News
De Soto on the Real Cause of the Global Financial Mess
Monday, December 5, 2011 3:30 pm | By Kelsey Zahourek

Peruvian economist, Hernando de Soto, has yet another insightful op-ed in the New York Times, this time dealing with the global financial crisis. In the opinion piece, de Soto explains that the United States and Europe have continually missed opportunities to enact real reforms that would pull the world out of this crisis. Instead of treating the “disease,” which he explains is the lack of knowledge of who owns what assets and therefore risks, lawmakers have focused mainly on the “symptoms”—faulty loans, the mortgage crisis, and rising unemployment.

 
De Soto explains:
 
Had those symptoms been the real cause of the crisis, “vulture capitalists” should have swept in by now. They should have spotted the signals that send knowledge of who is in trouble and — following the laws of supply and demand — picked up on the cheap the potentially lucrative remains of the nonperforming assets and transactions, correcting the deficiencies that led to them…
 
Mechanisms in the United States and Europe to record and signal the crucial knowledge that determines whether it is reasonable to grant private credit — who has the property rights over the assets, equity and liabilities, and therefore holds the risks, and what the opportunities are — are no longer reliable. The knowledge system is broken.
 
De Soto has spent a great deal of his life working with emerging markets to bring those working in the informal sectors of the economy into the formal economy by enacting the very reforms needed to fix much of what ails the current financial system. I encourage you to read the rest of the article here.

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PRA Supports the Barrasso-Heller Amendment to the Energy and Water Minibus
Monday, November 14, 2011 4:00 pm | By J. Michael Wahlen

Today, PRA released a Legislative Alert in support of the Barrasso-Heller Amendment. This Amendment seeks to stop the “Guidance” issued by the EPA to expand the Clean Water Act (CWA).

The new Guidance would significantly expand the type and amount of waterways the federal government could regulate. Under the new interpretation, the U.S. Army Corps of Engineers could regulate not just all navigable waterways, but interstate, intrastate and even non-navigable ones as well.

This jurisdiction clearly goes beyond the original intent of the CWA and greatly expands the power of the federal government. The Barrasso-Heller Amendment eliminates this Guidance by clearly defining and limiting the types of waterways the federal government can regulate. This Amendment ultimately prevents property rights from ceding away from private citizens to the EPA.

As the Alert notes:

[These powers] were limited in the past by two U.S. Supreme Court cases which clarified the scope of federal jurisdiction over wetlands and other "waters of the United States" under the Clean Water Act. The Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (2001) and Rapanos v. U.S. (2006) have significantly reduced the potential for abuse under the Clean Water Act, by limiting the previously broad definition of navigable water.

Unfortunately, the new Guidance seeks to subvert the court’s ruling, ceding power back to the federal government from the landowner. The Barrasso-Heller Amendment prevents this expansion of government power by clearly defining and limiting the waterways which the federal government can regulate.

The full text of the Legislative Alert can be found here.
 

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A Grand Slam of Eminent Domain Abuses
Friday, October 28, 2011 3:28 pm | By J. Michael Wahlen

As the World Series reaches a climax tonight in one of the most exciting Series in decades, a small storm in the world of baseball has also been brewing on the West coast. Oakland Athletics owner Lew Wolf is interested in bringing the A’s to San Jose, where the Mayor is pulling out all stops to make it happen.

While Baseball Commissioner Bud Selig has yet to sign off on the agreement, and the league will have to vote on change, all the plans are in place to make this happen. The only hiccup is the land. AT&T and Los Gatos are refusing to sell their 5.5 acres that are needed to build the stadium. As a result, the city is considering using eminent domain to push them off of the property. Thus, despite profitable businesses using the property, the government is willing to kick them off to benefit a more politically connected business.

Unfortunately, this scene has become all too common in the world of sports. A similar situation has occurred with many teams, recently including the Dallas Cowboys and Indianapolis Colts. Most famously, then Governor George W. Bush used eminent domain to force many to sell their land in order to build the Texas Ranger’s Ballpark, though they have since relocated. The result is a negative precedent that allows sports team to take other’s property rights with little political resistance.

While we here at the PRA wish the Rangers the best of luck tonight (and the same to the Cardinals, of course), we do not support for the continued use of eminent domain to build sports arenas. This is clearly a repetition of the Kelo case; the government should not be able to kick someone off of their land simply because the government believes it can make money off of it. Sports teams should be assets of the local community, not usurpers of it.
 

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