Sunday, June 08, 2008

Eminent Domain in Reverse

One reason the national debt is so damn big is that the federal government owns and operates assets that it shouldn't, like Amtrak.

What we need is a sort of eminent domain in reverse, a right vested in the American people to purchase government-owned assets at fair market prices. If the government wants to put a road through your property, or thinks a corporation would do more for the economy than you're doing, it can force you to sell it. Why can't We the People do the same for government assets? I'd exempt military bases and national parks but everything else should be on the table, especially businesses like Amtrak.

This would force the government to run their business interest profitably or lose them to the highest bidder. The proceeds of sales should be used to pay down the debt; the subsidies saved in future years will of course reduce the budget deficit.

4 comments:

bill said...

s I recall Adam Smith proposed that governments should be limted to national defense and erecting public statues or something similar. Margaret Thatcher pretty much took the path you propose and almost al governemtn assets that were not nailed down were sold, usually through public floatations. America's affection for of public sector industry and private utility monopolies is a strange sight to someone from the UK.

Robert E. Wright said...

Yes, Smith was quite a critic of the government and Maggie T. cut back on government ownership of biz assets. Of course any government that WANTS to sell a biz asset can do so. What I am trying to propose here is a mechanism whereby the government can be forced to sell a biz asset even if it hasn't yet convinced itself it would be a good idea. I should have mentioned this on the Lou Dobbs show on Tuesday ... doh!

Pete Jones said...

Hasn't American rail transportation always been heavily subsidized by the government? Since the early 80s the government has tried to privatize Amtrac by decreasing their appropriation every year. The only way Amtrac could keep afloat was by selling their infrastructure piece by piece- not really a great plan to run a nationwide transportation network.

As fuel prices and environment concerns increase- it makes sense for the government to turn to light rail transit in larger metropolitan areas and truck by rail to ease strain on the interstate system. Give money to a cleaner method of transportation, not hope that market forces will successfully run a public utility.

Robert E. Wright said...

Comments like Pete's are what keep me blogging. Pete, we've had railroads since the 1830s, not the 1980s, and until recently (on an historical scale) they were almost all private. Some did receive subsidies but because they could get them, not because they needed them. (See Burton Folsom's Myth of the Robber Barons for details.) In short, railroads need not be public utilities, no more than automobile manufacturers or software engineering companies need to be. By the 1980s the R.R. industry needed subsidies because government policies eviscerated their businesses. See Fred Kahn's work on the ICC &c. for details.

On the freight end, railroads are much "greener" than 18-wheelers. Freight naturally moves via the cheapest mechanism, not the greenest. But cheap and green will be one in the same if we had competition again in railroads and stopped subsidizing interstates.

Pete rightly notes than light rails are greener than autos but that isn't the question here. The question is whether light rail and other commuter transit systems need to be public or not. I say not. But I don't have a chance at proving it because our government doesn't currently recognize reverse eminent domain. So no businesses can try it out, not, as Bill hints, without explicit government approval. Good luck getting that, which would show more political/rent seeking savvy than business expertise anyway.