Atlantic Yards Eminent Domain Abuse Scheme Confronts Reality

The NY Times reports that Bruce Ratner's Atlantic Yards development in Brooklyn is suffering growing pains from the slowing economy (Charles V. Bagli, NYT March 21, 2008 http://www.nolandgrab.org/archives/2008/03/slow_economy_li_1.html )

The credit crunch and the slowing economy have hindered the developer from securing an anchor tenant for the showpiece "Miss Brooklyn" office building. Forest City Ratner claims they will begin construction on the Nets Arena, housing the professional basketball team that was previously in New Jersey by the end of the year.

Let us cast a Libertarian eye on Ratner's scheme as it unravels. 

The legal case proceeds on the eminent domain abuse issue.  I cannot say I am terribly optimistic given the laws in New York and the appalling Kelo decision, which I view as wrongly decided.

Libertarians have been greatly influenced by the Austrian school of economics which holds that the increase in the money supply by the Federal Reserve will lead to malinvestments (e.g. subprime mortgages) that will be exposed as such leading to painful corrections as they are liquidated.  The runup of prices is not inflation but  the symptom of inflation. 

As the credit market is jolted by the crisis, the availability of credit drops.  Real estate development is heavily dependent on credit financing. 

Eminent domain abuse transfers the private property of the current property-owners to the favored private developer.  Libertarians identify this as legalized theft.

Developers like Ratner frequently get tax-exempt government guaranteed bonds or in some cases outright grants. Once again, Libertarians describe these as legalized theft.

Government intervention in economic development distorts the market.   Eminent domain distorts the price that the developer would pay for real estate, artificially lowering the purchase price. Government economic development schemes artificially encourage certain plans that are favored by politicians and bureaucrats.  This is especially true with corporate sports welfare like the Brooklyn Nets Arena aspect of the Atlantic Yards development. 

In Economics In One Lesson, Henry Hazlitt wrote "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." 

Libertarians call for the abolition of sports welfare. No taxpayer funds or eminent domain for sports teams.  We say separate sports and state.

Nor is it sufficient to oppose this one instance.  NY Libertarians call for the abolition of the prime mover in the Atlantic Yards outrage, the Empire State Development Corporation.  The bureaucrats who run it represent the "banality of evil" in Hannah Arendt's words.

The NY Times article noted the involvement of the paper's parent company with Forest City Ratner in the construction of the new headquarters building opposite the Port Authority Terminal.  It neglected to mention that the land was stolen by eminent domain.  I called this scheme Time$cam.

While some Republicans and Democrats have opposed particular eminent domain schemes, overall both parties are heavily involved in them. Barack Obama, for example, has not taken a stand on eminent doman abuse. That is why we must elect candidates from the Libertarian Party (www.lp.org)  to office at all levels.  -30-

(About the author: Richard Cooper the export/import manager of a Long Island, NY manufacturer.  He has been active in combatting sports welfare and eminent domain amongst other issues as former Chair of the Libertarian Party of New York www.ny.lp.org. He worked with the Institute for Justice www.ij.org on some cases.)

 http://www.groundreport.com/World/Urban-Renewal-Schemes-Seeking-Planning-Consultant-

 http://www.groundreport.com/Politics/Presidential-Candidate-Defended-Black-Church-

http://www.groundreport.com/Opinion/Barclays-Bank-Boycott-To-Protest-Eminent-Domain-Ab

 http://www.groundreport.com/Politics/Columbia-University-Eminent-Domain-In-Harlem-Conde

http://www.groundreport.com/Politics/A-Childs-Book-of-Eminent-Domain

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