Americans were outraged in 2005 when a bare majority of the U.S. Supreme Court struck a dangerous blow against private property rights and economic self-determination. In Kelo v. City of New London, the high court delivered an expansive new interpretation of the Fifth Amendment's Takings Clause.
Historically, the Takings Clause had been interpreted to give government the power to exercise eminent domain in order to build streets and sidewalks or establish public utilities. Later, the high court expanded that understanding to include the power to condemn private property that contributed to economic or social blight.
But in Kelo, five unelected justices determined that government could take property not to make room for a highway and not because the structures that sat on it were irredeemably dilapidated and being used as crack houses. They weren't — these were middle-class homes.
No, the justices said the government was justified in taking private property and giving it to another private entity simply because it — the government — could divine more productive uses for it.
"All private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded — i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public," Justice Sandra Day O'Connor warned in a stinging dissent.
"The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."
The stimulus plan that President Obama and Democrats rammed through Congress using fear and sleight of hand is Kelo writ large, nationalized and on steroids. Set aside the fact that Obama's own Web site,
Change.gov, maintains a pledge to "end the practice of writing legislation behind closed doors" which is exactly how this monstrosity was constructed every step of the way.
And set aside the fact that the House — including 236 Democrats — had previously voted not to consider final passage of the stimulus until it had been available for review "in an electronic, searchable and downloadable form for at least 48 hours." The House voted on the 1,071-page conference report within hours of its release. No one who voted for it knew what was in the bill.
The fundamental problem with the spending provisions of the so-called stimulus is that it is based on two highly dubious propositions. The first is that — just as the liberal justices ruled in the Kelo decision — government bureaucrats and lifers in Congress can put your money to better use than you can.
And despite Obama's pledges to the contrary, the stimulus is laden with gifts to the rich and well connected, just as Justice O'Connor predicted. One of the worst pieces of pork is $8 billion for high-speed rail projects, including a magnetic-levitation line connecting Disneyland in California, home to House Speaker Nancy Pelosi, with Las Vegas, represented by Senate Majority Leader Harry Reid.
The second dubious proposition of the spending stimulus is something called the multiplier effect. Ifyou save or spend a dollar, it's just a dollar. But according to this theory, if the government borrows and spends your dollar, it's worth more.
In this instance, the White House's lofty claims about job creation and economic impact are based on an economic multiplier of around 1.5 — that is, for every $1 the government takes from you, the economy will receive a benefit of $1.50.
It's like magic. And if it really worked as advertised, the government would be justified in taking every private asset, redeploying it, and presto — a 50 percent increase in GDP! There's a name for that, and it isn't democratic capitalism.
Of course it doesn't work that way. And the multiplier effect, like the effectiveness of a fiscal stimulus, is simply a Trojan horse argument for a massive expansion of government. John McCain called the stimulus a case of "generational theft." He's right. But it's more than prosperity that's being stolen.
