You Can't Use Voluntary Action to Try to Stop Government Coersion

Or so says California's Gavin Newsom, in a great Reuters quote found by Zero Hedge:

California Lieutenant Governor Gavin Newsom says he wants the U.S. Department of Justice to investigate "threats" against local communities considering using eminent domain to seize and restructure poorly performing mortgages to benefit cash-strapped homeowners.

Newsom sent a letter on Monday to U.S. Attorney General Eric Holder asking federal prosecutors to investigate any attempts by Wall Street investors and government agencies to "boycott" California communities that are considering such moves.

"I am most disturbed by threats leveled by the mortgage industry and some in the federal government who have coercively urged local governments to reject consideration" of eminent domain," he wrote in a letter, a copy of which was provided to Reuters.

Newsom, a Democrat who was previously mayor of San Francisco, warned the influential Securities Industry and Financial Markets Association in July to "cease making threats to the local officials of San Bernardino County" over the proposed plan to seize underwater mortgages from private investors.

Some towns in San Bernardino County, which is located east of Los Angeles, have set up a joint authority that is looking into the idea of using eminent domain to forcibly purchase distressed mortgages. Rather than evict homeowners through foreclosure, the public-private entity would offer residents new mortgages with reduced debts.

Newsom said in the letter on Monday that while he is not endorsing the use of eminent domain at this time, he wants communities in California to be able to "explore every option" for solving their mortgage burdens "without fear of illegal reprisal by the mortgage industry or federal government agencies."

This quote is so rich with irony that it is just delicious.   Certainly ceasing to do business in a community that threatens to steal all your property strikes me as a perfectly reasonable, sane response.   Calling such a response an actionable threat requiring Federal investigation just demonstrates how little respect California officials, in particular, have for private activity and individual rights.

The third paragraph might be worth an essay all by itself, classifying a voluntary private boycott as illegally coercive while treating use of eminent domain, intended for things like road building, to seize private mortgages as so sensible that it should be sheltered from any public criticism.


  1. MingoV:

    I had thought that the legal definition of eminent domain was government taking of land and the structures on the land. Eminent domain can involve ANY kind of property, including leases, mortgages, stocks, etc. I already was angered by the Kelo vs. City of New London (mis)ruling; now I'm outraged because governments have yet another way to take anything from anyone.

  2. Elam Bend:

    Newsom is a sociopath who seems to think no law should stand in the way of his political career. I know politicians aren't exactly know for their moral standing, but fact that Newsom's career was NOT ended after he seduced a woman having a break-down (who also happened to be he campaign managers wife) says a lot about California. He's the very definition of a limousine liberal who espouses a faux-populist message while getting rich.

  3. Bill K.:

    Warren, did you see this David Burge quote (from a tweet)?
    “Government” is just a word for things we do together.
    “Corporation” is just a word for things we do together voluntarily.

  4. chuck martel:

    Couldn't the proposals by the California municipalities be considered threats as well?