Sam Gindin on the crisis in labor
[This is a lightly edited transcript of my interview with Sam Gindin, first broadcast on June 14, 2012. The audio is here. Thanks a million to Andrew Loewen for doing the transcription.]
My next guest is the excellent Sam Gindin. Sam is an economist who spent more than 20 years in the Canadian Auto Workers (CAW) Union, first as a researcher and then as an adviser to the president. He retired from the CAW in 2000 and has since been teaching in the wonderful political science department at York University, Toronto. He frequently collaborates with another Behind the News favorite, Leo Panitch.
The debacle in Wisconsin is deeply symptomatic of the crisis in American labor, and there’s no smarter commentator on that topic than Sam, even though he lives north of the 49th parallel.
Welcome Sam. The defeat of the Walker recall in Wisconsin has prompted some reflections on the state of the labor movement. What are your initial thoughts on that? I know you’re across the border in Canada, but it certainly has repercussions across North America.
Yeah, I’m interested for the same reasons everybody else is. It has repercussions here, and also my wife’s family is in Wisconsin, so we’ve been in touch with them. The main thing is—and it’s a point that you’ve made—that we have to take a look at what happened and ask ourselves some hard questions. I’m sympathetic to people who feel like “Walker won the election through the amount of money he put in; we have to try to defend the labor movement; we have to hope that people don’t get demoralized.”
But the real thing we have to do is be honest about what’s happened. And being honest means talking about the real, serious crisis in the labor movement. And it’s a crisis that’s actually been there for at least a quarter of a century. And it was especially evident when the financial crisis happened. And instead of being able to go on the offensive, labor was on the defensive. And it was revealed again with Occupy, when the labor movement supported Occupy but what was really called for was a question of labor showing that it can occupy things and that it had the power to do things.
So this is a serious crisis. And I think we really have to be honest and step back and address the seriousness of the crisis. We have to stop talking about just the economic crisis and just how bad the rightwing is when it does all the things that we expected them to do—and actually have that kind of discussion about the labor movement.
How similar are things in Canada to things in the US? I mean a lot of people will say this is an American issue, an American problem—you’ve got American individualism, the brutality of American repression of labor activism throughout the course of the last century or so.
Of course there are differences in Canada. In some ways the attack hasn’t been as aggressive. Canada doesn’t play the same imperial role that the United States plays and that leads to some differences, but the fact of the matter is that the differences are not that great in Canada. If anything we’ve been kind of converging to that same notion: of limited options, and ‘there’s nothing you can do about this,’ and lowering our expectations so that whatever happens ‘it could have been worse,’ or the Democrats—you know, ‘you have to make a choice between whoever is worse and whoever is worser.’
So I don’t think the differences are that great here and I’d even go further: I don’t think the differences are that great generally in Europe, except for some places like Greece, where there’s been a particular kind of resistance because of how much they’ve been attacked. But I think there’s been a general crisis in the trade union movement everywhere. And I think we should talk more about ‘what is it’ exactly; but I think it’s also wrapped up with a crisis on the left, which is an integral part of this.
Some of the criticisms I’ve gotten for the things I’ve written is that, first of all, not having been an organizer myself I don’t understand how difficult things are. I think I do understand how difficult things are—but the other thing is that there’s some people who seem to think what we need to do is keep doing the same thing with increased dedication and intensity. What do you think? Is that the way out of the crisis?
No. That’s part of the problem. I respect everybody who’s feeling like they’re put upon. It is difficult, and workers have immediate struggles. But seeing this as a problem of “let’s just plug on, let’s just be a little bit more committed”—if there’s anything we should learn it’s that that doesn’t get us anywhere.
This is a really serious, radical problem. Let me just say what I think it is, and what we have to talk about. There is a problem in unions, that in their very formation they were sectional organizations, that the essence of unions is that you’re defending a group of workers. You’re not actually thinking about the class as a whole, or about other dimensions of workers’ lives. On occasion, in spite of that sectionalism, you see the potential of workers because they go beyond it, as they did when they were mobilizing in Madison. But the problem is that the structure of unions, and their culture and their logic, takes them back to returning to being very instrumental. The problem with being sectional and just thinking about yourself is you also tend to think instrumentally. You look to your leaders as—you pay some insurance for being in the union, you give them some dues, and they’ll deliver. And the leaders think in terms of “well, we occasionally have to mobilize the workers but we shouldn’t exaggerate that or really open the door to mass mobilization, because we just want to mobilize them enough to make a deal.”
That problem is fundamental to what we’re seeing in this crisis. After World War II, this wasn’t obvious, because then you could in fact make gains by being sectional. And in fact some of those gains would spread to others. The defeat after the war was the defeat of the left inside unions, and part of that was promising people that “well, you can just win things within capitalism and just being instrumental, and you don’t really need a left.” And a lot of workers accepted that.
When neoliberalism came, in the absence of a wider vision, in the absence of a left, that sectionalism was dead. You just couldn’t make gains when you’re facing not just an employer but you’re facing the state, and you’re facing the employer in an entirely different context. I don’t think the trade union movement ever came to grips with that fact. They stumbled on doing what you just raised: “well, we’ll just have to try harder, this is cyclical, it’ll get a little bit better, maybe we’ll elect somebody else.” They didn’t realize that that whole era was over and unions really had to reinvent themselves.
And then came the financial crisis, the biggest crisis we’ve seen since the 1930s. In the 1930s, unions at least had recognized the limits of craft unionism and developed a new organizational form in terms of industrial unionism. The question that was being posed by the financial crisis is: okay, what are you going to do this time? What is the new organizational form that workers might come up with, given that the organizational form that that they have, sectional unionism, isn’t capable of doing it. The public sector unions can say “we’ll put up billboards to say we support the public sector,” but nobody really believes them—they see it as opportunist.
So there’s a real question of, what might a different unionism mean? I don’t think that people who are trying to defend unions—by saying “they’re okay, don’t attack them, just plug along”—are actually doing the unions any favor. I think what really needs to be done is we have to challenge unions. And I think that was the excellent part of what you were writing about.
There’s a perception in the broad public that unions are mostly interested in themselves. The leaders seem to be very interested in their own salaries and perks, too. But it seems that the leadership thinks it has a product to sell. That product is a contract and certain privileges in wages and benefits. That seems to foster a perception among the broad public that unions just don’t care about the working class as a whole. Is that a fair perception on the part of the public?
Yes and no. If you tested the unions compared to the ruling class, to other sections of society, they might in fact be more progressive on these issues. But the reality is that it’s not enough. It’s not enough that unions might in general—that their members might in general vote more progressively, or they might care more about these things. Unions have to prove it. And you don’t prove it by passing good resolutions, and even donating some money to good causes, or putting up billboards that say we support public services. Unions have to prove it. And to prove it they have to be radically different.
So, for example, they have to consider, when we’re in bargaining maybe we actually have to put the quality and level and administration of services on the bargaining table. Unions don’t do that. In other words, we would actually be ready to strike for something that we consider a fundamental right in society. Now when you start doing that you have to educate your members differently, you have to change all your structures, your research has to be different, how you mobilize and organize has to be different. But, you know, starting to think about that would mean a radical change and a chance to actually win the public over. And when I say win the public over I actually include other unions, who are also skeptical of this, who see this as “well they just want to raise their wages, and that means raising my taxes.”
So you’ve got to win people over. And it means you have to develop a class perspective. You have to be driven by a class perspective. You can’t say “we’re organizing but the point of organizing is we want to just get more dues,” because that effects what kind of commitment you have, what kind of energy you put into it, whether you’re going to cooperate with other unions to organize people even if you don’t get them. If you have a class perspective you’d have a different take on unionization—you have to deal with this question of, “Hey, wait a second, we’re saying that we support the public but then we go on strike and take away the service, isn’t that a contradiction?” You have to start thinking about, “Well, maybe we have to do other things, so that when we really go out on a full-scale strike people will get it.”
And by other things I mean such as if it’s a garbage strike, and they’re asking you to drop the garbage off in a park while the strike is on, maybe you drop it off on Wall Street, because you want to make a connection between austerity and the strike. Maybe you actually think about—we’re not going to pick up garbage in rich neighborhoods because we want to make that connection. We’ve had examples of workers coming up with that sporadically, but the problem is it’s only sporadic. It has to get to what the organization is actually about.
I should say, I don’t know that you can transform unions as they are to being more than that. But I’ve been trying to think through what it might mean to think about intermediate organizations. By an intermediate organization I mean something that would be a new form of working-class organization, that would see workers as joining them, linking them across unions. Having networks of activists across unions, so it isn’t just a union with a sectional interest, but it’s workers joining something because they see it as a class interest, and that it also expresses all the other dimensions of their lives. So it’s linked to the community.
So it’s not a political party but it is explicitly trying to take on the question of class and educate around the fact that unions face systemic problems that are more than facing a particular employer.
What do you make of the fact that something like a third of union members voted for Walker?
I think there’s a division between the public and the private which is part of that, with people being won over to isolating the public sector. But it completely reflects the fact that if unions are only instrumental, sectionalist organizations, and then people are voting on the basis of “does this help me in particular, even if it screws other workers?,” with no sense of if you’re screwing other workers how that might come back to bite you in the longer term perspective. If you accept the fact that, well look, in practical terms I do want to support business because the only model we have for growth and therefore for financing public services is to support business, then workers can make a very sensible and rational decision that this is best for me given that there’s actually no alternative. No one’s talking about challenging business. No one’s talking about an alternative way of creating jobs that isn’t just some stimulus, but is actually thinking about questions of planning and conversion.
So I think that as long as people have a limited perspective on how you define the problem that shouldn’t surprise us. And the reality is that unions don’t see their role as developing that kind of a broader perspective, for the longer term. My argument would be that that kind of narrow perspective which worked in the past isn’t even actually practical anymore. It’s not that you can make an argument that “well it’s practical to just be small.” That’s what we find out is impractical. You lose your own members. They see the solution not working. And we have to start thinking bigger and more radically, because that’s the only thing that’s practical right now.
That would a revolution inside unions—a massive cultural change. And I don’t think this can happen without a left that is both inside and outside the unions, pushing this kind of thing and getting unions, even if you don’t win them over, but getting them to at least put on their own agenda strategic questions about “how should we respond?”
If you think of the Wisconsin uprising, there should have been some structures formed as this was happening, like assemblies. Where people are actually discussing things. What do we do? How do we get neighbors on side? What do we when they say this? How do we answer these questions? How do we get into the high schools and develop people because is this is going to be, you know, we’re talking about another generation that’s going to be affected. When that was ignored, and everything just got channeled into an election—which at this point you’re simply operating on their terrain—yeah, the end result isn’t that surprising. And you’re not really building things.
You can also ask the question well what would’ve happened if unions won? In these circumstances even if unions won, it would’ve been a very important victory in terms of bargaining, but the Democrats would’ve been there to make sure that you have bargaining but that you couldn’t bargain over anything significant. They would’ve reinforced that image. I mean the main thing that the Democrats did in this election was run away from actually speaking about class, defending workers, defending unions, and thinking that you could win just by demonizing the other side. So there wasn’t even that kind of education and buildup during the election.
When you say things like this a lot of union people say, “Yeah that’d be very nice but we operate under a very severe set of legal constraints. We can get fined, we can go to jail, we can be destroyed. So we just have to operate by some rules that are very much stacked against us.” What do you say to that?
Part of the problem is people not knowing their own history. Unions didn’t come out of people sitting down and practically saying, “what are the rules, what are the constraints, and how do we operate within them?” They figured out how you actually have to break rules, how you have to change them, how you have to mobilize broadly. When you look at these problems in very small ways, like workers saying, “If I just walk out of my workplace, I’ll be fired”—yeah, you will be fired, so you shouldn’t do that. But you should figure out what would we have to do so we actually have a mass base. How do we build that base?
They showed that in Wisconsin. They were sitting in on the legislature—a massive act of defiance. All the things that we cheer when they happen elsewhere are acts of defiance. Everything about our history was an act of defiance. That requires being sober about it. It’s not just romantic. Let’s do it—it actually means asking, ‘If we can’t do certain things now, how do we prepare so that we can do them?” It does mean saying that if you want to change things, these are the kind of risks you have to take. How do we prepare ourselves to take those risks and pull it off?
Because if you accept the status quo then the thing you have to remember is that you’re not just protecting yourself right now. You’re sending a signal to them that they can keep doing it to you. And that’s what’s been going on for the last quarter of a century. You know, first they lower expectations, then you have the crisis, so then now you have to pay for the crisis and bailing out the banks. Now you get defeated. What’s going to come out of this Wisconsin thing is that there are going to be further attacks on workers in other states, and workers will be relieved because they weren’t as bad as what Walker was promising.
This is going to keep going on; it’s going to get worse. There’s no future in it. There’s no future in it for people’s kids. People have to start thinking in terms of: you have to take a stand, you have to think about what this means, and you have to prepare for it. And it is going to be risky. Everything that you raise should be addressed, you know, right on, instead of pretending that if you do these things it’ll be easy.
You’ve also said that the labor movement needs a left and the decay of the left has really damaged the labor movement. Could you elaborate on that?
It’s really difficult for me to imagine unions being transformed completely through their own dynamic. We just haven’t seen it happen. We’ve seen attacks on unions consistently now since the early eighties. And we haven’t seen bad times leading to something new. People just lower their expectations and hope that if there’s a crisis you just fix it so you can get back to what was normal before, even if that wasn’t so great. The leadership have no pressure on them to change. In fact, a lot of them have learned that since nobody blames them, maybe it’s more comfortable to be able to blame big money, or globalization, or neoliberalism. The leadership has gotten comfortable—and the membership finds it very hard to rebel when you’re looking at the world from one particular workplace and you don’t have connections to others. You know your leaders are worldly; they travel around; they know what’s going on in other places. But the workers are overwhelmed in terms of time, so it’s very hard for me to imagine that kind of rebellion.
What a left has to offer is making connections between people across workplaces, bringing in a class analysis so they seem it’s not just them. They can never win if it’s just a few of them against the state. They have to see there’s actually a class involved here. Giving them some alternatives, you know, giving them some historical memory, so they see how workers did this—in fact in more difficult circumstances in the past. Giving them some comparative analysis of what’s going on in Greece and elsewhere—how did people organize. So the left can play that role, in terms of bringing a class perspective, resources, memory into the picture. The truth is the left that we have now isn’t capable of doing that. So I think one of the questions that comes out of Wisconsin is not just “what’s wrong with unions?,” but “what kind of a left could actually do that?”
And the answer to that isn’t that we’ve got to convince workers that the politically right thing to do is to go into the Democratic Party. Because that will not develop capacities. In fact, it constrains the development of working-class capacities.
Some practical types would listen to what you just said and say, “well that’s all very nice but, you know, it’s too highfalutin’. We need some action on the ground. And all this stuff about making connections and international comparisons and class analysis is just over-intellectualizing what needs to be a much more activist approach to the problem.” What do you say to that?
At one level of course they’re right. The point of organizing isn’t that you phone up a worker and you say, “Hello, I’m so-and-so. I think we need a revolution and we need a class analysis and can you come and join me?” That’s not how people get organized. You do have to be on the ground. But you have to be on the ground in a way that has a class perspective behind it. If you’re talking about organizing and you’re thinking in terms of class, one of the questions is, “If there are so many people being laid off, what are unions doing about their members who’re being laid off?” If they can’t even organize people who were just recently their members, how would you expect them to organize anybody? And the reason they don’t do that, is because there’s no money in it.
There’s money in getting new members but there’s no money in helping your members once they stop paying dues. But if you have a class perspective it leads to something else. It leads to actively organizing the unemployed that were formerly your members. And if you don’t do it that’s where you get a lot of the rightwing populist response that you mentioned earlier. Workers say, “Well, they cared about me when I was paying dues; they don’t give a shit anymore.” And they don’t end up being very sympathetic to labor. That’s very on the ground.
If you’re talking about making a breakthrough and organizing homecare workers, who do exactly the same thing as homecare workers in institutions that are unionized do but do it privately, you have to get cooperation among unions. It would be a massive project. And if you got cooperation, it’d be a very on-the-ground, hands-on response to organizing low-paid, immigrant women. It’s very concrete. But to do that you’d need this cooperation among unions. And you’d actually have to talk about, “What kind of a union do you want, where does class fit in, why are you doing this?” And if you don’t want to talk about that you won’t do it. This notion of ‘let’s just go out and do it the old way and it’s on-the-ground’—that’s what I consider really idealist. It’s not working! You do have to think bigger.
That’s part of the role of the left: it’s to be a bridge—responding to practical and immediate things, but putting them in that kind of a larger context. Because without that kind of larger context we’re losing and we’re going to continue to lose. What’s really abstract is pretending that these kinds of questions don’t matter.
Is there really any hope for a model in which the goal of union activity is organizing a group of workers to get a contract and then have them pay dues for union membership? This is the central model of American unionism. Could this survive another generation, or has this got to go?
I don’t know if it has to go. But we need another kind of organization, which doesn’t mean this one has to go. It might mean that if we in fact had workers’ assemblies and spaces and places where workers were actually mobilizing and organizing around class, that might begin to have an impact on unions. Injecting that into unions might actually demonstrate to them that you actually need some kind of strategic thinking to even be effective at what you’re trying to do. So it may be that there’s a way of renewing unions—but only because you’ve actually responded to the times, and learned something, and said, “We need new forms of working-class organization.”
I just got back from Montreal. It’s fascinating because it’s one of those moments where in retrospect you can say it was predictable—there was a lot of student organizing and mobilizing before. But they’ve had marches of around 300,000 people. They’ve been fighting around the cost of tuition. Quebec has the lowest cost of tuition in the country and yet they’ve been fighting around it because they think it should be a public good that’s free. So what recently happened is they began to actually go into neighborhoods, banging pots, and what’s happened is neighbors have come out to join them. Nobody would’ve predicted this. They would’ve thought they’d be, you know, isolated as spoiled university kids.
You begin to see that once people begin to see that something’s possible, it opens everything. There are people on the streets supporting them. People in the bars run out and join the demo, There are all kinds of discussions taking place. People are actually talking about capitalism, because they’re being forced to as they do this. And the students have been running assemblies—democratic spaces in every university, in different faculties, to make decisions about where to go and what to do and about tactics. And then this is now being imitated to some extent in some of the communities, where people are forming community assemblies to talk about broader issues. Not just tuition fees but the educational system or why there are cutbacks. As struggles take place, you get surprised and things emerge. Then the question is well what do you do next to sustain it?
If you’re sober you have to be pessimistic. But there’s a quote that’s usually attributed to Gramsci—I don’t know if he actually said it—that the challenge is to have no illusions but not get disillusioned. That’s the trick. It’s just one of those historical moments where we have to figure out how to do something. If you think of the periods since The Communist Manifesto it’s always been as if there were some answers that somebody had: unionization, insurrection, forming communist parties, forming social-democratic parties.
Now we have to come up with our own answers because those answers weren’t real answers. It’s very difficult to live through this period because there’s no answer on any shelf to take, and we don’t have an example abroad to say why don’t we just do it like so-and-so.
It’s an incredibly difficult period, but I think capitalism has really been delegitimated. I don’t have any trouble talking to workers, telling them that capitalism is a barrier to human development. They nod their heads. They’re just not sure how to change it or have confidence in changing it; but it does mean that there’s an opening if we can organize and figure out how to organize and take advantage of it. And that’s a difficult challenge. It is crucial that we take our heads out of the sand, stop pretending that if we just keep trying, and defend workers, that things will change. That’s actually becoming a barrier to change. I say that with real respect for the fact that while you’re doing this of course all kinds of struggles are going to take place, and of course we should support them. But we should also be pointing to their limits.
My chat with Adam Davidson
My latest radio show, a long chat with Adam Davidson, is up in my radio archives:
June 9, 2012 Adam Davidson, host of NPR’s Planet Money and columnist for the New York Times Magazine, on finance, innovation, bourgeois ideology, journalism, and being mean on the Internet (a conversation that was prompted by this piece of mine) [Davidson columns discussed include: Wall Street, Bain dude, Honduras]
•
full conversation (unedited, except to remove some patter at the beginning and to suppress several volume spikes) is here
Sam Gindin comments…
The excellent Sam Gindin, who spent many years with the Canadian Auto Workers as an economist/advisor (and who cannot be dismissed as some armchair pointy-head), writes in response to my recent stuff on Wisconsin:
Very good response; I think you are right on re labour. The one thing I’d add, and I think it is very significant, is that this crisis in labour overlaps with the crisis on the left. I’m convinced that any renewal in labour won’t happen until there is an organized left with feet inside and outside labour—and even then it would have to be a left of a particularly creative kind. Which raises the unavoidable question of what we do to create such a left if neither the unions nor the democratic party are sites to make this happen and the notion of this happening through the old Leninist structures seems no less of a dead-end. THIS is the challenge that needs taking on….
I like this very much, and I don’t think it’s just because I’m flattered. I love the bit about an organized left that’s both inside and outside labor.
Incentivize labor leaders’ pay
Paging through the salary listings for top labor leaders reminded me of an idea that Liza Featherstone and I came up with a while back: tie their pay to performance. It’s a scandal that these characters, who’ve presided over years of shrinkage in membership and political power, are nonetheless paid well into the six figures (putting them securely in the 1%, in other words). To take one egregious example, the president of the Laborers Union is paid almost $600,000 even though membership is down almost 30% over the last decade.
So why not cut their pay to, say, two or three times the level of their highest-paid worker (not too radical, really) and then offer bonuses based on wage gains for the membership and genuine expansion in the number of members? Real, organic growth in membership through organizing, that is, and not SEIU-style growth through merger and gimmickry.
Wisconsin follow-up
Follow-up to yesterday’s post on the Wisconsin recall (“Walker’s victory, un-sugar-coated”).
I’ve been amazed at some of the tendentious misreadings of the piece that have made the rounds, mainly from left labor people. My favorite is that I just wasn’t aware of all the door-knocking and retail campaigning that union forces were doing over the last few months. Two points about that. One, months isn’t enough. I’m talking about years of education, organization, occupying. Face-to-face talk, direct action, all manner of things. And two, all that actually existing door-knocking was subsumed to a stupid electoral campaign—one whose defeat has only elevated Walker’s status and power. All those resources are now doubtless going into the Obama campaign—Obama, who did no more than tweet support for Barrett at the last minute!
Which reminds me of another thing—a pervasive, macho tendency in union culture to dismiss anyone who isn’t “in the trenches” as a pansy or an out-of-touch pointy-head. Outside analysts just don’t know all the great work they’re doing! Well, you know, it’s not really working out so well. Maybe all that time in the trenches just leaves you with a mouthful of dirt.
Another reaction was to think I don’t care about workplace issues. Of course I do. Workers, especially in private companies (though the post office isn’t much better) live under an authoritarian regime that offends their dignity every day. Unions can be a crucial defense against that. But the heavy emphasis on the contract and the workplace has led to a narrowing of vision, and to a perception among the 88% of the workforce that’s not unionized that unions don’t give a damn about them.
In other countries, unions are about more than contracts, and have done a lot better job fighting for broad public benefits, like pensions and health care. Our unions look too much like they’re fighting to defend their own private welfare states and not fighting to expand the public ones. They look like that because they all too often are. There’s no more disgraceful instance of this than the behavior of the Service Employees International Union around health care. SEIU’s former president, Andy Stern, dismissed single-payer as a Canadian import—while making common cause with then-Walmart CEO Lee Scott to try to craft a more distinctively “American” scheme. As one SEIU staffer told Liza Featherstone (“Labor Head Andy Stern Has Some Unusual Corporate Bedfellows”) [disclosure alert: she’s my wife], Stern “doesn’t hold social democracy in high regard.” Also, as Bob Fitch argued, unions typically take their cue on political matters from their employers. SEIU represents a lot of health care workers—and health care providers would hate single-payer.
The Wisconsin results overshadowed voter approval—by wide margins—of public sector pension cuts in San Diego and San Jose. Sad to say there’s not much of a sense of solidarity in America these days. Seeing generous retirement and pension provisions, the masses don’t say, “I want those too!” Instead, they say, “They can’t have them either!” It’s not clear that pouring more resources into fights to defend pensions will yield any good results against a 65–70% consensus on that.
Regardless of what I think about contracts and benefits, though, the old model is dead. Private sector unions are virtually gone, and those that remain are negotiating concessions. Public sector unions were safe for a long time, but now they’re on the chopping block. Dems will chop more slowly than Reps, but they will chop nonetheless. A lot of what I hear from even good union people amounts to an intensified dedication to the status quo. But that won’t work. Unions have to shift their focus from the workplace to the community at large, from private benefits enjoyed by a few to public benefits enjoyed by everyone, or they’re doomed.
Walker’s victory, un-sugar-coated
Democrats and labor types are coming up with a lot of excuses for Scott Walker’s victory in Wisconsin. Not all are worthless. But the excuse-making impulse should be beaten down with heavy sticks.
Yes, money mattered. Enormous amounts of cash poured in, mainly from right-wing tycoons, to support Walker’s effort to snuff public employee unions. While these sorts of tycoons—outside the Wall Street/Fortune 500 establishment—have long been the funding base for right-wing politics, they seem to have grown in wealth, number, consciousness, and mobilization since their days funding the John Birch Society and the Goldwater movement in the 1950s and 1960s.
But lingering too long on the money explanation is too easy. Several issues must be stared down. One is the horrible mistake of channelling a popular uprising into electoral politics. As I wrote almost a year ago (Wisconsin: game over?):
It’s the same damn story over and over. The state AFL-CIO chooses litigation and electoral politics over popular action, which dissolves everything into mush. Meanwhile, the right is vicious, crafty, and uncompromising. Guess who wins that sort of confrontation?
Please prove me wrong someday, you sad American “left.”
At this point, few things would make me happier to say than I’d been proven wrong. But I wasn’t.
There were several things wrong with the electoral strategy (beyond, that is, the weakness of electoral strategies to begin with). Barrett was an extremely weak candidate who’d already once lost to Walker (though by a slightly narrower margin than this time). Potentially stronger candidates like Russ Feingold refused to run, probably out of fear of these results. And the bar was very high for a recall. Only 19 states have recall provisions, and Walker was just the third governor to face one. Well over half of Wisconsin voters think that recalls should be reserved only for misconduct—and less than a third approve of recalls for any reason other than misconduct (Wisconsin recall: Should there be a recall at all?).
Suppose instead that the unions had supported a popular campaign—media, door knocking, phone calling—to agitate, educate, and organize on the importance of the labor movement to the maintenance of living standards? If they’d made an argument, broadly and repeatedly, that Walker’s agenda was an attack on the wages and benefits of the majority of the population? That it was designed to remove organized opposition to the power of right-wing money in politics? That would have been more fruitful than this major defeat.
It is a defeat. It is not, as that idiot Ed Schultz said on MSNBC last night, an opportunity for regroupment. (Didn’t hear it myself, but it was reported by a reliable source on the Twitter.) Because in the wise and deservedly famous words of Ralph Waldo Emerson, “When you strike at a king, you must kill him.” When you don’t, you look like a fool if you’re lucky. More likely, you’ll find your head in a noose.
And as much as it hurts to admit this, labor unions just aren’t very popular. In Gallup’s annual poll on confidence in institutions, unions score close to the bottom of the list, barely above big business and HMOs but behind banks. More Americans—42%—would like to see unions have less influence, and just 25% would like to see them have more. Despite a massive financial crisis and a dismal job market, approval of unions is close to an all-time low in the 75 years Gallup has been asking the question. A major reason for this is that twice as many people (68%) think that unions help mostly their members as think they help the broader population (34%). Amazingly, in Wisconsin, while only about 30% of union members voted for Walker, nearly half of those living in union households but not themselves union members voted for him (Union voters ≠ union households). In other words, apparently union members aren’t even able to convince their spouses that the things are worth all that much.
A major reason for the perception that unions mostly help insiders is that it’s true. Though unions sometimes help out in living wage campaigns, they’re too interested in their own wages and benefits and not the needs of the broader working class. Public sector workers rarely make common cause with the consumers of public services, be they schools, health care, or transit.
Since 2000, unions have given over $700 million to Democrats—$45 million of it this year alone (Labor: Long-Term Contribution Trends). What do they have to show for it? Imagine if they’d spent that sort of money, say, lobbying for single-payer day-in, day-out, everywhere.
So what now? Most labor people, including some fairly radical ones, detest Bob Fitch’s analysis of labor’s torpor. By all means, read his book Solidarity for Sale for the full analysis. But a taste of it can be gotten here, from his interview with Michael Yates of Monthly Review. A choice excerpt:
Essentially, the American labor movement consists of 20,000 semi-autonomous local unions. Like feudal vassals, local leaders get their exclusive jurisdiction from a higher level organization and pass on a share of their dues. The ordinary members are like the serfs who pay compulsory dues and come with the territory. The union bosses control jobs—staff jobs or hiring hall jobs—the coin of the political realm. Those who get the jobs—the clients—give back their unconditional loyalty. The politics of loyalty produces, systematically, poles of corruption and apathy. The privileged minority who turn the union into their personal business. And the vast majority who ignore the union as none of their business.
Bob thought that the whole model of American unionism, in which unions were given exclusive rights to bargain over contracts in closed shops, was a major long-term source of weakness. I find it persuasive; many don’t. But whatever you think of that analysis of the past is rapidly becoming irrelevant. Collective bargaining has mostly disappeared in the private sector, and now looks doomed in the public sector. There are something like 23 states with Republican governors and legislative majorities ready to imitate Walker who will be emboldened by his victory. And there are a lot of Dems ready to do a Walker Lite. If they don’t disappear, public sector unions will soon become powerless.
That means that if unions ever want to turn things around—and I’m old-fashioned enough to believe that we’ll never have a better society without a reborn labor movement—they have to learn to operate in this new reality. Which means learning to act politically, to agitate on behalf of the entire working class and not just a privileged subset with membership cards.
Fitch lecture video up
I could never bear to watch myself, but in case there’s someone else who might, the video of my Bob Fitch memorial lecture (Explaining what goes on in the world: in memory of Bob Fitch) is up here.
New York Fed: lower payments = lower default rate!
The New York Fed is out with a new paper (“Payment Changes and Default Risk: The Impact of Refinancing on Expected Credit Losses”) that shows that reducing monthly mortgage payments “significantly” reduces future default risks. (Abstract follows.) The details of the paper strike me as less interesting than the fact that this basilica of High Finance is arguing that some degree of debt reduction is prudent—bolder than anything that a mainstream politician would ever say. Remember, these are the folks who had David Graeber in recently to talk about debt (and debt forgiveness).
Payment Changes and Default Risk: The Impact of Refinancing on Expected Credit Losses
June 2012 Number 562
JEL classification: G21, G18, R51Authors: Joseph Tracy and Joshua Wright
This paper analyzes the relationship between changes in borrowers’ monthly mortgage payments and future credit performance. This relationship is important for the design of an internal refinance program such as the Home Affordable Refinance Program (HARP). We use a competing risk model to estimate the sensitivity of default risk to downward adjustments of borrowers’ monthly mortgage payments for a large sample of prime adjustable-rate mortgages. Applying a 26 percent average monthly payment reduction that we estimate would result from refinancing under HARP, we find that the cumulative five-year default rate on prime conforming adjustable-rate mortgages with loan-to-value ratios above 80 percent declines by 3.8 percentage points. If we assume an average loss given default of 35.2 percent, this lower default risk implies reduced credit losses of 134 basis points per dollar of balance for mortgages that refinance under HARP
Airline dereg: more a failure than Matt Yglesias says
Years ago, I wrote a piece on deregulation of all kinds and developed a mini-obsession about the absurdity of the airline sort. It had produced bankruptices, savage wage-cutting, union-busting, awful service, and the abandonment of marginal cities while not producing any improvement in affordability. It’s hard to get people to believe this, but it’s true.
Matt Yglesias is out with a post (“Passenger Aviation in the United States: 40 Years of Failure”) on how the airline industry is a “stunning business failure.” Is it ever. But he doesn’t mention deregulation.
The industry was deregulated in 1979. Though it’s forgotten now, dereg—even though it’s destroyed unions—was a project of Democrats. Their initial base was in Teddy Kennedy’s office (as a wit once remarked, this shows Kennedy’s merchant origins, since merchants—bootleggers in the case of the Kennedy family—always want to reduce transport costs). Dereg’s intellectual guru was Alfred Kahn of Cornell, an advisor to Jimmy Carter, who signed dereg into law as president. Route and fare regulation was replaced by a free-for-all. The result has been disastrous.
A few numbers to make the point. Good stats on the industry (Annual Results: U.S. Airlines) begin in 1948. These tell us that the entire industry has cumulatively lost money since then. Add up all the gains and losses between then and 2011, and you get $37.7 billion in total losses. Adjust that for inflation, and you get $12.9 billion in total losses (2011 dollars). But what a difference deregulation has made. Between 1948 and 1978, the industry made $5.5 billion in total (or $28.7 billion in 2011 dollars). Between 1979 and 2011, it lost $37.7 billion (or $41.6 billion in 2011 dollars). Of course, I’m not here to defend corporate profits, but it’s hard to see how an industry can survive under capitalism in a chronic state of loss.
Ah, but fares are down and ridership has grown faster, right? No.
First prices. Between 1963 (when the figures begin) and 1979, the airfare subindex of the CPI grew 25% more slowly than the overall CPI. Since 1979, it’s growth 2.4 times as fast as overall inflation. A major reason for this is that there are many fewer nonstop flights than in the regulated days, and far tighter advance purchase restrictions. To the Bureau of Labor Statistics, which computes the CPI, such quality decreases are the same as price increases. (This is the opposite of the logic prevailing in computers, where rapidly increasing power is the same as a price decline.)
And then ridership. Between 1948 and 1978, annual passenger miles flown grew 12% a year; since then, they’ve grown less than 4%.
And, man, are flights ever more crowded. From 1948 to 1978, planes were an average of 57% full. Since 1979, they’ve averaged 68% full. Over the last three years, they’ve averaged 82% full.
But almost no one respectable will ever say airline dereg has been a failure. You read it here not quite first (because if you’d been subscribing to LBO in 1989 you would have read it there), but it’s not too likely you’ve seen it elswhere.
Fresh audio product
These shows have been up on the server for a while, and available to podcast subscribers (e.g., iTunes – Podcasts – Behind the News with Doug Henwood), but I’ve finally gotten around to updating the web page. Here are three recent shows:
June 2, 2012 DH on Bob Fitch (an abbreviated aural rendition of this) • Ben Jacobs on the Wisconsin recall • Stan Collender on the fiscal cliff
May 26, 2012 Vijay Prashad, author of Arab Spring, Libyan Winter, on the topics implied by the book title • Mark Dery, author of I Must Not Think Bad Thoughts, on pop culture, beheading, David Bowie
May 19, 2012 Chase Madar, author of The Passion of Bradley Manning, on Manning, WikiLeaks, secrecy, and mass solitary confinement (truncated fundraiser edition: pleasecontribute to KPFA and keep these shows coming!)
Raid the Pentagon budget, do good works
A friend posted an item to Facebook, pointing out that it would cost C$5 billion a year to provide free university to all Canadians, a fraction of the country’s $24 billion military budget. I thought translating this into American would be a useful exercise. Here goes:
Translating this in to American: We spend about $845 billion on the military, and personal expenditures on higher ed are about $165 billion. So for 20% of the military budget we could make higher ed free to individuals.
But that’s not all. The old rule of thumb for Canadian/American equivalence is to multiply Canadian numbers by 10. So if the U.S. had a Canadian-sized military, we’d be spending $240 billion, less than a third what we do spend. The difference could fund, along with the free higher ed ($165 billion), universal child care (about $75 billion/yr)—and we’d still have $345 billion left over. We could bring the officially poor up to the poverty line for another $150 billion or so, leaving almost $200 billion for, oh, I don’t know, clean energy R&D, high-speed rail, and public installations of beauty.
I didn’t mention health care, since that’s a story to itself. Public health spending alone (via Medicare, Medicaid, etc.) in the U.S. is on a par with the entire health budget, public plus private, in many countries with more sane systems. If you combine public and private spending in the U.S. and convert to a single-payer system, we could provide platinum-plated universal care to everyone.
Bain actually loves Dems
All good Democrats are busily hating on Bain Capital right now. What they’re forgetting is how many Bain-affiliated political contributions have gone to Democrats.
Plug the words “Bain Capital” into an OpenSecrets.org search and you learn that while Bain people have lovingly contributed to their former CEO’s presidential campaign, almost 3/4 of their contributions to other candidates, 72% to be precise, have gone to Democrats. That’s a higher percentage to Dems than the AFL-CIO!
And among the top recipients are Dem headliners like Al Franken, Claire McCaskill, John Kerry, Mark Udall, Nancy Pelosi, and Sherrod Brown. They were also major contributors to the Democratic National Committee and the national Democratic party. There are very few Republican candidates on the OpenSecrets list, and no major gifts to the GOP itself.
So Cory Booker’s defense of private equity (PE) against attacks by the Obama campaign has a very materialist explanation: PE titans like Bain have been funding Dems for ages—including Booker himself (e.g., “Cory Booker’s Bain Capital money”). It was just a few years ago that hedge fund (HF) hotshot Paul Tudor Jones held a 500-guest fundraiser for Obama, back when “the whole of Greenwich” (an epicenter of the industry) was behind him (“Another top hedge fund chief backs Obama”). Then he hurt their feelings with one intemperate use of the term “fatcats.” But it’s not like Obama is about to expropriate the PE and HF types.
Explaining what goes on in the world: in memory of Bob Fitch
[This is the text of a talk I gave at LaGuardia College, Long Island City, Queens, in memory of Bob Fitch, who died on March 4, 2011, from complications of a fall he suffered when returning home from teaching at LaGuardia. My short remembrance, written for The Nation, is here. Thanks to Jane LaTour for the two photos of Bob reproduced here. Video by Prudence Katze and Will Lehman is here.]
I want to start by saying how honored I am to be giving this, the first Bob Fitch memorial lecture. I dearly hope there will be a second and many more after that, and it’s up to some of us in this room to make that happen. I admired Bob tremendously. I can’t think of anyone I’ve known personally who’s influenced me as much. He was remarkably erudite—read deeply in many areas and wonderfully cultured in an almost old-fashioned way. I called him once when he was listening to Schubert. We got to talking about the greatness of much bourgeois culture, and he criticized today’s bourgeoisie for taking such poor care of its class inheritance. That task had fallen to Marxists, I guess.
He was also a warm, generous, and very funny guy. It breaks my heart that I’d lost touch with him in recent years. I’d been resolving to change that, but then it got too late. I never got to talk to him about Bloomberg or Obama. I’m ashamed, actually.
I met Bob in the late 1980s—I can’t remember exactly when. He was just resurfacing after several years underground. A major publisher had given him a big advance to write a book about New York City, and he found it impossible to deliver. Bob delisted his phone number, gave up writing for union organizing, and tried to keep the forces of the bourgeois system at bay. When the coast cleared, he started writing for the Village Voice. His editor there, and mine, Don Guttenplan, introduced me to him.
On Don’s recommendation, I’d just read Bob’s fantastic 1976 essay “Planning New York,” which was adapted for The Assassination of New York 20 years later. It was about the 1929 plan for New York City drawn up by the Regional Plan Association. It laid out the outline for an auto-centered metropolitan region, including the highway system that would later be attributed to Robert Moses. It developed and formalized an old upper class desire to deindustrialize the urban center. The essay made it impressively clear just how precisely planned by elites over the very long term the physical and social evolution of New York City has been. One’s casual impression of the city may be that it’s unplanned and chaotic, but it’s long been anything but that. It’s been guided by the careful hand of the FIRE sector—finance, insurance, real estate—and the elite nonprofits and experts that think for it.
Bob and I became good friends after I read the essay. We saw each other from time to time but a lot of our friendship was on the phone, many hours a week. Bob talked to me a lot about the ideas that led to The Assassination of New York. I’d been living in the city for about ten years when I met Bob, and until then I never really understood how the place works. I had only the vaguest idea of how people like Felix Rohatyn and firms like his Lazard Frères shaped the city—including shaping the LaGuardia campus where we are right now.
I’m not really up to analyzing the present from the perspective of Bob Fitch, but I’d like to talk about some of the things he shaped my thinking on. At least three come to mind. One is the city, ruled by a true plutocrat—though it’s not like Bill Thompson or Christine Quinn would be much different. (Speaking of Christine Quinn, I was once sitting with Bob in a diner in downtown Manhattan when she walked by outside. She waved enthusiastically at him and he waved back. She’s changed a lot.)
Another is the state of the labor movement. When I was first asked for a title for this talk, I thought of something like, “The labor movement survived Bob Fitch, but barely.” The spectacle of Trumka endorsing Obama, months before he really had to, reminded you that institutions, like economic stats, can come in under expectations, even when expectations are already low. Back in 1995, when many on the labor left were excited over the ascension of John Sweeney to leadership of the AFL-CIO, Bob dismissed it as delusional. (I’d forgotten until just now that among the 11 union presidents who gathered to push Lane Kirkland aside was Arthur Coia, the leader of the Laborers Union who was driven out for corruption and criminal ties.) Later, when the labor left got all giddy over Andy Stern, Bob stabbed holes in those illusions too.
And then there are the Democrats, in whom organized labor is incorporated in a vassal-like relation. Though a lot of liberals moaned some about Obama last year, this year re-electing him is a task of world-historical proportions. Personally, I’d like to see Obama re-elected because it’s better for radicals when Dems are in power; it makes it clear how the suckiness is systemic, and not a matter of personnel or party. But that’s not the prevailing view. The urgency to support the Dems, as it often is, is driven by the awfulness of the right. If Romney wins, the Tea Party will move into the Executive Office Building. Can the brownshirts be far behind?
Obama and friendly FIRE
I recently came across the text of a talk that Bob gave to the Harlem Tenants Council, ten days after Obama was elected. After acknowledging his considerable talents and powers of enchantment, and the pride that African Americans felt over his election, Bob wondered just what was his political philosophy and just what interests did he represent? His political philosophy, said Bob, was Third Way-ish and communitarian, meaning that he dismissed any idea that there are real conflicts in society because we can all just reason together and do what’s best for all of us. But by saying that, they’re really just siding with the powers that be, because there are real conflicts in society and there can be no Best for Everyone happy ending.
Following that is a dazzling analysis of Obama’s roots in Chicago society—one of those Fitchian moments in which the world makes a lot more sense after you’ve gone through it. Many of us are familiar with the way that Obama was groomed for excellence by power from his early days. Beloved of elite schools and foundations, Obama—who’s poked fun at his mother’s “position-paper liberalism”—had a charmed rise on the status ladder of American society. When he arrived at the Senate, after not all that much experience in the Illinois legislature, he would have none of the gladhanding necessary to get along in that dismal body. So Harry Reid called him in after about a year and a half and told him that he had no aptitude for the Senate and he should run for president instead. Reid & Co were terrified that Hillary Clinton would get the nomination and lose disastrously, so Obama was their hope. Yet they were so afraid of Hillary’s vengefulness that they promoted his candidacy secretly at first. (The story is told in John Heilemann and Mark Halperin’s Game Change.) Obama proved himself up to the challenge. But that this guy was any kind of outsider, that he was anything but wired to the center of the Democratic branch of the power structure, well, it was remarkable what people believed in 2007 and 2008.
But Bob’s great contribution was to trace Obama’s roots in Chicago property relations. Over the last two decades, he reported, there’s been a concerted plan to gentrify the South Side of the city, home to the largest black population in the country, many of them rather poor. (Among the country’s ten-biggest cities, Chicago has the third-highest poverty rate, and the highest black poverty rate.) In the 1950s, the policy was urban renewal, meaning razing low-rise housing and moving black Chicagoans en masse into high-rise public housing. It did not work well. So in the 1990s, Democratic urban planners decided it was time to “spatially deconcentrate”—meaning knock down the high-rises and move people back into dispersed private housing. This was touted as an anti-poverty measure: since poverty is considered to be a communicable disease, scattering the poor about town will reduce their exposure to each other, thereby reducing the spread of the illness.
In Chicago, Daley’s administration cleverly brought black developers into the heart of the scheme. They would build and rehab the new units the displaced poor would move into. Since much of this happened in Obama’s state senate district, he knew the principal players very well. As Bob put it, there was a constellation of interests around Obama in Chicago—the typical FIRE sector, personified by big Chicago families like the Pritzkers and the Crowns, but also what Bob called “friendly FIRE,” the liberal foundations and nonprofit developers who try to synthesize an aura of community uplift around gentrification. A lot of what is called community organizing in this country quickly devolves into high-minded real estate development, typically with the assistance of the Ford Foundation—which by a not very stunning coincidence, employed Obama’s mother in Indonesia.
And though almost all of the people displaced by friendly FIRE are poor and black, they’re often displaced by a black financier/developer class that serves a rising black middle class. For the portion of the left that trades on a one-dimensional race analysis of social life, this is very confusing. But this is how Obama the “community organizer” could, just a few years later, praise Jamie Dimon of JP Morgan and Lloyd Blankfein of Goldman Sachs as savvy businessmen. And so it was hardly surprising that Obama brought in William Daley, brother of former Chicago mayor Richard Daley—by virtue of office, the chief executive of the South Side gentrification schemes—to be his chief of staff after Rahm Emanuel went off…to become mayor of Chicago. Oh, and it just happened that William Daley was the head of Midwest operations for JP Morgan Chase and chair of its foundation, which Bob called “the core of friendly FIRE.”
It doesn’t take anything away from Bob’s genius to say that these are not the kinds of facts that you need to spend years in obscure archives or filing a ream of freedom of information act requests to discover. (He did lots of that over the years, too, but not for this talk.) Most of the secrets of American political life are, like Poe’s purloined letter, hidden in plain sight. It’s just that many people don’t want to think about them. Certainly not all those people suffering from Obamamania in 2008, when Bob gave that talk, or even the mildly disillusioned liberals of 2010—and certainly not all those enthusiasts suffering from a relapse of their 2008 enchantment in 2012. Years divisible by 4 produce such predictable delusions.
planning New York
I’d like to spend some time with “Planning New York,” my introduction to Bob Fitch’s work. It was incorporated into The Assassination of New York but I still like the old version for sentimental reasons. It appeared in a collection, The Fiscal Crisis of American Cities, mostly though not entirely about New York, that was edited by Roger Alcaly and David Mermelstein. Alcaly, by the way, left radical economics to run a hedge fund, and then wrote cheerful articles about the New Economy of the late 1990s for The New York Review of Books.
Bob’s piece was about the Regional Plan Association’s 1929 plan for New York. The RPA is a classic elite outfit—a FIRE-dominated think tank, founded in 1922, which according to its own ad copy is all about improving the quality of life in the metropolitan area. Its idea of quality of life becomes quickly apparent on the front page of its website, which just the other day featured a study on how to make large real estate projects, which contribute so much to that quality of life, work. The RPA’s board consists of developers and financiers—including one guy who runs a hedge fund called Dialectic Capital Management. You have to wonder what his personal history is—but whatever, it got him a $5 million house in Brooklyn Heights.
New York has a habit of producing these long-term plans right around stock market peaks. There was another in 1968, just as the rot of the 1970s was to set in; another in 1987, just before the stock market crash; and another in 2007, just as the Great Recession was about to hit. That’s good for a chuckle—the bourgeoisie can be so silly—but still, the plans do basically come true. The local FIRE elite is capable of thinking beyond the business cycle—more than their national counterparts, it seems. When your fortune is tied to real estate, you can’t easily up and leave; you’re forced to care about the long term.
One reason for the appearance of grand plans at major market tops might be that during the boom that precedes them, FIRE accumulates vast wealth and power that they can then translate into long-term political gains. As Bob pointed out, the financial and real estate boom of the 1920s allowed FIRE to rise to local dominance, and though much of that wealth evaporated in the crash, the long-term plans remained intact. Similar things could be said about the later iterations.
In The Assassination of New York, much of it written during the early 90s slump after the ’87 crash, Bob was skeptical that the grandiose plans could be fulfilled. But there were two more booms to come—the stock mania of the late 1990s and the housing bubble of the mid-2000s, both of which fattened Wall Street and allowed for more office buildings and fresh frontiers of gentrification (though it didn’t hurt that 9/11 took 12 million square feet of office space off the market, depressing the vacancy rate as the economy was about to recover from the 2001 recession).
Again, it’s amazing how much of this scheming is hidden in the open. But it provokes no interest from mainstream journalists. I once talked with a New York Times reporter who’d been freshly posted to the metro desk. She was wondering what to write about. I suggested land use stuff—how apparently random real estate deals actually fit in with these long-term schemes. She wondered what the news value of this is. I said, the city is carefully planned and no one ever talks about that. (I had my doubts that the Times would ever publish such stories, but still I thought it was worth a try.) She found it completely uninteresting—there would only be a story if “some politician is getting rich off it.” Of course that’s been known to happen, but that’s not the most important thing. How a small elite shapes the economic, social, and physical environment we live in strikes me as a very important story, but it has no news value to a mainstream journalist.
As Bob put it, the influence of the 1929 plan can be seen in the division of the region into Slab City—the high-rises of Manhattan—and Spread City, the suburbs that surround the city center. This was enabled by the building of a set of highways that made it possible to travel to and from the city, or comfortably around it if you were traveling elsewhere. The network of highways typically attributed to Robert Moses were actually laid out in the RPA plan: as Bob put it, all Moses had to do was pour concrete on the dotted line.
The central idea was to concentrate high-end activities in the city center—finance and other service businesses that could afford high rents—and move the noxious stuff out to Jersey. Bankers with a taste for the country life would find it easier to get back and forth from Long Island or Westchester, and those that liked the urban life wouldn’t have to compete with the working class for housing and retail, or have to look at them on the sidewalk.
As Bob argued, Slab City requires high levels of public spending on physical infrastructure. This need is at the basis of a lot of Democratic politics—developers (and their bankers) contribute to politicians who then reward them with appropriate projects. It’s amazing how pervasive this relationship is over time, whether it was Harry Truman and his Kansas City patron, political boss Tom Pendergast, who just happened to own a cement plant, or Obama’s relationship with his Chicago patrons.
Truman, though, was old-style, the product of an urban machine. Much preferred by the FIRE elite are cap-P Progressive or cap-R Reform politicians, technocrats who are supposedly above the petty corruption of Tammany-style politics. As Bob put it, the major difference between those two tendencies can be seen most clearly in the municipal budget: Tammany types stoke the expense budget with patronage schemes, but the Reform types love the capital budget, with its infrastructure schemes. In fact, Bob argued that it was the borrowing to fund capital spending on transit and middle-income housing that got New York City into debt trouble in the 1970s, not the alleged generosity of the social services budget, as mainstream hacks like to claim.
Back to the ’29 plan. It was passionately devoted to getting manufacturing out of Manhattan. Though garment makers liked to be close to retailers, real estate interests didn’t like that. Rag shops took up space that could be far more profitably rented to bankers, lawyers, and admen. Too many garment workers—many of them unpleasantly Jewish—were clogging the sidewalks and scaring the wives of the better sorts away from high-end shops. Instead, the city should be reconfigured in line with this rough hierarchy: 1) financial business, 2) fancy retail, 3) fancy residential, 4) inferior retail, 5) wholesalers, and, at the bottom of the list, 6) industry and working-class housing. The ultimate goal was to turn the city into one of the commandingest peaks at the commanding heights of global economic activity: finance, senior management, and the consciousness industry.
Of course, the poor would not go away, even if their housing was demolished in the name of urban renewal and slum clearance. Instead, they’d be rendered structurally unemployed as industry was driven out to the suburbs or beyond. White flight, deindustrialization, and all the other familiar phenomena of post-World War II America didn’t just happened. The RPA et al. made it happen.
These themes are developed further, into the Dinkins years, in The Assassination of New York. But it’s amazing how much of the long-term urban strategy was established in the 1929 plan and continued even into the present. The planners did face a challenge in recovering from the trend that culminated in the crisis of the 1970s: there had been too much decentralization. It was essential to do some recentering—to get more high-end service activity in Manhattan and more rich people living there. It worked.
more recent history
And as Manhattan upscaled, so too did Brooklyn. But that, too, was no accident. Starting in the late 1960s, with the able assistance of Pratt Institute—named after its founder, Charles Pratt, a great property owner and Rockefeller partner—city planners pushed industry out of Brooklyn and began the gentrification of working-class neighborhoods. (I live in a former shoe factory at the eastern edge of Clinton Hill, just blocks from Pratt, that was turned into condos in 2005.) More recently, the Atlantic Yards project—heavily supported by city funds and with the massive power of eminent domain (New York has the most developer-friendly eminent domain laws in the U.S.)—are a perfect example of the use of public infrastructure projects as a gentrification strategy. The scheme extended the strategy of turning downtown Brooklyn into an office park and surrounding neighborhoods into elite residential space.
You can read the outlines of more recent planning in the 1987 volume, New York Ascendant: The Report of the Commission on the Year 2000, led by Robert “Bobby” Wagner, Jr., son of the three-term mayor. The report projected that city employment in 2000 would approach 3.8 million, matching the late-1960s peak, about 300,000 above where it was when it was published. But the stock market crash, and the bust that followed it, actually knocked nearly that much off city employment, leading Bob, writing in the early 1990s, to be very skeptical of the Wagner commission’s ambitions. This is a further reminder that radicals should always be careful of underestimating capital’s powers of self-renewal—something we should do even today, when it looks like the whole system has busted a gasket.
As it turned out, the Commission was right on target. City employment peaked at 3.8 million in December 2000, coming within a hair of the 1969 peak. (The city’s population was about 300,000 lower in 1969 than it was in 2000, meaning that a smaller share of the population was working. That’s structural unemployment for you.) And, by the way, we matched that level again in 2008, and are now above it after having lost fewer than 200,000 jobs in the Great Recession. FIRE’s recovery from the 2008 crisis has been very impressive, even if the recovery of the economy and the debtor class has been a lot less so.
And what was the development strategy outlined in New York Ascendant? Surprise, surprise: being a world capital of what economists call the tertiary sector. The primary sector is basic stuff like farming and mining; the secondary, manufacturing and construction; and the tertiary, elite services like finance, lawyering, and advertising, and less elite services like retail and restaurants. There’s more money to be had in the elite services, but bankers do like to eat well and wear snazzy clothes, and their kids do need nannies, so the tertiary city is notorious for a barbell-shaped income distribution: a legion of low-paid service workers tending to the high-paid service workers but with not so many people in the middle. This is, as the vulgar Marxists used to say, no accident. And, as Bob Fitch liked to say, vulgar Marxism explains 90% of what goes on in the world.
New York Ascendant did allow for a smallish manufacturing sector—a specialized one, tied to dominant industries, like “very high-end fashion,” serving the local design talent, and costume making for the theater. It also sought to retain low-end clerical work for the finance sector and to encourage the development of the information sector. To retain the back office stuff would require the extension of the central business district (CBD) across the East River into new beachheads in downtown Brooklyn and Long Island City. That has happened. That’s why we have MetroTech in downtown Brooklyn, populated among others by Chase (the old Rockefeller family bank) and NYU. And it’s not just the extension of the CBD: we see the Bloomberg administration pushing a high-tech campus on Roosevelt Island and pressing the residential development of Hunters Point just south of Long Island City, squeezing out the industrial uses that used to dominate the neighborhood.
And that scheme also explains how the campus we’re on now, LaGuardia College, evolved—though that was not the planners’ original intention. In accordance with elite scheming, Lazard Realty, an arm of the investment bank that employed the mighty Felix Rohatyn for many years, developed several buildings along Thomson Ave. in the late 1980s, with the hope of filling them with clerical workers. Rohatyn, while often portrayed as the “savior” of New York City, was the leader of the bankers’ coup during the fiscal crisis of the mid-1970s. He and his comrades displaced the elected government and imposed what could only be described as the dress rehearsal for the neoliberal agenda that would transform the world from the 1980s onward: austerity for the masses and largesse for the overprivileged. Of particular interest to CUNY people was Rohatyn’s insistence that the policy of free tuition, first established by municipal referendum in 1847, come to end—not so much for its fiscal importance, he said, but for its shock value. No more something for nothing in the era of lowered expectations.
Lazard Realty’s plans for the stretch of this road that it called Thompson Place proved ill-timed. The buildings were ready for occupancy just as the stock market crashed and the 1980s boom was turning to bust. But CUNY came to Lazard’s rescue, as LaGuardia College bought one of the buildings in 1988. No shock value, no lowered expectations for Lazard!
And another building was filled by the School Construction Authority, created by the New York State legislature in, yes, 1988. And, curiously, one of the prime advocates for the creation of the School Construction Authority—an independent authority to handle building and renovation tasks formerly handled by the Board of Education—was none other than Felix Rohatyn. Construction is a bondable activity, and investment bankers love floating bonds. But, as Bob frequently underscored, elites love the capital budget far more than the expense budget. Creating the SCA was just right for Felix’s personal and professional interests. And the timing was just right to take a problem property off Lazard’s hands.
I found all that out back in the early 1990s, when I was writing about the political economy of New York for the Village Voice—very much under Bob’s tutelage. I really miss doing that. I’ve lost track of what’s going on, and I can’t think of many prominent outlets for that sort of investigation. I’d really love to know what to make of Bloomberg’s plan for the year 2030, which includes more of the same, of course, with an emphasis on a green agenda. I love bike lanes, alternative energy, greenhouse gas reduction, and restrictions on auto use as much as any other red–green hybrid, but Bob taught me to be skeptical of this sort of thing, because it typically had a real-estate angle. Elites have loved parks because they take land off the market, thereby boosting the value of the remainder, and because they create hypervaluable parkside locations. But we love parks too. And we do want to save the earth, and short of a revolution that seems not to be imminent, we need enlightened bourgeois politicians to embrace a green agenda. I wish Bob were here to help us think straight about this era in which the richest man in town, a titan of the FIRE sector and not its mere servant, is in his third term as mayor.
the unions
Bob’s death severely reduces the ranks of people who study the political economy of New York City seriously. It also reduced the ranks of those who want to do something better with the substantial resources we have here. It was brought home to me how few of us there are about 20 years ago, during the Dinkins years, when we tried to put together a little think tank to come up with some alternative redevelopment schemes, centering around rebuilding the port and restoring the rail link to the mainland, both of which would encourage the development of manufacturing (and, incidentally, clean the air considerably, since almost everything that comes into town has to come by truck—something like 90% of it over the George Washington Bridge).
We managed to put together a handful of people, but there was no interest from the unions. To them, Bob was radioactive, as was the agenda. (Here’s a measure of how radioactive. Bob thanked a union staffer in a footnote to an article he’d written for an obscure journal. When the journal came out, the staffer called him, livid and terrified for being publicly associated with him. He feared reprisals from his bosses.) Nor was there any interest from some of the better politicians. Ruth Messinger, then the borough president of Manhattan and publicly identified as a member of Democratic Socialists of America, let it be known that not only did she want nothing to do with the group or its agenda, she didn’t want us talking about how low the wages were for a good bit of the city’s workforce. Without support, the people’s think tank, our RPA for the masses, quickly evaporated.
The chilly reaction of the unions, aside from CWA Local 1180, which gave us meeting space, was a reminder of one of Bob’s more profound observations: on major political questions, unions take their cue from their employers. Obvious after you hear it, but not before. We saw that most consequentially in the hostility of Andy Stern’s SEIU to a single-payer health care system, which he scornfully dismissed as a Canadian import. Of course, the employers of SEIU labor, the hospitals and nursing homes with whom he’d made so many noxious secret deals, didn’t want a single-payer system. And so, rather than traffic in Canadian imports, Stern chose instead to make common cause on the issue with Wal-Mart CEO Lee Scott.
Ah, the unions. Bob’s work on New York City alienated the liberal politicians, whose complicity with the FIRE sector threatened their claims to high-mindedness, and the elite foundations, who bankroll so many high-minded intellectuals. Many otherwise decent people need grants from Ford and Rockefeller and are scared to death to say anything about how philanthropists constrain political discourse. Many formerly decent people fall under the philanthropists’ sway and think they’re fighting for justice when they’re really engaging in upper-class charity work that ultimately sustains rather than challenges the social hierarchy.
Bob’s relentless criticisms of the labor movement, for being made up of corrupt and ossified feudal structures, made him very few friends. He went too far even for some on the left wing of the labor movement, who just didn’t want to hear what he had to say. It might be ok to criticize labor for having lost its fighting spirit to bureaucratization, but as Bob liked to say, it’s wrong to call the labor movement bureaucratized, because bureaucracies are effective. The rot was much deeper, and more structural.
Bob offered a nice summary of the thesis of his last book, Solidarity for Sale, in an interview with Michael Yates of Monthly Review:
Essentially, the American labor movement consists of 20,000 semi-autonomous local unions. Like feudal vassals, local leaders get their exclusive jurisdiction from a higher level organization and pass on a share of their dues. The ordinary members are like the serfs who pay compulsory dues and come with the territory. The union bosses control jobs—staff jobs or hiring hall jobs—the coin of the political realm. Those who get the jobs—the clients—give back their unconditional loyalty. The politics of loyalty produces, systematically, poles of corruption and apathy. The privileged minority who turn the union into their personal business. And the vast majority who ignore the union as none of their business.
Few things annoyed progressive union types as much as Bob’s critique of Andy Stern’s SEIU. As Bob pointed out, much of the growth in SEIU’s ranks came from very questionable sources. One was home care workers, who got union recognition in California and Illinois. This was accomplished by large contributions to gubernatorial campaigns (including that of the notorious Rod Blagojevich, now federal prisoner number 40892-424); the victorious governors said thank you by granting SEIU recognition to represent them. Many of these home care workers are people who are reimbursed for their efforts in taking care of sick relatives. This sort of union growth has nothing to do with organizing against the will of hostile employers. And SEIU did little or nothing to raise their dismal rates of pay. For pointing this out, Bob was accused of devaluing the home care workers, when instead he was showing how meaningless Stern’s claims of vigorous growth were.
And then there were the sweetheart deals with nursing home operators, in which SEIU was granted the right of representing workers at some homes in return for ceasing organizing efforts at others—and for agreeing to lobby on behalf of the operators’ political agenda, which included defeating a bill of rights for nursing home residents, and forbidding workers to agitate on behalf of the residents. That boosted the membership rolls, but gains to the working class are hard to measure.
Intellectuals loved Stern, because he was an Ivy League guy who talked like them and cultivated them. It didn’t hurt that he wrote checks to support their journals and websites, either. And so Bob’s critiques were dismissed with great scorn. I’d like to say that Bob was vindicated when Stern retired, his union aflame in civil war and something like $100 million in debt, but I’m afraid few opinion shapers see it that way.
coda
Bob wasn’t perfect, dare I say? But some of his vices were inseparable from his virtues. He sometimes leapt to conclusions—but he was usually right, but it always gave the nitpickers some nits to pick. He was interested in a million things—early on, he wrote a book about Ghana. He’d studied Chinese. That breadth of interest sometimes devolved into an undisciplined lack of focus. He started many things he never finished. Marty Gottlieb, the former editor of the Village Voice now at the New York Times (and who, despite that career trajectory is a very fine man) who helped him write Solidarity for Sale, told me that Bob was very difficult to work with—too often all over the place. But that’s part of what made him so great and lovable. His mind never stopped working, at an almost sublime level of ambition.
As I’m bringing this to a close, I thought it would be nice to quote two people who knew and worked with Bob. First, Mike Tomasky, now in exile in Washington:
I was writing about New York politics and power at the time, and thinking I was doing a pretty good job of it; then I read The Assassination of New York, which just made me feel embarrassed and even humiliated about all the things I hadn’t known. I learned so much from that book—and from and from my many memorable conversations with its brilliant, gentle, intense, and utterly incorruptible author.
And then Don Guttenplan, the man who introduced me to Bob, now in London, which is a much better place to be than DC:
[It’s a] scandal that they scrape the barrel to give these so-called genius grants to third-rate conventional fakers when Bob Fitch, a man who did his own thinking and his own research, and who came up with truly original insights about some pretty important topics—urban planning, organized labor, critical journalism—had to live like a luftmensch.
Alexander Cockburn once said the mission of the bourgeois pundit is “to fire volley after volley of cliché into the densely packed prejudices of his readers.” Left media often do the same, whether it’s lionizing Andy Stern or cataloging the terrors of the Tea Party (which of course make it essential that we get all fired up for the current Democrat). Bob would have none of that. Though he had an excellent circle of passionately devoted friends and fans, he alienated a lot of people who could have made his life materially easier. But as Mike Tomasky said, he was utterly incorruptible.
I have a six-year-old son who gets upset when people believe in fictions. He’s not against fiction as fiction—his problem arises when people actually believe stories of their own creation. He wouldn’t agree with Wallace Stevens that “The final belief is to believe in a fiction, which you know to be a fiction, there being nothing else.” So when kids talk about the Tooth Fairy, he indignantly tells them there’s no such thing. The same with Santa Claus. He seems pretty sound on the God question, too. I think he might have inherited this some from me. I want to tell him it won’t make you popular, but I stop myself, because we need all the people like that we can get.




4 Comments
Posted on June 3, 2012 by Doug Henwood
Radio commentary: compulsory patriotism, saggy job report
[I haven’t been posting my radio commentaries for while, for no particular reason. Here’s one from yesterday’s show. Audio soon to follow….]
rituals of compulsory patriotism
I’ll get to the May employment report in a moment, but first I wanted to say something about the Chris Hayes controversy from Memorial Day weekend. On his MSNBC show on the Sunday of that weekend, Hayes filed some objections to the use of the word “heroes” to refer to our soldiers, saying among other things that the designation was a way to sell unpopular wars. For this he was fried by the usual idiots, which is to be expected. [For a review, see here.] But then in a disappointing move on Monday, Hayes walked it back, as they say in DC, basically apologizing for having told the truth.
Hayes told me that no one asked him to do this. But this is one of those things that you don’t have to be asked to do—it’s how hegemony works. If you want to keep your TV show, you can’t be seen as criticizing the military in any way. Several times over the years, I’ve had the wonderful feminist scholar Cynthia Enloe on this show (e.g.: July 1, 2010) to talk about the military, one of her major topics of interest. I tried to get her on this week, but couldn’t get hold of her. So I’ll do the next best thing and channel her: there is no other country that calls itself a democracy, Israel excepted, that has so militarized daily life. There’s also no other putative democracy that has so many and frequent compulsory rituals of patriotism. Why do we sing the national anthem at sporting events? Why are we expected to pledge allegiance to the flag? There is no other democracy that has a pledge of allegiance like ours. And back in the 1950s, Eisenhower turned May Day into Law Day and Loyalty Day, thereby turning what was originally an American holiday to celebrate the working class and its radical potential into formal professions of obedience.
I am very sad that Chris Hayes felt like he had to apolgize. But this isn’t about him. In fact, he’s a good guy, admirable in many ways. It’s about our curious notions of freedom, which require constant genuflection to flag, army, and church. With this kind of ingrained deference, who needs fascism?
saggy job market in May
And now onto the May U.S. employment report. It was another saggy report, and revisions to the previous two months data make recent history even saggier than we initially thought. For a while it looked like some weather mischief was distorting the figures—activity normally undertaken in spring could have been brought forward into January and February, which came in stronger than anticipated. But that interpretation longer looks supportable: there’s a real slowdown underway—and the question is now whether we’ve reached the dangerous stage of “stall speed,” on which more in a moment.
Employers added just 69,000 to their payrolls in May, less than a third the long-term monthly average. That’s the lowest gain in a year. The average gain for the last three months is just 96,000, compared with 252,000 for the previous three. Just three sectors—transportation & warehousing, health care, and wholesale trade—together accounted for more than the entire private sector gain, since many other sectors were flat or down. Manufacturing wsa up decently. But construction was down hard, and the once-strong leisure and hospitality sector was also off. Government employment continues its long decline—a real anomaly for a recovery period by historical standards. For all the moaning by the right, government spending and employment has been a drag on recovery, not the usual stimulus. If getting government out of the way was the way to economic health, we’d be bounding about now instead of scraping along the bottom.
The length of the average workweek fell, and average hourly earnings were barely changed. As a result, the total number of hours worked throughout the economy fell, as did the total earnings of the mass of workers. It is impossible to sustain an economy on trends like these over the longer term.
The figures I’ve been quoting come from a survey of 300,000 employers. The simultaneous survey of about 60,000 households looked somewhat better, but not all that much. The share of the adult population working rose by 0.2 point, but that only reversed the decline of the previous two months. And while the household measure of employment showed good gains, they were more than entirely accounted for by gains in part-time employment (much of it among people who’d prefer full-time work). The number of full-time employed fell by over quarter of a million.
The unemployment rate rose a tenth of a point, as an uncommonly large number of people entered a workforce that was unable to accommodate them. But the problem of long-term unemployment, which had gotten a little better for a few months, got worse again in May. The average unemployed person has been out for work for nearly 40 weeks, one of the longest spells on record. And that’s almost three years into an economic recovery.
While this report hardly qualifies as a disaster, it does confirm that there’s a real slowdown underway, and not just some weather-related quirks. The question now is is this just a return to the post-financial crisis norm of weak gains, or a stall-speed transition to something worse? There’s good historical evidence that the U.S. economy just can’t live with slow growth. (And yes, before anyone emails me, I know that growth is not ecologically sound. But until we underake some serious structural reforms, it’s the only game in town.) So if growth gets much slower than it is now, we’re quite likely to fall back into recession. Add the worsening Eurotroubles, and it’s looking to us like the Federal Reserve will begin dusting off the Extraordinary Measures playbook very soon. Because god knows that neither the president nor Congress will do anything of the sort.
Share this: