Budget wars, activism, uprising, dissent and general rabble-rousing.
There she is, just the woman I was thinking of, on the op-ed page of the New York Times. Except she isn’t apologizing for her role unleashing the GOP’s “war on women.” She is writing about terrorism and the Clean Air Act. What I’d wanted someone to ask Christine Todd Whitman about was the day at the 1996 RNC, when she helped coronate today’s extremist GOP.
Former New Jersey Governor Christine Todd Whitman is usually described in the money media with the words “moderate” and “pro-choice” glued firmly to her name. Republican in a pro-choice state, she’s on the record saying that abortion is “a personal decision between a woman and her doctor,” and the government has no business telling a woman what to do. (That used to be the conservative position.) She’s held up by pro-choicers as a tragicomic victim, abandoned by her party, but the fact is, Whitman’s done more to help the vicious wing of the GOP than she ever did to stop the backlash.
To go back to the RNC. By 1996, Christine Todd Whitman had already long been loyal to her rightward-lurching party. Moderate voters were infuriated by the 104th Congress and Newt Gingrich’s Contract with America. At Gingrich’s bidding, Whitman agreed to rebut president Bill Clinton’s State of the Union address in 1995 and in ’96. She loaned her party her reputation and her media-friendly face when they had very unfriendly policies in store for the nation.
She agreed to do it again, when the party invited her to co-chair the RNC. The Republican Party would be “more inviting to all voters without an abortion plank” Whitman told the New York Times shortly before the event kicked off in San Diego. She promised pro-choice Republicans, in effect, that they’d be welcomed, even if they were concerned about the social service attacks in the Contract and the party’s 1992 manifesto. In 1992, the party platform stated that “the unborn child has a fundamental individual right to life which cannot be infringed” and called for a “human life amendment to the Constitution.” (The party has pledged to pass a Human Life Amendment since 1980—that’s thirty-two years and nine presidential elections. It dropped their commitment to the Equal Rights Amendment in 1980. The Democrats dropped their pledge to the ERA in 2004.)
When she could have gone to the mat to support her pro-choice colleagues, Whitman stuck with Gingrich. When pro-choice Republicans sought to remove the party’s anti-abortion plank in a platform fight, Whitman, to whom many looked for solidarity, did not even show up at a pro-choice demonstration. Inside the convention hall, she sold out two pro-choice governors who tried to make a stand. When Massachussetts Governor William Weld and California Governor Pete Wilson refused to address the convention rather than bow to party officials’ orders that they not talk about their support for abortion rights, Whitman said not a word from her coveted role as RNC co-chair. She even insisted on CNN that Weld and Wilson’s absence had nothing to do with their pro-choice stance. Her co-chair at the RNC that year was a fellow up-and-coming young governor, George W. Bush. Except he was up and coming; she was on her way out.
As for her views on terrorism and chemicals,Whitman’s role as Bush/Cheney’s mouthpiece, reassuring us, as EPA Administrator, just one week after 9/11 that New York’s “air is safe to drink and water is safe to drink,” should disqualify her forever from being taken seriously on environmental threats to human health. (There was no good science; there were no good facts, only political expediency behind the EPA’s all-clear.)
In the middle of another Republican convention at which the party is once again parading women to act as the “all about love” fronts for their party’s antisocial policies, it’s unconscionable that Whitman should find a place to tell the nation anything other than “I’m dreadfully, terribly, sorry.”
As for “mushroom cloud,” Condi. Don’t get me going. Anyone who wants to read more about the cynical way the GOP deploys its women can, in my 2004 book: BUSHWOMEN: Tales of a Cynical Species. It’s due for an update. Every year.
The sixteenth anniversary of TANF hit this week, and the Republican presidential candidate spent his time lying about the president’s position on it. The president, Mitt Romney insists, stripped the work requirements out of the temporary assistance program that replaced welfare for poor families under Bill Clinton in 1996.
Although every fact-check has shown he’s wrong, Romney and the Romney-phile propaganda groups keep pounding away at their message with ads like this one:
Unidentified male: “Under Obama’s plan you wouldn’t have to work and you wouldn’t have to train for a job. They just send you your welfare check.”
The president’s responded in typically Obaman fashion. Without wading into the welfare fray, he’s wagged his finger at Romney’s facts: “You just can’t make stuff up….” The Democrat is beating the drum for “more popular” government programs, like those for seniors and students and closing his rallies with Bruce Springsteen’s paean to solidarity, “We Take Care of Our Own.”
Good as it is, a bit of the Boss won’t clear things up. As even NPR pointed out this week, the Romney campaign is dredging up the welfare debate because as a piece of political hot button–pushing, it works like magic.
NPR’s Ari Shapiro spoke to Peggy Testa and her husband at a Paul Ryan rally outside Pittsburgh:
PEGGY TESTA: You know, we think that the fact that the work requirement has been taken out of welfare is the wrong thing to do.
SHAPIRO: I told her that’s not actually what happened.
TESTA: You know. I, at this point, don’t know exactly what is true and what isn’t, OK? But what I do know is I trust the Romney-Ryan ticket and I do not trust Obama.
At issue here is “trust” and that little matter of “we.” As far as half the country’s concerned, those whom government takes care of aren’t “our own.” They’re certainly not “we.” Mitt Romney knows that by uttering that one word “welfare” the phantom “welfare queen,” is summoned onto his campaign team, along with Newt Gingrich’s famous “food stamp President.” With that one word “welfare”—hey presto—the Republicans are talking race, as in “not us.”
Racial justice activist Scot Nakagawa who has started the excellent RaceFiles, talked about the “we” factor in this conversation, recorded earlier this summer in New York.
“We need to deal with the fact that white people view white privilege as having a real cash value,” said Nakagawa. “By having that privilege eroded your economic status will be instantly eroded.”
There’s a complicated history here. “Vilifying people of color had the intention of causing African-Americans and native Americans to be viewed as less than human by white people,” says Nakagawa:
“But it had the opposite effect. It dehumanized white people in the sense that their understanding of what it means to be human is limited by race. It’s very difficult to see what are human needs, when they are defined in terms of race. We have much more in common than people would like to imagine but we continually limit ourselves when it comes to understanding how we are to serve our society and to see how the various needs of different people in our society are connected.”
So, our reluctance to fund human needs is wrapped up in a fear that the funding will go to other sorts of humans? I asked.
Yes… The justification for limiting AFDC [welfare] and turning it into TANF was that black people were on the dole and having babies, stealing from our economy.… White people accepted the notion and moved on it. And who are the most of the people on welfare? White people.”
Barack Obama can fact-check all he likes, but it won’t make this go away. Romney only looks like a stiff; his campaign’s as happy in the gutter as Gingrich ever was. The GOP is betting that race-baiting will beat the Boss, and history suggests they’re right. American attitudes are shifting, day by day, but majority/minority demographics aren’t destiny—not yet. Talk about it Mr. President: in America, what does “we” mean? And what’s the price we pay for hearing “we” and thinking “them vs. us”?
Todd Akin, Mitt Romney, Paul Ryan and now Laurie Penny’s latest post (“What We Talk About When We Talk About Rape”), all have me thinking about June Jordan’s great “Poem about My Rights.” So here it is.
Poem about My Rights
Even tonight and I need to take a walk and clear
my head about this poem about why I can’t
go out without changing my clothes my shoes
my body posture my gender identity my age
my status as a woman alone in the evening/
alone on the streets/alone not being the point/
the point being that I can’t do what I want
to do with my own body because I am the wrong
sex the wrong age the wrong skin and
suppose it was not here in the city but down on the beach/
or far into the woods and I wanted to go
there by myself thinking about God/or thinking
about children or thinking about the world/all of it
disclosed by the stars and the silence:
I could not go and I could not think and I could not
as I need to be
alone because I can’t do what I want to do with my own
who in the hell set things up
and in France they say if the guy penetrates
but does not ejaculate then he did not rape me
and if after stabbing him after screams if
after begging the bastard and if even after smashing
a hammer to his head if even after that if he
and his buddies fuck me after that
then I consented and there was
no rape because finally you understand finally
they fucked me over because I was wrong I was
wrong again to be me being me where I was/wrong
to be who I am
which is exactly like South Africa
penetrating into Namibia penetrating into
Angola and does that mean I mean how do you know if
Pretoria ejaculates what will the evidence look like the
proof of the monster jackboot ejaculation on Blackland
after Namibia and if after Angola and if after Zimbabwe
and if after all of my kinsmen and women resist even to
self-immolation of the villages and if after that
we lose nevertheless what will the big boys say will they
claim my consent:
Do You Follow Me: We are the wrong people of
the wrong skin on the wrong continent and what
in the hell is everybody being reasonable about
and according to the Times this week
back in 1966 the C.I.A. decided that they had this problem
and the problem was a man named Nkrumah so they
killed him and before that it was Patrice Lumumba
and before that it was my father on the campus
of my Ivy League school and my father afraid
to walk into the cafeteria because he said he
was wrong the wrong age the wrong skin the wrong
gender identity and he was paying my tuition and
it was my father saying I was wrong saying that
I should have been a boy because he wanted one/a
boy and that I should have been lighter skinned and
that I should have had straighter hair and that
I should not be so boy crazy but instead I should
just be one/a boy and before that
it was my mother pleading plastic surgery for
my nose and braces for my teeth and telling me
to let the books loose to let them loose in other
I am very familiar with the problems of the C.I.A.
and the problems of South Africa and the problems
of Exxon Corporation and the problems of white
America in general and the problems of the teachers
and the preachers and the F.B.I. and the social
workers and my particular Mom and Dad/I am very
familiar with the problems because the problems
turn out to be
I am the history of rape
I am the history of the rejection of who I am
I am the history of the terrorized incarceration of
I am the history of battery assault and limitless
armies against whatever I want to do with my mind
and my body and my soul and
whether it’s about walking out at night
or whether it’s about the love that I feel or
whether it’s about the sanctity of my vagina or
the sanctity of my national boundaries
or the sanctity of my leaders or the sanctity
of each and every desire
that I know from my personal and idiosyncratic
and disputably single and singular heart
I have been raped
cause I have been wrong the wrong sex the wrong age
the wrong skin the wrong nose the wrong hair the
wrong need the wrong dream the wrong geographic
the wrong sartorial I
I have been the meaning of rape
I have been the problem everyone seeks to
eliminate by forced
penetration with or without the evidence of slime and/
but let this be unmistakable this poem
is not consent I do not consent
to my mother to my father to the teachers to
the F.B.I. to South Africa to Bedford-Stuy
to Park Avenue to American Airlines to the hardon
idlers on the corners to the sneaky creeps in
I am not wrong: Wrong is not my name
My name is my own my own my own
and I can’t tell you who the hell set things up like this
but I can tell you that from now on my resistance
my simple and daily and nightly self-determination
may very well cost you your life.
“Poem About My Rights” first appeared in Jordan’s Passion: New Poems, 1980. Clearly, some have yet to get the message.
A revolutionary writer, educator and activist, Jordan was killed in 2002 by breast cancer. Her published works include Directed by Desire: The Collected Poems of June Jordan (2007), Some of Us Did Not Die: New and Selected Essays of June Jordan (2002), Soldier: A Poet’s Childhood (2001) and Poetry for the People: Finding a Voice Through Verse (1996). Buy them, read them, keep them in print. Send them to Todd Akin.
I had the opportunity to interview author and broadcaster Bill Moyers last year, just before his latest TV show launched. Then, we were a full year ahead of the presidential election. Now, as we head into the cable-news crush called convention season, I watched our conversation again. It’s even more pointed now. Says Moyers: “The scandal, one part of the scandal, is local television stations make enormous sums of money from all of the campaigning that goes on every two or fours years…and they give back nothing for that.… Nothing. They should be giving “free time” to the candidates that have real debate with citizens and answer questions. Instead, they write carefully manufactured commercials that are exploitive and misleading and demeaning.”
Read Moyers, and then read this speech from Newton Minow, then chair of the Federal Communication Commission. Minnow said it best, when he said it 1961: “In a time of peril and opportunity, the old complacent, unbalanced fare of action-adventure and situation comedies is simply not good enough.”
Today, cable news has turned our elections themselves into unbalanced action adventures or worse, situation comedies. And public television, barring shows like Moyers’s own, is barely keeping afloat—or keeping anyone awake. Given our situation as a nation, maybe the last word should be “tragedies.”
Moyers did not laugh. Nor would Minnow. Watch part one of our May 2011 conversation here.
Laura Flanders: I’m here with Bill Moyers, veteran of public broadcasting and so much more. He has a new book out, Bill Moyers Journal: The Conversation Continues. I want you to talk about media. You were in Washington in the Johnson administration or moving that way in the early sixties when the Corporation for Public Broadcasting, its mission was still kind of being hammered out and articulated. What did you understand it to be?
Bill Moyers: Well there were only three networks at that time, believe it or not: CBS, ABC and NBC, and ABC was half a network actually. It didn’t even have a news division. President Johnson and the Carnegie Foundation and people like Newt Minnow of the FCC [Federal Communication Commission] believed that there should be just one channel free of commercials, free of commercial values, so that you could honor on that channel the spirit of creativity, the artist, good conversation, independent, unfettered journalism. There should be one place that was an alternative to the corporate world of media, which always has its own vested interest to serve. So that’s what public broadcasting was to be. And over the last forty-some-odd years, on the whole, public television and public radio enriched our culture enriched our politics, enriched our lives by honoring people who may have something to say and something to offer that has no commercial price attached to it.
Now Newton Minnow, the FCC chair in the early sixties, gave a famous speech in 1961—fifty years ago this year—where he talked about television having become a vast wasteland. He’s said that’s not the part of the speech he wanted remembered.… He said it was the public service part that he wanted people to remember, but that went by the by and no changes happened. Why?
[From Minnow’s 1961 speech. Read the full text here.]
I am in Washington to help broadcasting, not to harm it; to strengthen it, not weaken it; to reward it, not to punish it; to encourage it, not threaten it; and to stimulate it, not censor it. Above all, I am here to uphold and protect the public interest…. In today’s world, with chaos in Laos and the Congo aflame, with Communist tyranny on our Caribbean doorstep, relentless pressures on our Atlantic alliance, with social and economic problems at home of the gravest nature, yes, and with the technological knowledge that makes it possible, as our President has said, not only to destroy our world but to destroy poverty around the world—in a time of peril and opportunity, the old complacent, unbalanced fare of action-adventure and situation comedies is simply not good enough.
Your industry possesses the most powerful voice in America. It has an inescapable duty to make that voice ring with intelligence and with leadership. In a few years, this exciting industry has grown from a novelty to an instrument of overwhelming impact on the American people. It should be making ready for the kind of leadership that newspapers and magazines assumed years ago, to make our people aware of their world.
Ours has been called the jet age, the atomic age, the space age. It is also, I submit, the television age. And just as history will decide whether the leaders of today’s world employed the atom to destroy the world or rebuild it for mankind’s benefit, so will history decide whether today’s broadcasters employed their powerful voice to enrich the people or to debase them.”
Moyers: The press is always had a bias for the good, vigorous line, right? “Wasteland” is a great metaphor. I think T.S. Eliot first appropriated it, but that often happens. We can make a speech and yet the headline writer or the reporter can choose what to say. [Minnow] was right about the need for television, broadcasting to perform a public service because Thomas Jefferson was right, “It is better to have people who are informed than it is to have people who are not informed.” He was right, but at the same time I think he has acknowledged that none of us can speak for the public taste. America is so diverse, so pluralistic and our tastes run such a gamut that what you like is not necessarily what I’m going to like. What he was trying to say, which I think was true in that day, was that there was very little of the vast wasteland devoted to the life of the mind, to the life of the spirit. Free, honest, unfettered debate, and that’s what public broadcasting was chartered to fill.
[Minnow’s] other point was that the license was a license. We [the public] permit you [the broadcasters] to use the public airwaves in return for something and we should be entitled to actually assess whether you are using it well. At the time he says the broadcasters, the networks such as they were, were frightened, but it turned out they had nothing to be afraid of.
Once upon of time if you owned a local radio station, you had to meet certain, fairly rigorous standards of public service and there were broad definitions of public service, but you had to give so much time to news about religion, so much time to dissenting voices those you put on the air, so much time to children’s programming. This is the great scandal, that once you get that license now you have it in perpetuity unless you sell it for a vast fortune, which is what they [do.] The scandal, one part of the scandal, is local television stations make enormous sums of money from all of the campaigning that goes on every two or fours years in this country because 80–85 percent of all the money spent on our political campaigns is spent on advertising and you watch the annual reports of television stations and they spike at every election season—primary season in the spring and fall elections in the fall. And they give back nothing for that. Nothing for that. They should be giving “free time” to the candidates that have real debate with citizens and answer questions. Instead they write carefully manufactured commercials that are exploitive and misleading and demeaning.
How do we ever make change if our media are so intimately invested in our pay-to-play political system? Who’s going to do the change-making?
Change never comes—it never comes except from people. Howard Zinn, who is interviewed in my book The Conversation Continues, says this. He says you can’t expect government to make changes unless the people push the government to make changes, and he says you have to make history, and you make history by fighting for what you believe in, at the local level and with association with others. You have to become political. I don’t mean partisan, you have to think of yourself as an agent of change. You have to think that I can make a difference, but knowing that you can’t do it alone, you join with others, like Free Press, which is this wonderful, nonprofit, public interest group that advocates for more diversity, more freedom of the media, more voices in the media. You got to join more organizations like that, and participate with others because the only answer to organize power—which is what the media are all about—is organize people. So you’ve got to find like-minded, kindred spirits, associate with them, work with them, give your time and energy and aim for what you really think needs to be changed if it is the fight that your local television station or your local radio station is excluding women, excluding blacks, not covering local news, telling what’s going on with the school board, telling what’s happening at city hall. You’ve got to organize to bring pressure to bear.
Is there a crisis in public television? More and more stations seem to be breaking with the networks. Is that a good thing, a bad thing?
Well, we’ve always had the crisis of funding, which for forty years has been a real issue. Public television spends about $400 million dollars on programming every year. BBC spends about $6 billion. Why? They have an independent source of revenue, which comes from a designated tax or charge on commercial transactions on the media, and that goes into BBC, which can irritate big people, but you know it’s independent, you know it’s not playing to any corporate or privileged agenda and that’s what we need. Public television and public radio to a lesser extent, because public radio is less expensive to produce than public television; if we don’t find an independent source of funding that would guarantee the untainted, non-political pressure come into it… then I don’t think we have much of a future. Television’s changing anyway given the nature of internet, digital devices, where you will now be receiving everything that you would be getting over the air or on cable.… We can’t meet that challenge [either] unless we have adequate budgets, and that’s going to take some imaginative act of big trust-fund of foundations getting together creating an endowment for public television or a one-time trust fund created by Congress so they can get out of the business of funding public television all together. Something more imaginative than what we have now, or the screens are going to go dark.
Bill Moyers, thank you for joining us.
Arizona’s Sheriff Joe Arpaio is facing a class action suit that accuses him of racism in law enforcement. Omar Jadwat is a senior staff attorney with the ACLU Immigrants’ Rights Project, one of the groups representing the plaintiffs. Last week, Jadwat explained what’s at stake in the Arpaio case and what difference the Arizona suit might make. But is the Maricopa County sheriff the only problem where discrimination by law enforcement is concerned? Far from it. Another nasty piece of the immigration picture is the federal law that permits officers like Arpaio to serve as immigration agents in the first place. Unfortunately, as Jadwat says, “the federal government is not going to sue itself.” Indeed. Watch. The transcript of our entire conversation is below:
Omar Jadwat: For sure. I can tell you about our plaintiffs, the Rodriguez family, who were out on a recreational area on a recreation vehicle having fun together with other people. They are US citizens and they were pulled over, nobody else was pulled over and the police officer asked them for identification. David Rodriguez supplied his license and registration and the officer said that wasn’t good enough, that what he had to actually do was produce a Social Security card, other things that the officer thought would be sufficient to prove that he was an official US resident. The idea that US citizens—who are not required to generally carry any kind of national identification—would be singled out on the basis of their race and required to produce more and more personal identification and information just to satisfy a police officer who has no business enforcing immigration law in the first place is, you know, the kind of thing that we’re trying to focus on in this case to make sure it doesn’t happen again.
What does this have to do with the Supreme Court decision on [Arizona’s “papers, please” law] SB 1070?
What happened with the Supreme Court case on 1070 is that even though the Court struck down most of the provisions of the law that were up in front of the Supreme Court, it said for now it wasn’t going to strike down a fourth provision, which was the “show me your papers” provision of the law, which would allow police to layer a degree of immigration investigation on top of ordinary criminal stops and arrests and investigations.
The Court, I want to be clear, did not say that that provision was okay, but it said that on the record right now it wasn’t prepared to strike the law down, and so there are ongoing challenged to SB1070, and one of the key things that I think links these two is that we see when they passed SB1070, there was an explicit desire to protect and mandate statewide Sheriff Joe’s practices in Maricopa County, to try to make all of the police officers in Arizona to act that way. And we knew that even when SB1070 was passed that what Sheriff Joe was doing when he was doing immigration enforcement was racially profiling people. So the key here is, I think, is that we’re demonstrating what we already knew which was that Sheriff Joe engages in racial profiling by making him by law the model that all of the other Arizona enforcement entities would have to follow. You know that’s really an attempt to mandate racial profiling across the state.
I was in Georgia where a similar law to 1070 was passed and what it meant for all sorts of people of color is that being stopped for speeding or having a back light out—if you don’t have your papers with you or the investigating authority is skeptical of your papers—-can result in being held in custody for extended periods of time, potentially even losing your children. Is there anything in your case that could change any of that, as long as 1070 is still in place?
Well, one thing to be clear about is that SB1070—none of the most problematic provisions of SB1070 have gone into effect yet. Even now after the Supreme Court has ruled, there’s still a period of time and we are fighting very hard to make sure that the remaining “show me your papers” provision will never go into effect.
Now what’s true is what we see in the Ortega case as we’ve seen in other places (in Georgia as well, the law is suspended), we see there are officers who take themselves to be immigration agents and profile people and hold them without cause and try to punish them on the basis of what they perceive their status is, even without these laws. So I want to be clear that even if we get rid of SB1070 in its entirety and in the other states, that won’t be the end of the fight… We also need to make sure that these laws don’t make it worse by imposing this kind of burden on officers, statewide, making good officers into bad ones.
I think that one of the things that’s really interesting is that we see a lot of police officials nationwide speak out against laws like SB1070; law enforcement [officers] in Arizona and in the rest of the country, saying this is not the way that we want to be doing our policing, that it’s not a good idea to require police to act as immigration agents. They are concerned (just as we are) about what will happen. We’ve seen in Maricopa County itself that actually Sheriff Joe was so obsessed with profiling, scapegoating and targeting communities, that he’s actually neglected his duty to enforce the criminal laws, and that’s a real tragedy.
Something like 400 sex abuse cases were sitting there uninvestigated?
Felony warrants that haven’t been served, you know, all kinds of problems.
Your case gets to the heart of this question of how are the laws being implemented. That is not just a matter of 1070, but also, it seems to me, the problematic federal law 287G, under which sheriffs’ deputies are deputized to work for the federal government on immigration. Why has all the attention been on 1070?
Section 287G is a section is the immigration law that allows the federal government to deputize state or local officers as immigration agents for various purposes. This was a program that for many years after it was first enacted the federal government said, We don’t want to do that, it’s not a good idea, it’s not what we need to be doing with our resources, making these people into immigration agents.
The Bush administration towards the end quite aggressively started pursuing these 287G agreements with law enforcement agencies around the country, and those agreements have continued in effect and there’s actually been a few new ones in the Obama administration.
287G is the most formal cooperation agreement, but there’s also other programs that try to enlist state and local police immigration enforcement. There’s something called “Secure Communities” (S.COM) and there are some other programs as well.
I think what we see is—you’re right to perceive some of the same problems with 287G and S.COM that there are with SB1070 and the laws in Georgia, Alabama and these other places—the basic mistake is making local police into immigration agents, because as police have told us repeatedly, you can’t determine by looking at someone or not whether they are what you would call an illegal alien, but in general there’s not a way to systematically put these laws into effect without relying on people’s skin color, ethnicity, the way they speak, all of these things that we really don’t want police to be doing. And so I think that very much is part of the fight but obviously the federal government isn’t going to sue itself over 287G, and that’s an element that hasn’t been…court-challenged to the same degree, but that is obviously an area of real concern.
If your case comes out the way that your plaintiffs want it to what will it lead to? Will it lead to challenges of that kind of practice?
Well, I think there are two cases here that we’ve been talking about. There’s the profiling case against Joe Arpaio, the Ortega case and there’s the SB1070 challenge, and I think they do kind of fit together in a certain way. I think the Arpaio case is really important in terms of demonstrating to people in a very visceral way with real stories told in court, witnesses testifying about the real cost, the real human cost across the state and across any state where you would try to do something like this of, again, making police immigration agents. The way that US citizens, lawful residents, the families suffer, the way that policing gets twisted and distorted. In fact we have had a chance to look through some of Sheriff Joe’s files and we see that one of the ways he decided which neighborhood to target for these immigration sweeps that he did was based on patently racist e-mails that were coming in and letters that were coming in from people in the community saying that there are too many Mexicans in this neighborhood, you’ve really got to do this sweep. So to see that that’s the kind of corruption of an agency that should be there to protect us all, I think it’s really important to see, to have documented the kinds of problems that really do result from SB1070 and the other laws that are trying to be put into place.
Have you been to Arizona?
I’ve been a few times.
What was the most surprising thing to you; having seen the documents on paper—the most surpising thing about actually being there?
The really distressing thing is the degree to which entire communities feel like a target’s been painted on their backs. And it’s not people who are here illegally who are the only people concerned. It really is a broad section of the community. People who feel like because I’m Latino, because I’m Asian, I’m going to be singled out by the police. I have to worry every time I get in my car (which in Arizona you do all of the time). Every time I get in my car to go somewhere or get on my bicycle to ride around the neighborhood, I have to worry about whether I have to prove to some officer’s satisfaction whether I am here legally. The sense that creates in really trying to drive a wedge into the community, the divisiveness of these policies is really I think striking when you arrive and when you see it. That’s why in our suit against SB1070 we’re really trying to make sure we’re going to keep trying over and over as long as we have to, to make sure that law doesn’t go into effect and that the fear communities feel, hopefully they’ll be able to put that fear aside and participate one again as full members of the community.
“You’d think there is somebody watching the control panel somewhere.” There is not. That’s what the head of one market research firm told the New York Times after a swarm of computerized trades caused craziness on Wall Street Wednesday.
Says Larry Tabb of the Tabb Group, “We still don’t have a firm grasp over our market infrastructure.”
That’s putting it mildly.
Circuit breakers installed after the 2010 “flash-crash” that are supposed to regulate robo-trades don’t. They don’t respond to high volumes of trade and they don’t even turn on until fifteen minutes after the market opens, we learned in the last twenty-four hours.
Market believers are supposed to prefer incentives over regulation. If each of those trades carried a cost, how quickly do you think Wall Street would rein in the robots ?
When we spoke with John Fullerton, former JP Morgan director and hedge fund head (now with the Capital Insitute), he cited market instability as his number one reason for endorsing a financial transaction, or “Robin Hood” tax.
A financial transaction tax (FTT) would impose a small levy on every trade, boosting public revenues but also stabilizing market trading. Economist Robert Pollin talked us through the numbers in last week’s post. Even a modest financial tax could generate $350 billion calculates Pollin.
Watch the full conversation with Pollin here.
The UK already has an FTT. The push for one here is growing. There were more demonstrations in Washington last month, and the cause has backing from a spectrum of people that spans from the stability-minded Fullertons to the cash-conscious National Nurses United. That makes it an achievable goal. Wall Street’s arguments against financial transaction taxes just got a whole lot weaker. Tell me again why the Obama team is against them?
Prominent economists have been expounding for months on the dire consequences of this country’s unemployment crisis. As recently as this May, Dean Baker and Ken Hassett exhorted us to pay vigilant attention. In an op-ed headlined “The Human Disaster,” they described unemployment as “nothing short of a national emergency.”
Still, the election discussion plods on with barely a nod to the criminal unemployment disaster.
For bracing relief, check out the latest from economist Robert Pollin, professor at the University of Massachusetts, Amherst. Pollin’s latest book, Back To Full Employment, lays out a roadmap to recovery that wouldn’t take a miracle. It wouldn’t even require a Democratic sweep this November; merely action by the Fed and a progressive movement worth its salt.
When world leader companies like Caterpillar Inc. are putting the squeeze on their workers despite accruing record-setting profits; when banks are hoarding $1.6 trillion, money is cheap and government borrowing costs are at their lowest in history, there’s simply no excusing existing levels of poverty, and the poverty-level wages currently prevailing in the not-so-United States.
There’s no excuse for 6 million people to be living on food stamps alone or for 103 million to be not getting by on wages that barely lift them above poverty (see Peter Edelman on this, if you don’t believe it). There’s no excuse, and there’s no point simply beating up on trade unions.
The world’s best president could roll back every last anti-organizing law and set organizers free to sign up every last employed American, and still the standing pool of desperate unemployed would drain worker power away. To expect otherwise is to wait for Batman.
“it’s beyond the Democrats. It’s beyond Barack Obama,” says Pollin in this interview.
Economists know how to maintain decently full employment. Coming out of the Great Depression, says Pollin, we had some basic tools. “To run an economy at a level of fundamental decency, you try to achieve full employment.” Neoliberalism, under Thatcher and Reagan, he says, “tossed it all away.”
The last time the US saw relatively full employment wasn’t in ancient history. It was at the end of the 1990s. We can do it. Pollin lays out how. What we need is a progressive movement with full employment at the spear-tip of its agenda.
Alexander Cockburn and Pollin discussed full employment in the Nation in 1987. It’s chilling how little has changed. You can read that article here [pdf]. A full transcript of my conversation with Pollin will appear in the next print edition of CounterPunch.
The British banking scandal reveals—again—just how wrong-headed our assumptions about finance are. Morality and self-interest are hopelessly at odds; add planetary crisis to the picture, and we're "lost," said one former JPMorgan executive I had a chance to interview last month.
Are banksters redeemable? The British rate-rigging scandal has been lying in plain sight. City of London bankers, upper crust, chummy types, were supposed to tell the truth about their own bank’s borrowing power and every day, based on those estimates, the London inter-bank borrowing rate or LIBOR was set. Now that regulators have spoken, it’s come to seem absurd that private bankers were expected to play fair, act responsibly and act in anything other their own self-interest—without oversight. But that’s just how the inter-bank lending rate setting worked.
As one former senior trader close to the scandal put it to The Economist, “There is no reporting of transactions, no one really knows what’s going on in the market…” The implications? “You have this vast overhang of financial instruments that hang their own fixes off a rate that doesn’t actually exist.”
Sans transparency, soaked in incentives, the bankers had every reason to hide their institution’s weaknesses, and that (it turns out), is all too often what they did. Now regulators have woken up, criminal investigations are about to start and Barclays chief Bob Diamond is likely to be only the first, not the last, chief executive hit. But what about the bigger story?
The LIBOR scandal itself will soon shift to courts and public inquiries, boring, complex and long enough for most regular people to lose interest. The bigger morality tale is already slithering down the details-tube.
Before it does, it’s worth seizing the opportunity to ask some bigger questions—like what are bankers for? What are banks for? If banker self-interest conflicts with the public world interest, what regulator on the planet can cope with that?
John Fullerton is a former managing director at JPMorgan. Finance drives economics, he says, and economics largely determines the fate of the planet, yet the resources of the planet are finite. “The notion that exponential growth can go on indefinitely in a finite planet is in violation with arithmetic and basic physics.” As long as growth is the sine qua non of market economic ideology: “We are lost.”
If we don’t redefine self-interest, said Fullerton, in this conversation recorded in New York in late June, “I think we will look back, and our grandchildren will ask us, What were you thinking?”
Today, Fullerton is the founder and director of Capital Institute, whose “Third Millenium Economy” project released a potentially useful report in the run-up to the RIO+20 United Nations Conference on Sustainable Development. You can download “Economics, Finance, Governance and Ethics for the Anthropocene," here.
Watch our conversation, and read the transcript below.
Laura Flanders: Let’s talk quickly about Rio. As we’re meeting, it’s pretty clear that not much came out of what was supposed to be the landmark follow-up to the Earth Summit of twenty years ago. Why so little agreement, why so little progress?
John Fullerton: Well, I think that timing is probably part of it. I think the world has enormous very near-term challenges that are really overwhelming the agenda of the politicians. So from the people I talk to I think the expectations about any breakthrough were very low…
What do you make of the idea coming out of Rio that now is the time to put a value on our natural processes—in order to induce people like you, people in the finance sector and business, to tread more carefully.
The idea comes from the classic neoliberal economics frame which is to say, if we value something we need to put a price on it so that the price of that gets factored into the economic system. Right now we don’t have a price on carbon, for example so we’re free to pollute the atmosphere with as much carbon as we want without paying for it and that’s clearly a problem. This idea of valuing ecosystem services is to take that same idea and apply it to a broad range of ecosystem services.
Such as bee pollination or a healthy water cycle, or such as the cleansing of rivers through natural systems
So you would say, “the work of all those bees is equal to this many million dollars?”
Yes, or what would it cost if we had to artificially pollinate our crops? If we had to breed bees bring them into agricultural zones, which people do and pay beekeepers to do that.
Isn’t this a horrible kind of concession to the idea that everything and everyone on our planet can be commodified and put a price on?
I have real mixed feelings about it. I think on the one hand, it’s taking the price system and saying well, we have externalities—we have things that are not being priced—so let’s internalize them into our economic system. That’s all well and good, but the logical extension of this thinking is that, A, we’ll never know enough to put a price on all these systems. I mean there’s an enormous complexity within natural systems that we don’t even begin to understand much less put a value on them. Secondly, and probably more importantly, by putting a price on these services it implies that we can actually consume them and use them up, and what I’ve been taught by ecologists is that there is no ecosystem services if there is no ecosystem function! What’s important is to preserve the function, which in many cases is actually priceless.
I am much more in favor of an idea of a safe operating space for the human economy, figuring out what are the unbreachable barriers and imposing real hard limits through policy to ensure that we don’t destroy critical ecosystem function which is the foundation of the entire human economy.
Well, this really goes to your personal story in a sense. You were once happily trundling along a very successful career track in the financial world. To start with why did you decide to go into finance? And secondly, why did you decide to leave?
The story of how I got into finance is kind of an interesting one. It was not the classic, boy-goes-to-Wall Street-to-make-fortune kind of story. When I went to Wall Street in 1982 I went to a commercial bank called Morgan Guaranty Trust…. My decision was inspired by a course I took in college. I had been an International Relations major, and the course was called the Economics of International Relations and the thesis was that global finance and economics would determine the course of international relations in the future rather than politics.... That idea turned out to be true, but certainly not in the way I had anticipated. But I went into to banking to really learn about international economics and finance and I had this sort of vague idea that I would get trained in banking and then go work in the World Bank someday and put the knowledge to good use.
And at what point did you say, I got to leave, this is not for me?
Well, it was sort of a long process.… As the business matured and I kind of grew restless to find something more aligned with my initial purpose of going to Wall Street. Frankly, when the merger with Chase Manhattan occurred, I’ll be very candid, my stock options vested. I didn’t have to walk away and leave a lot of equity at the door and the culture had shifted in a way that made me less comfortable working there so I got up one summer and I left with no real plan on what I would do and it was real frightening.
You went on to start a hedge fund. It’s only been recently, watching your career that it seems to me you’ve decided actually, the whole world of finance is on the wrong track. Can you talk about that?
This idea of aligning capital with social purpose really started while I was at Morgan and so I explored that after I left and did what is now called impact investing, investing some of my own funds and working on some projects with other people, particularly focused on the food and water issues. I began to learn a lot about the ecosystem crisis. And it was really only after studying the ecological crisis as a systemic issue that the conclusion of that study kind of led me back first to the economy—the economy is driving this ecosystem crisis and finance drives the economy—so if economy is creating the problem and finance is driving the economy then it sort of led back to finance, and this was before the financial collapse. I would begin to explore these ideas with some of my friends and people would look at me like, you know, you’ve lost your marbles and then the financial collapse happened and then suddenly people didn’t think I was so crazy anymore.
How do you define the crisis? How do you see it now?
The financial crisis, well, I think now it’s in its long gestation period. I think we had this initial eruption back in 2008, 2009. That seemed to have stabilized, but only through unprecedented central bank intervention, so in many ways the system is now on some kind of a support system that is tenuous at best, and of course what’s going on in Europe is nothing but frightening.
And what about the biosphere?
The biosphere has been left out of the conversation, and in many ways what our work at the Capital Institute is about is looking at a different context of our economic challenges. The unfortunate truth I’ve come to believe is that we’ve reached the logical conclusion of this expansionist economic paradigm. This is not a new idea. There are people who have been writing about this for decades, but the notion that exponential growth can go on indefinitely in a finite planet is in violation with arithmetic and basic physics and yet our economic ideology (and I call it an ideology quite intentionally), suggests that there are no limits to growth. And again as a finance person if there are boundaries or limits to growth and investment drives growth, then the implications are that we need to think very differently about how investment flows.
I have spoken with the economist, physicist and environmentalist Vandana Shiva about this and about the need for a new kind of economics in the way that we have developed a new understanding of physics. The two are related. Talk a bit about how we got mired in this Newtonian idea of economics; what that has done to our idea of the role of finance, and finally what might quantum economics look like?
Well, those are hard questions, but you’ve raised an issue that very few people in finance are aware of I would suspect which is that neoliberal economics is grounded in Newtonian Physics.
There’s a great book by Bob Nadeau that explains this but very few people are aware that the early classical economists were really philosophers and trying to equate to the natural laws of physics…Newtonian laws at the time. They believed that there must be equivalent laws that govern the economic sphere; Adam Smith’s “invisible Hand” being the most significant example of that. As the economic profession progressed, that flawed foundation was never really revisited. So when we had the advances in quantum physics, no one in economics said, “Well, wait a second, that means we’ll need to rethink everything about economics.” Where that leaves us is that we’re sort of up in the sky in a very abstract world where mathematics has dominated the economics profession and yet the foundation is really not grounded in anything solid. So we’re lost.
If you think about the way money is invested, the classic modern portfolio theory is an idea that the recent economic collapse has sort of proved to be inadequate.
The central idea of modern portfolio theory is that you can look at historical volatility of securities and divine something about future volatilities of securities, and secondly if you diversify your portfolio you can diversify out most of the idiosyncratic risk.… It says nothing about the systemic risk. So when the financial crisis happened, the correlations of all these different asset classes suddenly approached one: all asset classes dropped at the same time, and it essentially made the premise of modern portfolio theory prove to be wrong in real-life practice, and yet no one has come up with an alternative theory which is forward-looking, that takes on board the ecosystem.
So let’s talk about the irony that you would have the Rio +20 Conference happening in Brazil, with all of the people talking about the future of the planet at the same time the G20 meeting is happening in Mexico, with all of the world leaders talking about economic development If you had been looking for a clear display of how these two things have disconnected, there is one. How do we bring these worlds together and where do you see it happening?
“Holism” was coined by Jan Smuts at the beginning of the twentieth century. Einstein wrote Smuts a letter saying this idea and his idea of relativity would be the two most important ideas that would determine the course of civilization or something to that effect. And the idea of holism is that the whole is greater than the sum of the parts.
Just as you pointed out, we have economics policymakers focused on the financial crisis as if the financial crisis is disconnected from the ecosystem crisis. The solution to the financial crisis and our economic challenges—unemployment and depression—is to spur economic growth, but economic growth, at its root, is the cause of many of the ecosystem crisis.
But economic growth is putting people to work, is creating jobs. That’s all good stuff and that’s what we’re fighting for isn’t it?
We need to figure out a way to create full employment without being dependent on perpetual, material throughput, the growth of material throughput, and that, I believe, is the challenge of the twenty-first century.
That’s not a trivial question and I’m very aware of the challenge of trying to do this without simply trying to get back on the growth-band wagon. When we’re in a depression we certainly need to stimulate growth to get back to some kind of equilibrium.
So some kind of growth that doesn’t involve using stuff?
Very little material throughput is related to technology, to the news media, to programs like this. They generate data. They don’t generate need for iron, cement and steel. So we need to shift the economy for sure to a much more dematerialized economy, and some of this will come through technological innovation, but some of it will come through a realistic assessment of how much is enough, and where we’ll need to be more thrifty with the use of materials.
So, there’s what we’re making, but isn’t there also how it’s being made and the power relations between those doing the making and the economy and that financial world that you talked about that has very different types of goals and agendas than the planet?
Yes, so the premise of finance is compound interest, what Einstein called the most powerful force in the universe. Now compound interest, when that drives perpetual economic growth, is in conflict with the laws of thermodynamics at some point.
Explain what compound interest is in this context.
So compound interest is the idea if I invest my money today, I’ll earn some return. Let’s say I put it in the bank and earn an interest of 3 percent (remember those days when you used to earn interest on bank accounts). Compound interest is the idea at the end of the year if I put in $100 I’ll have $103 and if I invest $103 at the end of next year I’ll have $103 times 3 percent and at the end of the next year. It keeps compounding at 3 percent, and that looks like exponential growth, which is the root problem of the crisis of the biosphere.
We can’t have an economy fueled by exponential growth in money that grows material throughput at an exponential rate. So, to your point, finance is probably the most disconnected or reductionist practice. We segregate risk into simple buckets of risk and manage them separately rather than thinking of them holistically, and we think about risk in finance and financial investments as being the financial risks, the volatility of the financial assets. We don’t pay attention to investment decisions and the feedback loops they generate in the real economy.
If WalMart expands (to put it concretely), that means they pave over a huge area of farm land and generate demand for cheap goods that come from all around the world. That all has an ecological footprint, but the investment [decision] to do that is only measured in terms of its financial consequences.
How do we change it and where do you see initiatives that are hopeful?
Well, certainly one of the really hopeful areas and it’s small and it’s fringe but it’s growing is a field that’s called impact investing and these are investors such as myself that look at the problems in the world and look to create businesses and social enterprises that attack these problems. So the purpose of the investment is actually to address a social or an ecological challenge
You don’t want to make money?
Many of these are for profit models, but the mission is not to optimize the financial return, the mission is to earn inadequate financial return for the risk while optimizing or maximizing the social or environmental impact. And again, this is not the mainstream yet, but it is moving into the mainstream. Firms like Morgan-Stanley do have impact investment funds and there’s a whole long story about how real that is and what the impact is, but it’s a sign of hope, I think.
You talked at the very beginning about power of finance in decision-making. I’m happy to hear that…Morgan Stanley is doing social impact investing. But if they still have the same power in Washington to block regulations of these other areas, what’s changing in terms of power relations?
Nothing yet. I mean there is a mountain if change that needs to occur so that the real flow of capital which is banks, institutional investors is redirected away from this short-term speculative economy and directed into real investment that actually shifts the characteristics or the quality of the economy that we have.
We need capital to flow into sustainable energy and alternative energy and not into highly speculative short-term housing bubbles, which then when they collapse create the tremendous social dysfunction and the need to then stimulate growth in order to recover the unemployment rate!
As painful as the financial collapse has been for so many people it also creates this huge need to regenerate growth in order to get people employed again, which creates more of the ecosystem strain than we can no longer afford. So it has got really a double cost that hasn’t factored in as yet.
How would governance need to change?
Governance is a huge challenge in a now-interdependent global world where many of these ecosystem crises, some of them are local, like the pollution of the river is a local issue, but many of them, most notably, climate change, carbon in the atmosphere is a global problem. We’re not organized globally, we’re actually organized by nation state, and nation states operate in their interests. So we don’t really have a solution to how do we organize in these global issues, and the difficultly of a conference like Rio only shows how challenging this will be.
Elinor Ostrum who recently passed away, did a tremendous amount of work and the won the Nobel Prize for work on governing the commons, and she showed that commons at a local level can be managed locally, and there are lessons from that work that may be able to be applied on a global scale. But it’s probably the trickiest challenge we have.
Look at what is happening in Europe right now. They can’t figure out how to manage holistically in the interest of all of Europe because each nation state has their own interests and their constituency is demanding that they protect their interest. And so you’re seeing the whole European experiment moving closer and closer to a real serious crisis in my judgment because of the inability to get above parochial, national interests. And we have that challenge in managing the ecosystem crisis in spades.
There is a campaign right now for something called the Robin Hood Tax or Financial Transaction Tax. As somebody from the world of finance, are you for it?
I am in favor of the Financial Transaction Tax and I’ve been speaking about it and writing about it now for a couple years, working in particular with IPS in Washington. There’s little progress on this front in the United States. (Our treasury secretary has come out against it without really explaining why.) But there’s a strong interest in a financial transaction tax in Europe and most recently Germany, France, Spain and Italy, the heads of state have all come out in favor of financial transaction tax. There seems to be real momentum moving a so-called coalition of the willing to move forward with this policy even without a consensus.
And this would it impose a small levy on stocks, bonds and derivatives trading?
On the trading, and my reason for favoring it is not because it’s a “Robin Hood” tax, I am actually not a fan of that terminology. It’s because the speculation in the financial markets has exploded to such an extreme that the trading volume has actually destabilized financial markets.
There’s something called high-frequency trading which is the extreme version of this where traders trade by computer thousands of trades per second, which has nothing to do with investing in the real economy, and because of that speculative activity which economists confuse for liquidity and efficiency, it’s actually, in my judgment, very destabilizing, and so by having a very, very modest tax on speculative short-term trading activity, you actually discourage that activity and encourage longer term real investment at the margin while also collecting meaningful tax revenue which honestly we’re desperate to find sources of tax revenue these days.
I consider it almost a no-brainer—I mean, there’s no such thing as a non-brainer tax—all taxes will have consequences some of which we won’t anticipate—but this is a tax that makes total sense given what’s happened in the financial market.
Talk to your colleagues for a minute, John, people coming up in economics training and business schools and have one idea of what their role is and [that role] is to get as big of a return on their money as they can. There’s no difference in investing in something like Instagram that employs eight people and GM that employs 8,000. What’s your message to them about their role in the society in this moment?
Given the importance of how financial capital investment drives the economy and the economy [affects] the social ecosystem with both positive and negative consequences, there’s a tremendous responsibility that goes with how one invests financial capital at this point and time and like never before. I think those who control the significant pools of financial capital have a burden and responsibility to think holistically about the impact of those investment decisions beyond the financial return.
Just for their own conscience and karma?
Among other reasons, yeah. I think we will look back and our grandchildren will ask us, “What were we thinking when you were investing in some high-frequency trading thing, when you knew that we needed to shift the entire energy system of the planet off of coal and into alternative energy? What were you thinking?”
So redefine self-interest?
Yes, you redefine self-interest and you can actually think beyond self and understand that we’re all connected and that my self-interest is the common interest, and we are in the process of shifting from a total self oriented, individualistic culture to one that by necessity will understand that we’re all connected and that we’re all in this boat together.
Let’s hope so. John Fullerton, thanks so much.
A workers’ cooperative in the Goose Island area of Chicago is desperately trying to stop the liquidation of a windows and doors factory, the sale of which will scuttle their plans but benefit some well-connected investors.
Union members who put their bodies on the line not once but twice to save their windows and doors factory in Chicago found out Sunday that their former employer has broken a pledge to give workers a fair chance to buy factory equipment and plans instead to sell off machines as soon as Friday rather than let a black- and Latino-led workers’ cooperative buy and keep the plant in operation.
The workers, members of the United Electrical and Machine Workers of America Local 1110, sat in and briefly occupied their plant this February after the owner, Serious Energy of California, announced a shutdown and a plan to move jobs out of state. Many of the same workers occupied the same factory in December 2008 (when it was known as Republic Windows and Doors), becoming a cause célèbre at the height of the unemployment crisis.
After the sit-down, Serious agreed to delay liquidation and to give workers a fair chance to bid on the plant’s equipment. About two dozen longtime employees then formed a cooperative—New Era Windows—kicking in $1,000 each (with the help of family and friends). For months, several workers have been attending weekly co-op management classes.
The news of a next chapter for the famous Chicago windows workers was beginning to spread. (America Beyond Capitalism author Gar Alperovitz, wrote about them this week.) Prospects for a worker take-over were looking good when, three days before the July 4 holiday, Serious Energy announced on a conference call that bids were due at once and told New Era that their offer of $1.2 million ($500,000 in cash), was insufficient.
“No one else is going to save the factory. Every other bidder is going to chop the place up and sell the machines for scrap,” said Brendan Martin, who was on the call. Martin’s nonprofit, The Working World, has been helping New Era. “It seems Serious never intended to give the workers a chance to buy.”
Calls to Serious Energy executives have so far not been returned.
Now the workers have launched a petition drive, calling on Serious to play fair. On Thursday, July 5, at noon, they are planning a march that could turn up the heat on local politicians.
One of the investors most likely to profit from Serious’s shady sell-off is Mesirow Financial, a financial firm with close ties to Chicago Mayor Rahm Emanuel. Mesirow made a $15 million investment in Serious in 2009. Thomas E. Galuhn, a senior managing director at Mesirow Financial, sits on the board of directors at Serious.
When Mayor Emanuel graced the cover of Michigan Avenue magazine this May, the party for the issue was hosted at Mesirow’s swanky Chicago headquarters. In December 2011, Emanuel appointed Olga Camargo, still senior VP of Mesirow, to the City of Chicago Plan Commission, which, among other things, reviews city development plans and long-term “community projects.”
Mesirow Chairman, Howard Rossman, is a major contributor to Democratic party campaigns. According to the Center for Responsive Politics, Rossman gave $30,800 to the Democratic Senatorial Campaign Committee in 2012, along with $5,000 to the DNC and another $2,500 to Barack Obama’s re-election effort.
“Rahm could do the right thing, or he could watch this become his Bain Capital,” said Brendan Martin Tuesday.
New Era workers had been hoping that Emanuel’s “Refit Chicago” plan to retrofit city buildings could be a source of good contracts for their conveniently located, energy-efficient window business.
Instead, quite possibly with supporters Van Jones and Michael Moore at their side, New Era workers and their friends will be marching on the mayor’s pals at Mesirow at noon today, Thursday, July 5, asking why the well-off firm would rather make a quick mean buck than keep viable jobs in a low-income, high unemployment community.
(My thanks to Zoë Schlanger for research help on this article—LF)
Eat your heart out, Rupert Murdoch! Book publisher Chelsea Green won’t be up for sale anytime soon. To the contrary, Chelsea Green employees celebrated the Fourth of July this year not only independent but as brand-new employee-owners of their company. On July 2, Chelsea announced that the company had established an Employee Stock Ownership Plan (ESOP).
Chelsea Green was founded on South Green in Chelsea, Vermont, by Margo and Ian Baldwin in 1984. With help from some bestsellers like George Lakoff’s Don’t Think of an Elephant, the company became a successful small publisher, making money and getting recognized by ForeWorld magazine in 2011 as “Publisher of the Year” for its books on politics and sustainable living.
Sustainability became an issue for the company itself four years ago when early investors started itching to be repaid. Selling out and retaining independence in today’s conglomerated market had become a contradiction in terms.
“When we founded the company twenty-eight years ago we imagined some day we’d sell,” Margo Baldwin explained July 3. “Having established a pretty nice little company that’s doing well and doing good in the world, it simply made no sense to have it dissolved and taken over by a big publisher.”
Five of the six big book publishers in the US are foreign-owned corporate conglomerates. Another option would have been to become a not-for-profit (“not a fun existence,” says Baldwin).
“Selling to our employees was the a win win for everyone.”
Details vary, but in basic terms, an ESOP is a sort of employee benefit plan: a way to create a market for departing share-holders and reward employees when they leave the company or retire. Under the agreement Chelsea Green completed June 29, original investors be repaid, the Baldwins will retain a minority portion of the company’s privately held stock, 80 percent will be held by Chelsea Green’s twenty-one employees—and the company will stay in the state where it was born.
“It’s an amazing law that more companies should know about,” says Baldwin. ESOP regulations permit companies to use their own stock to buy existing shares and transfer ownership to workers using pre-tax dollars. Employees’ shares vest over time—depending on seniority, company performance and the details of the plan. What the company pays in in stock is tax-deductible. Without paying a dime, employees end up with what amounts to a nifty tax-deferred pension plan. And there’s more to it than money.
ESOPs aren’t cooperatives. Baldwin will be staying on, as president and publisher. Still, ESOPs also change the model of ownership.
“With shared ownership, everyone is invested in the company’s performance—and everyone’s involved in figuring out the operation going forward. It’s a step towards building new leadership from within,” Baldwin explained.
A survey of Vermont employee-owned companies includes King Arthur Flour, Gardener’s Supply, PC Construction and Carris Reels, among others. It’s not just a Vermont phenomenon. According to the National Center for Employee Ownership, Chelsea Green employees will be joining 11 million Americans currently participating in stock ownership plans. Publishing’s a risky business, but ESOP companies (according to the Center) tend to outperform the competition in profitability, productivity and employee retention and compensation.
“It’s not just a future. I think it’s the only future,” says Baldwin. One thing’s sure: they were partying harder at Chelsea Green this Independence Day than over at Harper Collins.