President Trump has declared that he’ll block the opening of the Gordie Howe International Bridge – a major infrastructure project connecting Detroit, Michigan, and Windsor, Ontario – unless “the United States is fully compensated for everything we have given [Canada].”
America shouldn’t even be in this position. The Gordie Howe International Bridge has been a long and arduous folly in spending abuses of the very type the Constitution is designed to protect us from.
The GHIB was initially planned in 2001, intended as a public competitor to the privately owned Ambassador Bridge. But in order to begin construction, Michigan needed land. Much of the land along the Detroit river, it turned out, rested in the hands of Manuel “Matty” Moroun – the billionaire owner of the Ambassador Bridge. Obviously not keen to sell his land to his competitor, Moroun played hardball – and the State had no option but to exercise its power of eminent domain.
But after a successful lobbying campaign, Moroun persuaded the Michigan State Legislature to ban the Michigan Department of Transportation from making any expenditures on the bridge – theoretically saving his land. That is, until the Michigan DOT struck a reimbursement deal with the Canadian government. Canada would foot the bill for the seizure of Moroun’s land, and in exchange, it would get ownership of the bridge and exclusive and perpetual tolling authority.
Not so fast, said Moroun. Each state, after all, is required by the federal Constitution’s Guarantee Clause (Article IV, Section 4) to provide a republican form of government. And, as with the federal system, republican governments are designed to place the control of the purse strings in the hands of the legislature. From James Madison’s writings in “Federalist 58,” to George Mason’s 1787 declaration, the founding fathers understood that placing the proverbial “purse” in the same hands as the “sword” was a recipe for a tyrannical executive.
So Moroun sued. Just as is the case with any federal agency, he argued, Michigan’s Department of Transportation can’t spend money when the legislature has expressly told it not to. Both the Michigan constitution (Art. IX, § 17) and Michigan legislation (§ 18.1366) make that clear.
Still, the Michigan Court of Appeals disagreed. In DOT v. Riverview-Trenton R.R. Co. (Mich. 2020), the court held that money was not really “expended” unless it was missing at the end of a fiscal year’s accounting. Accordingly, the DOT could spend however much money it wanted, so long as someone else provided reimbursement in the proper timespan.
This is a disgrace, and the consequences are clear: Unbound from democratic accountability through the legislature, the executive can wield state power on behalf of the highest bidder. Under this system, the executive devolves from a faithful servant of the public will into a gun-for-hire with a monopoly on violence.
In this instance, the consequences are only the perpetual GHIB toll. But under these lax principles, there’s no real limit as to what benefits rogue executives may deliver into the hands of foreign and private actors.
Indeed, SCOTUS has left similar vulnerabilities in the federal legal system. In the 2024 case Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd.(2024), the court held that so long as the executive is able to identify a legal source of funds, the Appropriations Clause (which safeguards the power of the purse) is satisfied. Justices Alito and Gorsuch provided a grave warning in their dissent: Such loose conditions “would give the Executive a most dangerous discretion,” that, as the solicitor general admitted at oral argument, would “permit an agency to be funded entirely by private sources.”
The president is right: Canada’s exclusive right to toll on the GHIB is rotten. But if we don’t want the executive handing out special privileges to foreign actors and private parties unchecked, we need to draw a hard line at allowing the executive to take their paychecks.
Tate Kaufman is a senior contributor at Young Voices, an editor at the National Security Law Journal, and a Mercatus Center Graduate Scholar.
Back in the 1960s, there were a number of houses, maybe a dozen, Brayboy said, sprawled along the hillside that overlooked the historically Black neighborhood. That included his great-uncle’s home. Brayboy said he’d ride up the hill with other neighborhood kids and just gaze out.
“It was a beautiful hill,” Brayboy said. “There was grandeur to the skyline. It was amazing that they just came in one day and said, ‘Hey, we’re taking it. Y’all can do what you want to do.’ ”
By “they,” Brayboy is referring to the city and the state. The “taking” was the state’s acquisition of homes in several Black neighborhoods for its Northwest Expressway. It was a $10 million project that put Brookshire Freeway, or NC-16, through the middle of McCrorey Heights.
A glimpse of the highway that backs up to the neighborhood of McCrorey Heights in Charlotte. The highway fractured the neighborhood in the 60s. KHADEJEH NIKOUYEH Knikouyeh@charlotteobserver.com
Now, current McCrorey Heights residents may be experiencing deja vu with the city and state’s latest I-77 expansion plan.
Dubbed the I-77 South Express Lanes plan, the 11-mile project would add toll lanes from the Brookshire Freeway exit to the South Carolina border. Although McCrorey Heights sits north of the Brookshire, residents were told by the North Carolina Department of Transportation that their neighborhood may be affected by the expansion.
What that impact is, from increased noise pollution to another round of eminent domain, is unclear.
“We’re still trying to come up with a design for the project itself,” said Felix Obregon, an NCDOT engineer. “We wanted to reach out to the community, talk to them about our upcoming project. … But as far as the actual impact to (McCrorey Heights), we’re still trying to work through that concept of what that would look like.”
But residents said these conversations feel like a repeat of the 1960s discussions on Brookshire. They want to make sure the city and state don’t fragment the neighborhood further.
“We understand Charlotte’s growing by leaps and bounds but this isn’t the right approach,” said Sean Langley who wonders whether the I-77 toll lane project will impact McCrorey Heights. KHADEJEH NIKOUYEH Knikouyeh@charlotteobserver.com
“This is not something that we take lightly,” said Sean Langley, president of the McCrorey Heights neighborhood association. “This has already happened to our community. It disconnected us from uptown to Greenville to all these different communities. Now to see again, the third time, essentially, their desire to expand the freeway and encroach towards McCrorey Heights, is problematic.
“We understand Charlotte’s growing by leaps and bounds, but this isn’t the right approach.”
A history of the I-77 South Express Lanes project
In 2007, state and regional transportation planners began discussing the addition of toll lanes to the I-77 corridor.
The agencies conducted a “Fast Lane Study” to determine whether existing and planned highways would benefit from express toll lanes to ease congestion, especially because of Charlotte’s potential growth.
“I think those folks back then were really forward-thinking to really realize that the Charlotte region was going to grow,” said Brett Canipe, NCDOT’s western deputy chief engineer. “I don’t think anybody predicted the rate of growth that the area’s seen, but certainly it’s tremendous growth and a lot of traffic.”
State road improvement projects take a long time to come to fruition because of planning and funding, Canipe said.
After several stages of rankings and approvals, the plan gets put on a long-range planning document.
Survey equipment stands on the Oaklawn Avenue bridge over I-77 South in Charlotte. The bridge may be impacted by the I-77 toll lane project. Melissa Melvin-Rodriguez mrodriguez@charlotteobserver.com
The plan is technically complex, Canipe said, and it’s the most expensive highway project in the state’s history at $3.2 billion.
The state has committed $600 million. Needing an additional $2.6 billion, the state will seek a public-private partnership to help fund the project.
What is the I-77 South Express Lanes project?
The project is similar to the existing 26 miles of express lanes along I-77 from Charlotte to the Lake Norman area, which opened in December 2020.
Running from Westinghouse Boulevard to the I-277/Brookshire Freeway, the I-77 south project will transform the highway into three free general-purpose lanes and two variable toll lanes.
A recent report from Wilmington-based law firm Shipman & Wright said I-77 from central Charlotte down to South Carolina is the sixth-deadliest stretch of roadway in the state, with 12 deadly crashes from 2019 to 2023.
The I-77 south corridor has a crash rate 2.5 times higher than the statewide average for urban interstates, according to a statistic from NCDOT. The cause, the agency said, is congestion.
Charlotte’s growth and the subsequent need for infrastructure change is a tune McCrorey Heights residents are familiar with, Langley said.
In the early 1900s, when Charlotte’s white suburbs barred Black residents, Rev. H.L. McCrorey had an idea. The second Black man to serve as president of Johnson C. Smith University wanted to build his own neighborhood.
In 1912, McCrorey founded McCrorey Heights.
The Dr. Reginald Hawkins house, on the corner of Clifton Street and Madison Avenue, is one of the most historic houses in the McCrorey Heights neighborhood. Melissa Melvin-Rodriguez mrodriguez@charlotteobserver.com
But McCrorey Heights thrived, becoming home to influential Black educators, clergy, doctors, lawyers, politicians and civil rights activists, such as Reginald Hawkins and Jimmie and Minnie McKee, who opened the historic Excelsior Club.
However, during the ’60s, the city and the state came knocking again. Local officials said they needed to run a highway through the neighborhood.
Residents pleaded with the highway department to find an alternative route. Their main argument: where would they go?
Smith said residents were making an appeal to reroute the highway some 100 feet but “if it was the only way, we wouldn’t stand in the way of the progress of the great city of Charlotte.”
Plans are advancing for I-77 toll lanes going from South Carolina to Brookshire Freeway. Residents of McCrorey Heights, who’s neighborhood was fractured by Brookshire, wonder if the highway expansion will impact them. Melissa Melvin-Rodriguez mrodriguez@charlotteobserver.com
Several houses were moved to what would become Hyde Park, but many were demolished.
“One of the biggest costs Charlotte needs to reckon with is the destruction and the dismemberment of the Black neighborhoods,” said Marilyn Twitty Brown, a long-time McCrorey resident. “These areas, Brooklyn, Biddleville, Dalebrook, McCrorey, were either fragmented or demolished by highway construction. Families were displaced all to get to uptown faster. …
Shauna Bell, who lives along Van Buren, said the nearby stormwater drain is constantly clogged from highway debris, which floods her yard.
And for years, McCrorey Heights residents have asked for a noise barrier to be placed on Van Buren Boulevard to block sounds from Brookshire.
Obregon said a barrier couldn’t be erected if it wasn’t tied to an active transportation project.
The I-77 South project is currently looking at potential environmental impacts, such as noise and pollution. Sound barriers could be added around the neighborhood once noise studies are complete.
An embankment is all that separates the edge of the McCrorey Heights neighborhood, at Van Buren Avenue, from Interstate 277 in Charlotte. Residents have long asked for a noise barrier to be put in place. Melissa Melvin-Rodriguez mrodriguez@charlotteobserver.com
But ultimately the impact to McCrorey Heights is unknown, according to Canipe and Obregon.
Irwin Creek, which runs next to I-77, may be moved closer to the neighborhood. Oaklawn Avenue Bridge, which was just reconstructed for the I-77 north expansion, may be partially demolished and rebuilt. And if the impact study says homes need to be moved or taken, they will be.
“It doesn’t matter if it’s the I-77 project or turning a two-lane to a four-lane road due to our increased travel demands, there’s no getting around the fact that what we do impacts people’s daily lives,” Canipe said.
Obregon continued, “It’s a tight corridor. We are really trying to work on finding a solution that limits the environmental impacts as well as impacts to the residents.”
What’s next for McCrorey Heights?
NCDOT will host two public meetings on the project: Nov. 12 at Johnson C. Smith and Nov. 13 at Silver Mount Baptist Church.
There, the agency will go over potential plans and residents can voice their opinions.
McCrorey Heights residents are gearing up for the meeting.
At an association meeting Thursday, about 30 residents discussed the I-77 plan and their next steps.
Twitty Brown said the group should reach out to local and state representatives. Staying quiet isn’t an option, she said.
Langley and longtime resident Winston Robinson said the group should come up with a community benefits agreement asking for quality of life improvements including noise barriers, a greenway or a park.
A view of Interstate-77 South and Irwin Creek are visible from the Oaklawn Avenue bridge in Charlotte. The bridge and the creek may be impacted by the I-77 toll lane project. Melissa Melvin-Rodriguez mrodriguez@charlotteobserver.com
Residents also said they should form coalitions with neighboring areas, including Wesley Heights, which has also pushed back against the I-77 project.
It was hard to come up with anything concrete, as the current plans are vague. It’s also unclear how McCrorey Heights’ historic designation could come into play.
“I want to see the map,” Brayboy said. “And then I’ll raise hell if I have to.”
There was some pessimism in the air. The group knows residents fought for their homes back in the 1960s, but in preparing for the worst, Robinson said those quality of life improvements would be a requirement.
One of the main sentiments was the understanding that Charlotte was growing. It goes back to what Rev. J.W. Smith said in 1962. There is no standing in the way of progress.
But several residents asked why Charlotte’s growth has to come at McCrorey Heights’ expense.
“If the same group of people are constantly being affected and impacted by progress, how is that fair and equitable?” Bell asked. “Yes, there’s growth and yes, there’s progress. Where’s the progress and the growth for that certain group of people?”
Desiree Mathurin covers growth and development for The Charlotte Observer. The native New Yorker returned to the East Coast after covering neighborhood news in Denver at Denverite and Colorado Public Radio. She’s also reported on high school sports at Newsday and southern-regional news for AP. Desiree is exploring Charlotte and the Carolinas, and is looking forward to taking readers along for the ride. Send tips and coffee shop recommendations.
This is part of Reason‘s 2025 summer travel issue. Click here to read the rest of the issue.
The Hess Triangle is the result of an eminent domain fight that began in 1910, when New York City seized and demolished a Greenwich Village apartment building owned by the Hess family. The city had forgotten this roughly 25-inch plot on the edge of the property—until 1921, when officials demanded that the Hess estate pay back taxes on the land. The Hess family refused to give the plot to the city, and in 1922 it instead installed a sidewalk mosaic reading “Property of the Hess estate which has never been dedicated for public purposes.”
This article originally appeared in print under the headline “The Hess Triangle.”
BOSTON — The state is distributing nearly $28 million to communities and regional organizations to upgrade parks and preserve open space as part of broader efforts to blunt the impact of climate change.
The state Executive Office of Energy and Environmental Affairs said it has awarded $27.8 million for park improvements and open space acquisition through several grant programs to help 54 communities and trusts to protect land. The spending will help preserve nearly 2,400 acres of open space statewide, the agency said.
Gov. Maura Healey said the open space program’s projects will “boost public health, drive tourism, and strengthen our economy” and that the spending is part of a large effort “creating sustainable communities and safeguarding our natural resources for future generations.”
“Investing in parks and open space is critical for our state’s resilience against climate change, tackling issues like urban heat islands, flooding, sea level rise, and drought,” Healey said in a statement.
The funding includes $500,000 for Lawrence to cover upgrades to Campagnone Common, a 17.5-acre park in the city’s downtown that hosts festivals and other gatherings.
“By enhancing public spaces for recreation and community, we’re not only fostering a healthier, more vibrant Lawrence but also contributing to our city’s economic vitality as more people come to enjoy everything Lawrence has to offer,” state Sen. Pavel Payano, D-Lawrence, said in a statement.
Salem is receiving $500,000 from the Parkland Acquisitions and Renovations for Communities program for renovations at Curtis Memorial Park that will upgrade structures and a playing field, the agency said.
The Essex County Greenbelt Association will receive $300,000 through the Conservation Partnership Grants program to preserve 84 acres of farmland, wildlife habitat and headwaters to the East Meadow River, a tributary to the Merrimack River and a major source of drinking water for Haverhill, the agency said.
A 1972 amendment to the state constitution, approved by 82% of voters, gave the state Legislature the authority to order the purchase of land – by eminent domain or otherwise – for conservation, recreation or open space. It set a two-thirds vote requirement for lawmakers to approve or make changes to protections.
A 2022 amendment to the law declares that land preservation is considered a “public purpose” by the state government and that “people have the right to clean air and water, freedom from excessive and unnecessary noise, and the natural, scenic, historic and aesthetic qualities of their environment.”
The law includes a provision that allows for a cash payment in lieu of replacement land, which must be at 110% of the property’s value.
Within three years of the transaction, the money must be deposited into a fund dedicated to the purchase of Article 97 land that is of “equal natural resource value and acreage.”
The Resilient Lands Initiative, a coalition of state agencies, nonprofit environmental groups and land trusts, wants to speed up land conservation in Massachusetts with a focus on climate resilience and environmental justice. The group has set a goal of conserving 30% of land statewide by 2030 and 40% by 2050.
Conservationists have faced a backlash from some local leaders who have raised concerns about the drain on their budgets when large tracts are taken off the tax rolls and made off limits to commercial development or housing projects that provide tax revenue.
The scramble for undeveloped land has also pitted advocates of open space against those of affordable housing, who argue that the need for low-income housing in many communities often takes a back seat to creating new parks, protecting forests and preserving wildlife habitat.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.
Eminent domain can be understood through the Trolley Problem, which is a philosophical thought … [+] experiment.
By Original: McGeddon Vector: Zapyon – This SVG diagram includes elements from this icon:, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=67107784
The government can take private land and property for public use through eminent domain in the United States. This authority can benefit communities and be used to achieve economic growth and prosperity, but it can also harm minority groups. In the coming decades, we will need eminent domain more than ever to overcome the challenge of climate change. However, we need to remember the history of eminent domain so we don’t reinforce past inequities.
Eminent Domain Is A Real Life Trolley Problem
Eminent domain is a legal principle that grants the government the power to take private property for public use, provided that property owners receive compensation. Governments typically use this process for infrastructure projects or other public endeavors that serve the greater community.
Eminent domain is a real-world example of the Trolley Problem from moral philosophy. The Trolley Problem is a thought experiment that involves a runaway trolley heading toward a group of people tied to a track. The decision-maker must choose between actively diverting the trolley onto the other track, potentially sacrificing one person, or allowing the trolley to continue its course, harming a larger group. From a purely utilitarian perspective, saving five people is better than saving one person. But other considerations could be used to justify saving one person and harming the others, like if the one person is a child, and the other five people would prefer to save the child.
When considering the use of eminent domain, governments must decide whether it is worth taking private property to build something that could benefit the greater good. Like in the Trolley Problem, the decision is about sacrificing the well-being of a small group of people to help a larger group of people.
The Historical Uses And Misuses Of Eminent Domain
The United States has used eminent domain for economic projects that have benefited millions of Americans but have also hurt underserved communities. For example, the Tennessee Valley Authority (TVA) took land from Appalachian communities to build dams, reservoirs, and power plants in the 1930s. Although the project required forced displacement and resettlement for many families, the TVA significantly modernized the region and paved the way for economic development. Although the TVA failed to produce equitable economic growth to the residents of the valley, it still succeeded in improving the economy of the region as a whole.
Another example of infrastructure that required eminent domain is the United States Interstate Highway System. The highway system connected cities from coast to coast, allowing for interstate commerce and economic growth. However, the use of eminent domain for the highway system disproportionately harmed Black communities nationwide.
In the 1950s, the neighborhood of Rondo was a vibrant and prosperous African American community home to about 80% of St. Paul’s Black population with grocery stores, churches, and credit unions. However, in the late 1950s and early 1960s, the construction of Interstate 94 cut through the heart of Rondo, displacing thousands of residents and destroying hundreds of homes and businesses. The government used eminent domain to force residents to relocate. Former Rondo residents had to move to areas where they faced discrimination, segregation and poverty. Some residents could not afford new housing or received inadequate compensation for their properties. The highway also created noise, pollution and physical barriers that isolated the remaining residents from each other and the rest of the city.
After the U.S. Interstate Highway System was completed, cars proliferated across the United States. These cars are now a significant source of the carbon emissions that cause climate change. Scientists predict that the harms of climate change, such as flooding, will disproportionately harm Black neighborhoods. With all of this context, it is hard to justify the Interstate Highway System’s use of eminent domain. Although there have been economic benefits, there have also been immeasurable harms from the project.
Climate Change Mitigation Will Require Eminent Domain
Even though eminent domain has been used unjustly, we need this legal tool to prepare for and mitigate climate change. Because climate change will make some communities unlivable, governments must use eminent domain to relocate communities out of harm’s way. The U.S. Army Corps of Engineers flood mitigation policy requires local governments to use eminent domain to relocate households in flood-prone areas, when necessary, as a condition for receiving federal funding to fight floods
We must also build green infrastructure projects to reduce our carbon emissions.
Governments may also use eminent domain for small initiatives, like building bike lanes or restoring flood-absorbing wetlands. In 2013, Boulder, CO, suffered a devastating flood that destroyed property and put residents at risk of drowning. To prevent future flooding catastrophes, the city used eminent domain to build the Wonderland Creek Greenway. The greenway includes a flood-absorbing irrigation ditch paralleled by a bike trail that connects surrounding neighborhoods.
As we employ eminent domain moving forward, we must remember the policy’s history and how people have been harmed in the past. We must ensure those displaced will receive undisputedly fair compensation before proceeding with new projects. At the same time, we should protect the invaluable and irreplaceable aspects of communities, like the Rondo neighborhood, from being lost. The Trolley Problem doesn’t have clear answers. There are many moral considerations, and the same will be true when justifying the use of eminent domain.
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
New York CNN
—
Some of the world’s largest oil exporters shocked markets over the weekend by announcing that they would cut oil production by more than 1.6 million barrels a day.
OPEC+, an alliance between the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC oil-producing countries, including Russia, Mexico, and Kazakhstan,said on Sunday that the cuts would start in May, running through the end of the year. The news sent both Brent crude futures — the global oil benchmark — and WTI — the US benchmark — up about 6% in trading Monday.
OPEC+ was formed in 2016 to coordinate and regulate oil production and stabilize global oil prices. Its members produce about 40% of the world’s crude oil and have a significant impact on the global economy.
What it means for Putin: OPEC+’s decision to cut oil production could have big implications for Russia.
After Russia invaded Ukraine last year, the United States and United Kingdom immediately stopped purchasing oil from the country. The European Union also stopped importing Russian oil that was sent by sea.
Members of the G7 — an organization of leaders from some of the world’s largest economies: Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — have also imposed a price cap of $60 per barrel on oil exported by Russia, keeping the country’s revenues artificially low. If oil prices continue to rise, some analysts have speculated that the US and other western nations may have to loosen that price cap.
US Treasury Secretary Janet Yellen said Monday that the changes could lead to reassessing the price cap — though not yet. “Of course, that’s something that, if we’ve decided that it’s appropriate to revisit, could be changed, but I don’t see that that’s appropriate at this time,” she told reporters.
“I don’t know that this is significant enough to have any impact on the appropriate level of the price cap,” she added.
Russia also recently announced that it would lower its oil production by 500,000 barrels per day until the end of this year.
Just last week Putin admitted that western sanctions could deal a blow to Russia’s economy.
“The illegitimate restrictions imposed on the Russian economy may indeed have a negative impact on it in the medium term,” Putin said in televised remarks Wednesday reported by state news agency TASS.
Putin said Russia’s economy had been growing since July, thanks in part to stronger ties with “countries of the East and South,” likely referring to China and some African countries.
Russia, China and Saudi Arabia: The OPEC+ announcement came as a surprise this week. The group had already announced it would cut two million barrels a day in October of 2022 and Saudi Arabia previously said its production quotas would stay the same through the end of the year.
“The move to reduce supply is fairly odd,” wrote Warren Patterson, head of commodities strategy at ING in a note Monday.
“Oil prices have partly recovered from the turmoil seen in financial markets following developments in the banking sector,” he wrote. “Meanwhile, oil fundamentals are expected to tighten as we move through the year. Prior to these cuts, we were already expecting the oil market to see a fairly sizable deficit over the second half or 2023. Clearly, this will be even larger now.”
Saudi Arabia stated that the cut is a “precautionary measure aimed at supporting the stability of the oil market,” but Patterson says it will likely “lead to further volatility in the market,” later this year as less available oil will add to inflationary feats.
Still, the changes signal shifting global alliances with Russia, China and Saudi Arabia around oil prices, said analysts at ClearView Energy Partners. Higher-priced oil could help Russia pay for its war on Ukraine and also boosts revenue in Saudi Arabia.
The White House, meanwhile, has spoken out against OPEC’s decision. “We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear,” National Security Council spokesman John Kirby said Monday.
– CNN’s Paul LeBlanc and Hanna Ziady contributed to this report
The crisis triggered by the recent collapses of Silicon Valley Bank and Signature Bank is not over yet and will ripple through the economy for years to come, said JPMorgan Chase CEO Jamie Dimon on Tuesday.
In his closely watched annual letter to shareholders, the chief executive of the largest bank in the United States outlined the extensive damage the financial system meltdown had on all banks and urged lawmakers to think carefully before responding with regulatory policy.
“These failures were not good for banks of any size,” wrote Dimon, responding to reports that large financial institution benefited greatly from the collapse of SVB and Signature Bank as wary customers sought safety by moving billions of dollars worth of money to big banks.
In a note last month, Wells Fargo banking analyst Mike Mayo wrote “Goliath is winning.” JPMorgan in particular, he said, was benefiting from more deposits “in these less certain times.”
“Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis,” said Dimon. “While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd.”
The failures of SVB and Signature Bank, he argued, had little to do with banks bypassing regulations and that SVB’s high Interest rate exposure and large amount of uninsured deposits were already well-known to both regulators and to the marketplace at large.
Current regulations, Dimon argued, could actually lull banks into complacency without actually addressing real system-wide banking issues. Abiding by these regulations, he wrote, has just “become an enormous, mind-numbingly complex task about crossing t’s and dotting i’s.”
And while regulatory change will be a likely outcome of the recent banking crisis, Dimon argued that, “it is extremely important that we avoid knee-jerk, whack-a-mole or politically motivated responses that often result in achieving the opposite of what people intended.” Regulations, he said, are often put in place in one part of the framework but have adverse effects on other areas and just make things more complicated.
The Federal Deposit Insurance Corporation has said it will propose new rule changes in May, while the Federal Reserve is currently conducting an internal review to assess what changes should be made. Lawmakers in Congress, like Democratic Sen. Sherrod Brown, have suggested that new legislation meant to regulate banks is in the works.
But, wrote Dimon, “the debate should not always be about more or less regulation but about what mix of regulations will keep America’s banking system the best in the world.”
Dimon’s letter to shareholders touched on a number of pressing issues, including climate change. “The window for action to avert the costliest impacts of global climate change is closing,” he wrote, expressing his frustration with slow growth in clean energy technology investments.
“Permitting reforms are desperately needed to allow investment to be done in any kind of timely way,” he wrote.
One way to do that? “We may even need to evoke eminent domain,” he suggested. “We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives.”
Eminent domain is the government’s power to take private property for public use, so long as fair compensation is provided to the property owner.
Uniondale-based Forchelli Deegan Terrana announced that the law firm has launched a condemnation practice group.
Also known as eminent domain, condemnation is the taking of private property by the government for public purposes. Headed by Jason Penighetti, a partner at the firm, the practice group handles proceedings on behalf of clients with any interest in the property taken.
Penighetti is also a member of the firm’s tax certiorari group, as well as an author and speaker. He has obtained millions of dollars throughout New York State on behalf his clients, according to FDT.
Other members of the group include John Terrana, co-managing partner and co-chair of the certiorari practice group; Donald Leistman, partner and co-chair of the tax certiorari practice group; Myrna Cadet-Osse, partner; and Carol Rizzo, partner. All of the members bring expertise in condemnation to the new practice group, according to FDT.
The group was formed following the recent addition of six former attorneys from Koeppel Martone & Leistman. That addition enhanced FDT’s existing real estate tax law practice, providing opportunity to launch “complementary practice groups,” including the condemnation group, according to a news release from FDT.
