11/08/2006 10:21 pm ET Updated May 25, 2011

California's Indecent Proposal

I was in Florida in 2004, and this feels a whole lot better. Dirty tricks and scare tactics aside, reality and truth prevailed. Although the tide didn't wash entirely over California, where Schwazenegger was re-elected despite that no one can really say what he's done as governor, and where Proposition 87 was defeated by the oil lobby, at least Proposition 90 was defeated. That leaves us with the status quo, which is better than the state Prop 90 would have left behind.

It's a bit below the radar, but Proposition 90's defeat is another good sign. In case you hadn't heard about it, Prop 90 was the conservative stalking horse for "regulatory takings." It was disguised as a response to the Supreme Court's Kelo decision in 2005, which seemingly expanded eminent domain by affirming the right of New London, Connecticut to appropriate several houses for a future multi-use redevelopment project. True, this was a strange decision in many ways, partly because the seemingly pro-growth majority opinion came from a center-left lineup, with John Paul Stevens writing in the opinion that "promoting economic development is a traditional and long accepted function of government." This went beyond the "public use" described in the fifth amendment, and property rights advocates and other conservatives immediately went on the warpath. Since then, many states have passed laws restricting eminent domain power.

At first, stopping overreaching government seems reasonable. No one wants City Council members taking their house to let some fat cat build his mini-mall. Except that's exactly what Proposition 90 was designed to do. Hidden in the populist rhetoric was the most developer-friendly, pro-growth, radically libertarian, fat cat-friendly political idea in the conservative movement today.

Here's how it goes. Tucked into just a few sentences among the four pages of Proposition 90 was the ulterior motive of what supporters call the "Kelo-plus" strategy: the regulatory takings provision. This had nothing to do with eminent domain. What it would have meant is that the property owners who believe themselves to be aggrieved by silly regulations like, you know, zoning or airspace usage can sue the government for perceived financial losses caused by those regulations.

Example: Let's say you own some land that can accommodate ten houses, and also a munitions dump, but zoning says you are in a residential neighborhood and can only build the houses. According to Proposition 90, the government would have then owed you the theoretical future profit from your desired munitions dump. Since the government can't pay that, it would have to change the zoning, and - voila - you, fat cat developer, get your decommissioned ordnance, residential neighbors or not.

An extreme example, yes, but just such outcomes were ultimately the goal of Proposition 90. The backers of the initiative believed that basic zoning is government overreaching for which landowners should be compensated handsomely by government, and by extension, taxpayers. (A similar law passed in Oregon in 2004 has already led to almost 2,000 claims for a total $3.8 billion in claims against the state.) So when the Cato Institute's Roger Pilon argued in the LA Times that Proposition 90 is meant to protect "the poor and politically unconnected" it is disingenuous at best, unless by poor and politically unconnected he means the wealthy national developers like Howard Rich who were the primary backers of the Kelso-plus legislative movement.

So Proposition 90's defeat is yet another repudiation of the overreach by the conservative movement. Howard Rich, Americans for Limited Government, Grover Norquist and the rest of the conservative "thinkers" want a world with no rules. But rules create the orderly, equal playing field that fosters economic growth, democracy, and the prosperous country we all enjoy. Without them, there'd be chaos. There are places in the world with no regulations. Howard Rich and company are welcome to move there and see how they like it. Since it didn't fly in California, maybe put some regulatory takings on the ballot in Mogadishu. Or Tijuana, for that matter. (Zoning-free land use seems to work well there!) Now that the Republican Revolution is finally over, Roger Pilon can feel free to relocate the Cato Institute offices to eastern Congo. And Limbaugh and Norquist can join him. I hear they're looking for new ideas.