If it’s not one thing, it’s another. No sooner did we get done with the Lady Liberty screw-up by the Postal Service, described in the imediately preceding post, that we came across another example of your gummint at work — this one with much more serious implications.
If you are of our generation, you were inculcated in high school with the well-nigh religious belief that the Tennessee Valley Authority, a veritable jewel in the crown of the New Deal, was just plumb wonderful. Its hydroelectric dams brought the Tennessee Valley into the modern age and improved everything from agricultural practices to good sex (even if in those days the latter subject was not mentioned at all). What the TVA really accomplished was at first, a large number of eminent domain takings, and eventually the production of dirt-cheap electricity generated by its dams. How cheap? Oh, about half the price charged by private utilities. Naturally, this attracted a lot of industry to the area so that eventually the power-generating capacity of those hydroelectric dams was used up. The TVA stepped into that breach and proceeded to build a bunch of coal-fired power plants that delivered power at a mere 30% discount from private utilities and attracted still more industry.
Ah, but if you are going to operate coal-fired power plants you need lots of coal. So the TVA proceded to strip-mine it in prodigious quantities, causing pollution of streams in the area and contaminating the air with power plant exhausts. Moreover, when you burn large quantities of coal you wind up with large quantities of coal ash that has to be disposed of somehow. TVA’s method of choice was to deposit that ash in special dumps that . . . But surely, you must have read about it in the paper. After the ash heap grew tall, it collapsed and inundatecd the nearby area with tons and tons of a toxic, semi-liquid goop that inundated private land and gave rise to litigation that is still going on.
That aspect of TVA operations was understandably not bragged about. But in recent years, as environmental concerns became more important, the inevitable happened. TVA’s operations collided with environmental laws. Making a long story short, today’s New York Times brings the news (Felicity Barringer, T.V.A. Agrees To Shutter 18 Generators That Use Coal, April 15, 2011, at p. A11). The settlement calls for the closing of 18 of TVA’s coal-burning plants over the next six years while spending $3 billion to $5 billion on pollution controls on any remaining coal-fired generating units.
And so, the TVA, an agency that was created during the Depression to bring electricity to rural America — says the Times — became one of the largest users of coal in the utility industry, causing 1200 premature deaths and hundreds of cases of bronchitis and nonfatal heart attacks, as well as 21,000 asthma attacks.
So why is all that of interest in a blog on eminent domain? Because it was in an eminent domain valuation case that the U.S. Supreme Court ruled in favor of the TVA, noting in the process that it had to keep an eye on compensation because awarding it implicated a “conflict between the peoples interest in public projects and the principle of indemnity to the landowner” (United States ex rel. T.V.A. v. Powelson, 319 U.S. 266 (1943)). Indemnity? In eminent domain? Don’t be silly. But as long as the court brought it up, why should those landowners be forced to forgo full indemnity for all their demonstrable economic losses, and why should the government be relieved of having to pay for all economic losses caused by its takings? The court never got around to explaining any of that.
Now, it turns out that “the people’s interest in public projects” is not a freebie, that it carries a price, in this case a heavy price in human lives, health and environmental degradation. Nor is that all. Reading the name of Felicity Barringer, the author of the Times story that inspired this post, reminded us of another of her articles (Decades Later, Simmering Debate on a Road Heats Up, N.Y. Times, Feb.21, 2006, at p. A12), reporting that as of that date, almost a half century after the fact, the TVA had still not provided the compensation it promised when one of its dams flooded a local road.
Bottom line: the judicial attitude reflected in Powelson allowed the TVA to enjoy a “free lunch,” a right to inflict economic (and later physical) harm on large numbers of people who were denied full and fair compensation for their losses by government-minded judges.
For a more detailed discussion of the TVA economics see Jane Jacobs’ famous book, Cities and the Wealth of Nations, 116-117 (1984). Also see Amity Shlaes, The Forgotten Man, 181, 187-188 (2007).