27, 2009

AP Does a Balanced Update on the Kelo Story and Current Situation

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 6:48 pm

Susette-Kelo-784696Pigs aren’t flying, but don’t be surprised if you see a few of them sprouting wings.

The Associated Press, which along with the rest of the establishment media has almost totally ignored the aftermath of the awful Kelo v. New London ruling over fours ago, actually carried a mostly fair and balanced piece about where things stand by writer Katie Nelson. Though I’ve followed the story reasonably closely since the fall of 2005, I learned a few things I didn’t know about the City of New London’s original lofty promises.

I do have a couple of quibbles, the biggest one being the current headline (“Conn. land vacant 4 years after court OK’d seizure”). It seems to me that the word “Kelo,” as in Susette Kelo (pictured at top right), belongs in it. My other problem is that it’s a weekend story and will thus be lightly read.

But let me highlight the better paragraphs in Nelson’s report:

Weeds, glass, bricks, pieces of pipe and shingle splinters have replaced the knot of aging homes at the site of the nation’s most notorious eminent domain project.

There are a few signs of life: Feral cats glare at visitors from a miniature jungle of Queen Anne’s lace, thistle and goldenrod. Gulls swoop between the lot’s towering trees and the adjacent sewage treatment plant.

But what of the promised building boom that was supposed to come wrapped and ribboned with up to 3,169 new jobs and $1.2 million a year in tax revenues? They are noticeably missing.

Proponents of the ambitious plan blame the sour economy. Opponents call it a “poetic justice.”

“They are getting what they deserve. They are going to get nothing,” said Susette Kelo, the lead plaintiff in the landmark property rights case. “I don’t think this is what the United States Supreme Court justices had in mind when they made this decision.”

…. New London officials decided they needed Kelo’s land and the surrounding 90 acres for a multimillion-dollar private development that included residential, hotel conference, research and development space and a new state park that would complement a new $350 million Pfizer pharmaceutical research facility.

Kelo and six other homeowners fought for years, all the way to the U.S. Supreme Court. In 2005, justices voted 5-4 against them, giving cities across the country the right to use eminent domain to take property for private development.

The decision was sharply criticized and created grassroots backlash. Forty states quickly passed new, protective rules and regulations, according to the National Conference of State Legislatures.

…. In New London the city’s prized economic development plan has fallen apart as the economy crumbled.

…. In July, backers halted fundraising for the project’s crown jewel, a proposed $60 million, 60,000-square-foot Coast Guard museum.

Read the rest of Nelson’s story for other quotes from Kelo, Kelos’s Institute for Justice lawyer Scott Bullock, and current New London Development Corporation excuse-maker John Brooks, who blames the Kelo litigation itself for the development failure.

Nelson did miss one thing that continues to annoy: the fact the high-powered Italian Dramatic Club, in an act of blatant political favoritism, was spared the wrecking ball and allowed to stay where it is, while homes right next to it were demolished. This June 2006 BizzyBlog post, which includes a view of the neighborhood and identification of the holdouts’ home locations, shows how absurd the IDC’s permission to survive really was. The media’s failure to tell its consumers about the IDC’s survival while homes around it were destroyed kept public sympathy for the Kelo holdouts lower than it should have been, and made the Supreme Court’s risible decision in the case easier than it should have been.

Image found at ArkJournal.com.

Cross-posted at NewsBusters.org.

This is McCain…

Filed under: Activism,Taxes & Government — Rose @ 9:10 am

…and this is McCain sipping Romney’s Kool-Aid.

Any questions?

Of course not, this tells us all we need to know. (HT: Ben Smith)

Stick a fork in “Mandate, Objectively Unfit Mitt…”

Capitalism Works, When It’s Not Corrupted

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 8:09 am

capitalism_flyer

The free market is not the problem.

___________________________

Note: This originally went up at Pajamas Media and was teased at BizzyBlog on Friday.

___________________________

Market capitalism is getting the blame for things that have nothing to do with it. Several examples will make my point.

Several years ago, two judges in Northeast Pennsylvania (Democrats, in case you’re curious; I’m telling you because the Associated Press won’t) put together a kickback arrangement with the owner of two area juvenile detention centers to refer youths brought up on even the most trivial of charges to those facilities instead of prescribing probation, community service, or other less stringent sentences. The now-former judges, Mark Ciavarella Jr. and Michael Conahan, collected $2.8 million over the course of the “enterprise.” The former owner of the detention centers has already pleaded guilty, and the two recalcitrant judges were recently indicted after their plea-bargaining sincerity failed to impress the case’s judge.

Thousands of kids who made minor mistakes (one teenage girl’s crime supposedly warranting detention was “making fun of her school’s vice principal on a Myspace page”) are scarred for life, and it’s likely that more than a few have become career criminals, something that would never have happened if the judges had not hatched their outrageous scheme.

According to filmmaker/provocateur Michael Moore, the sordid episode just described represents a failure of capitalism. The saga is supposedly such an obvious failing that it is part of Moore’s just-released “Capitalism: A Love Story.” Moore openly describes capitalism as evil.

Here’s a bigger one. In the 1990s, Enron, a former consulting client of New York Times columnist and economist Paul Krugman and a recipient of his praise in a 1999 Fortune column, built up a unique enterprise engaged in energy trading. While it was in essence a transaction broker, it did fine, in fact revolutionizing what had been a pretty staid business. But over time, it built a pressure-packed, corner-cutting corporate culture that was deliberately created by the suits in the executive suite. Out of this environment came top management’s deliberate choice to abuse the employment of “special purpose entities” to the point where they were barely disguised empty shells designed for the sole purpose of fooling the credit rating agencies. This decision, combined with the 2001 fall in energy prices, led to the company’s shocking multibillion-dollar collapse in late 2001.

Enron’s fall, along with that of Worldcom and several other companies, led to the passage of the Sarbanes Oxley Act of 2002 (SOX). The law imposed onerous new accounting, control, and reporting requirements on public companies, but especially on those considering going public. By 2006, Hong Kong was doing a higher volume of initial public offerings than New York. In 2008, both Hong Kong and Australia did more deals. It’s a virtual certainty that many growing companies that would once have gone public at the opportune time have instead chosen to be acquired. YouTube’s decision to sell out to Google in 2006 is likely one such example.

SOX’s wave of new rules, regulations and constraints came about, according to popular mythology, because capitalism had failed.

Here’s an even bigger one. In 1977, Congress passed the Community Reinvestment Act (CRA). Initially, it was meant “to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.”

“Encouragement” was not enough for the coalition of grievance mongers and big-government types who conceived CRA. In 1989:

…. the CRA was amended to require public access to CRA examination evaluations and performance ratings. (Then) in 1995, the CRA evaluation process increased the emphasis on actual lending and decreased the emphasis on banks’ documentation of their efforts to assess community needs.

In essence, an encouragement process turned into bean-counting.

Then in 1999, in the name of increasing minority home ownership, government-sponsored enterprises Fannie Mae and Freddie Mac (Fan and Fred) began to underwrite risky “subprime” loans, relaxed credit standards required to qualify, and took the loans off the books of the financial institutions that originated them.

Not surprisingly, financial institutions got into the business of originating a lot of these loans. Also not surprisingly, a lot of these loans, now on the books of Fan and Fred, went bad. Both entities crashed and burned last year. Since then, taxpayers have dumped $85 billion. The ultimate price tag will be in the hundreds of billions.

Many entities that kept these loans on their books or speculated on the price movements of securities collateralized with these loans have also failed.

Leftist “wisdom” says that the failures just noted, and the accompanying steep decline in housing prices, represent failures of capitalism.

To no one’s surprise, the three failures described here, all allegedly laid at the feet of capitalism, mean that the government simply has to get more involved than it already is. Specifically, capitalism’s disbelievers say that:

  • Prisons and other public services should not be privatized.
  • Public companies must spit out more reams of printed paper and consume more gigs of bandwidth producing stuff that no one will read until they consider legal action.
  • The Treasury Department and the Federal Reserve simply must establish an ironclad grip on the mortgage market and the banking system.

The free-market answers are much simpler, more elegant, and will lead to more long-term wealth and prosperity:

  • Privatizations of services traditionally handled by government that will save money without affecting quality should be permitted under strict competitive-bid arrangements. In the case of prison systems, judges should conduct themselves ethically and honestly (imagine that). It’s not capitalism’s fault if they don’t.
  • Public companies should be transparent and ethical; the overwhelming majority were that way before SOX, and are still that way now. If we want our economy to be competitive with the rest of the world, the provisions of SOX requiring hundreds of thousands if not millions of hours of ridiculous busywork must be repealed. It’s not capitalism’s fault if management doesn’t obey the law and run an ethical enterprise.
  • The government should get out of the housing market completely, and let prudent lenders be prudent lenders without the perverse, state-inspired, standard-destroying incentives that brought on the mortgage-lending debacle. Then it won’t be capitalism’s problem if lenders who take on too much risk fail; it will be those lenders’ fault alone.

The only things preventing these solutions are an ethical ruling class and courageous free-market advocates willing to buck the conventional wisdom until it breaks.

I wrote that the answers are simple. I didn’t indicate they will be easy to put into place.

Positivity: Mother McCrory’s miracle investigation goes to the Vatican

Filed under: Positivity — Tom @ 6:09 am

From Piscataway, NJ:

Sep 24, 2009 / 09:16 pm

The Diocese of Metuchen in New Jersey has completed its role in an investigation of a possible miracle performed by Servant of God Mother Mary Angeline Teresa McCrory, the foundress of the Carmelite Sisters for the Aged and Infirm. The investigation is to be continued at the Vatican and could lead to Mother McCrory being declared “Blessed” by the Church.

A ceremony at the diocesan headquarters concluded the local inquiry, which began on May 20, 2009. The investigation has been handed over to the Vatican’s Congregation for the Causes of Saints, which will determine the authenticity of the miracle as well as if it can be attributed to Mother McCrory.

The Carmelite sister was a woman of great faith who spent her life caring for the elderly and ailing in long-term care facilities operated by her order. She died in 1984 at age 91.

The Vatican has already released a degree of “Juridical Validation” for the diocesan investigation of her life undertaken by her home diocese, the Diocese of Albany.

According to Lori Albanese, Chancellor of the Diocese Metuchen and notary of the investigation, 10-15 individuals were interviewed regarding the case, including family members, people who prayed for the miracle, the doctors involved, as well as two medical experts who are independent of the Church and of the case. “We were very pleased with the quality of testimony,” Albanese said. “The witnesses were very accessible.”

The local bishop, Most Rev. Paul G. Bootkoski told myCentralJersey.com, “I’m pleased that the investigation was completed within four months.” He added, “we were honored to be asked by the Vatican to investigate the possible miracle.” Details of the miracle have not been released to the public.

On September 24, CNA spoke with Mother Mary Mark Randall, the Superior General of the Carmelite Sisters for the Aged and Infirm.

Mother Mary Mark revealed that the miracle being investigated involves a family in the diocese who prayed for Mother McCrory’s intercession when they found out their unborn child had been diagnosed with a severe genetic defect. When their baby girl was born, the abnormality was not as severe as doctors had anticipated.

According to Mother Mary Mark, “the child is doing fine now. She is leading a normal life.” She also said that the little girl was related to one of the members of the order.

The progression of this investigation as well as the 80th anniversary of their founding gives the sisters dual cause to celebrate this year. ….

Go here for the rest of the story.