demimasque

The Price of Development

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Modernization has apparently driven prices up in China, so that many of its Taiwanese investors are thinking of pulling out. Don Lee of the Los Angeles Times reports:

Thousands of foreign businesspeople, primarily Taiwanese, helped turn this southern Chinese city into one of the world’s busiest export manufacturing centers.

Now, amid rising wage and pension costs, energy shortages, tighter government regulation, traffic bottlenecks and other concerns, some of them are starting to look elsewhere. Their restlessness reflects a dark side to China’s economic boom, as growth pains and other issues prompt companies to reconsider starting up or expanding in China.

Chang Han Wen is having second thoughts. He came here from Taiwan in early 1991 when the area was still largely farmland, launching a shoe assembly line with 200 workers. He has since opened five factories, including three shoe plants that employ 3,000 people and produce 1.5 million pairs of specialty boots and high-end shoes a year for export to the United States and Europe.

But his sixth plant, a garment operation, sits empty. Chang has indefinitely postponed its opening, anxious about China’s tense trade relations with the West and the threat of more quotas that would limit clothing exports. That’s only part of his worries.

This year Dongguan’s minimum wage jumped more than 27%. Even with the increase, employers are struggling with worker shortages. Government inspectors are making the rounds at factories, enforcing work-hour rules and pension contributions that officials paid little attention to in the past. Electricity is in short supply, as is fuel.

All in all, Chang says, things have gotten so much tougher that his next investment may be in Vietnam, where many Taiwanese have gone.

“For manufacturers here, the golden period has passed,” he said.

China has often tried dangling the carrot of lower capital costs to attract foreign investment from Taiwan. Beyond the obvious uses for modernization, this also tied Taiwanese business closely to Chinese interests, and made Taiwanese investors in the mainland pliable to suggestions that they rein in nascent “independence” programs. Now that capital flight is happening, the Communists may be losing even more influence in Taiwanese politics.

However, supporters of Taiwanese independence should be careful. Loss of such influence may indicate a willingness on Beijing’s part to push its political agenda “by other means”, as Clausewitz would have appreciated.

[Cross-posted at Between Worlds and Naruwan Formosa]

Eminent Domain and the Free Market

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The fallout over Kelo vs. New London has become a topic of conversation throughout many discussion boards, including my350z.com. In the latest tussle, one member asked, Do you think the free market is always the perfect solution? Can you think of any circumstances in which the free market produces unsatisfactory results?, in response to a flurry of attacks on government seizures of property. One particular response (free registration required) is worth noting, from member plezercruz:

The free market always produces the most efficient solution, with some rare exceptions. These exceptions are the standard Coasian transaction costs: search costs, lack of information, spite, etc. Where there is a transaction cost that surpasses the profit gain of a transaction, the most efficient transaction will not happen. If for example, your Saudi landlord won’t sell out of sheer spite, inefficiencies arise. If it is simply too difficult for a buyer to negotiate with all of the owners of a parcel of land, making it too expensive to buy it, inefficiencies arise.

The fact that these ineffiencies occur is the reason why we have governments, and the reason why we have eminent domain. The idea is that by cutting through all the haggling, spite, and sentimental attachments, we can more efficiently produce the results that we want as a society. However, these results are almost always INEFFICIENT because they occur contrary to market forces by government fiat.

The real problem with eminent domain is that it attempts to apply an objective standard to valuation, and value is a subjective determination. We can measure with some accuracy how much land OUGHT to be worth, but we cannot measure how much it is worth to the owner. The solution government has come up with is to outright ignore subjective value, and allow the buyer (government) to determine the fair market price, which (surprise surprise) almost always turns out to be far less than the owner thinks its worth and significantly less than the market would actually bear. I forget the case, but I remember reading in Con Law that government doesn’t even have to pay prevailing market price, it only needs to pay a price high enough that it isn’t completely unreasonable.

Another thing that eminent domain takings overlook is that forced sales necessarily should come at a premium price, not at fair market price. There is a difference between buying land that has come on the market volunatarily and trying to buy land when the owner is not eager to move. The price to buy a parcel of land RIGHT NOW should be significantly higher than fair market price. Eminent domain practice ignores this fact.

All this results in takings which are unjust, unfair, and extremely unpopular. It did not have to be so. If, for example, the Supreme Court had used it’s common sense and realized that taking price should exceed fair market value, then the governments of this country would have to pay a premium to seize land (which is only proper). If that were the case, MOST people would be EAGER to have government take their land. Government would show up and say “We’ll offer you twice what your land is worth” and people would throw parties because the government took their land. That’s the way it ought to be done…if the government “needs” your land badly enough, let THEM pay the premium. You shouldn’t have to be screwed.

I personally hope they take Souter’s home and I hope they give him half what it’s worth. That’s how the rest of us live…why should he be special?

Well said!

New Sisyphus: Why We Fight

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Despite being a very busy guy, New Sisyphus took some time out to write a very cogent, very considered essay on why it was right to take the war to Iraq (emphases mine):

A number of reasons made dysfunctional Baathist Iraq the obvious choice: it was a once-prosperous, multi-ethnic community in the heart of the Islamic world that had been brutalized by an insanely aggressive regime that not only had invaded neighboring countries twice but had used long-banned chemical weapons in doing so. It also had an on-going program to further develop WMD for its use. It had used WMD against its own population to strengthen its rule by fear. It was still technically at war with the United States, violating a cease-fire almost daily by firing upon American pilots. It had attempted to assassinate an ex-President of the United States. It was supporting suicide bombing in Israel by providing financial benefit to such fanatic’s families. It had given refuge to terrorist groups and terrorist leaders. In short, Iraq was the poster child for the type of dysfunctional political culture that had given rise to the grievance-based ideology of Islamic Fascism.

Thus, Iraq presented the President with a convergence of strategic sense and tactical opportunity. Strategic, in that a conversion of Iraq to a more democratic and prosperous country would provide a counter-model to that proposed by the Islamic Republic and Bin Ladenism in the heart of the Islamic world; tactical in that its WMD program, aggressive behavior and some links to terrorist groups represented a threat to the United States.

In sum, the short-term problem of active Al-Qaeda support was solved (to some extent) by the change of regime in Afghanistan while the long-term problem of Islamic Fascism would be countered by the democratic rise of a new Iraq, leading to the spread of the ideals of democracy and liberty in the greater Middle East. Together, both prongs, along with the aggressive use of law enforcement domestically and abroad, diplomacy, and special operations in remote theatres, make up the wider War on Terror. Both were prompted by the adoption of war goals by the President, whose judgment was largely colored by what he felt were the central lessons of 9.11.

…

Thus, for the NY Times and liberals at large to say that Iraq had “nothing whatsoever to do with the terrorist attacks,” is to miss the larger point the President is making, made last night and will continue to make for the rest of his term. Iraq is central to the President’s war aims in that he seeks to inject a radical new order in the heart of the Middle East, one that will present an alternative and democratic space that will deflate the appeal of the fascism that gave rise to 9.11 and similar attacks.

For liberals to pretend not to understand all this—for them to lose their vaunted sense of nuance and understanding—reveals a profound and distasteful dishonesty on their part, as well as a whiff of desperation. Beyond indicting Bin Laden in District Court for the Southern District of New York, liberals have been without a strategic plan on how to win the War on Terror. In fact, they would deny such a war even exists.

Exactly. They didn’t get it during the Cold War, and they don’t get it now. Their ostrich-like perspective and their paranoid style of rhetoric has, unfortunately, stripped them of all credibility on issues of national security and foreign policy.

One important point, which I readily concede to antiwar friends, is that the Iraq War was a war of choice. Indubitably. But that’s like trying to decide where in the house to lay the roach traps, or even trying to decide whether to merely mop up after roach attacks, or proactively going after the roaches, or even worse, doing nothing at all. Similarly, Iraq was a crossroads of Islamofascism (of which bin Ladenism is only a variant), was already in a state of hostilities, and had provided plenty of legitimate reasons for the resumption of military operations.

Read the whole thing; it is without a doubt one of the best essays out there.

[Cross-posted at Between Worlds]

Recruitment Shortfall Reversal

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Despite harsh images coming out of Iraq (and made to look even harsher by a traditional media elite determined to make Iraq another Vietnam), which had recruitment well behind schedule for much of the first half of this year, June saw a reversal in recruitment trends:

The U.S. Army, hard pressed to attract new soldiers amid the Iraq war, exceeded its monthly recruiting goal in June, ending four straight months of shortfalls, the top U.S. military officer said on Wednesday.

But the active-duty Army, three-quarters through fiscal 2005, remained 14 percent — about 7,800 recruits — behind its year-to-date target and was in danger of missing its first annual recruiting goal since 1999, officials said. Its goal for fiscal 2005, ending on Sept. 30, is 80,000 recruits.

“I will tell you that for the month of June, the United States Army active recruiting is over 100 percent of its goal, which is a turnaround from where they’ve been the last several months,” Air Force Gen. Richard Myers, chairman of the Joint Chiefs of Staff, told an audience of Pentagon employees.

“So there’s a bit of good news in here. We’ll see how it works out the rest of the year,” Myers added.

Well, it seems to me that if there weren’t so many bans on military recruitment on campuses, perhaps the shortfall wouldn’t be so great. The bans make no sense if you support the troops, even if you opposed the war itself.

Nonetheless, now that school is out, perhaps young men and women looking to serve their country will no longer be blinded by their teachers to the military option. In fact, that may be the greatest factor in explaining the uptick.

It’s worth considering, too, that perhaps, with a war going on, our youngsters are thinking a little more thoroughly about what military service entails, instead of viewing it as simply an obligation-free way to pay for college or get out of the hood. Indeed, this deeper soul-searching makes each new warrior even more valuable, even in later civilian life, because he or she will have decided, more unequivocally than ever, that a life worth having (thanks to help from the government) is a life worth fighting, even dying, for.

(Hat-tip: Alexander K. McClure of PoliPundit.com)

[Cross-posted at Between Worlds]

Eminent Domain Stunt?

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Recently, a report has been circulating all over the blogosphere that Justice David H. Souter, one of the Justices that voted in the majority in Kelo vs. New London, may soon fall victim to the ruling. The press release from Freestar Media seems tongue-in-cheek:

Press Release

For Release Monday, June 27 to New Hampshire media
For Release Tuesday, June 28 to all other media

Weare, New Hampshire (PRWEB) Could a hotel be built on the land owned by Supreme Court Justice David H. Souter? A new ruling by the Supreme Court which was supported by Justice Souter himself itself might allow it. A private developer is seeking to use this very law to build a hotel on Souter’s land.

Justice Souter’s vote in the “Kelo vs. City of New London” decision allows city governments to take land from one private owner and give it to another if the government will generate greater tax revenue or other economic benefits when the land is developed by the new owner.

On Monday June 27, Logan Darrow Clements, faxed a request to Chip Meany the code enforcement officer of the Towne of Weare, New Hampshire seeking to start the application process to build a hotel on 34 Cilley Hill Road. This is the present location of Mr. Souter’s home.

Clements, CEO of Freestar Media, LLC, points out that the City of Weare will certainly gain greater tax revenue and economic benefits with a hotel on 34 Cilley Hill Road than allowing Mr. Souter to own the land.

The proposed development, called “The Lost Liberty Hotel” will feature the “Just Desserts Café” and include a museum, open to the public, featuring a permanent exhibit on the loss of freedom in America. Instead of a Gideon’s Bible each guest will receive a free copy of Ayn Rand’s novel “Atlas Shrugged.”

Clements indicated that the hotel must be built on this particular piece of land because it is a unique site being the home of someone largely responsible for destroying property rights for all Americans.

“This is not a prank” said Clements, “The Towne of Weare has five people on the Board of Selectmen. If three of them vote to use the power of eminent domain to take this land from Mr. Souter we can begin our hotel development.”

Clements’ plan is to raise investment capital from wealthy pro-liberty investors and draw up architectural plans. These plans would then be used to raise investment capital for the project. Clements hopes that regular customers of the hotel might include supporters of the Institute For Justice and participants in the Free State Project among others.

# # #

Logan Darrow Clements
Freestar Media, LLC

Phone 310-593-4843
logan@freestarmedia.com
http://www.freestarmedia.com

The fax request to Chip Meany reads as follows:

day, June 27, 2005

Mr. Chip Meany
Code Enforcement Officer
Town of Weare, New Hampshire
Fax 603-529-4554

Dear Mr. Meany,

I am proposing to build a hotel at 34 Cilley Hill Road in the Town of Weare. I would like to know the process your town has for allowing such a development.

hough this property is owned by an individual, David H. Souter, a recent Supreme Court decision, “Kelo vs. City of New London” clears the way for this land to be taken by the Government of Weare through eminent domain and given to my LLC for the purposes of building a hotel. The justification for such an eminent domain action is that our hotel will better serve the public interest as it will bring in economic development and higher tax revenue to Weare.

I understand it your town has five people serving on the Board of Selectmen. Therefore, since it will require only three people to vote in favor of the use of eminent domain I am quite confident that this hotel development is a viable project. I am currently seeking investors and hotel plans from an architect. Please let me know the proper steps to follow to proceed in accordance with the law in your town.

Thank you.

Sincerely,

Logan Darrow Clements
Freestar Media, LLC

Something seems out of sorts here, so I decided to investigate a little bit. First of all, what is Justice Souter’s relationship to the Town of Weare?

DAVID HACKETT SOUTER was born in Melrose, Massachusetts, September 17, 1939, the only child of Joseph A. Souter and Helen Hackett Souter. Although he lived with his parents in Massachusetts, Souter spent much of his youth, including most summers, at his maternal grandparents’ farmhouse in Weare, a small New Hampshire town twenty miles southwest of Concord, the state capital.

After his grandparents had passed away, Souter, age eleven, and his family moved to the farmhouse. His father was a banker with the New Hampshire Savings Bank in Concord. He died in 1976, but Souter’s mother still lives near the family farmhouse in a retirement community.

Souter has called Weare, which borders Hopkinton Lake, “a town large in geography [and] small in population,” where everybody “knew everybody else’s business or at least thought they did. And we were, in a very true sense, intimately aware of other lives. We were aware of lives that were easy and lives that were very hard.” It is, indeed, a typical small town in rural New England, still governed by a town meeting. Souter learned many “lessons in practical government” by sitting in the back bench of the Weare Town Hall and watching the town meetings.

A quick Google map of the given address shows, indeed, that such an address exists. Moreover, once you zoom out a bit on the map, you’ll see that it is indeed not far from Hopkinton Lake.

Returning to the press release, I was intrigued by this Logan Darrow Clements character. Who is he? A Google search revealed that he was a candidate for California Governor in the 2003 recall race which catapulted Arnold Schwarzenegger to the forefront of state politics. A report by Hank Willow for Hollywood Investigator describes Clements as “a self-described Objectivist and admirer of philosopher Ayn Rand”, whose Atlas Shrugged figures not only on his campaign site, but as part of his request to Chip Meany.

Who is Chip Meany? A reference to him was made in meeting minutes of the Weare Board of Selectmen on 21 June 2004. He is also the current Building Inspector of the Town of Weare’s Building Department. The information given by Freestar Media as Mr. Meany’s fax number is, indeed, correct.

All of this, so far, is publicly available information. Given all this, as well as the fact that the instigator is located in California, across the continent from New Hampshire, I would conclude that the press release is probably a publicity stunt by Logan Darrow Clements, designed to bring attention to what many feel is an egregious ruling on the part of Justice Souter in Kelo vs. New London.

[Cross-posted at Between Worlds]