They Bet On One Horse To Win And I Bet On Another To Blow


Bear Market Rides to Win!

Save the auto industry! Save the banks! Save the…horse track?

On Tuesday, Maryland governor Martin O'Malley signed legislation that gave the state eminent domain over the Preakness Stakes horse race franchise, "hours after the fast-tracked bill passed in the General Assembly."

From H.L. Mencken's old writing pad:

Lawmakers, some of whom donned "Save the Preakness" badges on the session's last day, quickly rallied around the bill that authorizes the state to acquire racing assets of bankrupt Magna Entertainment Corp., including Laurel Park, Pimlico Race Course and rights associated with the second leg of the Triple Crown and its trophy, the Woodlawn Vase.  

Maryland legislators, facing huge short falls in the state's budget, apparently agreed that "it's better to have the power and not need it than to need it and not have it." The Baltimore Sun also came out in support of the bill, citing the oh-so-terrible loss of the Colts franchise in 1984. Maryland tried to pull the eminent domain card to keep the football team from rushing to Indianapolis but–alas–was a day behind with its intervention.

The new legislation shouldn't really be a big surprise, though. Discussing other stud-filled venues –sports stadiums–Reason Contributor Daniel McGraw reported in 2005:

[T]he use of eminent domain has mushroomed. The Institute for Justice, the nonprofit law firm that is arguing the [Kelo v. City of New London] case before the Supreme Court, has documented more than 10,000 cases between 1998 and 2002 in which local governments have transferred or threatened to transfer property from one private party to another. Blight is no longer the issue; the question now is simply whether the deal helps the local economy in some way.

…During the last 15 years, economists such as Stanford's Roger Noll, Smith College's Andrew Zimbalist, and Cleveland State University's Mark Rosentraub repeatedly have shot down the claim that new stadiums benefit local economies. "There is no dispute in the economic community about who gets the primary benefit from the subsidy," says Raymond J. Keating, chief economist for the Washington-based Small Business & Entrepreneurship Council and an expert on sports facility financing.

In case you were curious:

In Kelo v. City of New London (2005), the U.S. Supreme Court allowed the government to condemn property and transfer it to other private owners in the name of "economic development." Upholding the forced transfer of land in New London, Connecticut, to private developers, the Court ruled that virtually any potential public benefit satisfies the Fifth Amendment's requirement that the authorities can take property only for a "public use."

Superfluous Mencken quote:

In the United States, doing good has come to be, like patriotism, a favorite device of persons with something to sell.

…It's also a favorite device of states with poor purchasing histories and a penchant for power grabs.

More Reason coverage of Kelo case here. Jack Shafer on Mencken here. Senior Editor Brian Doherty on what Mencken believed.  

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