AS WE'VE WRITTEN
a few times over the years, at the heart of America's high quality of life is our system of government, a constitutional republic built on a foundation of individual rights, namely property rights. Many in this country have come to take property rights for granted. But property rights are an anachronism in the socialist dictatorship of Venezuela, where, despite the fact that the country is teeming with oil and natural resources, more than 66% of the population lives below the poverty line, unemployment hovers near 18% and the infant mortality rate is 26 per 1,000 births (compared with seven per 1,000 in the U.S.). (Seechart
How nonexistent are property rights in Venezuela? Consider a 2001 land law, part of Hugo Chavez's "revolution for the poor" that allows the government to confiscate privately owned land judged to be idle or unproductive. In March, the Venezuelan government announced it would seize 270,000 acres of farmland belonging to the Branger Family, whose ownership had stretched back to the end of the 19th century. It wasn't an isolated incident. Just a few weeks back, the government declared that more than 67,000 acres belonging to Britain's Vestey Group Ltd. were "idle," and thus were to be turned over to the state.
Under the socialist Chavez, ownership rights become contingent on the whim of a government official who can revoke, rescind or redistribute it at will. As one Branger family member told the Christian Science Monitor," At the end of the day, the government can do whatever they want to us and our land."
While similar scenarios would seem downright impossible in a country founded on the principles of "life, liberty and the pursuit of happiness," that is precisely the road the U.S. is now heading down in the wake of a disastrous Supreme Court decision reached last week.
In Kelo et al. v. City of New London et al., the Supreme Court ruled that local governments may use eminent domain to confiscate private homes in order to turn land over to developers. The reasoning behind the decision was that the new development in this case, a hotel and marina would bring "benefits to the community," including "new jobs and increased tax revenue."
It is irrelevant if new development would cure AIDS, end poverty or put Bin Laden's head on a pike. Even if compensation is offered, privately owned property is just that privately owned. The so-called public good cannot trump the individual rights of a homeowner who doesn't want to sell.
I suppose the longtime residents who live in those nine homes set to be demolished aren't among the public the government aims to benefit. They are the minority, who, as always is the case when the "public good" is promoted, are strung up to be sacrificed for the majority mob.
Proponents argue that the constitutionality of the decision rests in the fifth amendment, which says the government may take private property "for public use" if it pays the owners "just compensation." But in this case, the land is being transferred from one private citizen to another. Eminent domain isn't being used to build a military base or superhighway, or because the homes in question are dangerous to others. Now, all government officials must do is to aim to increase taxes or create jobs in order to forcibly remove taxpaying, law-abiding citizens from their homes. Is this America?
Writing for the majority, Justice John Paul Stevens explained that "Promoting economic development is a traditional and long accepted function of government." Apparently, at least from Justice Stevens' perspective, protecting an individual's property rights is not a "long accepted form of government." One wonders how he, or Justices Kennedy, Souter, Ginsburg and Breyer, would feel if Virginia condemned their> homes to build a Costco or Trader Vic's?
Look, I know the score you want stock tips, not political rhetoric. You're looking for a buy list, not a lecture. But as Ayn Rand wrote, "without property rights, no other rights are possible." The Kelo decision puts capitalist America and socialist Venezuela in the same position of trampling on property rights, confiscating private land and sacrificing individuals for the "public good."
So forget crude prices: If you want to know why the Dow dropped 166 points Thursday as the decision was made and 123 points the day after that this is the reason. I promise you.
Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC. At the time of writing, Hoenig's fund may have held positions in any of the securities mentioned herein.>
|Comparing the U.S. and Venezuela|
Source: CIA Factbook