Another Failure of the Kelo Backlash - President Bush's Executive Order on Takings:

In an earlier post, I described how the political backlash against the Supreme Court's decision Kelo v. City of New London has largely fallen short of the mark, despite massive public outrage against the condemnation of property to promote "economic development" by other private parties. I noted that numerous state legislatures are enacting laws that supposedly ban Kelo-style but actually achieve little or nothing.

Today's presidential executive order on eminent domain continues this pattern. On the surface, the order seems to forbid federal agencies from undertaking economic development condemnations. But its wording undercuts this goal. Here is the key part of the text (hat tip: InstaPundit):

By the authority vested in me as President by the Constitution and the laws of the United States of America, and to strengthen the rights of the American people against the taking of their private property, it is hereby ordered as follows:

Section 1. Policy. It is the policy of the United States to protect the rights of Americans to their private property, including by limiting the taking of private property by the Federal Government to situations in which the taking is for public use, with just compensation, and for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.

Read carefully, the order does not in fact bar condemnations that transfer property to other private parties for economic development. Instead, it permits them to continue so long as they are "for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken."

Unfortunately, this language validates virtually any economic development condemnation that the feds might want to pursue. Officials can (and do) always claim that the goal of a taking is to benefit "the general public" and not "merely" the new owners. This is not a new pattern, but one that bedeviled takings litigation long before Kelo. Indeed, the New London authorities made such claims in Kelo itself and they were accepted by all nine Supreme Court justices, including the four dissenters, as well as by the Connecticut Supreme Court (including its three dissenters). This despite considerable evidence that the takings were instigated by the Pfizer Corporation, which at the time hoped to benefit from them. Not all the evidence of Pfizer's role was available at the time of the trial, but enough was submitted to demonstrate that Pfizer played a crucial role (e.g. - the head of a firm that helped prepare New London's development plan testifed that Pfizer was the "10,000 pound gorilla" behind the takings). Nonetheless, the courts accepted New London's claims that its officials acted in good faith, since they could have been intending to benefit the public as well as Pfizer.

As the Kelo experience shows, it is usually difficult or impossible to prove that such claims are insincere. Indeed, at least to a certain extent, the claims will always be correct. Virtually any economic development condemnation provides at least some benefit to "the general public," if only because the productivity of the new owner's business is likely to increase, thereby promoting development and raising tax revenue. The problem, as I have documented in great detail elsewhere, (e.g., here and here), is that these benefits can usually be achieved by methods other than coercion, and are unlikely to be worth the cost of condemning the property and eliminating preexisting uses.

Even had President Bush's order been better worded, its impact would have been limited. The vast majority of economic development condemnations are undertaken by state and local governments, not by federal agencies. Nonetheless, it is unfortunate that the Bush administration has chosen to join in the charade of pretending to do something about Kelo while actually doing little or nothing.

UPDATE: Tim Sandefur of the Pacific Legal Foundation takes a similarly critical view of the executive order. I agree with almost everything Tim says. However, I am not as certain as he is that "it’s gratifying to see the President take an interest in this issue." Bogus reform efforts such as this one create a danger that the public will be falsely persuaded that the problem has been solved; indeed, I suspect that in some cases that is part of their purpose (though I have no evidence of the Bush Administration's motives for issuing this order). Sometimes, a bogus reform is worse than no reform at all.

UPDATE #2: Some commenters cite Section 3 of the order (which I did not quote, but did link) and argue that it provides a good list of the situations where eminent domain should be allowed. I agree that Section 3 would be quite defensible if it were an exhaustive list of the situations where the order permits federal agencies to condemn property. In fact, however, Section 3 is a list of exceptions to the rule set out in Section 1. This is evident from the fact that Section 3 is entitled "Exclusions" and begins with the words:

Nothing in this order shall be construed to prohibit a taking of private property by the Federal Government, that otherwise complies with applicable law, for the purpose of: [a list of purposes follows].

Therefore, Section 3 merely lists situations where property can be condemned even if doing so violates the rule set out in Section 1: that condemnations must not be "merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken."