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Cato Daily Dispatch for April 24, 2002

Jerry Brito, editor, jbrito@cato.org

Supreme Court Deals a Blow to Property Rights
Cuban Delegation May Visit U.S. for Trade Talks
Daschle v. Schumer on Ethanol

Supreme Court Deals a Blow to Property Rights

The Supreme Court ruled yesterday that the Constitution does not require governments to pay compensation to landowners when agencies temporarily prohibit them from building on their land, a decision that strengthens the hand of environmental regulators against the "property rights" movement, according to The Washington Post.

By a vote of 6 to 3, the court rejected the argument of a group of California property owners that government freezes on development are tantamount to official seizures -- known in legal parlance as "takings" -- of private property and require compensation. Rather, the court held that such claims must be considered case by case, balanced against other factors such as the duration of a development moratorium and the government's reasons for it.

In the Cato Handbook for Congress chapter "Property Rights and Regulatory Takings," (pdf) Vice President for Legal Affairs Roger Pilon urges Congress to enact legislation that specifies the constitutional rights of property owners under the Fifth Amendment's Just Compensation Clause and treat property taken through regulation the same as property taken through physical seizure.

In "The Birth of the Property Rights Movement," Steven J. Eagle recounts how "Americans who own property -- homeowners, landlords, businesspeople of all kinds, even nonprofit organizations such as churches and charities -- have found themselves increasingly entangled in a web of regulatory restrictions that have limited what they can do with their property. Imposed in the name of an amorphous 'public interest,' those restrictions have often been unwarranted and severe, resulting in untold personal and financial losses." By century's end, he writes, they had led to the birth of the property rights movement, which is likely only to grow in the 21st century.

Cuban Delegation May Visit U.S. for Trade Talks

A Democratic senator who favors ending the 40-year-old U.S. trade embargo with Cuba is inviting Cuban officials to visit his home state, North Dakota, even though the State Department has revoked their visas, according to the Associated Press.

Sen. Byron Dorgan sent a letter yesterday to Pedro Alvarez, president of Alimport, the Cuban agency that buys food from abroad, and asked him to come to North Dakota to discuss buying wheat and beans. Dorgan said he has told Secretary of State Colin Powell about the invitation and asked Powell to see that Alvarez and other Alimport officials get visas.

"If Cuba wants to buy dried beans and wheat, and North Dakota's family farmers want to sell those products to Cuba, the State Department needs to step aside and allow those sales to take place," Dorgan said.

In "A Policy Toward Cuba That Serves U.S. Interests," Philip Peters argues that the wide array of U.S. sanctions has failed to promote change in Cuba and has allowed Castro to reinforce his arguments that the United States promotes economic deprivation in Cuba. "It is time for the United States to turn to economic engagement," he says. "Whether or not the embargo is lifted completely, a policy that respects the rights of Americans to trade with, invest in, and travel to Cuba would more effectively serve U.S. interests in post-Soviet Cuba: defending human rights, helping the Cuban people, and connecting with the generation of Cubans that will govern that country in the early 21st century."

According to Jonathan G. Clarke, Cato research fellow, and William Ratliff, senior research fellow at Stanford University's Hoover Institution, the embargo is not responsible for Cuba's poor economic condition--as Havana claims--nor has it been effective at achieving Washington's goal of isolating the Cuban regime. Their study, "Report from Havana: Time for a Reality Check on U.S. Policy toward Cuba," draws on their interviews with officials, dissidents, and private citizens in Cuba.

Daschle v. Schumer on Ethanol

After six weeks of slow debate on energy legislation, the Senate entered the final stretch today, agreeing to a package of tax incentives for energy production and conservation and voting to expand the amount of ethanol in the nation's gasoline, according to The New York Times.

Senators from New York and California led a fight to delete from the legislation a section that would triple the amount of ethanol in the nation's gasoline supply by 2012, but their proposal was rejected, 68 to 31.

Senator Charles E. Schumer (D-N.Y.) argued that the requirement for increased use of ethanol, a clean-burning additive usually made of corn, would lead to increased gasoline prices on the East and West Coasts, where that crop is not widely grown. But Daschle, the main sponsor of the ethanol provision, said this view of higher prices was "just not accurate."

In "Gasoline Prices: Still Good News," Rob Bradley explains that "ethanol is more expensive than gasoline because it takes more resources -- including energy -- to produce it."

In "Push Ethanol Off the Dole," Stephen Moore discusses how ethanol subsidies have been a costly boondoggle with almost no public benefit. In a policy analysis entitled "Archer Daniels Midland: A Case Study in Corporate Welfare," James Bovard looks at the numbers behind ADM's subsidies: Every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30.