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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 7, Issue 26: June 27, 2005

  1. Supreme Court Abandons Private-Property Rights
  2. Rule of Law up in Smoke?
  3. What Should Donald Rumsfeld Negotiate?

1) Supreme Court Abandons Private-Property Rights

"...nor shall private property be taken for public use without just compensation."
--from Amendment V, U.S. Constitution

Last week's 5-4 Supreme Court decision in the eminent-domain case of Kelo v. City of New London (CT) shows that a majority of the Court has abandoned individual rights and gravely misread the Fifth Amendment's Takings Clause. In that decision, Justices Stevens, Souter, Ginsburg, Breyer, and Kennedy supported the taking of private property for the sake of a private developer who had promised to bring the City more jobs and tax revenue. This is exactly what the Framers meant to prohibit when they specified in the Fifth Amendment that a lawful taking required "public use."

The majority's interpretation of "public use" effectively wipes out that term, as Justice O'Connor noted in her dissenting opinion. If the Court can sanction the redistribution of property from Private Party A to Private Party B simply because Private Party B's use of the property may generate more tax revenue, then no one's property is protected.

"In [the Fifth] Amendment," writes Research Fellow Tibor R. Machan, "private property was deemed to be subject to eminent-domain measures only where the purposes of taking it was public and even then individuals would have to be properly compensated for what was taken from them. A public purpose is one that serves the interests of everyone in the community in relationship to his or her citizenship....

"But New London, CT, as have other cities across the U.S.A., has decided to violate the right to private property so as to promote the city officials' conception of economic development.... The 5-to-4 decision pretty much follows in the footsteps of other recent decisions in which individual rights have been trampled upon -- the case of medical marijuana, the case involving forcing farmers to fund public service propaganda in which they do not believe, etc., etc.... So, in fact, the Court's ruling is yet another nail in the coffin of individual rights in the United States of America."

See "Betrayal at the Supreme Court," by Tibor R. Machan (6/24/05)
http://www.independent.org/newsroom/article.asp?id=1525
SPANISH TRANSLATION:
"Traición en la Corte Suprema"
http://www.elindependent.org/articulos/article.asp?id=1525

To purchase PRIVATE RIGHTS AND PUBLIC ILLUSIONS, by Tibor R. Machan, see
http://www.independent.org/store/book_detail.asp?bookID=46

To purchase THE VOLUNTARY CITY: Choice, Community, and Civil Society, ed. by David T. Beito, Peter Gordon, and Alexander Tabarrok
http://www.independent.org/store/book_detail.asp?bookID=17

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2) Rule of Law up in Smoke?

The U.S. Department of Justice recently reduced the damages it seeks from the tobacco industry to $10 billion -- from $280 billion, originally. What gives? Did the DOJ wake up one day and decide that its prior claim had been excessive or had misapplied a principle of justice?

No, the feds are simply operating on the assumption that collecting some money is better than collecting none. The feds had argued that the industry's practices constituted a "pattern of criminal activity" -- and hence a violation of the federal anti-racketeering law, RICO. But in February of this year, a ruling by the District of Columbia Circuit U.S. Court of Appeals put such RICO suits in jeopardy. Still, the feds are asking for $10 billion to cover what they said is "the risk of 'future violations' of RICO by tobacco companies," as Research Fellow Michael I. Krauss explains in a new op-ed.

But even with a pared down claim of $10 billion, "the ongoing federal lawsuit against tobacco companies is an outrage against the Rule of Law and against the very idea of limited federal government," writes Krauss. "It is past time for the administration to administer the coup de grace to this lawsuit, for it makes a mockery of our tort system.

"As I indicated in my 2002 book FIRE AND SMOKE: Government, Lawsuits and the Rule of Law, in 1997 Attorney General Janet Reno testified before the Senate that the federal government had no legal basis to recover health-care expenditures from tobacco companies," Krauss continues. "That’s why she left this task to the states, which recovered a whopping $246 billion from the industry in 1998. Yet in 1999, under pressure from a White House that had failed to enact its desired 55-cent per pack federal cigarette tax increase, Miss Reno shamelessly filed the very same suit she had explicitly admitted was groundless."

"The federal suit was a legal shambles," writes Krauss. The feds had known that smoking presents health risks, and had required warning labels on cigarette packs since 1964; the feds could not claim they had acquired individual smokers' rights to sue, since the federal government had long denied such rights exist; nor was the feds' economic rationale for the lawsuit -- revenue enhancement -- sound.

"Virtually every serious expert who has studied the issue has concluded that, while smoking is dangerous for smokers, it causes no financial loss to the federal government. This is because smoking affects the timing of government health-care costs. Smokers on average die earlier than nonsmokers, so costs paid by government to treat tobacco-related diseases are more than offset by savings on other diseases and retirement benefits. The billions in federal excise taxes each year generate a net gain to federal coffers. Washington would suffer fiscally if all Americans stopped smoking."

See "Snuff Out This Silly Suit," by Michael I. Krauss (WASHINGTON TIMES, 6/24/05)
http://www.independent.org/newsroom/article.asp?id=1526
SPANISH TRANSLATION:
"Terminemos con Esta Ridícula Demanda Judicial"
http://www.elindependent.org/articulos/article.asp?id=1526

To purchase FIRE AND SMOKE: Government, Lawsuits and the Rule of Law, by Michael I. Krauss, see
http://www.independent.org/store/book_detail.asp?bookID=39

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3) What Should Donald Rumsfeld Negotiate?

Defense Secretary Donald Rumsfeld recently confirmed that the United States is negotiating with key insurgent leaders in Iraq to help bring peace and stability to that war-torn country.

"Unfortunately, the ongoing talks are unlikely to succeed," writes Ivan Eland, director and senior fellow of the Independent Institute's Center on Peace & Liberty, in his latest op-ed. The Sunni Arabs, Eland explains, "fear that the Shi'a and Kurds -- who control the U.S.-backed Iraqi regime -- will use the central government's power to pay them back for their past oppressive rule of Iraq. The Sunnis, with some justification, fear that democracy in Iraq could result in a 'tyranny of the majority.'"

Given the Sunni suspicions, what should Rumsfeld attempt to negotiate? Or, more broadly, what kind of political arrangement has the best chance of bringing stability to Iraq and avoiding a prolonged and bloody civil war? The best hope, according to Eland, may be in assuring the Kurds, Shi'a, and Sunni that the new central government is too weak to pose a threat to the security of each. In this case, decentralized governance -- a confederation or a partition -- would seem to have the greatest chance of success.

"Even potential reactions by Iraq’s neighbors to a controlled weakening of the central government have probably been overstated," writes Eland. "The Turks would likely be constrained from reckless military action by their overwhelming desire to get into the European Union, and the export of Persian Iran’s failed theocratic rule to Iraq’s Arab Shi’a would probably have at most limited success

"Decentralized governance is not a panacea. The administration is so far in the hole that civil war remains a distinct possibility. And the issues of oil revenue sharing, the status of Kirkuk, and the boundaries for areas of self-rule would have to be settled. Despite these challenges, however, a negotiated U.S. withdrawal and agreement among Iraqi groups for a decentralized solution are the best hope for salvaging Iraq. Because the U.S. public will eventually demand a U.S. withdrawal, a controlled decentralization of Iraq is better than one arrived at later in chaos or civil war."

See "Negotiations with Iraqi Rebels Are a Good Start But Not Enough," by Ivan Eland (6/27/05)
http://www.independent.org/newsroom/article.asp?id=1527

"The Way Out of Iraq: Decentralizing the Iraqi Government," by Ivan Eland
http://www.independent.org/publications/policy_reports/detail.asp?type=full&id=16

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see
http://www.independent.org/store/book_detail.asp?bookID=54

To purchase PUTTING "DEFENSE" BACK IN U.S. DEFENSE POLICY, by Ivan Eland, see
http://www.independent.org/store/book_detail.asp?bookID=19

Center on Peace & Liberty
http://www.independent.org/research/copal/

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