The bulldozers are revving their engines.
Emboldened by the June 23 U.S. Supreme Court ruling permitting governments to take private property in the name of higher tax revenue, cities from Connecticut to Missouri to Texas are moving to build shopping centers and hotels where homes now stand.
Fortunately, bulldozers in Arizona may be stopped in their tracks. The Arizona Constitution declares, "Private property shall not be taken for private use." A recent Arizona court ruling affirms that "the constitutional requirement of 'public use' is only satisfied when the public benefits and characteristics of the intended use substantially predominate over the private nature of that use."
Some officials, like Mesa mayor Keno Hawker, have expressed a desire to see private property rights protected. But officials in several other Arizona cities, including Chandler, Tempe, and Phoenix have indicated they intend to move forward with projects that rely on taking private property.
Those cities will come face-to-face with the Institute for Justice, which has successfully defended home and business owners against such takings in the past. As IJ executive director Tim Keller writes, "The institute is in the business of suing bureaucrats who overstep their constitutional bounds."
To get hands-on, check out the Castle Coalition's "Hands Off My Home" campaign.
- Arizona Republic: "Private Property Ruling Stirs Concerns"
-Tim Keller: "Private-property ruling opens door to abuses"
- Wall Street Journal: "Leviathan"
-Castle Coalition: Hands Off My Home
In her mission to woo technology development in Arizona, Governor Napolitano shepherded the Knowledge Economy Capital Fund with the goal of raising $100 million in venture capital. Seeded with $25 million from the State Compensation Fund, high-profile fund partners such as Phoenix mayor Phil Gordon hoped to amass another $75 million from the private sector.
Not surprisingly, the private sector has yet to add a dime.
To wit, fund overseers have trouble deciding who's in charge. The governor's office indicated that "the Comp Fund and high-tech leaders not the governor's office are taking the lead." Meanwhile, Mayor Gordon's office says "the governor's office is the main engine," and the State Compensation Fund calls it "a joint effort."
In the risky arena of venture capital, it's easy to see why political interests would want to keep this project at arm's length. It's also easy to understand why savvy investors have steered clear.
Government-driven investment rarely offers any kind of advantage when compared to the highly specialized and fast-moving world of capital markets. Additionally, private investors who contribute to venture capital funds are banking on the previous experience and success of particular funds. Entangling one's assets in politics makes venture capital even riskier.
Wanting to write their own check to the high-tech ball, some politicians are now surprised that no one showed up for the party.
- Phoenix Business Journal: "State tech fund not attracting private investors"
-Study: The Effects of Government-industry R&D Programs on Private R&D
- Business Week: "Global Silicon Valleys First, Kill All the Subsidies"
-Jerry L. Jordan, President and CEO, Federal Reserve Bank of Cleveland: "The State and Prosperity"
Mesa spends $2.5 million to run two city-owned golf courses. At the same time, city employees are being asked to forgo cost-of-living adjustments for the next two years to help stave off a looming budget deficit. While glittering greens may look great in brochures and nicely complement the other 19 golf courses in Mesa, a round on the municipal back nine is cold comfort to employees facing de facto pay cuts.
Mesa is not alone in financing personal recreation at public expense. Tempe and Glendale each run two courses; Kingman, Page, and Casa Grande have eighteen holes each. But these one- and two-course operations are positively quaint compared to other Arizona cities. Tucson has 5 city-owned courses, Phoenix runs 7, and Sun City has 8.
Consider that there are over 300 privately owned courses in Arizona. Reasonable people may disagree about the proper role of government, but municipal golf courses? It's enough to make you need a day on the greens.
For years, Trident claimed "4 in 5 dentists" agreed its sugarless chewing gum was the best on the market. Dentists, the advertising theory held, were the authority on the topic.
When it comes to Social Security reform, the media, at least, are taking 150 college student body presidents, who recently signed a letter opposing voluntary personal retirement accounts, as the authority. The letter received widespread attention from the Associated Press to the Washington Post.
Compare that to coverage of a letter supporting personal accounts, which was signed last month by 450 economists, including Nobel Prize laureates Milton Friedman, Vernon Smith, and ASU's Edward Prescott. A Lexis-Nexis search shows the letter received zero coverage in the major media, and only a single National Journal mention about the lack of coverage.
So who should we trust-the students or the teachers?
Back in 1999-when today's student body presidents were in high school-Milton Friedman had already addressed the students' main concern: issuing debt to finance the transition to personal accounts. "There are no real transition costs to privatizing Social Security, merely the explicit recognition of current implicit debt."
Moreover, these renowned economists recognize a fact that's escaped the 150 student body presidents-allowing younger workers to create personal retirement accounts would pay off the long-term Social Security debt faster, thanks to higher rates of return that come from actual savings and investment.
For advice on how to win a popularity contest at an American college, ask a student body president. But when it comes to reforming our country's retirement system, 450 economists are the authority.
-Students for a Secure Future
-450 Nobel Laureates Backing Social Security Choice
-Cato Institute Project on Social Security Choice
- Wall Street Journal: Pat Toomey on Social Security (subscription)
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