4 ms·

Not sure I understand the quotation. Who is the one driving a cart and horses through the law, is it Wells Fargo or Richmond?

hga 13y ago
Richmond. What they're doing is flatly unconstitutional, as the article mentions. And it's an old American tradition to consider bankers as "the Devil" or strongly in that direction. This has even provided what's very possibly our best bit of political rhetoric, "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." (http://en.wikipedia.org/wiki/Cross_of_Gold_speech http://en.wikipedia.org/wiki/Cross_of_Gold_speech)
- HarryHirsch 13y ago
  The constitution explicitly permits eminent domain, provided it's for the benefit of the public. It's also clear that Wells Fargo will argue against it, because it's obviously not in their interest. Not too far from where I live is a house that Deutsche Bank took possession of a year and a half back. They haven't made any moves to sell since. The lot is overgrown, the roof will start leaking soon, it's an eyesore that's getting worse every month. A few years back I had the misfortune to rent from an absentee landlady from one of the poorest ZIP codes in Brooklyn who had bought that property at the height of the boom. The high point of the tenancy was the heating failing in early October. When the code inspector showed up I could show him the garbage that hadn't been collected for three weeks and send him down to the basement where the lady, her husband and her useless cousin had torn the boiler apart, attempting to fix it, and couldn't put it back together again. She had arranged for the plumber to come, cancelled it a day later, and then went out from Brooklyn to do this cock-up of a cowboy job. The backstory was that her bank had asserted rights the day the plumber was cancelled. The garbage was there because the garbage hauler had gone unpaid for that month. I moved out soon after, and the move was a pain. That was in 2008. The state of the house is uncertain. Lis pendens was filed in 2008, as I said, and there has been no court date until now. What I'm saying here is that unmaintained housing stock and housing stock without a clean title has real effects on the people that live in them and nearby, the public that is. You can make a good case that eminent domain is justified here. No one has done it yet, this is uncharted territory as far as the law is concerned, but it's heartening to see Richmond take a shot at it.
  - hga 13y ago
    What the 5th Amendment actually said is "nor shall private property be taken for public use, without just compensation." Kelo notwithstanding, "benefit of the public" is not "public use"; the former can be stretched infinitely, to the ending of the rule of law. You're also ignoring that they admit they're seizing the property for less than it's value: "Richmond, working with San Francisco-based Mortgage Resolution Partners, offers $150,000 to buy a $300,000 bank loan on a house that is now worth $200,000 and is in danger of foreclosure. If the bank agrees, the city and the company then obtain the loan at $150,000. Richmond and the company then offer the homeowner a new loan of $190,000, which, if accepted.... If the bank refuses to sell the loan to Richmond, then the city invokes its power of imminent domain and seizes the mortgage. It would then offer the bank a fair market value for the home." See the Naked Capitalism posting that cynicalkane brought to our attention for more details and a view from a very different angle: http://www.nakedcapitalism.com/2013/08/beware-of-private-equity-guys-bearing-gifts-eminent-domain-mortgage-scam-hit-with-well-deserved-lawsuit.html http://www.nakedcapitalism.com/2013/08/beware-of-private-equ... Also mentions that California has a property owner friendly way of establishing "just compensation".
    - HarryHirsch 13y ago
      The offer of kUSD 150 in cash for a title to a house valued at kUSD 200 in Richmond, that the bank needs to realize a steady stream of income from, doesn't seem unfair outright. What I mean is, where are the creditworthy buyers in Richmond? The town is failing and not getting any better. What is always troubling is the interaction between municipal authorities and venture capital; their interests do not intersect, and there is little experience in municipalities with complex financial deals. The showcase piece is the Birmingham, AL sewer disaster. The idea of eminent domain is appealing, and the real-world implementation is another problem.
      - bradleyjg 13y ago
        They aren't seizing title to the house, they are seizing a lien and promissory note. Although the lien can't be worth more than the underlying property, the note certainly can.
- tzs 13y ago
  > Richmond. What they're doing is flatly unconstitutional, as the article mentions. I didn't see that mentioned in the article. Are you sure you are not thinking of that article someone linked to in a comment here on HN rather than the submitted article?
  - hga 13y ago
    "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain, which allows governments to seize private property for public use — like a house in the path of a new highway or a piece of land needed for a new park." That's consonant with the plain language of the 5th Amendment, Kelo notwithstanding: "nor shall private property be taken for public use, without just compensation." I take the article's language as the author knowing this is scamming the Constitution's provision for eminent domain, even if it's pretty clear he doesn't care. Hence the quote starting this thread.
- mbreese 13y ago
  > What they're doing is flatly unconstitutional Not so sure about that... the Supreme Court has given wide leeway to municipalities in their interpretation of eminent domain. This is just one of the slippery slope side effects of their earlier decisions.
  - hga 13y ago
    I do not for a moment accept the principle that the Supreme Court has the final say in what's Constitutional, especially since the latter makes that crystal clear, explicitly in jurisdiction stripping (http://en.wikipedia.org/wiki/Jurisdiction_stripping http://en.wikipedia.org/wiki/Jurisdiction_stripping) and implicitly in the absence of sanctions on the Executive ("John Marshall has made his decision, now let him enforce it!") But your point about this slippery slope is well taken.
    - mbreese 13y ago
      Isn't that kinda their job?
      - hga 13y ago
        Prior to Marbury v. Madison (http://en.wikipedia.org/wiki/Marbury_v._Madison http://en.wikipedia.org/wiki/Marbury_v._Madison) in 1803, no, not at all. Thomas Jefferson had this to say about it, per Wikipedia: "You seem to consider the judges as the ultimate arbiters of all constitutional questions; a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Our judges are as honest as other men, and not more so. They have, with others, the same passions for party, for power, and the privilege of their corps.... Their power [is] the more dangerous as they are in office for life, and not responsible, as the other functionaries are, to the elective control. The Constitution has erected no such single tribunal, knowing that to whatever hands confided, with the corruptions of time and party, its members would become despots. It has more wisely made all the departments co-equal and co-sovereign within themselves." The subsequent history has shown he was spot on. Given that the Switch In Time That Saved Nine waved through FDR's New Deal, and most subsequent gross violations of the Constitution, shows in practice they're really bad at what they arrogated to themselves, and they've far too often given the other branches of government cover. E.g. "sure, this might be unconstitutional, the Supreme Court will decide!" Fairly often the "might" is really "is", and later politicians who depending on a saving throw from the Supremes got disappointed. E.g. McCain-Feingold.
- dalke 13y ago
  "old American tradition"? Bryan's speech is a continuation of a tradition which is far older than the US. In the Bible, Jesus cast out the moneylenders from the temple, and thus for centuries usury - loaning money at any interest - was prohibited in Christendom, upon torment of one's immortal soul. A similar prohibition exists in many parts of the Islamic world today. Can you point out where the article mentions that it's "flatly unconstitutional?" The only reference I could find to constitutionality (mentioned also in the photo caption) is: "first-in-the-nation plan to use the government's constitutional power of eminent domain to ..." The article does mention that "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain", but every legal opposition to eminent domain seizure makes that claim.
  - hga 13y ago
    Well, yes, but you're very wrong about the example of Jesus, he chased out the moneychangers. Per Wikipedia: "A money changer is a person who exchanges the coins or currency of one country for that of another." I won't get into the much more complicated usury argument, since that's now settled in (post)Christendom, else we wouldn't be having this argument. For "flatly unconstitutional", see https://news.ycombinator.com/item?id=6273984 https://news.ycombinator.com/item?id=6273984
    - dalke 13y ago
      Thanks for the correction! For years I've been thinking it was "money lenders" not "money changers." I read the link you pointed to. It affirms that the plantiff's claim is "consonant with the plain language of the 7th Amendment." There must be a typo there, as the 7th is right to a trial by jury, while the given quote about "nor shall private property ..." is from the 5th. I don't see though how this is an effective argument. Every single lawsuit filed in opposition to an eminent domain seizure must claim that the seizure is violation of the 5th amendment. So of course this lawsuit is "consonant with the plain language of the 5th Amendment" as otherwise it would be thrown out as being unjustified. A more effective argument would point to existing legal cases, to show how the courts have previously ruled. But the comment you linked to dismissed Kelo - a case which gives some idea of how much the Supreme Court may defer to local governments - without giving any reference to other more relevant cases.

hga 13y ago

Richmond. What they're doing is flatly unconstitutional, as the article mentions. And it's an old American tradition to consider bankers as "the Devil" or strongly in that direction. This has even provided what's very possibly our best bit of political rhetoric, "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." (http://en.wikipedia.org/wiki/Cross_of_Gold_speech http://en.wikipedia.org/wiki/Cross_of_Gold_speech)

HarryHirsch 13y ago
The constitution explicitly permits eminent domain, provided it's for the benefit of the public. It's also clear that Wells Fargo will argue against it, because it's obviously not in their interest. Not too far from where I live is a house that Deutsche Bank took possession of a year and a half back. They haven't made any moves to sell since. The lot is overgrown, the roof will start leaking soon, it's an eyesore that's getting worse every month. A few years back I had the misfortune to rent from an absentee landlady from one of the poorest ZIP codes in Brooklyn who had bought that property at the height of the boom. The high point of the tenancy was the heating failing in early October. When the code inspector showed up I could show him the garbage that hadn't been collected for three weeks and send him down to the basement where the lady, her husband and her useless cousin had torn the boiler apart, attempting to fix it, and couldn't put it back together again. She had arranged for the plumber to come, cancelled it a day later, and then went out from Brooklyn to do this cock-up of a cowboy job. The backstory was that her bank had asserted rights the day the plumber was cancelled. The garbage was there because the garbage hauler had gone unpaid for that month. I moved out soon after, and the move was a pain. That was in 2008. The state of the house is uncertain. Lis pendens was filed in 2008, as I said, and there has been no court date until now. What I'm saying here is that unmaintained housing stock and housing stock without a clean title has real effects on the people that live in them and nearby, the public that is. You can make a good case that eminent domain is justified here. No one has done it yet, this is uncharted territory as far as the law is concerned, but it's heartening to see Richmond take a shot at it.
- hga 13y ago
  What the 5th Amendment actually said is "nor shall private property be taken for public use, without just compensation." Kelo notwithstanding, "benefit of the public" is not "public use"; the former can be stretched infinitely, to the ending of the rule of law. You're also ignoring that they admit they're seizing the property for less than it's value: "Richmond, working with San Francisco-based Mortgage Resolution Partners, offers $150,000 to buy a $300,000 bank loan on a house that is now worth $200,000 and is in danger of foreclosure. If the bank agrees, the city and the company then obtain the loan at $150,000. Richmond and the company then offer the homeowner a new loan of $190,000, which, if accepted.... If the bank refuses to sell the loan to Richmond, then the city invokes its power of imminent domain and seizes the mortgage. It would then offer the bank a fair market value for the home." See the Naked Capitalism posting that cynicalkane brought to our attention for more details and a view from a very different angle: http://www.nakedcapitalism.com/2013/08/beware-of-private-equity-guys-bearing-gifts-eminent-domain-mortgage-scam-hit-with-well-deserved-lawsuit.html http://www.nakedcapitalism.com/2013/08/beware-of-private-equ... Also mentions that California has a property owner friendly way of establishing "just compensation".
  - HarryHirsch 13y ago
    The offer of kUSD 150 in cash for a title to a house valued at kUSD 200 in Richmond, that the bank needs to realize a steady stream of income from, doesn't seem unfair outright. What I mean is, where are the creditworthy buyers in Richmond? The town is failing and not getting any better. What is always troubling is the interaction between municipal authorities and venture capital; their interests do not intersect, and there is little experience in municipalities with complex financial deals. The showcase piece is the Birmingham, AL sewer disaster. The idea of eminent domain is appealing, and the real-world implementation is another problem.
    - bradleyjg 13y ago
      They aren't seizing title to the house, they are seizing a lien and promissory note. Although the lien can't be worth more than the underlying property, the note certainly can.
tzs 13y ago
> Richmond. What they're doing is flatly unconstitutional, as the article mentions. I didn't see that mentioned in the article. Are you sure you are not thinking of that article someone linked to in a comment here on HN rather than the submitted article?
- hga 13y ago
  "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain, which allows governments to seize private property for public use — like a house in the path of a new highway or a piece of land needed for a new park." That's consonant with the plain language of the 5th Amendment, Kelo notwithstanding: "nor shall private property be taken for public use, without just compensation." I take the article's language as the author knowing this is scamming the Constitution's provision for eminent domain, even if it's pretty clear he doesn't care. Hence the quote starting this thread.
mbreese 13y ago
> What they're doing is flatly unconstitutional Not so sure about that... the Supreme Court has given wide leeway to municipalities in their interpretation of eminent domain. This is just one of the slippery slope side effects of their earlier decisions.
- hga 13y ago
  I do not for a moment accept the principle that the Supreme Court has the final say in what's Constitutional, especially since the latter makes that crystal clear, explicitly in jurisdiction stripping (http://en.wikipedia.org/wiki/Jurisdiction_stripping http://en.wikipedia.org/wiki/Jurisdiction_stripping) and implicitly in the absence of sanctions on the Executive ("John Marshall has made his decision, now let him enforce it!") But your point about this slippery slope is well taken.
  - mbreese 13y ago
    Isn't that kinda their job?
    - hga 13y ago
      Prior to Marbury v. Madison (http://en.wikipedia.org/wiki/Marbury_v._Madison http://en.wikipedia.org/wiki/Marbury_v._Madison) in 1803, no, not at all. Thomas Jefferson had this to say about it, per Wikipedia: "You seem to consider the judges as the ultimate arbiters of all constitutional questions; a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Our judges are as honest as other men, and not more so. They have, with others, the same passions for party, for power, and the privilege of their corps.... Their power [is] the more dangerous as they are in office for life, and not responsible, as the other functionaries are, to the elective control. The Constitution has erected no such single tribunal, knowing that to whatever hands confided, with the corruptions of time and party, its members would become despots. It has more wisely made all the departments co-equal and co-sovereign within themselves." The subsequent history has shown he was spot on. Given that the Switch In Time That Saved Nine waved through FDR's New Deal, and most subsequent gross violations of the Constitution, shows in practice they're really bad at what they arrogated to themselves, and they've far too often given the other branches of government cover. E.g. "sure, this might be unconstitutional, the Supreme Court will decide!" Fairly often the "might" is really "is", and later politicians who depending on a saving throw from the Supremes got disappointed. E.g. McCain-Feingold.
dalke 13y ago
"old American tradition"? Bryan's speech is a continuation of a tradition which is far older than the US. In the Bible, Jesus cast out the moneylenders from the temple, and thus for centuries usury - loaning money at any interest - was prohibited in Christendom, upon torment of one's immortal soul. A similar prohibition exists in many parts of the Islamic world today. Can you point out where the article mentions that it's "flatly unconstitutional?" The only reference I could find to constitutionality (mentioned also in the photo caption) is: "first-in-the-nation plan to use the government's constitutional power of eminent domain to ..." The article does mention that "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain", but every legal opposition to eminent domain seizure makes that claim.
- hga 13y ago
  Well, yes, but you're very wrong about the example of Jesus, he chased out the moneychangers. Per Wikipedia: "A money changer is a person who exchanges the coins or currency of one country for that of another." I won't get into the much more complicated usury argument, since that's now settled in (post)Christendom, else we wouldn't be having this argument. For "flatly unconstitutional", see https://news.ycombinator.com/item?id=6273984 https://news.ycombinator.com/item?id=6273984
  - dalke 13y ago
    Thanks for the correction! For years I've been thinking it was "money lenders" not "money changers." I read the link you pointed to. It affirms that the plantiff's claim is "consonant with the plain language of the 7th Amendment." There must be a typo there, as the 7th is right to a trial by jury, while the given quote about "nor shall private property ..." is from the 5th. I don't see though how this is an effective argument. Every single lawsuit filed in opposition to an eminent domain seizure must claim that the seizure is violation of the 5th amendment. So of course this lawsuit is "consonant with the plain language of the 5th Amendment" as otherwise it would be thrown out as being unjustified. A more effective argument would point to existing legal cases, to show how the courts have previously ruled. But the comment you linked to dismissed Kelo - a case which gives some idea of how much the Supreme Court may defer to local governments - without giving any reference to other more relevant cases.