Saturday, August 10, 2013

Eminent Domain Tables Turned in California

The national government of the United States, to a through depth in all three branches, has been captured by global (not merely national) corporatist interests.     Those who would think to deny this statement should explain to you why a third of QE I and almost all of QE II actually went to the U.S. branches of foreign owned banks, and from there the money was quickly transferred overseas.   The new money did not goose our domestic economy because it did not enter it.   It was about bailing out Europe's banking system.  Your children are expected to work in order to pay off the debt created to accomplish this.    If the American people and not global corporations control the government of the United States, how did this happen?

The entities which effectively control our national government are not even of our nation, therefore it is little wonder that this government's (I do not say "our" government) policies on foreign affairs, immigration, education, trade, banking and economics, and essentially every other major issue is globalist in outlook.    Minding our own business and doing things our own way while allowing others to do the same is not an option valued in either dominant political gang.  The reason? Because global corporations find it easier and more profitable for them to do business when rules, and therefore governments, are "harmonized."

Domestically, this grinding corporate oppression takes many forms.  From mandates from government that we purchase and use their products (even dangerous products like some vaccines) to various subsidies and advantages written into the law to suppress free-market competition.   The number of ways the laws were changed to enhance the looting of the population exploded as the ruling class noticed there was very little push-back from the population no matter how outrageous their actions.    People continued to plod along, locked in the Red- Blue facade, and completely trusting their team color of choice to look out for their interests and protect their liberties even though they are funded by the same people doing the looting.

The abuse of eminent domain has been added to the list of ways giant corporations have used the government to transfer wealth from private citizens to their pockets.   The Courts, through the Kelo decision, solidified the practice of a local government using eminent domain to transfer property from one private owner to another.    It forced people out of their homes who did not want to leave, or who wanted a higher price, in order to turn (for example) the land into a strip mall.    Using the government to transfer the ownership of private property from one private entity to another is considered by Localists and many others to be an abuse of eminent domain.

Recently, the town of Richmond, California introduced a new twist to the by now too-familiar practice of abusing eminent domain for private-to-private transfers.    They want to use it to take underwater homes away from banks and sell those homes back to the owners at a steep discount.  The local government would pocket some of the difference in the price that they would force the banks to take for the property and the price they would re-sell it to the home owner for.

Imagine a home mortgaged for $400,000 that was only worth half that.   The city would take it from the banks at 80% of true value and issue a new mortgage to the "owner" at 90% of true value.   The banks would go from having a $400,000 loan on their books (backed by a home worth $200,000) to $160,000 in cash.  Well, technically, since these mortgages were all repackaged and sold from the original lender what would happen would be that the value of the Mortgage Backed Securities which owned any income from the mortgages would take a big hit.   The banks are outraged, and are counter-suing.

This news brings conflicting feelings.  On the one hand, one is tempted to think what is sauce for the goose is sauce for the gander.    On the other hand, whether the rich are using government to loot the rest or the rest are using government to loot the rich, it is still looting.    When the corporate giants first started this abuse of government, they should have realized that there would be unintended consequences to perverting the rule of law.   There always is.   The stratagems they use to undermine property rights in order to defraud others can be used by others to defraud them.

Richmond California, if they are permitted to follow through on their plan, will find that there are unintended consequences as well.     It will be harder for other people to get home loans in that jurisdiction.    More people will want access to the scam, leading to costly legal battles.   Once the genie of government theft is out of the bottle, it is hard to tell where it will end up.

And that is the real trouble with government theft.  That is what must happen once government abandons its true calling of protecting private property rights and becomes the enforcer for redistributing the same.   We will all spend less and less of our time, energy and effort serving one another and thereby generating new wealth.  Instead, we shall spend more and more of our time, energy, and effort lobbying government to protect what we already have from looting, and loot others of what they have.   This turns us from one another's mutual servants to one another's rivals and pillagers- with the effect on civility which we have begun to see.    In the long run, abandoning the rule of law, respect for private property rights, and if I may say so the Tenth Commandment of God, is a recipe for poverty and oppression.  

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