Tag Archives: Georgia

Eminent Domain: That Itchy Spot Below the Belt

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By Katharine C. Otto
February 1, 2017

 On January 25, The Wall Street Journal ran a front page article claiming “Trump Revives Pipeline Projects.” The article states that President Trump gave a thumbs up to the Keystone XL and Dakota Access pipelines, both stalled by former President Obama.

The WSJ is all for this, as noted in its editorial “No More Keystone Capers” the same day, which asserted the Keystone XL and Dakota Access pipelines are good for “the economy.”

The WSJ says those in the industry are divided about whether the pipelines are needed.  Some say they are not needed yet. Other sources indicate energy use is declining worldwide, there is a glut of oil, and prices are down.

The WSJ’s slant is well known.  It supports Wall Street, assuming that what’s good for big business is good for the country.  It glosses over the long term costs of large-scale industrialization, manufacturing and exporting of natural resources.  The cost effectiveness of pipelines (and other large projects that benefit big business at the expense of residents) rides on the use of “eminent domain,” the government’s self-proclaimed right to confiscate private land for public purposes.

The Dakota Access pipeline is at the hub of the Standing Rock Sioux’s protest against the US government.  The Sioux claim the pipeline, slated to run under the Missouri River, endangers sacred ancestral and hunting grounds, as well as their drinking water supply (and that of others downstream).  Their resistance has drawn support from other Native American tribes, numerous environmental, other land-friendly and taxpayer-friendly groups.  The group is staking out its territory through the winter, justifiably worried that bulldozers will move in as soon as protesters look the other way.

While eminent domain has been in use over a century, it got a jump start forward in June, 2005, with the infamous “Kelo decision,” in which the Supreme Court voted 5-4 to allow the New London, Connecticut City Council to eminent domain Susette Kelo’s neighborhood to build a convention center.  Pfizer, the massive pharmaceutical company, was a heavy hitter behind the move, as it had promised to build a $270 million research facility next door.

It was a bitter fight, as several of the neighbors had lived in their homes in the Fort Trumbull area for close to 60 years, paying property taxes all that time.  After the Supreme Court decision, Kelo’s neighborhood was razed.  Four years later, when Pfizer’s tax credits expired, it announced that it was abandoning the project, not to return.

Meanwhile, the precedent-setting decision by the Supreme Court has had devastating consequences, including using eminent domain to condemn property for oil pipeline construction.  It reaches deep into the pockets of all property owners and taxpayers and raises questions about what, exactly, is guaranteed by land ownership.

Shortly after the Kelo decision, there was a stampede by municipalities and other government entities across the nation to confiscate private land on the flimsiest of pretexts.  It got so bad in Georgia (and over 40 other states) that the state legislature put brakes on it, much to the dismay of our city and county governments.

In Savannah, title searches were being conducted by city officials to determine which properties the city might claim.  It was irrelevant to them that property taxes were being paid.  Now municipalities are lobbying the state legislature to remove the limits and maybe expand them, too.

Worse, eminent domain is rearing its ugly head in ever more ominous guises.  President Trump has said he would like to expand the its use.

This power of the state to confiscate private land for corporate cartels has run amok.  In Georgia, the latest assault on private property comes from corporate giant Kinder Morgan (of Enron heritage), which is lobbying the Georgia government for direct eminent domain rights.  There is a newly formed legislative committee studying how to slip this egregious theft past taxpayers and still get re-elected.

Meanwhile, multiply-subsidized Southern Company (a Fortune 500 company), has recently paid $1.5 billion cash for a stake in Kinder Morgan’s future.  Never mind that Georgia taxpayers, energy users, and captive SoCo market customers are already paying for two unneeded nuclear power plants upriver from Savannah.

I contend the industrial age has peaked.  Long term costs, like widespread contamination of shared resources, are becoming increasingly apparent, yet these are not factored into the government or corporate prognostications.  The “global economy” works when you’re talking about electronic money.  It’s a different matter when you’re exporting valuable natural resources and leaving the waste behind.

Eminent domain cuts both ways.  The impact of the Kelo decision has been for government to determine what is in the interests of “the public good,” to the great indignation of “the public.”  Remember that property owners pay property taxes every year to secure their protection from land confiscation, among other things. Guarantees such as water quality come with property tax payments.

By comparison, in the mid 1800s, much of the US rail system was built on government granted land, acquired by the government by “treaty” with natives, ”purchased,” as in the Louisiana Purchase, or presumed US territory because no one contested it.  Abraham Lincoln and his successors, such as Andrew Johnson and Ulysses Grant, gave 10-mile wide swaths to private rail companies.  During the War Between the States and during Reconstruction, the North was desperate to insure a food supply for the cities, since it had eviscerated the South’s agricultural economy.  Let’s not forget that Abraham Lincoln was a corporate railroad lawyer before he was president.

So the race to link the continent’s coasts as quickly as possible gave rise to government bonds and favors, and railroad stock speculation, with the so-called “Robber Barons” like John D. Rockefeller, J.P. Morgan, and Andrew Carnegie playing both ends against the middle and profiting on all sides.   They skillfully manipulated the government and stock markets to do their bidding, at maximum public cost.

Immigrants from China, Ireland, and other places were tricked into leaving their homes to come to the “land of the free” to do the grunt and dangerous work, like laying the tracks.  They were now destitute, unable to return home, and forced to do maximum labor for minimum wages and the worst possible living conditions.

Back to the 21st century, the most outrageous difference between the rail and the highway systems now is that the highways are owned by the public, and the rail lines are owned by corporate rail giants, like Norfolk-Southern, CSX, and Western Pacific.

To allow the rail infrastructure—an invaluable public resource–to languish in corporate hands distorts US perceptions so badly that we lose track of the obvious.  Rail is the most efficient, enjoyable, and effective land transporter of goods and people ever devised.  Rail has versatility, accessibility, and practicality that pipelines can never provide.  It’s out in the open, so people can see what’s broke and fix it easily.  Best of all, the infrastructure is already in place, just needs a little of The Donald’s magic wand in terms of claiming it for the public good and using some of that infrastructure funding to spiff it up and make it safe for all.

If the new President wants to use eminent domain for the public good, he would do well to look at the rail system, but don’t expect him to think of this on his own.  It is in every citizen/taxpayer’s best interest to look at who benefits from eminent domain as it is currently wielded.  Once again, it favors large institutions over individual taxpayers, while taxpayers suffer the costs.

And now the world knows my solution to the pipeline problem.

Coming soon . . . my solution to the health care problem.

 

 

 

 

Spotlight Therapy “You ask questions.”

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I dreamed awhile back that I was in a public meeting about the latest GoverCorp outrage (take your pick). I took my characteristic Spotlight Therapy stance, which involves turning the lights on to reveal triangulation tactics.

Afterwards, a 20s-something minority female, eyes shining, came up to thank me. “What for,” I replied. “I don’t accomplish anything.”

“Yes, you do.” she said. “You ask questions.”

“Triangulation” is a term applied to the strategy of playing both ends against the middle. You don’t confront the enemy directly, but go for things that are important to him.  When you turn the lights on, the previously hidden manipulators are exposed.

When the dot.com bubble burst on March 10, 2000, my stock value suddenly shrank below my mortgage debt. At that time I was naïve and inexperienced.  Had I known then what I know now, I would have sold the stock before the bubble burst and paid off the mortgage.  Instead, I trusted a banker and stockbroker who I thought worked for me.  They wiped me out instead.

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I believe it was intentional. This sounds paranoid, but the financial setback started me on a reading tangent that validated my suspicions.  Books like Confessions of an Economic Hit Man, The Robber Barons, The Creature from Jekyll Island: A Second Look at the Federal Reserve, Supercapitalism, Wealth of Nations, Alexander Hamilton, The Whiskey Rebellion, and None Dare Call it Conspiracy,* to name a few—as well as the US Constitution–opened my eyes, and I was horrified.  These writings revealed how boom and bust cycles are created on purpose to consolidate wealth and political power in the hands of relatively invisible insiders.

Desperate people are capable of desperate acts, to save themselves. Perhaps my banker and stockbroker were feeling the squeeze before the bubble actually burst, and trying to save their own skins.

But the practice of trapping individuals and nations in debt has a long history. It gives the lender—the presumed lender, anyway—a strategic advantage in terms of control.  Often the presumed lender, like a bank, is lending other people’s money, called “leverage.” Newspapers like the Wall Street Journal regularly inform their readers how many billions this or that hedge fund or individual controls.

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This is triangulation in action. Between the stock market and the mortgage market, individual wealth has been gutted by seemingly random events.  Don’t believe it.  Spotlight the Federal Reserve, the “lender of last resort,” which has no wealth of its own.  It creates money out of thin air to “lend” to the federal government, which then disburses it to pay bills and fight wars.  This from The Creature from Jekyll Island, which explains the history of money and banking.  It also reveals the secret beginnings of the Federal Reserve Act, which essentially put Congress in the debt-creation business, to trap taxpayers in un-repayable debt until the sun burns out.  In other words, the dollar is backed only by government promises to pay.

Now anyone who trusts government promises deserves to suffer, and those who believe the government has the right to promise unborn taxpayers’ future earnings, in order to repay the Fed for its fiat money “loans,” is living in LaLa Land.

taxarrow0406 What Creature does not say is that the income tax was also initiated in 1913, two months before the Federal Reserve Act, in order to guarantee perpetual interest income to the Fed.  The precedent for this double whammy was set by first Treasury Secretary Alexander Hamilton.  Hamilton introduced legislation for the Whiskey Tax and the first US central bank December 13 and 14th in 1790, for the same purpose—ostensibly to pay off Revolutionary War debts, but also to provide a vehicle for trapping the fledgling nation in a bottomless barrel of new debt.

In my case, debt would force me to work in a career I had come to detest, to feed the absentee bosses and other middlemen, who work behind the scenes to call the shots, yet take no personal risks.

These days, you can’t get away from news reports, politicians, and “economists,” who are bemoaning the state of “the economy,” the need to “create jobs,” and concerns about unstable stock markets and central banks around the world. The hidden truth behind all this hand-wringing is, as Ron Paul has tried to say, “The US is bankrupt.”  (His book End the Fed, is also well worth reading.)

It appears the balance has begun to shift, because everyone–individuals, corporations, and government—is maxed out on credit. Bills are coming due, without resources to pay.  As the Boomer generation (that’s me), approaches retirement, and Social Security payments can’t keep up with expenses, Boomers are withdrawing money from the stock market to make ends meet.  At the other end of the earning spectrum, the millennials are dealing with student debt, credit card debt, automobile debt, and maybe mortgages, too. Not only are there fewer of them than of seniors, but they don’t have money to invest in the stock market.

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But what’s good for “the economy” is bad for individuals. The “strong dollar,” is hurting exports, meaning Josie Taxpayer’s dollar has more buying power at home. Percentage-wise, she pays less in taxes, too.  This “deflation” that terrifies the money churners could have the effect of grounding the dollar at home, where it belongs.  Also, as people get out of debt–whether paying it off, writing it off, declaring bankruptcy, or walking away–the inflated money supply shrinks even more.  Interest on debt, as well as inflation (a “hidden tax,” according to Creature), reduce the buying power of the money. This is great for people who have no debt, and bad for “the economy,” which now is $19 trillion in debt, equal to the gross domestic product.

For example, on Thursday, February 18, 2016, The New York Times ran an article entitled “Oil Price Soars and Shares Rise.”  The assumption by the NYT and Wall Street Journal is that what’s good for stocks and raises prices is good for America.

This false assumption becomes easier to understand when you realize a goodly portion of America is heavily invested in stocks through “retirement benefits” like pension plans, including public pension plans. Hedge fund and pension fund managers can make significant waves in the stock market by moving those large pots of money around.  “Investors,” then, are not primarily the wealthy “one percent” that the public has been taught to hate.

“Investors” are the groups and individuals who make their money through managing other people’s money, people they assume want the greatest value for their money. Only trouble is, the most profitable stocks are issued by some of the most unscrupulous companies, often those with incestuous ties to the government, and are beneficiaries of large, cushy government contracts.

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As is my habit—and one of my favorite pastimes–I underlined and scribbled in the margins of the above-mentioned article. Here, we are informed that stocks climbed the previous day as “investors clung to hope for an international deal” to cut production.  “The price of oil rose sharply, as did the stocks of major energy companies like Chevron.”

“Who benefits by raising oil prices?” I wrote.  I know the State of Georgia benefitted mightily by low oil prices last summer, as Governor Deal signed a six-cent gas tax increase as soon as oil prices fell.  Now, the State of Georgia can expect even more tax revenues.  Already the accumulated excise and sales taxes on gasoline amount to over 50% of the customer cost.

Who is the greatest consumer of oil and gas? I don’t know for sure, but I believe it’s the military, which probably doesn’t pay the taxes and competes for the oil.  I applaud anyone who wants to research that.

When the NYT repeated that “investors’” hope for an “international deal that will cap or cut production,” I commented it doesn’t matter, as demand remains low.  I also asked if this “deal” to cut production also applies to US offshore well drilling, new oil pipelines, fracking, and other domestic eco-rape.

 

We are told that Chevron and Hess profited. We are also told that Kinder Morgan gained, too, on the news that Warren Buffet has acquired a 1.2 percent stake.

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Now Texas-based Kinder Morgan is a loaded kettle of fish. Founded by Richard Kinder, of Enron fame, it is in the process of appealing the state of Georgia’s denial of eminent domain for its Palmetto Pipeline.  Governor Deal did something right, for a change, when he denied Kinder Morgan’s request.  This would have set a dangerous precedent for publicly traded corporations to use state government to seize private property for a pittance.  Not only are oil prices low, and sales slow, but the pipeline is planned to run through 210 miles of coastal Georgia and to affect 396 landowners across 12 counties, only to transport gasoline, diesel, ethanol, and natural gas to the Savannah, Brunswick, and Jacksonville ports for export.  Kinder Morgan also expects to drastically enlarge its liquid natural gas storage facility on the Savannah River.  Meanwhile on the opposite side of the continent, Kinder Morgan is trying to trample Native American Tl’azt’en Nation’s native hunting and fishing lands in British Columbia.

I congratulate anyone who wants to investigate Kinder Morgan’s ethics and stock investors. I’m especially interested in public pension investments in Kinder Morgan, as well as its customers Marathon Oil and Marathon Petroleum, among others.  Remember that everyone in the decision-making “pipeline” from governor to judges to legislators and the United States Congress, state and federal levels of the Department of Transportation, Environmental Protection Division, Department of Natural Resources—and the military—have taxpayer-funded pensions handled by managers for whom there is no bottom line—if they can get taxpayers to subsidize profits.

 

I abandoned Wall Street in early 2008, when it continued to abandon me. I advise anyone who has more sense than money to do the same.  Also, as any stock broker might advise, “Sell high.”

 

 

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*Authors and publication dates are listed in a previous blog, “Sell the TV and Read.”

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