privitization

Posted: March 10, 2013
By: Clay Cerny

[On Sundays, this blog explores topics beyond the work world in “Sabbath.”]

Detroit and Democracy

I wanted to do more to prepare more to write this post, but I’ve had work responsibilities this week and weekend that would not let me dive into research and numbers.  Even so, I feel a need to express my less than informed opinion on a vital topic – the impending takeover of Detroit.

It’s not the big media story I thought it would be.  It’s taken as a given that Detroit is “bankrupt” and “something has to be done.”  I’ve even heard that claim in progressive media.  Is Detroit in trouble?  Of course, it is.  So are many other large American cities that have lost their industrial base.  No one seems to be asking if there are alternatives to taking power from the hands of elected officials and putting it in the hands of an unelected Emergency Manager.  Governor Rick Snyder presents this solution that he has introduced in other cities as the only way to save the state’s biggest city.

Let’s take a minute and ask some questions:

1.  Is the situation as bad as the governor claims?  Why is Michigan the only state in the nation where such action is taking place on such a scale?  Is the governor really concerned about helping cities, or is he working off an ALEC playbook strategy to transfer public wealth into private hands?  Is there any evidence that Emergency Managers in other cities have made a long term improvement in local conditions – long term, not a simple give away to the connected class?

2.  Where is the wealth?  Throughout America, central cities are surrounded by suburbs that conduct business in and take their identity from the urban hub.  Could some system be devised where those who benefit from the hub pay their share for its upkeep?  Why not tax suburbs that have a surplus?  Why not introduce county wide or regional taxes that would help revive great American cities?

Here in Chicago we’ve had similar claims of impending ruin.  One of Mayor Daley’s chief aides used the term “Doomsday” in talking about the state of the city’s school system and public transit system.  Both systems were cut in the face of such claims.  Mayor Daley also transferred public assets of parking meters and a public toll road to private interests.  The city’s finances are not better.  In fact, by the end of the contract, the city will lose money on the parking meter contract.  Now Mayor Emanuel want to close over 100 schools because of a pending billion dollar deficit.  Is this a real problem or a way to move students from public to “charter” schools?

Whenever a politician claims a situation is an emergency, we need to ask for better evidence and transparency, not solutions that make the original problem worse and benefit only those who are the most wealthy.  We need to ask harder questions about our leaders and their solutions, especially those that deal with privatization.  The fate of Detroit and other cities in Michigan need to seen as a sign of things to come.  Will the U.S. live up to its promise of being a democracy that offers opportunity to all of its people, including the poor?  Or will the country further devolve into an oligarchy of the wealthy, by the wealthy, and for the wealthy?

Postscript: On this weekend’s Smiley and West radio program, Cornel West said: “You can’t love money and love poor people.” He was criticizing political leaders, both Republicans and Democrats.  I can only respond with one word: Amen.

More:  Laura Clawson of Daily Kos weighs in on the consequences of a Detroit take over and what has happened in other Michigan cities that have lost their democratic rule.

Posted: March 2, 2013
By: Clay Cerny

[“Sabbath” is this blog’s Sunday feature that looks beyond jobs and career.]

NPR – One-sided on Detroit?

I was listening to NPR’s Weekend Edition this morning, and what I heard upset me.  The program featured two stories on Michigan Governor Rick Snyder’s decision to appoint an Emergency Manager [Financial Dictator] for its largest city, Detroit.  Snyder was given ample time to defend his decision, which he did using rhetoric that combined strong leadership and sunny optimism.

The only challenge host Scott Simon put before the governor was the sad, softball question, “Why now?”  Snyder answered with a list of numbers and story about a consent agreement.  The most impressive number was a $14 billion long term debt.  This was a clear point that should have been challenged.  Yes, pension funds, among other things, have caused governments on all levels to have huge long term debts.  These debts are real, but is Snyder’s plan the only way to address them?  Similarly, Synder said that the city did not meet the terms of a consent agreement it signed with the state.  Host Simon did not ask the governor to outline any of those terms, nor did he interview any other guests who might have a different point of view.

Rather than do this Simon asked questions about politics and race, given that Detroit is run by Democrats and its population is mainly African American.  Snyder said his motives have nothing to do with politics or race.  I’ll grant that this is probably true.  Privatization campaigns are all about taking revenue from public sources and transferring them to public hands.  That’s the question Simon should have asked.  A son of Chicago, he should know what our Democratic Mayor Richard M. Daley did in leasing the Skyway and parking meters.  Neither of those deals has helped the city.  The only winners are those investors who now benefit from what was a public good.

After the interview, there was a follow up report on the Detroit’s financial crisis and why it merits the appointment of an Emergency Manager.  Several times the report raised the fear of Detroit going bankrupt.  In fact, one guest was a specialist in municipal bankruptcy.  The question not raised was: So what?  If there are experts in municipal bankruptcies, it must mean that this circumstance happens.  Why is the Emergency Manager needed?  Also any recent change in the level of the city’s debt was not discussed.  Over the last two years, the American auto industry has boomed.  One would imagine that the city’s revenues have improved along with the auto industry.  Does that assumption have any merit?  Is the city worse off today than it was in 2010?  Journalism should ask questions, not rewrite press releases or enable politicians to make unchallenged claims.

My biggest problem with this story and Governor’s Snyder’s action is that they fall into a pattern of rhetoric used by government officials for over a decade.  Naomi Klein calls it the “Shock Doctrine.”  Governments proclaim a crisis and based on that claim assume emergency powers.  Is Detroit any worse off than Cleveland or Gary?  How much worse is it than Chicago or Atlanta?  Every level of large government has debt obligations.  The question is how to meet them while still providing services people need.  Intentionally or not, NPR and Scott Simon have given into shock doctrine thinking.  They did not ask if the crisis in Detroit is based on legitimate financial data, nor did they seek out any possible dissenting voices like Lansing Mayor Virg Benaro or former Governor Jennifer Granholm.  We often hear corporate journalists crying that “both sides” are the same.  Too often, as in this case, they present stories that only give one side.  That’s not journalism.  It’s P.R.

Postscript:  Groups in Detroit are rallying in opposition to the governor’s actions.  What is at stake?  If an emergency manager is put over Detroit, more than half of African Americans in the state will be living in cities run by unelected managers.  How can anyone – including the governor [or Scott Simon] – call that democracy?

 

Posted: May 6, 2012
By: Clay Cerny

[On Sundays, Career Calling ponders intersections of work and life in “Sabbath.”]

Private Is Not Better Than Public

Over the past few decades in the U.S., conservatives have won a message war that is begin to tear apart our country’s social and democratic foundations.  The message is simple – and false:  Private is better than public.  We in Chicago have gotten a real smack in the face with the deal our former mayor Richard M. Daley made in leasing the city’s parking meters, which I will discuss below.  But it’s not just Chicago.  Across the nation, we’re seeing roads, schools, garbage collection, and even prisons privatized in the name of efficiency.  The problem is that, like the promises of trickle down economics, the promise of cost savings and greater efficiency from privatization is a lie.

Starting in 2009, parking meters in Chicago were taken over by a company called Chicago Parking, LLC (All information in this paragraph is taken from the Chicago Sun-Times, 5-4-2012).  It paid $1.15 billion for a 75 year lease.  In the last year the city operated the meters, it collected $23.8 million in fees.  Over the next three years, the private company has collected $45.6 million (2009), $71.2 million (2010), and $82.8 million (2011).  Currently, Chicago Parking is billing the city for lost revenue due to street closure and spaces used by handicapped drivers.  For 2009-2010, the city paid an extra 9 million to cover parking spaces taken out of service.  The city is disputing an additional $27 million in additional charges.

How have the people of Chicago benefited from this move from public to private?  First, residents of the city are paying significantly more for parking under the private regime.  What if we called this a tax?  People would be outraged.  Second, it’s not a good deal.  At $80 million a year, the cost of the lease will be covered in less than 20 years, which means more than 50 years of the lease will be sweet profit for the private company.  Who’s not profiting?  The city and its taxpayers.

Meanwhile, the Sun-Times also reports that former mayor and three of his top aides now work for the law firm that represented the city in the park meter negotiation.  A cynical person might think this was some kind of conflict of interest.  But after hearing again and again over the past 20 years how much Mayor Daley, son of The Mayor Daley, loved the city, I cannot believe that there is anything shady in this arrangement.  After all, Mayor Daley loved the city.  If this is true, the parking meter deal must be seen as an expression of his love. 

It’s not just parking meters.  Private prisons in Arizona are costing more than original projections and there have been problems with lax security and prisoners escaping, which cannot be called greater efficiency.  The state’s legislature has shut down a review of the program.  A study in Colorado found a similar problem with cost overruns in another allegedly more efficient private prison system.  Who ends up paying more?  Taxpayers.

These are just two examples of the way government and private industry have joined in a big scam.  At the beginning of this article, I attributed the private is better than public meme to conservatives, and I hold by that claim.  However, many Democrats have jumped on the train, especially when it comes to education.  I have frequently written about education and how funds have been routed from public to private and charter schools, how teachers and teachers unions are the bogey man for education “reformers.”  There is no clear evidence that these private schools do a better job of educating children.  Some charter schools are good.  However, three of the top four ranked high schools in the state of Illinois are in the Chicago Public School system.  Many suburban districts in Illinois that have a strong tax base and low poverty offer their citizens great public schools. 

I do not defend any kind of public waste, corruption, or failure.  Ineffective teachers and other public employees who cannot do their jobs should be fired.  So should bad CEOs, who now often get multi-million dollar gold parachutes when they are fired.  We need to move beyond a cliché like private is better than public to the wisdom that John Dewey gave us long ago:  What works?  What works for the nation and most of its people?  What works to build a foundation for a strong democracy?  We need to find what works and leave the slogans behind.

Postscript:  My friend Bill Savage sent me this happy news.  By the end of the parking meter lease, the city will probably pay "fines" that equal what it paid the city in the original lease.   Really, he loved the city.