A Stitch in Haste

"A building has integrity, just like a man — and just as seldom."
--The Fountainhead

Goldilocks and the triplicate permit forms:

John Jessop earned a cult following among his colleagues after his withering comments were leaked in an e-mail which has been sent all round the country.

After being asked to fill in a "design access statement" for a storage shed on a small farm, he wrote: "The density is like on a farm, the social context is a farm in the country, the economic context is farming in the United Kingdom in 2008 (which is not very economic), the opportunities are to store equipment inside rather than the outside, the constraint is the planning system."

And under a section headed Context Analysis, he said: "The use is compatible with a farm because it is a farm building."

"It is located where it is because it is in the most convenient place, being on the farm and near the farmhouse."
...
"It can not be lower because nothing could be stored in it. It is not made any higher because that would be silly."

But since when did being "silly" stop a planning bureaucrat?

The notion that a farmer needs anybody's permission to build a farming shed on his farming land to store his farming equipment that he uses to earn his farming income shows how far the half-sibling notions of "zoning" and "environmental impact statements" have corrupted what used to be a rationally based concern for negative externalities. In the past, such reviews were cursory, common sense inquiries. Today? Yes, we the central planners have graciously allowed you to call your land a "farm," but that obviously did not mean that we would also allow you to "do farming" on it. We'll get back to you on that after we review your design access statement...

Other gems omitted from the media account:

--"Landscaping: The applicant and pervious [sic] occupants have spent a long time, probably more than a thousand years, making the countryside around the house look like farmland so that everyone can enjoy the pretty English countryside."

--"Access: There is an airport at Bristol which can be accessed by driving your tractor along the road. This gives direct access to warm sunny places all over the world."

--"Appearance: It looks like a typical modern agricultural shed in green profiled metal sheeting because that is what it is, and a great architect once said, 'Buildings should look like what they are'."

Methinks Mr. Jessop has read The Fountainhead.

Kip's Law: Every advocate of central planning always — always — envisions himself as the central planner.

Original 3-page document PDF here. (Via Fark.)

Tyler Cowen asks a simple question:

How good would the abolition of zoning in New York City be?

Of course, that question completely drops the context within which "good" is embedded. Stated differently: "Good" -- by what metric? Real estate values? Total available housing stock? Aesthetics? Whose aesthetics?

Suddenly it's not so simple a question after all.

How about defining "good" as "respecting property rights and constitutional principles"? As I commented at Cowen's blog:

Sorry for the Clintonism, but it depends (as you note) on what your definition of "zoning" is.

First-order zoning -- an area is simply designated "residential," "commercial" or "industrial" -- is not an excruciating abomination to libertarians and can be defended, at least in the abstract, as externality-correcting.

Second-order zoning -- height restrictions are the best example -- are less defensible and should be presumed illegitimate (i.e., restrictions should be subject to heightened scrutiny). This is the kind of "zoning" imposed on most of Manhattan.

Third-order zoning -- where any and every alteration, expansion or demolition must be submitted to an unelected board with near-plenary authority to approve or reject the project -- for any reason up to and including the whim and caprice of the board members -- is per se illegitimate, and under any sane jurisprudence such an infringement of fundamental property rights would be an irrebuttable due process violation. (So-called "historic districts" -- of which there are many in New York City -- are the most egregious example.)

Yes, the "first-second-third" nomenclature is my own concoction, inspired by similar terminology in the context of price discrimination.

More thoughts from Perfect Substitute

"A provision of the Constitution, it is hardly necessary to say, does not admit of two distinctly opposite interpretations. It does not mean one thing at one time and an entirely different thing at another time."
--Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 (1933) (Sutherland, J., dissenting)

If this doesn't violate the Contracts Clause, then nothing ever does:

Warning that America is experiencing a "housing emergency," six Boston city councilors want to force lenders who foreclose on Hub properties to rent seized houses and apartments back to occupants.
...
The proposal would order lenders to lease foreclosed properties back to ex-owners or tenants at market rates until either third parties buy the homes or the measure expires in 2014. Violators would face fines of at least $10,000.
...
Ross said the measure aims to primarily help tenants who've paid rent on time but face eviction anyway because their landlords fell into foreclosure. However, the measure would also cover individual homeowners who fell behind on their own mortgages.

That was a trick observation, incidentally: It doesn't violate the Contracts Clause because, under current Supreme Court precedent, nothing ever does.

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There are two distinct issues here that need to be disentangled.

As a common law principle (individual jurisdictions may of course have their own nuances), renters are already insulated from any and all changes in title to the property they rent (with one huge exception — eminent domain). If I own a house and rent it to you, then (absent mutually agreed-to provisions to the contrary) your lease is binding on any future owners of the land during the period of the tenancy. Even if I sell the house, gift it, die — or default on my mortgage — the lease is the lease and you are protected by it while it remains in effect.

These activist legislators are, therefore, offering you a protection that you already have. Don't you feel "indebted" to them?

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I as the owner facing foreclosure, on the other hand, am screwed. As I should be, given that I'm a defaulter who failed to meet my voluntarily-entered-into obligations. Maybe I was the victim of circumstance, maybe I was reckless in my finances, maybe I was a predatory borrower. It doesn't really matter which. I defaulted on a debt, I breached a contract, my counterparty has both a legal and equitable remedy.

And, under the Constitution, there ought not be a damned thing either I or these hack politicians could do about it:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The Contracts Clause (Article I, Section 10, Clause 1) is one of the least appreciated libertarian aspects of the Constitution. The fact that it applies only to states and not the federal government is, one could plausibly argue, the single worst flaw in the original 1787 document.

But it is still there and still wholly applicable to this fact pattern. A mortgage is unarguably a "contract," the requirement to surrender to a valid foreclosure is unarguably an "obligation" and requiring lenders to lease to defaulters is unarguably an "impairment." Q.E.D.

Or not: Essentially the exact same law was enacted in Minnesota in 1933 and the same five Supreme Court Justices who would later finish off the last traces of economic liberty in America* also killed off economic substantive due process — and an entire clause of the Constitution as collateral damage — in the nightmarish case, Home Building & Loan Assn. v. Blaisdell.

The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile — a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.

In other words, a state's "police power" (a grant of power that appears only implicitly in the Tenth Amendment) can summarily trump the Contracts Clause (a limitation of power that appears explicitly in Article I), whenever "the peace and good order of society" require it (i.e., whenever activist legislators feel like it).

I'm surprised the Bush Administration never cited to Blaisdell in the War on Terror. The decision's twisted "police powers" reasoning makes John Yoo's memos seem like ACLU briefs.**

It is sad to have to repeat such a axiomatic statement, but it is precisely during emergencies that we need constitutional limitations on government power the most. It is precisely during emergencies that the more vague elements of constitutional law (e.g., "police power" or "executive authority") must yield to the less vague (e.g., "no impairment of contracts" or "no suspension of habeas corpus"). It is precisely when the government wants to act the most that it needs to be constrained the most.

(Incidentally, who but the most opportunistic malcontents would dare suggest that the current housing "crisis" rises to the level of the Great Depression — or the War on Terror? Note that the hack politicians in Boston were quite careful to label their proposal a "housing emergency" measure and to give it a specific expiration date — precisely as the Blaisdell court suggested was necessary to survive a Contracts Clause challenge. Someone on their staff certainly did their homework.)

If I were to expand my list of the Ten Worst Supreme Court Cases to twenty or even fifteen, Blaisdell would definitely make the cut.

More thoughts from Cato.

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*Via Nebbia v. New York, 291 U.S. 502 (1934), impliedly overturning Lochner v. New York, 198 U.S. 45 (1905).

**But, cf., this oft-quoted passage from Blaisdell:

Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency. Its grants of power to the Federal Government and its limitations of the power of the States were determined in the light of emergency, and they are not altered by emergency. What power was thus granted and what limitations were thus imposed are questions which have always been, and always will be, the subject of close examination under our constitutional system.

How the Blaisdell majority gymnastically went from that to actually upholding the "no foreclosures" law remains one of the great embarrassments of Supreme Court jurisprudence.

In a recent Questions post, I asked: Is it a violation of copyright to sell a used book?

Elite Eleven blog no third solution offers an answer:

Prohibiting resale, be it books, cars, or collateral, would serve only to impoverish people who need money and are willing to part with slightly used goods, and to impoverish their would-be trading partners. If enforced, there is no up-side to this sort of prohibition.

To which I commented:

You realize I hope that often the intended answer for my "Questions" is "Duh." ;-)

But let's not overreach. "There is no upside to this sort of prohibition"? Really? Never ever?

My parents reside in a planned community where only people over 55 are allowed to live. My parents cannot sell their home to anyone under 55 (more or less).

My contract with the ASCPA forbids me from selling or giving Diamond to anyone, except back to the ASPCA itself.

Contract rights can indeed supercede property rights. But like all contracts, the terms should be clear and the parties should be entering into it voluntarily and fully informed.

See also "non-compete agreements," "confidentiality agreements," and countless other examples where an individual exchanges a right for a benefit. The right to convey property without restriction is no different -- you should be allowed to trade it for something else you value more.

(But, cf., Shelley v. Kraemer, 334 U.S. 1 (1948) (restrictive covenants based on race are not legally enforceable).)

To review: Regardless of what one thinks of the propriety of the government blocking strictly private employment contracts between competent consenting adults at the lower end of the work spectrum (i.e., minimum wage laws), the arguments for such incursions upon freedom of contract have exactly zero relevance to the upper end of the work spectrum. Stated differently, malcontents need an alternative rationalization for their disturbed voyeurism regarding "excessive" executive compensation ("Excessive"? To whom? By what standard?)

For some among the hubris class, the the latest fashionable rationalization is the fiction of "rising income inequality." (A fiction, as I explained recently, because income percentiles are not constant over time -- today's "top 1%" are neither yesterday's "top 1%" nor tomorrow's "top 1%," and likewise for the "bottom 20%.")

Others are less creative and just flat out claim the prerogative to subject all transactions to mob veto because -- well, because it's the mob:

Net income at Office Depot fell 23 percent last year compared with 2006; its share price fell 64 percent. Steve Odland, its chief, made nearly $18 million all told -- some 85 percent more than in 2006. With the share price of Toll Brothers, the luxury home builder, plummeting, it seems reasonable that Robert Toll, its chief, got no bonus. Still, the company took steps to ensure that he gets one this year, even if home-building doesn't recover.

It's hard to square the conceit that chief executives are rewarded for improving companies' performance with the fact that chiefs at 10 financial-services firms in the study made $320 million last year, even as their banks reported mortgage-related losses of $55 billion.

Of course, it's only "hard to square the conceit" of what other people make when you try to square it in the first place. And you only try to square it when you suffer from some ignoble mixture of envy and schadenfreude. It's one thing to feel compassion for the less fortunate; it's another thing altogether to loathe the more fortunate.

It's quite simple really: If you are uncomfortable or indignant about what the CEOs of Office Depot and Toll Brothers are paid, then don't invest in Office Depot or Toll Brothers. Don't work there. Don't shop there. But don't project your fiscal sociopathy onto others and pretend that you're not the one with an pathological fixation on something that is, literally, none of your business.

More:

In any case, the combination of inexorable income growth at the very apex of society and stagnation everywhere else can serve no public good.

The Bush administration has focused its economic policies on cutting taxes for the very richest Americans. Taxation needs urgently to become more progressive. If the United States is to continue to embrace globalization, technological innovation and other forces that contribute to economic growth, it has to share the spoils better.

One wonders how to say this any more remedially: Private contracts do not need to serve a "public good." Person A paying, out of his own pocket, Person B a sum that Person C happens thinks is "too high" is not an "externality," and Person C has no right, either alone or ganging up with his neighbors, to block or punish that transaction.

The rest is just flat-out lying: The Bush tax cuts did not benefit "the rich" at the expense of "the poor" and the federal income tax is already obscenely progressive. The data are what they are; wishing they were "oppressive" does not make them so.

(One might also note -- since the Times can't be bothered -- that Internal Revenue Code Section 162(m) already disallows the deduction of salaries above $1 million as a business expense for publicly traded corporations -- a figure which, to the best of my knowledge, has never been adjusted for inflation. Such salaries are therefore double-taxed much as corporate dividends are double-taxed. At some point "punitive" tax policy -- which is abhorrent enough -- becomes downright sadistic tax policy. Except to the Times -- for which too much bloodsucking is never enough.

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I find it laughably ironic, incidentally, that someone at the Times chose the headline "Corporate Croesus" for this silly editorial. For those not in the know:

Croesus consulted the oracle of Delphi in Greece. The oracle replied: "If Croesus goes to war he will destroy a great empire." So Croesus went out to meet the army of Cyrus and was utterly defeated, he destroyed his own great empire.

Leave it to the Times not to understand the difference between capitalism and warfare, between an entrepreneur and an emperor, between selling and plundering, between the civility of private contracts and the barbarism of mob rule.

More:

The old story goes on to relate that Cyrus ordered Croesus to be burned alive. When Croesus saw the flames creeping upward to consume him, he remembered the words of the wise Solon and cried out, "O Solon! Solon! Solon!" Supposedly Cyrus was so moved by the story of how Solon had warned the proud king that he ordered Croesus to be released. Cyrus asked to Croesus why he shouted Solon's name, and Croesus asked him another question "what your soldiers are doing now?", showing the Persian soldiers taking all the treasures and destroying everything; Cyrus replied "They are plundering your city"; then Croesus said "They are not plundering my city, it's your city now and your soldiers are destroying your city". After that short conversation Cyrus the Great stopped his soldiers.

The worst thing that can ever happen to an advocate of central planning is to actually become a central planner. For when they do, then learn the hard way that there is indeed a difference between building a business and seizing it, between running a firm and controlling it, between making something and stealing something.

Just a quick pass-long so Tony doesn't get upset with me:

A federal magistrate has overturned Virginia's decades-old ban on alcohol-related advertising in college newspapers, saying that the law violates the student publications' constitutional right to free speech.

U.S. Magistrate Judge M. Hannah Lauck sided with the student newspapers at the University of Virginia and Virginia Tech, which said the restrictions on alcohol references -- including phrases such as "happy hour" -- in print and online media hampered their ability to make money because they've had to turn down potential advertisers.

My long-standing view is unchanged: Truthful commercial advertising should enjoy full First Amendment protection on a par with political speech. The fact that these are college media outlets is utterly irrelevant.

Also irrelevant is the notion that bars or breweries have no "need" to advertise (e.g., via college publications or websites). Such arrogant micromanaging conveniently blanks out the fact that there are students (or graduate students or employees or whoever) who are over 21, not to mention the lack of any evidence whatsoever to suggest that advertising a happy hour "worsens" alcohol abuse, intoxication-catalyzed crime or injury, or any other purported "social harm." (And even if it did, so what? The First Amendment ought not yield so impotently to dubious alcohol-related "externalities" any more than it ought yield to dubious pornography-related "externalities.")

The case is Educational Media Company v. Swecker, No. 3:06CV396 (E.D. Va., March 31, 2008) (PDF - 36 pages)

If you could condense everything I've ever written on this blog into one succinct passage, it would come out something like this:

First, democracy requires judicial supervision to thwart the excesses of elected officials. Second, governments closest to the people are — never mind what sentimentalists say — often the worst.

Whether that says more about me or about the person who actually wrote that succinct passage is unclear.

Meanwhile, if you could condense everything I've ever written on this blog into one succinct passage, plus one footnote, that footnote would come out something like this:

P.S. Ron Paul is not a libertarian —

[Dale] Bell, 58, who served in the Reagan administration, calls himself "a Ron Paul guy."

Under Ron Paul's theory of unbridled anti-federalist majoritarianism, the "fiefdom" (Will's term) of Pinal County, Arizona*, would be perfectly within its "states' rights" authority to ban dancing in Bell's restaurant, the controversy at issue in Will's column.

For those curious about the fact pattern:

The question concerns statutory interpretation. The statute includes "dance hall" — along with bowling alleys, penny arcades, skating rinks and other things — among the "amusement or recreational" enterprises that must be "within a completely enclosed structure." Does Bell's restaurant, which makes 99.75 percent of its revenue from food and drink (the rest comes from pool tables and trinkets) become an illegal (because not completely enclosed) dance hall when someone rises to "sway, shuffle or even dance"?
...
The 14th Amendment's guarantees of equal protection and due process of law should mean that government may interfere with a citizen's economic liberty only to promote important government interests that cannot be advanced through less restrictive means. Under today's weak "rational basis" standard, courts validate virtually any abridgement of economic liberty, no matter how tenuous the connection to even a minor public purpose. Conservatives, note well: Restoring economic liberty requires a kind of judicial activism — judges judging rather than merely ratifying government's caprices.

Or as I have put it:

I will never — never — be more afraid of judges than of politicians. And I will always — always — be afraid of those who are.

Incidentally, can you guess which other fiefdom has declared a very similar "War on Dancing"?

I would refine Will's analysis only to note that the Fourteenth Amendment is meant to restrict, not "government" writ large but states specifically — as well as their subordinate units (cities and towns, counties, school districts, etc.) — and to emphasize that there is no fundamental difference between having one's rights violated by Congress, a state legislature, a town council or a school board. A local majority can be just as tyrannical — perhaps more so — than a national majority. That was the whole idea behind Will's second point at the beginning of this post.

That was also supposed to be the great charge of the Fourteenth Amendment — the "new birth of freedom" that has mostly proven to be stillborn.

More thoughts at Hit & Run.

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*When did Arizona stop being "Goldwater country"? Can it be traced to Sandra Day O'Connor ("the only former legislator on the Supreme Court"), to John McCain ("loyal foot soldier in the Reagan Revolution"), both or neither? (But cf., Jeff Flake.)

You all know the primary Tragedy of the Commons. When property is owned publicly, or its use is subsidized such that the price to use it is artificially low or even zero, it will be overused. If no one owns the meadow and if everyone may freely graze their cows on it, then the meadow will be overgrazed to everyone's detriment.

But there is another Tragedy of the Commons: When property is managed publicly, it will often be underused. The politician or bureaucrat responsible for managing the commons may decide, rationally or irrationally, that sheep should be kept off the commons, or that a new and improved variety of grass should not be planted on it, or that the meadow should be off limits on Sundays, or that gay weddings can't be performed on it, etc.

Exhibit B:

Want to browse Vanity Fair magazine on the Denver airport's free Wi-Fi system? Sorry. You'll have to buy it at the newsstand, because DIA's Internet filter blocks Vanity Fair as "provocative."

You can't get to the popular gossip column perezhilton.com on DIA's Wi-Fi signal, either. Or the hipster-geek favorite boingboing.net. Or the Sports Illustrated swimsuit photos, even though the magazine's bare-breasted cover shot is on prominent display at airport stores, right next to Penthouse and Hustler.
...
[Airport bureaucrats] say they're using prudent judgment in a public, family-friendly atmosphere.

Of course, one bureaucrat's "prudent judgment" is another bureaucrat's "too prudent" and yet another's "not prudent enough." Such is always the case with hopelessly vague and subjective terms such as "prudent" (or, worse, "provocative").

So, in this instance of the "secondary" Tragedy of the Commons, "not free, but unlimited" has been replaced, not with "free and unlimited" but rather with "free, but limited." And arbitrarily limited at that. That's not a per se improvement; it's merely exchanging one constraint for another -- at the whim of a low-level bureaucrat.

An airport may well be a natural monopoly that is best owned publicly. The same cannot be said for wi-fi (which, since it is perfectly excludable, is never a public good). Even wi-fi at a public airport is not a public good. To avoid the secondary Tragedy of the Commons, the Denver airport should stick to its knitting and leave the wi-fi business to bona fide businesses.

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Incidentally, here is Exhibit A, back from 2006.

One blawger suggests the answer may be yes:

As more of our lives become dependent on Web 2.0 technologies, should we have some sort of rights or consumer protection? Is Facebook the digital equivalent to the company town?

The context was a story that an extremely popular blawger had his Facebook account deleted, supposedly with no explanation (but later updated with a perfectly reasonable "TOS violation" explanation -- and a reinstatement).

In any case, here is the answer I posted:

As more of our lives become dependent on Web 2.0 technologies, should we have some sort of rights or consumer protection? Is Facebook the digital equivalent to the company town?

No and no.

What part of "private property" and "free to the user" are unclear?

I also find it fascinating that this question is being asked in the wake of far more people complaining about exactly the opposite phenomenon: Facebook refusing to delete profiles.

Meanwhile, one person's "dependence" (real or purported) being wielded as a sword upon another person's private property gave us, inter alia, Kelo v. New London. No thanks.

Sometimes private property is just private property. Sometimes a user agreement is just a user agreement.

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It's like your employer locking you out of your office and not letting you take your things."

No, it's like a hotel guest who makes too much noise, is kicked out and then claims "tortious interference with business" because he missed a sales meeting the next day. Utter nonsense.

Or, if you prefer, it's like your employer firing you and then not letting you copy the draft blogposts you stored on its network [in violation of your employment contract].

Remember always: Adhesion contracts, including EULAs and TOSs, are a good thing. They lower costs, reduce litigation and catalyze innovation. It is a false dichotomy to suggest the alternatives are "unfair adhesion contracts and fair adhesion contracts." The choice is between "voluntary adhesion contracts and nothing." All else is sophistry.

I have no problem with people who have a problem, on policy grounds, with the deductibility of mortgage interest from income tax liability. (I have pragmatic and equitable concerns about abolishing it post facto, but not a "problem" with the concept of repealing it per se.)

I have a huge problem, on the other hand, with this:

The mortgage tax deduction for owner-occupied residences now costs $430.2 billion and is projected to be the fourth largest federal tax expenditure in 2007-2011.

A tax deduction is not a tax expenditure. The government does not "spend money on me" by abstaining from taxing me in the first place.

There are valid reasons to oppose the mortgage interest deduction. "The government spends too much money on it" is simply not one of them.

Tyler Cowen bemoans an increase of over 50% in the assessed value of his home.

I as have noted before and commented at his blog:

Assessment values can and should be based exclusively on real characteristics (acreage, square footage, the presence of a chimney/pool/garage/etc.). The formulas could admittedly become complex and politically influenced, but they would still be more reality-based than bubble-bloated assessments.

Only the tax rate upon the underlying (i.e., real not nominal) assessed value should be allowed to vary (i.e., the taxing authority should only be allowed to vary the tax rate, openly and notoriously, and should be prohibited from engaging in "assessment creep").

It is unreasonable to change a tax burden on one property that has not changed physically for no other reason than because it was sold at a certain price (or, worse, because a neighbor's property was sold at a certain price).

Meanwhile, malcontents who decry "predatory lenders" while denying even the possibility of predatory borrowers might also consider the role of property taxes -- and property tax liens -- on foreclosure rates. Stated differently: Who would dare suggest that there is no such thing as a "predatory tax authority"?

The EconLog post on why libertarians seem so willing to submit to government excesses and abuses, to which I blogged a reply seems to have legs.

My latest comment entry:

There is of course a third way [as opposed to submission or civil disobedience]: to sue, hopefully before "activist judges" who understand their solemn constitutional duty to thwart the tyranny of the majority.

And

Civil disobedience? We can't even get people to check "No" on the $3 Presidential Campaign Fund box on tax returns.

Also, I would submit (sorry, poor word choice) that the Taser and the increasingly lax standards by which its use is considered appropriate have made traditional 1960s-style civil disobedience difficult if not impossible.

Discuss.