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Cato Dispatch for July 27, 2006

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

Property Owners Win Big Ohio Ruling

"In a signal embarrassment for the U.S. Supreme Court, the Ohio Supreme Court ruled unanimously Wednesday that a Cincinnati suburb can't use eminent domain to take private property for a $125 million multiuse redevelopment, Investor's Business Daily reports.

"It was the first challenge of a city's right of eminent domain to be decided by a state high court since the U.S. Supreme Court ruled last summer that economic benefit constitutes 'public use' under the Constitution."

In "Eminent Domain Blinds Bureaucrats to Their Duty," Timothy Sandefur, a staff attorney at the Pacific Legal Foundation and author of the Cato book Cornerstone of Liberty: Property Rights in 21st Century America, writes: "Nobody's going to invest in a place where property can be stolen, or condemned, at any moment. In fact, experience shows that redevelopment doesn't require the use of eminent domain. Seattle recently completed a major redevelopment project without it. Even the Disney theme parks were built without using eminent domain. Unfortunately, eminent domain abuse not only blinds officials to the possibilities of free-market development; it also distracts them from their legal and ethical duties.

"Bureaucrats today have a hard time distinguishing the genuine public interest from the private interests of powerful developers. There's really only one thing that's in the genuine public interest: the equal protection of individual rights.
 
"But real reform requires more than court decisions. It requires all Americans to return to our founding principles, and to recognize that government doesn't exist to 'remold' our rights; it exists to protect our rights to life, liberty, and the pursuit of happiness."

Senate Committee Begins Bolton Hearings

According to The Washington Post: "U.N. Ambassador John R. Bolton's blunt diplomatic style has made him a political rock star among conservative Republicans who relish his routine exposure of U.N. foibles and criticism of its bureaucrats. But international diplomats, including several from countries closely allied with the United States, complain that he has furthered U.S. isolation here and undercut U.S.-backed efforts to reform the sprawling bureaucracy of the United Nations.

"The Senate Foreign Relations Committee begins hearings Thursday on whether to make Bolton's temporary appointment, which will expire in January, permanent. His appearance in Washington, where Democratic leaders have vowed to oppose Bolton, is expected to be as polarizing as his presence at U.N. headquarters." 

In the 1997 Cato book Delusions of Grandeur: The United Nations and Global Intervention, Bolton's chapter, "The Creation, Fall, Rise, and Fall of the United Nations," strongly criticizes the U.N. and argues for reform: "The U.N. was an admirable concept when conceived; it has served our purposes from time to time; and it is worth keeping alive for future services. But it is not worth the sacrifice of American troops, American freedom of action, or American national interests. The real question for the future is whether we will know how to keep our priorities straight."

'Big Box' Stores to Raise Wages

The New York Times reports, "After months of fevered lobbying and bitter debate, the Chicago City Council passed a groundbreaking ordinance yesterday requiring 'big box' stores, like Wal-Mart and Home Depot, to pay a minimum wage of $10 an hour by 2010, along with at least $3 an hour worth of benefits." The article continues, "The ordinance, imposing the requirement on stores that occupy more than 90,000 square feet and are part of companies grossing more than $1 billion annually, would be the first in the country to single out large retailers for wage rules."

In "Minimum Wage Socialism," James A. Dorn, professor of economics at Towson University and editor of the Cato Journal, writes: "Communism may be dead, but socialism is alive in the many forms of government intervention we see daily in the marketplace. One widely accepted policy -- the minimum wage -- is appropriately reflected in Karl Marx's dictum, 'To each according to his needs, from each according to his ability.'

"The idea that legislators can help low-income workers simply by mandating a pay raise is the height of hubris. While the minimum-wage rhetoric may sound good, the reality is quite different. Forcing employers to pay low-skilled workers a higher than market wage -- in the absence of any changes in productivity -- will decrease the number of workers hired (the law of demand).
"It would be much wiser to let workers and employers freely negotiate wages than to enact a minimum wage law that interferes with freedom of contract and prevents low-skilled workers from gaining the experience and work ethic necessary to achieve higher living standards."

Kristen Kestner, editor, kkestner@cato.org