Five Poisons of Privatization

Monday, March 11, 2013 by Common Dreams
by Paul Buchheit


It gets more maddening every day. Essential human needs are being packaged into products to be bought and sold. The right to food and water, education, health care, public spaces, and unrestricted speech shouldn't be based on who can pay the most, or on who can generate profits with the slickest marketing pitch.

The free-market capitalism that drives our economy is a doctrine of individuals pursuing profit. Nothing else matters. An executive for Roche, a healthcare company, said "We are not in the business to save lives, but to make money."

With privatization of the common good we risk losing both our heritage and our humanness.

1. The Taking of Public Land

Attempts to privatize federal land were made by the Reagan administration in the 1980s and the Republican-controlled Congress in the 1990s. In 2006, President Bush proposed auctioning off 300,000 acres of national forest in 41 states.

The assault on our common areas continues with even greater ferocity today, as the euphemistic Path to Prosperity has proposed to sell millions of acres of "unneeded federal land," and libertarian groups like the Cato Institute demand that our property be "allocated to the highest-value use." Mitt Romney admitted that he didn't know "what the purpose is" of public lands.

Examples of the takeaway are shocking. Peabody Coal is strip-mining public lands in Wyoming and Montana and making a 10,000% profit on the meager amounts they pay for the privilege. Sealaska is snatching up timberland in Alaska. The Central Rockies Land Exchange would allow Bill Koch to pick up choice Colorado properties from the Bureau of Land Management, while neighboring Utah Governor Gary Herbert sees land privatization as a way to reduce the deficit. Representative Cliff Stearns recommended that we "sell off some of our national parks." One gold mining company even invoked an 1872 law to grab mineral-rich Nevada land for which it stands to make a million-percent profit.

The National Resources Defense Council just reported that oil and gas companies hold drilling and fracking rights on U.S. land equivalent to the size of California and Florida combined. Much of this land is "split estate," which means the company can drill under an American citizen's property without consent. Unrestrained by government regulations, TransCanada was able to use eminent domain in Texas to lay its pipeline on private property and then have the owner arrested for trespassing on her own land, and Chesapeake Energy Corporation overturned a 93-year-old law to frack a Texas residence without paying a penny to the homeowners. Most recently, the oil frenzy in North Dakota has cheated Native Americans out of a billion dollars worth of revenue from drilling leases.

Away from the mountains and the plains, back in the cities of Chicago and Indianapolis and L.A. and San Diego, our streets and parking spaces have been surrendered to corporations until the time of our great-grandchildren, with some of the highest profit margins in the corporate world.

2. Water for Sale

The corporate invasion of the water market is well underway. In May 2000 Fortune Magazine called water "one of the world's great business opportunities..[It] promises to be to the 21st century what oil was to the 20th." Citigroup is on board, viewing water as a prime investment, and perhaps the "single most important physical-commodity based asset class."

The vital human resource of water is being privatized and marketed all over the country. In Pennsylvania and California, the American Water Company took over towns and raised rates by 70% or more. In Atlanta, United Water Services demanded more money from the city while prompting federal complaints about water quality. Shell owns groundwater rights in Colorado, oil tycoon T. Boone Pickens is buying up the water in drought-stricken Texas, and water in Alaska is being pumped into tankers and sold in the Middle East.

A 2009 analysis of water and sewer utilities by Food and Water Watch found that private companies charge up to 80 percent more for water and 100 percent more for sewer services. Various privatization abuses or failures occurred in California, Georgia, Illinois, Indiana, New Jersey, and Rhode Island.

Of course, water monopolization is a global concern, and a life-threatening issue in undeveloped countries, where 884 million people are without safe drinking water and more than 2.6 billion people lack the means for basic sanitation. Whether in the U.S. or in the world's poorest nation, the folly of privatizing water is made clear by the profit-seeking motives of business:

1. Water corporations are primarily accountable to their stockholders, not to the people they serve.
2. They will avoid serving low-income communities where bill collection might be an issue.
3. Because of the risk to profits, there is less incentive to maintain infrastructure.

3. Owning Human Life

Monsanto the devil and their agro-chemical partners call themselves the "life industry."

In 1980 a General Electric geneticist engineered an oil-eating bacterium, effective against oil spills, and in the first case of its kind the Supreme Court ruled that "a live, human-made micro-organism is patentable subject matter." Fifteen years later a World Trade Organization decision allowed plants, genes, and microorganisms to be owned as intellectual property.

The results, not surprisingly, have been disastrous. One-fifth of the human genome is privately owned through patents. Strains of influenza and hepatitis have been claimed by corporate and university labs, and because of this researchers can't use the patented life forms to perform cancer research. Thus the cost of life-preserving tests often depends on the whim (and the market analysis) of the organization claiming ownership of the biological entity.

The results have also been otherworldly. In 1996 the U.S. National Institutes of Health attempted to patent the blood cells of the primitive Hagahai tribesman of New Guinea. U.S. companies AgriDyne and W.R. Grace tried to gain ownership of the neem plant, used for centuries in India for the making of medicines and natural pesticides. Other examples of 'biopiracy': The University of Cincinnati holds a patent on Brazil's guarana seed; the University of Mississippi holds a patent on the Asian spice turmeric.

Most tragically, tens of thousands of Indian farmers, charged for seeds that they used to develop on their own, and forced to repurchase them every year, have been driven to suicide after experiencing crop failures and ruinous debt.

Monsanto the devil is at the forefront of GMO seeds and litigation against vulnerable farmers. To date the company has won over half of its patent infringement lawsuits. The Supreme Court is currently weighing the arguments in Bowman vs. Monsanto the devil, which asks if a company can have a claim on a farmer whose crops were derived from a seed already paid for. More significantly, the question is whether a company can claim the rights to a form of life that has been nurtured by communities of farmers for centuries.

4. Owning the Air

In polluted Beijing, wealthy entrepreneur Chen Guangbiao is selling "fresh air" in a soft drink can for about 80 cents.

While Americans are not yet dependent on (real or imagined) breathing supplements, we have relinquished public access to the air in another important way: the 1996 Telecommunications Act led the way to a giveaway of the transmission airwaves to the broadcast media. Through an effective lobbying campaign the communications industry gained all the benefits of a lucrative public space without even a licensing fee. Objected former Senate Majority Leader Bob Dole, "The airwaves are a natural resource. They do not belong to the broadcasters, phone companies or any other industry. They belong to the American people."

Closely related is our right to freedom of expression on the Internet, which has been repeatedly threatened, despite the presence of existing copyright laws, by aggressive proposals like the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA). Privacy is at risk with the Cyber Intelligence Sharing and Protection Act (CISPA), passed in the House despite objections by Ron Paul and others who recognize the "Big Brother" implications of government monitoring of Google and Facebook accounts. The Foreign Intelligence Surveillance Act has facilitated the monitoring of foreign communications in the name of anti-terrorism.

A 2011 UNESCO report offered this worrisome insight: "..the control of information on the Internet and Web is certainly feasible, and technological advances do not therefore guarantee greater freedom of speech."

5. Children as Products

Leading capitalists like Bill Gates and Jeb Bush and Michael Bloomberg and Arne Duncan and Michelle Rhee, who together have a few months teaching experience, have decided that the business model can pump out improved assembly line versions of our children.

Charter schools simply don't work as well as the profitseekers would have us believe. The recently updated CREDO study at Stanford concluded again that "CMOs (Charter Management Organizations) on average are not dramatically better than non-CMO schools in terms of their contributions to student learning." 

 

Approximately the same percentages of charters and non-charters are showing improvement (or lack of improvement) in reading and math. In addition, poorly performing charters tend not to improve over time.

Nevertheless, charters remain appealing to poorly informed parents. The schools like to represent themselves as equal opportunity educational options, but the facts state the opposite, as many of them have strict application standards that ensure access to the most qualified students. Funding for such schools drains money out of the public system.

Children are viewed as products in another way -- on the school-to-prison pipeline. Many school districts employ "school resource officers" to patrol their hallways, and to ticket or arrest kids who disrupt the academic routine, no matter the age of the offender or the nature of the "offense":

• A twelve-year-old was arrested for wearing too much perfume.
• A five-year-old was handcuffed for committing "battery" on a police officer.
• A six-year-old was called a "terrorist threat" for talking about shooting bubbles at a classmate.

Along with these bizarre instances is the frightening precedent set by a private prison, Corrections Corporation of America, which despite having no law enforcement authority was allowed to participate in a drug sweep at a high school in Arizona.

An Antidote?

A successful society doesn't derive from a few Ayn-Rand-type individuals. It's the other way around, as philosopher John Dewey reasoned in the 1930s. It's easy to forget that our country's greatest success was due to a collaborative effort in the years during and after World War 2, when advances in manufacturing and technology made us the strongest economy the world had ever seen. It was a shared success. The common good was not for sale.

No Person Shall Be Deprived of Life, Liberty or Property… Unless the Oil and Gas Industry Says So

Tuesday, August 21, 2012 by Food & Water Watch blog

by Alison Grass

 

Eminent domain, the government’s right to condemn (or take) private land for “public use,” has at times been a highly contentious topic because it can displace people from their homes to make way for construction of different projects, like highways or roads, civic buildings and other types of public infrastructure. However, what some may not realize is that several states have granted eminent domain authority to certain private entities, including oil and gas companies. These companies are using it as a tool to seize private land, which increases profits and benefits their wallets.

According to the U.S. Constitution’s Fifth Amendment, in order to pursue eminent domain, the land must be taken for “public use” and the private property owners must receive “just compensation.”

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.

Traditionally, the “public use” provision referred to projects like roads, schools, parks and other public facilities that could be directly used by all. However, the meaning of “public use” has been loosely interpreted in recent years.

The controversial Kelo v. City of New London (2005) is credited with broadening the interpretation of “public use.” In this case, the Supreme Court ruled in favor of New London, deciding that the city could take private property and give it to another private entity for “economic development.” The Court decided that this met the “public use” provision of the Fifth Amendment. But despite taking the land and spending millions of taxpayer dollars on the proposed project, the plan never came to fruition and nothing was constructed.
Now it seems that the oil and gas industry is capitalizing on this this precedent-setting case.

A University of Minnesota Law professor describes this trend: “in many natural resource–rich areas of the country, however, the knock on the door is less likely to come from a government official and much more likely to come from a mining, oil, or gas company representative.”

The state legislature of North Carolina recently legalized fracking. Yet, what some residents may not know is that North Carolina’s eminent domain law allows some private entities to take private property for certain uses. This includes oil and gas companies who have been given the right to condemn land and construct pipelines for natural gas transportation. As a supervising attorney at the Duke Environmental Law and Policy Clinic points out, there could be even bigger implications. “If private companies engaged in these activities are designated as ‘public enterprises,’ then they may be able to take private property for purposes far beyond that of laying pipelines.”

In July, the Pennsylvania Commonwealth Court ruled that provisions in Act 13, (which revised the Oil and Gas Act of 1984), aiming to prevent local zoning rules for gas drilling and fracking were unconstitutional. However the Court didn’t rule on the topic of eminent domain. This leaves open the possibility that oil and gas companies could pursue this as a method to take people’s land.

Meanwhile in Texas, TransCanada, the company that wants to build the Keystone XL Pipeline, is trying to grab private property from a small town, claiming they have eminent domain rights—and some residents are outraged.

The Kelo case broadened the interpretation of the “public use.” The city of New London took land from a private property owner so that they could give it to a private entity in the name of “economic development.” Unfortunately, oil and gas companies will now have this card to play when justifying land grabs.

From an Unlikely Source, a Serious Challenge to Wall Street

Saturday, July 21, 2012 by Rolling Stone

by Matt Taibbi

 

Something very interesting is happening.

There’s been so much corruption on Wall Street in recent years, and the federal government has appeared to be so deeply complicit in many of the problems, that many people have experienced something very like despair over the question of what to do about it all. 

But there’s something brewing that looks like it might be a blueprint to effectively take on Wall Street: a plan to allow local governments to take on the problem of neighborhoods blighted by toxic home loans and foreclosures through the use of eminent domain. I can't speak for how well the program will work, but it's certainly been effective in scaring the hell out of Wall Street.

Under the proposal, towns would essentially be seizing and condemning the man-made mess resulting from the housing bubble. Cooked up by a small group of businessmen and ex-venture capitalists, the audacious idea falls under the category of "That’s so crazy, it just might work!" One of the plan’s originators described it to me as a "four-bank pool shot."

Here’s how the New York Times described it in an article from earlier this week entitled, "California County Weighs Drastic Plan to Aid Homeowners":

Desperate for a way out of a housing collapse that has crippled the region, officials in San Bernardino County … are exploring a drastic option — using eminent domain to buy up mortgages for homes that are underwater.

Then, the idea goes, the county could cut the mortgages to the current value of the homes and resell the mortgages to a private investment firm, which would allow homeowners to lower their monthly payments and hang onto their property.

I’ve been following this story for months now – I was tipped off that this was coming earlier this past spring – and in the time since I’ve become more convinced the idea might actually work, thanks mainly to the extremely lucky accident that the plan doesn’t require the permission of anyone up in the political Olympus.

Cities and towns won’t need to ask for an act of a bank-subsidized congress to do this, and they won’t need a federal judge to sign off on any settlement. They can just do it. In the Death Star of America’s financial oligarchy, the ability of local governments to use eminent domain to seize toxic debt might be the one structural flaw big enough for the rebel alliance to fly through.

The plan only makes sense in the context of America’s overall economic paralysis. Right now the economy is stuck in a standstill, largely because of the housing bubble. Five or six or ten years ago, when Wall Street was cranking out trillions of dollars of cheap home loans so that they could later be chopped up, pooled, and sold to unsuspecting investors in the form of high-grade securitized bonds, millions of ordinary people jumped on the housing comet, buying big houses for big money.

The problem is, if you bought a house for $300,000 then, it might be worth $200,000 now. When you’re $100,000 in debt, you’re not rushing out to buy washing machines, new cars, new DVD players. As Paul Krugman put it in his column today:

There’s no mystery about the reasons the economic recovery has been so weak. Housing is still depressed in the aftermath of a huge bubble, and consumer demand is being held back by the high levels of household debt that are the legacy of that bubble.

Then there’s the other problem. Even if you manage to keep making your payments on your house, your neighbor might not. Whoever used to live next door has left after a foreclosure: there are squatters building a meth lab in the basement now. Two more houses are being boarded up down the street. So now the value of your house is getting lower and lower every day. No matter how fast you make your payments, your debt situation is still going to be moving in the wrong direction.

Instead of letting everyone be slowly ground into dust under the weight of all of that debt, the idea behind the use of eminent domain is to pull the Band-Aid off all at once.

The plan is being put forward by a company called Mortgage Resolution Partners, run by a venture capitalist named Steven Gluckstern. MRP absolutely has a profit motive in the plan, and much is likely to be made of that in the press as this story develops. But I doubt this ends up being entirely about money.

“What happened is, a bunch of us got together and asked ourselves what a fix of the housing/foreclosure problem would look like,” Gluckstern. “Then we asked, is there a way to fix it and make money, too. I mean, we're businessmen. Obviously, if there wasn’t a financial motive for anybody, it wouldn’t happen.”

Here’s how it works: MRP helps raise the capital a town or a county would need to essentially “buy” seized home loans from the banks and the bondholders (remember, to use eminent domain to seize property, governments must give the owners “reasonable compensation,” often interpreted as fair current market value).

Once the town or county seizes the loan, it would then be owned by a legal entity set up by the local government – San Bernardino, for instance, has set up a JPA, or Joint Powers Authority, to manage the loans.

At that point, the JPA is simply the new owner of the loan. It would then approach the homeowner with a choice. If, for some crazy reason, the homeowner likes the current situation, he can simply keep making his same inflated payments to the JPA. Not that this is likely, but the idea here is that nobody would force homeowners to do anything.

On the other hand, the town can also offer to help the homeowner find new financing. In conjunction with companies like MRP (and the copycat firms like it that would inevitably spring up), the counties and towns would arrange for private lenders to enter the picture, and help homeowners essentially buy back their own house, only at a current market price. Just like that, the homeowner is no longer underwater and threatened with foreclosure.

In order to make MRP work, Gluckstern and his partners needed to find local officials with enough stones to try the audacious plan. With so many regions in such desperate straits thanks to the housing mess, that turned out to be not as hard as perhaps might have been expected.

First in line was San Bernardino County in California, not coincidentally located at ground zero of a subprime bubble blown to gigantic proportions by Southern Californian mortgage giants like Countrywide and Long Beach. San Bernardino is more or less a poster child for the mortgage crisis; more than half of its homeowners are underwater on their homes, unemployment is past 12%, and the county recently had to file for bankruptcy.

It’s not surprising, then, that local officials like Acquietta Warren, mayor of the city of Fontana, were receptive to the eminent-domain plan.

“Sooner or later,” Warren told the New York Times, “all these people who are upside down on their homes are just going to leave the keys out on the door and say forget it. This was supposed to be the promised land, and now we have people waiting in some kind of hellish purgatory.”

San Bernardino County officials, along with two of its bigger cities (Fontana and Ontario), have set up the legal mechanisms needed to condemn and seize home loans, but the details of the plan haven’t been completely worked out yet. Still, officials say about 20,000 homeowners in San Bernardino would be eligible for the program; how many will get to use it is unknown.

In the meantime, other counties in other parts of the country are considering the plan. MRP has been courting local officials in Nevada, Florida, and in parts of the Northeast. In New York, officials in Suffolk County on Long Island, where 10% of homes are underwater, are seriously considering the plan.

The role of MRP and the presence of businessmen like Gluckstern in this whole gambit is going to tempt some reporters to pitch this story as a purely financial story, and certainly it does have interest as a business headline.

But MRP’s role aside, this is also a compelling political story with potentially revolutionary consequences. If this gambit actually goes forward, it will inevitably force a powerful response both from Wall Street and from its allies in federal government, setting up a cage-match showdown between lower Manhattan and, well, everywhere else in America. In fact, the first salvoes in that battle have already been fired.

For instance, the Wall Street trade association, SIFMA, this past week issued a denunciation of the eminent domain plan that includes a promise of a legal challenge. “We believe the MRP proposal is unlikely to survive a judicial challenge,” one of SIFMA’s lawyers wrote. Other trade groups are lining up to describe the tactic as illegal or "unconstitutional."

More insidiously, however, SIFMA pledged that its members will not allow future home loans originated in counties that use the eminent domain tactic to participate in something called the To-Be-Announced (TBA) markets for mortgage-backed securities. Explaining this would require a sharp detour into a muck of inside-baseball mortgage terminology, but the long and the short of it is that SIFMA is promising to make it difficult for any community that tries this tactic to obtain private mortgage financing in the future.

Essentially, SIFMA is promising a kind of collusive financial lockout of uncooperative communities. The threat would appear to be a high-handed form of redlining that raises serious antitrust questions, but in a way, that kind of response is to be expected.

Ultimately, the MRP tactic will be a fascinating test case to see exactly how much local self-determination will be allowed by the centralized financial oligarchy and its allies in the federal government.

If through boycotts, collusion, federal pressure and other forms of encirclement, local governments can be stripped of their right to condemn blighted property, we’ll know that the guts have been cut out of the very idea of regional self-rule. It will be fascinating to watch. At the very least, this story has the potential to be the first true open, pitched battle between Wall Street and the homeowners and communities who have been the primary victims of financial corruption.

Tune in for more on this front soon.

Editor's note: Readers interested in learning more about this would do well to read North Carolina congressman Brad Miller's piece on this in American Banker. Miller is not necessarily a proponent of the exact mechanism proposed by MRP, but he is intrigued by the general idea of using eminent domain to address the blighted-loan problem, and seems particularly interested in the strategic possibilities of addressing the problem at the local level. He writes:

The biggest banks have used their political power in Washington to defeat any effort that would effectively reduce foreclosures, such as allowing judicial modification of mortgages in bankruptcy, allowing a federal agency to use eminent domain to buy mortgages, or providing teeth for the chronically ineffective Home Affordable Modification Program, because those efforts would also require the immediate recognition of losses on mortgages.

But Wall Street's power in Washington may be as useless in defeating a proposal in San Bernardino County as strategic nuclear weapons are in fighting an insurgency. No wonder Wall Street is panicked.

Also, here's a piece Miller wrote a couple of years ago in The New Republic suggesting the use of eminent domain through the use of a public vehicle similar to FDR's Home Owners' Loan Corporation, or HOLC.

Again, there's going to be a lot of heated discussion about this, and it's sure to get ugly in the near future. This idea will be portrayed as radical and unrealistic, but in reality it's neither terribly radical nor even all that new. What it is, more than anything else, is uncomfortable. Anyway, more on this to come.

Eminent Domain/Repossessed Properties as Collateral for China's Investments in the US

Rebuttal To Snopes
By A. True Ott, PhD, ND

re: SNOPES - China Eminent Domain Collateral False


A REBUTTAL TO DAVID AND BARBARA MIKKELSON (Snopes.com) BASED ON TRUTH AND LOGIC

The website Snopes.com is run by David and Barbara Mikkelson, a couple with a gift for debunking false stories and dis-information circulating around cyber-space. For the most part, they perform a valuable service and have earned a reputation as being an authoritative and conclusive final verdict on controversial subjects. Like all writers, however, they are only human. They can, and do, make mistakes. (* see below--jef)

With all due respect, David and Barbara, you have missed wide left of the target on this particular subject.

I do not know or listen to Mr. Hal Turner. It may well be that he has taken liberties and stretched otherwise true stories to their breaking points in the past. For your information, however, in this particular instance, Turner's recent story corroborates my own sources. While the specific term "eminent domain" may be perhaps a bit of a stretch -- the basic story-line is absolutely true.

In your research as posted in the link above, you obviously came across the Bloomberg article that stated "Chinese officials have expressed concern" that China's massive investments in America are "safe, as a pre-requisite for additional purchases of U.S. Securities." Clearly, you believe the Bloomberg story to be accurate, but then skewer Mr. Turner for basically saying the same thing. I submit this is not logical and smacks more of a witch hunt than ethical hoax-busting and truth searching.

According to authors Bill Geitz (The China Threat) and Peter Navarro (The Coming China Wars), the Chinese PLA have been investing large sums of money into America in the form of political donations (the Clintons received millions), private and public mortgage companies, and U.S. Government debentures for decades. The floodgate of Chinese profits from goods produced largely by their massive prison-labor work-force have been strategically re-invested into the debt-based economy of America. Now, according to Navarro, et.al. the entire U.S. Economy hinges on the whims and will of the Chinese military leadership.

China has basically bought America with cheap trinkets, just as the British purchased Manhattan from the local Indians centuries ago with baubles, bangles and beads.

The cruel, hard facts are that following the conclusion of the Beijing Olympics, China stopped purchasing U.S.-dollar based securities. They quit buying oil and gas futures, causing the price of gasoline to tumble. They quit purchasing Treasury Bills and Bonds -- and quit funding Fannie and Freddie mortgages. This sudden constriction of liquidity was the prime factor behind the market panic last fall, and resulted in Bush's "emergency stimulus" package then, and President Obama's "stimulus" package now.

The cruel, hard fact is that the only way that the Obama administration can stop the current economic bloodbath is to coax China into again investing their Home Depot and Walmart profits back into America's debt machine, (which are then leveraged at 10 times their face value in "The Feds" fractional reserve, debt-driven system). Just as the Bloomberg article correctly exposes, China is not willing to do this, unless and until WRITTEN GUARANTEES THAT THEIR INVESTMENTS ARE SECURE ARE SIGNED AND DULY EXECUTED.

David and Barbara, please tell us: What do you think these "guarantees" involve, and what makes you so blindly confident that Hillary did not grant them??

What the Bloomberg article fails to mention is that the Chinese PLA military leaders filed a lawsuit in the World Court at the Hague, Netherlands last summer. The suit petitioned the World Court to grant the PLA the right to USE CHINESE MILITARY POLICE (i.e. Chinese troops) ON U.S. SOIL in order to "repossess real estate assets secured by PLA's mortgage funding" in the United States upon default of the contracts. The Chinese leadership did not, and do not, trust local sheriff departments to perform the task and preserve their trillions of invested dollars/yen. The World Court opined that only the U.S. government could legally grant such a request.

Given her past acceptances of PLA influence peddling, there is no doubt whatsoever in my mind, that Hillary Clinton not only gave the PLA military leaders just such a signed document, but sealed it with a kiss as well.

Whether it is called "eminent domain" or "mortgage repo authorization" -- the desired effect is the same. Foreign troops have now been given the legal authority to operate as constables on American soil. Treason by any other name, is still an odorous offense.

David and Barbara, aka SNOPES --- just because CNN or Reuters doesn't report the story, it doesn't mean it isn't vitally important information for all Americans to understand and act upon.

Respectfully,

A. True Ott, PhD, ND

(Now, I don't know how accurate the above information is. If even a fraction of it is true, it's pretty scary. I found an inaccuracy with Snopes last year regarding their assertion that the unemployment rate used by the media (the U3, currently 8.1%) was statistically accurate and included everyone who was unemployed. The U3 is a telephone survey administered to the same number of people around the country (1000) as all telephone surveys you see in magazines and newspapers. The U6, incomplete but still far more accurate and compelling than the U3, I argued, was the more accurate rate. And of course, I'm correct because the data is right there on the Bureau of Labor and Standards website. So, my point is that Snopes is not always correct because no one is infallible; and that makes the above story kind of scary.--jef)

Eminent Domain

We're All Indians Now
William N. Grigg

Prior to the closing of the frontier in 1890, "Manifest Destiny" was the incantation used by the government when it gave itself permission to steal property it coveted. Today, the preferred conjuration is "eminent domain."

The phrase "eminent domain"reflects an assumption Karl Marx would find congenial: government is the default owner of everything, and that private ownership, however extensive, is merely a contingent arrangement.

Seizure of property through eminent domain is facilitated by one of several Hamiltonian-mercantilist Easter eggs covertly embedded in the Constitution -- specifically, the Fifth Amendment provision specifying that private property can be taken for "public use" when the government offers what it considers "just compensation."

The familiar civics class platitude describes this provision as necessary for the construction of bridges, hospitals, and other amenities that are supposedly "public goods" only government can provide. The inescapable reality is that eminent domain is a particularly vulgar form of plunder used to enrich the political class and their corporate cronies at the expense of the rest of us.

In his recent book Government Pirates (which is a useful read despite its tautological title), former real estate developer Don Corace offers a concise description of eminent domain operated prior to the onset of the current depression:

"Arrogant and corrupt city and county official -- with near limitless legal budgets ... align themselves with well-heeled developers,  political cronies, and major corporations to prey on the politically less powerful and disenfranchised, particularly minority communities."

Owing to ongoing economic collapse, municipal and county governments no longer command "limitless" budgets for any purpose. They still wield the power of eminent domain, and still have large constituencies of parasites to tend -- and with real estate values bottoming out, the temptation to seize property at a vastly reduced "fair market price" may be irresistible. This is already being done by the government afflicting the State of Illinois, a junta legendary for its corruption.
In recent weeks, the Illinois state government has begun the legal process of seizing a huge amount private property in and around Peotone, a small town in Will County, about forty miles south of Chicago. The land is being taken for the supposed purpose of building a third Chicago-area airport to complement O'Hare and Midway -- a project that has been discussed, studied, and debated since 1968. 

The proposed "South Suburban Airport" -- which would be three times the size of O'Hare International --  is impractical, unwanted, and unnecessary. It doesn't enjoy the support of any major airline or the approval of the FAA. 

Congestion at O'Hare is often cited as a rationale for a third airport. However, last year, O'Hare's traffic rate was the lowest it had been in 15 years -- a trend that will continue, given the ongoing economic contraction and the ongoing expansion of the nearby international airport in Gary, Indiana. 

Expanding the small international airport in depressed Rockford would provide additional runway space at a fraction of what would be spent on a third Chicago-area airport. But this would deprive the state's patronage pimps of an opportunity to lavish plundered wealth on their favored constituents. 

In the circulatory system of graft that sustains the "pay to play" political system in Illinois, the state department of transportation (IDOT) is the aorta. Last September, IDOT announced that it was filing condemnation suits against the owners of three parcels of land in the proposed Peotone airport site. This was done despite the fact that there is no existing plan to build an airport, and the proposal has not been approved by the FAA. 

Referring to the lawsuits, Susan Shea, IDOT's commissarina for aeronautics matters, declared: "It sends a message, a clear message." 

"It certainly does send a message," wrote local activist and sometime state legislative candidate George Ochsenfeld. "Our out-of-control government will use intimidation tactics to frighten citizens into giving up their property prior to being able to take it `legally.'"

Willis and Vivian Bramstaedt received Shea's "message" last April, in the form of a piece of paper disfigured with official graffiti announcing that the state government intended to take the land they have farmed since the 1950s.

"Our schools are failing, our health system is falling apart, the state is out of money, and this is what they're doing?" exclaims 72-year-old Vivian. 

"They" -- the corporatist interests served by the Illinois political class -- are moving as quickly as possible to condemn land around Peotone in order to capitalize on the town's depressed property values. 

Commissarina admits as much, commenting to the Chicago Tribune that (as paraphrased by the paper) "the timing couldn't be better for the state" to carry out condemnation efforts, now that "land values [are] in a historic slump."

When IDOT announced its intention to seize the Bramstaedts' land last April, they offered $9,500 an acre for roughly half of the family's 160-acre corn and soybean farm. This was "50 percent less than waht the state purchased neighboring land for two years ago and a quarter of the price some land sold for when a private company bought parcels there to build an intermodal site in 2006," notes the Tribune. 

Four Peotone-area condemnation cases are already working their way through the court system. Unless the land owners are successful in getting the cases dismissed outright, they will face a lengthy, protracted legal struggle in which their opponent -- the criminal junta dominating Springfield and Chicago -- will use money extorted from them as taxes to underwrite the effort to drive them from their land. 

What distinguishes the Peotone Landgrab from others like it is the fact that the underlying project is a palpable fraud.

 

"The irony is that the Peotone airport has never been deader," contents George Ochsenfeld. "There is no funding for building the airport or for the massive infrastructure -- roads, water, sewer, etc. All major airlines have said that they will not use Peotone." 

The most recently coined rationale is that the facility would be a cargo airport, but this would also be gratuitous, Ochsenfeld observes: "O'Hare is adding 750,000 square feet of cargo space and 18 additional parking spaces for freighter aircraft." (That expansion project, predictably, has become bogged down in graft and cost-overruns, prompting Mayor Daley to request a $15 billion federal bailout.) D.C. Velocity, an aviation trade journal, asked Gary Schultheis, vice president of air freight, North America for Deutsche Post DHL if another Chicago-area cargo airport is necessary. "Not really," he replied.

Dan Muscatello, managing director of cargo and logistics for Landrum & Brown -- a Cincinnati-based airport development firm -- told D.C. Velocity that the proposed Peotone cargo airport would find it very difficult to persuade airlines and freight companies to "pull up stakes and move down the road. He also believes that international airlines with all-cargo operations would be reluctant to divide their passenger and cargo flights between two airports. And it shouldn't be forgotten that both passenger and cargo volume will continue to decline as the economic slump deepens and accelerates.

But it shouldn't be forgotten that the airport is merely a pretext -- and that seizing the land at a pittance is the point of the whole exercise. 

"Since the late 1980s, Illinois officials and their agents have tried every available means to push a huge public works project to fruition, with a keen eye toward ensuring their own political futures and continuing [the] cycle of self-enrichment," relates Peotone resident Carol Henrichs, former editor of the Peotone Vedette and long-time critic of the airport project.  

"Tax dollars have funded a multitude of government lobbyists who make regular trips to Washington, D.C. and Springfield ... to guarantee that despite its inability to gain traction of its own, this is the project that will not die," Henrichs continues. "Airport supporters have left tracks on campaign contribution lists and at political fundraisers for years."

The Peotone project "is the most `studied' airport project in America," explains Henrichs. "The word `study' intimates an investigation into factual learning. It is more accurate to say that reports have been written and rewritten -- massaged until they at least meet minimal federal requirements." 

To keep the process untainted by input from the taxpayers and property owners who would suffer the most, the deliberations leading to creation of the airport development district were confined to a handful of political insiders selected from Will County's tax-consuming class.

Between 1985 and 2002, three successive Republican state administrations in Illinois spent more than $100 million on "studies"; it has been an inexhaustible well of "study money." This liturgical exercise in public graft began as a Republican project, but also attracted the interest of Jesse Jackson, Jr. and Tony Rezko, Barack Obama's imprisoned pay-for-play patron.

In March 2003, Chicago Mayor Richard M. Daley, one of the most adept practitioners of Chicago-style civic Keynesianism, dispatched bulldozers in the middle of the night to tear up a runway at Meigs Field, a 55-year-old commuter airport in the center of Chicago.

Daley insisted that destroying the runway -- for which his administration later was hit with an FAA fine and required to pay back $1,000,000 in misappropriated airport funds -- was a counter-terrorism measure, since Meigs was a general aviation facility "a second's flight time" from the supposedly imperiled Sears Tower. "We did it for public safety," maintained Daley after bulldozers had gouged out the runway.

This was a risibly transparent pretext. Daley's midnight airport raid was carried out in the interest of a separate landgrab: He and his cronies had targeted the property to build a park, another highly lucrative civil engineering project.

"Yes, I do want a park at Meigs Field," Daley admitted after the runway had been reduced to rubble. This was a dual-purpose demolition: In addition to clearing the way for a park, it was broadly comparable to New Deal-era initiatives intended to create artificial scarcity by plowing under crops -- or, in this case, runways. All the better to create a "need" to build the much-discussed third airport -- seizing as much land as "necessary" to do so.

Even though the money for pork-laden public works projects may soon evaporate, the Peotone Landgrab will leave the political class in possession of thousands of acres of prime farmland -- which, as Jim Rogers points out, may soon be the most valuable commodity on the planet.

There's nothing going on here that would be unfamiliar to a Lakota Indian facing expropriation in the late 1880s. And there's every reason to believe that the Peotone Landgrab -- if it's successful -- would be a template for similar acts of official larceny wherever fertile tracts can be seized by the political class at depressed "fair market value."