The American Prospect #334

Jarod Facundo: The Union-Busting Law Firm • Ryan Cooper: Finland’s Giant Co-Op • Robert Kuttner: Flight Attendant Power

Southeastern Confrontation

Democratic strategy in a post-Dobbs world

By Gabrielle Gurley

BUYER BEWARE

Online retailers like SHEIN, Temu, and Amazon are known for their low prices. But their “great buys” come with hidden costs.

These companies stand accused of horrible practices such as operating sweatshops, stealing intellectual property from designers, damaging the environment, and selling goods containing toxins like lead. There are even credible reports of forced labor in their supply chains.

America’s own trade laws are giving these brands an unfair advantage, and at the same time, are also undermining our manufacturers and workers.

The “de minimis” loophole allows packages valued under $800 to enter the U.S. duty-free. Because SHEIN and others send their cheap goods directly to consumers, they are able to dodge import duties, even though they ship hundreds of thousands of packages to the United States every single day.

It’s time to reform de minimis. Let’s ensure SHEIN, Temu, and Amazon pay their fair share.

ADD YOUR VOICE:

Features

16 The Dobbs Strategy Heads South

Gubernatorial elections this fall in Kentucky, Mississippi, and Louisiana may clarify where Democrats can, and can’t, run on abortion. By

Gabrielle Gurley

24 Energy Insufficiency

With a mission to create green jobs and bring green-energy loans to the poor, BlocPower has gained powerful backers in tech, finance, and government. Where are the results?

By Lee Harris

34 A Union of Their Own

How a culture of gross sexism in the airlines created America’s most militantly feminist union By Robert Kuttner

42 The Cooperative That Could

How S Group became Finland’s most dominant retailer

By Ryan Cooper

48 Lawyers, Not Persuaders

The anti-labor law firm Littler Mendelson’s reputation is a premier example of the limitations in existing labor law.

By Jarod Facundo

Prospects

04 Investing in Disinvested America By Harold Meyerson

Notebook

07 Georgia’s Donor Reward System By Luke Goldstein

10 Workers Funding Other Workers’ Misery By Rachel Phua

13 TCTACs: A Treat for Disadvantaged Communities

By Ramenda Cyrus

Culture

55 David Dayen on The Last Politician: Inside Joe Biden’s White House and the Struggle for America’s Future

58 Lily Geismer on A Fabulous Failure: The Clinton Presidency and the Transformation of American Capitalism

61 Anya Schiffrin on Digital Empires: The Global Battle to Regulate Technology and Building Back Truth in an Age of Misinformation

64 Parting Shot: The Hottest Fall Trends of 2023

By Francesca Fiorentini

Cover art by Victor Juhasz

Visit prospect.org/ontheweb to read the following stories:

With few exceptions, the raiders have mostly emerged from the rubble unscathed, as small communities became too preoccupied by attempting to salvage their hospitals to bother examining where the money had gone.

Iwayemi on gambling startup Kalshi’s attempting to expand the amount of gambling on the country’s elections

There have been $231 billion IRA and CHIPS-related investments in just the first year, and a projected 170,000 clean-energy jobs. Near ly all of these jobs are being locat ed in areas with weekly wages below the national average.

As much as the American justice system has continuously let Black people down, it reserves particular scorn for Black women, ignoring and often downplaying their pain. Peterson’s sentencing provides a rare form of justice for a Black woman. And it closes the chapter on a contentious case that has at every corner illuminated the widespread disrespect for Black women.

— Ramenda Cyrus on the sentencing of rapper Tory Lanez

One party totally united behind a man who attempted to overthrow the government by force and was the most corrupt president in American history...it sounds scary. But what if I told you this was a great opportunity for fun and profit?

Timi

David Dayen on the success of the CHIPS and Science Act

David Bieloh revisits his series of forest fire–inspired Pantone colors.

Prior to the pandemic, Texas Central had its eye on 100,000 super-commuters who travel between Dallas and Houston at least once a week.

Gabrielle Gurley on a potential partnership for high-speed rail in Texas

Maureen Tkacik in our ongoing series on the Business of Health Care

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Vol. 34, No. 5. The American Prospect (ISSN 1049 -7285) Published bimonthly by American Prospect, Inc., 1225 Eye Street NW, Suite 600, Washington, D.C. 20005. Periodicals postage paid at Washington, D.C., and additional mailing offices. Copyright ©2023 by American Prospect, Inc. All rights reserved. No part of this periodical may be reproduced without consent. The American Prospect ® is a registered trademark of American Prospect, Inc. POSTMASTER: Please send address changes to American Prospect, 1225 Eye St. NW, Ste. 600, Washington, D.C. 20005. PRINTED IN THE U.S.A.

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MEYERSON

Investing in Disinvested America

to his campaign to become the Democratic nominee for president in 1960, then-Sen. Lyndon Johnson traveled to Hyde Park, New York, to remind Democrats of his political beginnings as the young Texas congressman who’d championed the New Deal. He praised his hero Franklin Roosevelt, “a New Yorker and an Easterner,” for dedicating himself to building up the South and the West with programs like electrification and water projects. “And the West and the South will forever love him—and follow where he led,” Johnson said.

Even in 1959, the assertion that the West and South would forever love Roosevelt looked shaky. In 1948, four Deep South states had strayed from the Democratic column, voting for third-party segregationist Strom Thurmond rather than Roosevelt’s successor, Harry Truman. But the assertion that Roosevelt had made massive public investments to raise living standards in regions outside the more prosperous Northeast and Midwest was not only true, it was a necessary reminder of a massive accomplishment that was already vanishing from the nation’s memory.

The New Deal, after all, had been about social insurance, minimum wages, workers’ right to unionize, regulating finance. That its efforts to raise ordinary Americans’ living standards also encompassed vast economic development projects targeted to the South and West wasn’t omitted from history books, exactly. But the regional

aspects of the New Deal—the electrification of the South through the dams and power lines of the Tennessee Valley Authority, the provision of hydroelectric power to Western states that enabled their huge and rapid growth—were never central to the reigning New Deal narratives.

A similar dynamic is taking place today. Like Lyndon Johnson once he became president, Joe Biden has deliberately sought to build on Roosevelt’s New Deal legacy. He is surely the most pro-union president since FDR; he is reviving the long-overdue regulation of big business; his social proposals in the Build Back Better bill of paid sick leave, affordable child care, and free community college would have extended the social provisions of the New Deal; and his commitment of funds and tax credits to revive America’s industries and infrastructure has clear echoes of Roosevelt’s public investments.

That those commitments of funds also have a specific regional focus, though, isn’t often viewed as a central feature of Bidenomics. A Washington Post article from this August headlined “5 Key Pillars of President Biden’s Economic Revolution” said that the five were: Run the economy hot; Make unions stronger; Revive domestic manufacturing through green energy; Rein in corporate power; and Expand the safety net.

Those are indeed five key Bidenomics pillars. But there’s a sixth, or, at least, a crucial addition to the one about reviving

domestic manufacturing: Locating that revival in regions that private capital has long abandoned.

The United States no longer has distinct geographically contiguous regions that are economically underdeveloped, at least not the way it did before the New Deal began to spread the wealth spatially. Disparities in wealth and income between the South and the Northeast had widened steadily and hugely from the outset of the Civil War until the New Deal began to address them. The South’s white power structure didn’t really want them addressed; its senators and House members only supported establishing a federal minimum wage and legalizing collective bargaining if those laws expressly excluded agricultural and domestic workers (that is, African Americans). Still, the TVA was the first major investment of capital in the region since the Civil War destroyed slavery, which had been its primary form of capital. And the TVA was the kind of investment that made possible other investments, from the shipyards and Oak Ridge uranium processing plants of World War II to the defense factories that Ronald Reagan showered on the Sun Belt during his presidency.

Biden has confronted a different kind of underdevelopment, one that’s not particular to any one geographic region. It’s rural. It’s small-town. To be sure, the once-industrial Midwest has been called the Rust Belt for several decades now, but that’s chiefly due to contrast between prior investment and then its abandonment. Disinvestment is a steady state in nearly all of non-metropolitan America.

In 2016, the Economic Innovation Group (EIG) released a study that revealed with grim clarity the scope of capital flight from rural America. It looked at the share of new businesses in large counties (more than 500,000 residents), midsized counties (100,000 to 500,000), and small counties (fewer than 100,000) in what were then the three most recent economic recoveries: 1992 to 1996; 2002 to 2006; and 2010 to 2014. During the first recovery, the share of the nation’s newly created businesses that were in the midsized counties was 39 percent; during the second, it declined to 36 percent; and during the third, it dropped still further to 19 percent.

Within the small counties, the share of the nation’s newly created businesses during the first recovery was 32 percent, which

In 1959, as a prelude

HAROLD

fell to 15 percent during the second recovery, and collapsed to a flat zero percent in the third recovery after the 2008 financial implosion. Similarly, in the small counties, the share of the net increase in the nation’s jobs fell steadily, from 27 percent in the 1992–1996 recovery to one-third of that— just 9 percent—in the recovery of 2010–2014.

The scope of private capital’s abandonment of non-metropolitan America is breathtaking, and surely due to Wall Street financialization, offshoring, and associated ills. But investment by public capital flatlined as well, as the end of the Cold War decreased the military Keynesianism that had spread public dollars across the nation, as the federal government proved itself incapable of investing in improvements to the nation’s infrastructure, and as a growing number of right-wing state governments adamantly opposed public spending.

It’s to these places—to Disinvested America—that Bidenomics is prompting massive investment, primarily through tax credits and grants to corporations to build factories (manufacturing construction has increased by 76 percent over last year).

The reasons for this targeting are straightforward. First, factories take up space; there’s little if any room for them in metropolitan areas. Second, these places, where life spans have been contracting and deaths of despair rising, need investment, and the higher wages that manufacturing will hopefully bring to these terrains. Third, it must be said, corporations pursuing these tax subsidies and grants are seeking out locations where they can enjoy non-union labor and right-to-work laws.

The fourth reason isn’t so straightforward. These places are home to those working-class, disproportionately white Americans whose decades-long flight from Democrats has condemned the party, even when it wins, to the narrowest of victories. These places present Democrats with, at best, limited growth potential. And it’s in rural counties that support for Democrats has dropped the most. In this summer’s vote in Ohio on what effectively was a referendum on women’s right to an abortion, seven of the eight most populous counties voted to support these rights; 41 of the 42 smallest counties voted to deny them.

If density is political destiny, the effects of even transformative investment on Democratic prospects may be muted at best. Still,

that’s where Bidenomics is betting big on an industrial renaissance. The most recent comprehensive survey of the more than 200 manufacturing projects spawned by greenenergy tax credits in the Inflation Reduction Act lists the six leading states, in order, as Georgia, South Carolina, Michigan, Ohio, Tennessee, and Texas—states of the antiunion South and the formerly unionized Midwest. Of the roughly 125 congressional districts where companies have announced they’ll be building or expanding IRA-funded factories, the 15 with the highest level of investment are all represented by Republicans. Approximately 72 percent of the jobs projected to be created by these investments and 86 percent of the dollar value of all investments announced thus far are in Republican districts, the survey reported.

I don’t for a moment think that the Biden people believe investments of any size will enable Biden to carry South Carolina, Tennessee, or other solid-red states in 2024. I do think they believe it can help him in swing states like Georgia, Arizona, and North Carolina, and add an insurance point or two in a state like Michigan. That said, most of his campaign jaunts have been to states and districts where he can claim credit for a new plant springing up. Even if he’s in the reddest of red states, the thinking goes, his message can seep across state lines and may swing some votes that really matter.

And yet, he can’t really count on getting his message out as well as FDR could. For one thing, Roosevelt campaigned in a nation with tens of thousands of local newspapers, in which a new factory or new bridge, let alone a presidential visit, qualified as big news. In our time, rural and small-town news outlets have disproportionately disappeared. Fully 2,500 newspapers have folded since 2005, many in the kinds of places where Bidenomics factories are springing up, and where the void created by newspaper closures has been filled by Fox News.

Biden clearly learned from the failure of the Obama administration to promote projects funded by their stimulus package that the absence of such a publicity campaign can contribute to disaster at the polls. What’s not clear is how much a publicity campaign for these kinds of projects can actually help. Has he embarked on a fool’s errand?

No polling exists that can disaggregate the reasons for Roosevelt’s re-elections. In voting for him, Americans were affirming the New Deal generally, and FDR’s leader-

ship through depression and war. As to the New Deal’s largest public investments, FDR carried the South after the TVA had been created, but Democrats had been carrying the South by and large since the days of Thomas Jefferson and Andrew Jackson. Once the Hoover and the Grand Coulee Dams had been completed, he carried the Pacific states, but he carried them before they’d been completed, too.

Roosevelt understood that major development projects were economically and morally necessary, but not by themselves at all key to his electoral hopes. Much of his large-scale dam and bridge and aircraft carrier building was carried out through the Public Works Administration (PWA), but as his first winter in office loomed in 1933, he responded to the very real threat of mass starvation among the quarter of American workers who were unemployed by taking funds from the PWA and redirecting them to less capital-intensive projects (paving roads, building parks and schools) that immediately created jobs for millions. That was even more morally necessary, but also more immediately tangible in its effects on the populace than massive transformative projects that would be slow to take shape.

As a political matter, the PWA investments weren’t game changers by themselves, but they were part of the larger New Deal gestalt. That’s the role that Biden’s IRA-funded factories can play in the Bidenomics gestalt. By revitalizing communities with the shops and eateries and everything needed to serve a new workforce, these projects, if they continue to spring up as they’ve done so far, can bring new life to Disinvested America. Placed alongside Biden’s pro-union actions, his campaign against monopolies and overpriced medications, his as-yet-unrealized plans to help families navigate child care and sick leave and the costs of college, his resurrection of American industry and the places from which it fled affords him just one more way he can answer the question of Which Side Are You On.

Despite his neo-Rooseveltian policies, though, Biden has yet to convince most Americans—especially those whose local economies will benefit the most from those policies—that he is, in fact, very much on their side. His resurrection of American manufacturing comes with no guarantee of electoral success. But in its long-term effect on American well-being, as Biden once famously said, it’s a big fuckin’ deal.

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Georgia’s Donor Reward System

Under an obscure program, state and local authorities got to pick construction firms for Rivian and Hyundai plants. They chose non-union firms that have contributed heavily to Republicans.

By Luke Goldstein

Since the passage of the Inflation Reduction Act, Georgia Gov. Brian Kemp (R) has remade the state into a premier regional hub for green investment. Over the past two years, Georgia has been the beneficiary of 22 cleanenergy projects and almost 17,000 cleantech jobs, the second-highest for both totals of any state. Despite claiming to not think a lot about climate change, Kemp has courted

green jobs, in large part by offering billions in tax subsidies to attract employers already flush with federal tax credits from the IRA

The red state’s green transition and manufacturing renaissance, however, has sidelined trade unions. Building trades groups haven’t managed to strike a single project labor agreement with a major new employer coming to the state, or gain a foothold in construction hiring. Labor leaders say many businesses won’t even return their calls.

One reason for that is employers’ resistance to a higher-wage labor force. But at several of the largest electric-vehicle sites coming into the state, Gov. Kemp’s administration has in fact secured economic development deals with these companies that award lucrative contracts for building out the factories to non-union construction firms. The selected companies are also donors to Republicans in the state, including the governor—the former owner of a

Gov. Brian Kemp (R-GA) announced Rivian’s $5 billion Atlanta-area battery and assembly plant in 2021.

non-union construction company himself.

This political favoritism speaks to the broader challenge for the goals of the Democrats’ signature climate policy achievements. While the president and national Democrats speak vocally about creating good-paying union jobs and reducing carbon emissions, the economic gains from the IRA are flowing disproportionately to red states or red districts, where local Republican officials are finding ever more creative ways to undercut collective bargaining.

In a statement to the Prospect , Gov. Kemp’s office responded to the charges of bid-rigging. “While President Biden uses federal funding to tip the scale in favor of his union donors and punish right-to-work states, in Georgia we don’t pick winners and losers but instead utilize a competitive bidding process,” said Garrison Douglas, a spokesperson for the governor.

New cleantech employers are flocking to Sun Belt states for the same reasons other companies have for decades: lax union laws and a less stringent regulatory environment.

These states are also using aggressive tax abatement packages to attract cleantech firms, supplementing the billions in tax incentives the federal government is already handing them. A report from the policy research organization Good Jobs First found that states and municipalities have awarded at least $13.8 billion in economic development subsidies to electricvehicle and EV battery makers. The largest packages came from Georgia, North Carolina, and a handful of other Southern states.

Gov. Kemp is leading this tax subsidy bonanza, ponying up $1.5 billion to EV truck manufacturer Rivian and $1.8 billion to automaker Hyundai for new plants. They represent the two largest tax deals ever delivered to automakers in history. Total “mega-deals” in Georgia (defined as deals over $75 million) total $3.6 billion. The agreements only have limited conditions to ensure companies follow through on the wages and job totals they pledged to deliver.

The state has provided the usual cocktail of property tax breaks, sales tax exemptions, write-offs for workforce development, and other subsidies. But in three major deals with Rivian, Hyundai, and the U.S. subsidiary of South Korean battery manufacturer SK Battery, the state (in collaboration with local development authorities) has thrown in an additional sweetener. Through an

obscure state economic development program called Regional Economic Business Assistance (REBA), Georgia will also foot the bill for initial construction at these plants, mainly the civil work and grading to level the property along with other site preparation.

As part of this provision, the state and local authorities effectively act as the general contractor for the initial construction phase on a private development project, and get to select their preferred firms.

Greg LeRoy, executive director and founder of Good Jobs First, has tracked state development deals for over two decades. He says the Georgia deals are highly unusual, though there are a handful of parallel cases. At Tesla’s Gigafactory in Nevada, for example, the state’s economic development board paid for additional road construction to extend out to the factory’s remote location, and selected the contractor for the project.

Perhaps the closest analogue to Georgia’s state grants for construction resulted in a massive bid-rigging scandal in New York during former Gov. Andrew Cuomo’s tenure. Multiple state officials were charged with corruption for awarding one of Cuomo’s top campaign donors a $28 million contract to build a SolarCity (now Tesla) site. Though the convictions were overturned by the U.S. Supreme Court on a technicality this year, the case points to the conflicts of interest that can arise from state development contracts for private companies.

In Georgia, each of these state grants has been used to tilt the playing field in favor of non-union construction companies, according to building trades unions. The $45 million state development contract for the new Rivian plant outside Atlanta went to a large nonunion firm named Plateau Excavation, owned by Sterling Infrastructure. And the $50 million grant for the massive $5 billion Hyundai plant outside of Savannah was awarded in 2022 to a joint partnership between two smaller construction companies and Barnett

Southern, a notorious anti-union firm in the state. The same was true for a smaller $5 million state grant awarded last year at SK Battery’s $2.6 billion plant in Commerce.

These construction firms are represented by the Associated General Contractors of Georgia, a trade association that’s donated over $1 million to Republican candidates across the state over the past two decades, including $30,000 to Brian Kemp’s re-election bid in 2022. The association supported one of the state’s most aggressive anti-union laws, which was passed in 2013 and constrains project labor agreements among state contractors.

The individual firms that received state funds at Rivian and Hyundai both have financial ties to state Republicans as well.

Barnett Southern is run by Ames Barnett, the former Republican mayor of Washington, Georgia, who currently sits on the state workforce development board, a position he was appointed to by Gov. Kemp. Barnett has contributed $54,300 in campaign donations, entirely to Republicans, since 2015, along with $17,500 in total to both of Brian Kemp’s gubernatorial campaigns, according to documents compiled by Follow the Money. As a company, Barnett Southern contributed $38,500 to Kemp’s re-election and nearly $67,000 in total to Republican candidates in Georgia since 2014.

Over the past decade, Plateau Excavation gave $34,050 to Republicans, along with individual contributions from its top executives to Brian Kemp’s campaign, according to Follow the Money.

Barnett Southern and Plateau Excavation did not respond to a request for comment. The governor’s office says Kemp did not get involved in the local selection process for the contracts.

Union contractors in Georgia say they were cut out from the bidding process for state construction contracts at Rivian and Hyundai. Even among the unions that knew about the bids, labor leaders told the Prospect they were caught in a byzantine application process favoring larger firms, or in some cases were dissuaded from applying by local and state authorities. Though the grants come from state funds, the selection process is handled by joint development authorities, which are consortiums of municipal development agencies across multiple counties and frequently staffed with members of the local chambers of commerce.

“There was an illusion of equal oppor -

Each of these state grants has been used to tilt the playing field in favor of non-union construction companies.

tunity [for these state contracts] when in fact it was cosmetic,” said Brett Hulme, the political and communications director for the Southeastern Carpenters Regional Council who also sits as a committee chair on the Savannah and Southeast Georgia Building Trades Council.

Randy Beall, the business manager for the Atlanta and North Georgia Building Trades, told the Prospect that his team only learned about the state grant at the new Rivian plant months after it had been awarded. This came as a surprise, not only because it’s rare for the state to be a general contractor on a private company’s project, but also because state infrastructure projects, for instance, are usually announced in a public notice. Neither Randy nor any of the other building trades groups ever saw an official public notice for the Rivian construction site.

“It seems to us that the only companies that knew that this bid was taking place were the large open shops,” said Beall.

According to the building trades, several contractors did consider pursuing bidding for the Rivian and Hyundai sites, but were met with obstacles. For one, the window to submit a bid at the Rivian plant was around a month long, far shorter than what’s typical for a large state contract.

Two separate petitions were submitted to the joint development authority in Mor -

The Rivian plant, which Georgia sank $1.5 billion into, allows wages as low as $20 an hour, with no employer-provided health care or other benefits, through the year 2046, according to Good Jobs First.

gan County, home of the Rivian facility, asking to extend the deadline, given the narrow open application period for bids. One petition was granted and one denied, according to public records. Other contractors were discouraged from applying by the joint development authority in Morgan because of financial requirements in the contract favoring a larger firm size in order to qualify.

This objection was unusual, since it’s not uncommon for several smaller private contractors to form joint ventures to meet the threshold for a project. That’s what Barnett Southern did to secure the contract for the Hyundai plant.

At the Hyundai site, Brett Hulme says the number of administrative hurdles led many of the contractors he works with to drop out of the application process. In several cases, the development authority’s web page hosting the application would have technical difficulties.

“They just made you jump through all these hoops and it takes a toll when you’re a small contractor,” said Hulme.

Rivian and Hyundai did not respond to a request for comment. The joint development authority departments involved in the decision-making around the Rivian and Hyundai plants declined to comment on the details of the bidding process. Public records for the Joint Development Authority of Morgan

County show that only one other Georgiabased construction company was considered for the Rivian project, along with one outof-state firm. Both of them were non-union.

While the state contracts are only for limited site preparation work, union representatives emphasized that it’s crucial to secure early contracts with employers. It can lead to trust and getting a foothold on other construction projects on the site that come later.

The building trades also believe that, without the state’s involvement favoring open shops, the unions might actually have had a better chance at securing the contracts. Rivian in particular has expressed interest in working with the local chapter of the International Brotherhood of Electrical Workers, because of a labor shortage across the state for a trained workforce in construction.

Kenny Mullins, the business manager at the IBEW Local 613, told the Prospect that the union has been in talks with Rivian’s management about setting up an official meeting to pursue a deal. Though the talks are still in early stages, it shows that based on current economic forces, employers may actually have given the unions a shot.

“It certainly doesn’t help when the state puts their thumb on the scale to pad the pockets of their buddies at our expense,” said Beall. n

Georgia ponied up $1.8 billion for a new Hyundai/Kia plant in the state.

Workers Funding Other Workers’ Misery

Billions of dollars in public pension fund money flow to private equity–owned firms that union-bust, violate labor laws, and put workers’ safety at risk.

in assets, said they are planning to allocate more money to private equity.

“Private equity is fundamentally dependent upon public pension funds. [This] gives them a lot more power,” said David H. Webber, a Boston University law professor who writes about shareholder activism.

Public pension funds have been unmoved by an array of studies showing that private equity buyouts have led to job losses, wage cuts, lower revenue, labor productivity decline, and company bankruptcies. There are even examples of public employee savings being used to cut the wages of their own members. In 2011, Aramark, then private equity–owned and backed by 37 state and local retirement funds, underbid a custodians’ union for school cleaning contracts, and then offered the custodians their jobs back at $11 less per hour.

“If you’re killing jobs, even if you get a good return, you could be hurting the fund because now you don’t have people paying into it,” Webber said.

By Rachel Phua

Critics of private equity often stress the business model’s impact on workers. Blackstone’s Packers Sanitation Services, Inc., was found to have illegally hired over 100 minors and placed them in dangerous jobs. Arby’s and Dunkin’ Donuts owner Roark Capital lobbied against a federal minimum wage. Fairmont and Sofitel owner Brookfield Asset Management has repeatedly threatened to retaliate against hotel workers attempting to unionize. And when the private equity purchase of Toys ‘R’ Us drove the toy retailer into bankruptcy, leading to a loss of over 30,000 jobs, its owners Bain Capital, KKR , and Vornado Realty Trust made off with about $200 million in management fees.

“They’re making money even when they’re hurting the underlying business,” said Bianca Agustin, the co-executive direc-

tor of retail workers advocacy group United for Respect, which found that over 1.3 million workers lost their jobs due to private equity and hedge fund ownership.

But when private equity firms need the financing to continue inflicting this damage on workers, they turn, confoundingly, to other workers.

Public pension funds are now the largest backers of private equity, based on a database of 6,700 buyouts between 1997 and 2018 collected by recently graduated Columbia Business School Ph.D. student Vrinda Mittal. Pension funds, which are almost one-third of all investors in private equity, have invested 13 percent of their capital in the asset class—over $620 billion in 2022—up from 3.5 percent in 2001 and 8.3 percent in 2011, according to data from public pension research nonprofit Equable Institute. Pension funds like CalPERS, the second-largest in the U.S. with $462 billion

The growing clout with private equity offers pension funds the power to condition their financing on better labor practices. They can tell fund managers “the way you handle this [labor issue] is important to us if we’re gonna invest with you again in the future,” said Justin Flores, labor-jobs director at the Private Equity Stakeholder Project.

But pension funds contacted by the Prospect were reluctant to even discuss their private equity holdings, much less commit to using them in a way beneficial to their fellow workers.

A Repeated Pattern

At a New Jersey plant run by Refresco, which produces drinks like Arizona Iced Tea and Tropicana juices, safety violations ensued after the company was bought by private equity giant KKR last February.

Ivan Rios, who has worked at the Refresco job site for 20 years—having joined when it was Whitlock Packaging—said working

Toys ’R’ Us is one of many private equity–owned businesses to go bankrupt in recent years.

conditions at the plant did not get better after KKR took over, though KKR pledged to allow space for “worker voice” and improve workplace safety. In January, a worker fell off a tanker truck ladder, while a June case involving two workers who suffered steam burn injuries is still under investigation, an OSHA spokesperson confirmed. In April, another worker fell and broke his leg. OSHA told Refresco to investigate the incident, letters between the agency and Refresco’s lawyer showed. KKR and Refresco did not respond to a request for comment.

Eight of the 16 investors in KKR Global Infrastructure Investors IV, the KKR fund that owns Refresco, are public pension funds, with investments of at least $1.28 billion. The New York City pension system, the fifth-largest in the country, is invested in the KKR fund, along with employee pension funds for New York state and Hawaii, and the Alaska Permanent Fund, data from Infrastructure Investor showed.

This pattern is repeated over and over. Blackstone Core Equity Partners, the fund that purchased child labor employer PSSI, includes backers like the California State Teachers’ Retirement System (Cal STRS), New York State Common Retirement Fund, North Carolina Department of State Treasurer, and Houston Firefighters’ Relief and Retirement Fund. Roark Capital, the fast-

food chain owner that lobbied against the minimum-wage increase, has 11 different pension funds invested in its fund Roark Capital Partners V, data from private equity research firm Preqin showed. Backers of the funds that bought Toys ‘R’ Us include public employees in California, teachers in Texas, and the Oregon State Treasury.

BC Partners bought PetSmart in March 2015, and workers have subsequently endured rampant understaffing, which has led to psychological torment. The BC European Capital IX fund that bought PetSmart has 140 backers, Preqin data showed. A whopping 24 of them are American public pension funds, including CalSTRS and the NYC Employees’ Retirement System. The total U.S. public pension investment is at least $1.37 billion; some funds did not disclose how much they invested in the fund. (For data that was recorded in euros, the USD conversion rate on August 18, 2023, was used.)

Blackstone and PSSI said in separate statements that they are against child labor violations and have taken “extensive” steps to prevent it from happening again. BC Partners and Roark Capital did not respond to requests for comment.

After controlling for post-buyout acquisitions and divestitures, employment shrank by 4.4 percent at firms bought out by private equity, Harvard University and University

of Chicago economists who studied 6,000 buyouts between 1980 and 2013 found. Mittal’s study found that at private equity–owned firms, five years after a buyout, employment fell nearly 24 percent, revenue dropped about 23 percent, and labor productivity dipped 0.4 percent.

One-fifth of private equity buyouts lead to bankruptcies within ten years of going private, California State Polytechnic University researchers who studied 484 leveraged buyouts between 1980 and 2006 found.

Reluctant Pushback

John Ocampo, a field organizer with the United Electrical, Radio and Machine Workers of America (UE), said that New York City’s pension system “somewhat” helped Refresco workers, who were negotiating for a first union contract this year (they got it in July). The workers met with staff at City Comptroller Brad Lander’s office, which oversees the city’s pension funds, including the one that owns Refresco.

The Comptroller’s Office asked KKR to meet with the workers and said they were concerned about the factory’s safety issues. The office said it “wasn’t their place” to intervene in contract negotiations, Ocampo said. “It’s hard to say how much of an impact that had but it likely did serve to help the company understand that it was in its best interests to reach an agreement.”

John Adler, the Comptroller’s chief ESG officer, cited a similar action encouraging BC Partners to talk to PetSmart employees. “We facilitated dialogue between the company and its workers. And we think that’s a positive thing,” he said.

New York City retirement systems have occasionally refused to commit to several private equity firms’ funds, including Carlyle Partners after 2013 and Trilantic North America after 2019. But that’s an infrequent tactic.

Adler said the system cannot make an investment decision on “one factor” alone. “[We look] at all risk factors, including investment risks, reputational risks, longterm climate risks … and labor risk,” he said, adding that as limited partners, the system cannot micromanage every action the private equity fund makes.

Even New York City’s circumspect use of pension fund leverage was rare among private equity investors. The Prospect reached out to 26 public pension funds, and 22 either declined or did not respond to requests to

explain why they invest in private equity, and whether they have addressed the labor consequences of their investments.

Those that did respond, including the State Board of Administration of Florida and the Arizona State Retirement System, cited their “focus” on their fiduciary responsibility to maximize returns. “As private equity investors we focus solely on pecuniary factors and have no involvement in the operations or labor practices of any of these companies,” Florida’s spokesperson wrote in an email. Florida committed about $100 million in BC European Capital IX—the fund that owns PetSmart—but said they sold their interest in that particular fund “years ago.”

Cal STRS , which at $314 billion is the country’s third-largest pension fund, and which committed about $258 million to the BC Partners fund and $500 million to PSSI owner Blackstone Core Equity Partners, declined an interview request and pointed to its ESG investment policy. One of the risk factors includes “worker rights,” where the investment noted “the right to organize and bargain collectively,” “status of child labor practices and minimum age for employment,” and other labor rights.

Questionable Returns

Public pension funds first moved into more volatile assets in the 1970s, chasing a target annualized return of 8 to 9 percent. But following the stock market crash of the 2008 financial crisis, allocations to alternative investment funds like private equity increased.

Diversification helps pension funds reduce the risk of a particular asset class driving down the whole portfolio. But fund trustees also buy into private equity’s marketing pitch. “If you are a trustee … and your choices are between going to the legislature and saying we need more money,” said Anthony Randazzo, Equable Institute’s executive director, “or from listening to this

private equity manager who just came in to pitch you on, ‘Hey, our fund’s going to … beat the S&P[500],’ you’re probably gonna go [private equity’s] way.”

Indeed, public pension funds justified their holdings by claiming that private equity improves returns. Arizona’s system argued that the returns “enable us to drive down the contributions that need to be paid by our employees and employers,” it said in a statement. Maryland’s pension fund also attributed their fund’s improving performance to private equity.

Yet studies have shown that private equity doesn’t outperform public markets. One University of Oxford study of over 2,100 private equity funds between 2006 and 2015 found that these funds provided the same returns as public equity indices, net of fees, for which investors were charged $230 billion.

Jeffrey Hooke, a former private equity and investment executive who now teaches at Johns Hopkins University’s Carey Business School, explained how private equity “can make up their own results.” Private equity firms come up with what they think their unsold portfolio companies are worth, plumping up their funds’ financial performance on paper. No one knows their real value until they are sold. Even Goldman Sachs said funds tend to mark up existing assets. And it’s becoming more common for private equity to sell a portfolio company to itself, making it harder to reveal its true value.

Pension fund executives buy the hype to keep their jobs, Hooke said. Investing in funds that track the stock and bond markets requires few people—Nevada’s pension fund famously did it. And pension fund staffers listen to pension fund consultants and private equity players because that’s where they want to end up next in their careers.

Meanwhile, pension boards, often made up of retirees and union representatives, don’t have the investment expertise, so they put their trust in the consultants, Hooke said.

Labor’s Time in the Sun

Public pension funds have wielded power before, taking stances against apartheid in South Africa, tobacco, terrorism, guns, Russia’s invasion of Ukraine, and fossil fuels. The value of private prison companies GEO Group and CoreCivic fell extensively after public pension funds divested from the two largest publicly traded operators.

Some funds say they are working to extend this to labor issues. “Figuring out

a systematic way to ensure workers’ rights across our portfolio is a priority of ours,” said Alison Hirsh, the NYC Comptroller’s Office chief strategy officer.

Given that half of New York City’s pension fund boards of trustees, who vote on investment decisions, are workers and union representatives, private equity funds need to present acceptable labor standards to win them over, she added. “We can have a material impact on companies’ workers rights practices through engagement.”

Like New York City’s pension system, several pension funds have responsible contractor policies, although these mostly apply only when the pension fund has a minimum 50 percent stake in the investment, which doesn’t apply to private equity holdings.

When Toys ‘R’ Us’s severance pay promise was rescinded, Minnesota’s state pension withheld investments in KKR temporarily. KKR and Bain Capital later set up a $20 million hardship fund (though not the $75 million workers felt they were owed).

Labor advocates argue that a greater investor focus on private equity labor practices would benefit returns and the wider economy. “Labor disputes cost money,” Flores said. “In a bunch of industries where there are strikes happening, companies are unable to fill positions, unable to grow because they can’t staff.”

Making sure the private equity funds’ portfolio companies aren’t cutting employees or going bankrupt will “do the economy a net positive if you can stave off hundreds and thousands of layoffs that will strain the unemployment rolls,” Agustin said.

Recently, there’s been pushback against pension funds wielding their might on social issues, particularly around so-called environmental, social, and governance (ESG) practices. Three New York pension funds were sued by members for cutting their stakes in fossil fuels.

But with private equity, public pension funds have grown vital enough that they could simply decline to invest in firms with poor labor practices, without necessarily taking a hit to their own returns. But that would require pension fund managers to connect the workers they represent with the workers who are being harmed by their investments. n

Rachel Phua is a freelance journalist based in Singapore who has worked for Payday Report, DealStreetAsia, Atlas Obscura, Nikkei, and CNBC International.

It’s becoming more common for private equity to sell a portfolio company to itself, making it harder to reveal its true value.

TCTACs: A Treat for Disadvantaged Communities

By Ramenda Cyrus

The bipartisan infrastructure law gives a unique opportunity to communities across the country. For the first time, federal dollars are widely available to take on major infrastructure projects, invest in public transportation, increase access to high-speed internet, and shore up resilience against climate change. The historic funding has the potential to revitalize infrastructure for

decades, but communities need to survive competitive and inequitable bidding processes to receive and utilize the investment. The Biden administration has attempted to address these inequities by mandating resources for marginalized communities. The Justice40 Initiative requires that 40 percent of the federal funding of certain investments flow to disadvantaged communities. In the past, funding has indiscriminately flowed to larger and more privileged

communities, leading to widespread disparities seen across America.

However, even with Justice40 goals, the administration can only offer money to communities that ask for it—and the ability to ask is often limited by strained capacity. By addressing this and other issues, a new federal program aims to ensure disadvantaged and smaller communities get a fair piece of the pie.

In April, the Environmental Protection Agency (EPA) announced over $170 million in funding for the Environmental Justice Thriving Communities Technical Assistance Centers. These 17 TCTACs (pronounced “tic-tacs”) are intended to aid communities and remove barriers to access to funding from the infrastructure law, the Inflation Reduction Act (IRA), and other federal grant opportunities.

“The generations of disinvestment and marginalization of communities of color and low-income communities and indigenous communities across the United States means that tens of thousands of communities across the country are lacking the basic capacity to even get in the game to get [and use] government resourc -

The Biden administration is funding technical assistance for places that have been left behind, so they can access public investments.

Smaller, poorer cities like Flint, Michigan, often get left behind for federal investments, which can lead to disaster.

es,” Matthew Tejada, the deputy assistant administrator for environmental justice at the EPA , told the Prospect

Gaining access to federal funding requires detailed proposals, goal-setting, and a detailed understanding of a community’s needs. Larger and more prosperous cities have the workforce and expertise to perform those tasks, simply by having a bigger population and more stakeholders. Smaller communities and municipalities, as well as habitually poor cities, have many of the same needs for better infrastructure and protections against climate change (if not more), but few have sophisticated teams of grant-writers and support staff. The TCTACs are an attempt to address these disparities.

“This is part of the administration’s effort to really disrupt the dynamic where paperwork favors the powerful,” Bonnie Keeler, associate professor at the University of Minnesota, and co-lead of the university’s newly designated TCTAC program, told the Prospect

As Grist notes, “rural communities are on the front line of climate change.” Midsized cities and municipalities often also find themselves overburdened by climate change and infrastructure needs. Add in the systemic racism that has forced people of color into certain communities and then subsequently stripped those communities of resources, and there are hundreds of places across the country that are living in the shadow of bigger and wealthier places. Sometimes, this can lead to disaster— take the water crisis in Flint, Michigan, for example.

“Systems established by federal and local governments often suffer from inequities that were designed to focus resources in more affluent areas while excluding minoritized populations from the benefits and power provided by funding,” Janelle Armstrong-Brown, senior manager for the Center for Equity and Social Justice Research at Research Triangle Institute, another TCTAC awardee, told the Prospect over email. “The work of the TCTACs is designed to support rural, remote, and underresourced communities in achieving their environmental justice goals so that they can improve their quality of life and provide them a voice in the environmental decisions that will impact them in the long term.”

The need for expertise is great because there’s so much money on the table: hundreds of billions of dollars in the biparti-

san infrastructure law and IRA , which can go toward everything from electric-vehicle charging stations to replacing lead water pipes to reconnecting communities severed by large freeways. “Even if a community is pulling itself together to want to apply to a grant, which one do they go to? There’s thousands of them across the federal government, and the government places the burden on communities to figure out which one is the right one for them. So the TCTACs are really going to help solve that problem for them,” Tejada told the Prospect

Each of the technical assistance centers will receive at least $10 million to provide technical assistance to local and disadvantaged communities. The awardees range from Blacks in Green, a nonprofit focused on “Black community economic development,” to the University of Minnesota. The centers are then partnered with colleges, universities, nonprofits, and local governments. There are also awardees designated to aid tribal communities, such as the National Indian Health Board. Some of the centers are partnered specifically with minority-serving institutions to reach further into “underserved and overburdened communities.”

Communities may need support when applying for funding, identifying available resources, goal-setting, or budgeting. The wide breadth of expertise within the technical assistance centers allows more communities to identify their needs and advocate for themselves within intensely competitive funding cycles.

Assistance may be as simple as a fact sheet, or more intensive, with in-person training, networking, webinars, and more, RTI’s Armstrong-Brown told the Prospect. The technical assistance will “not only help [communities] in the short term to receive funding from the federal government, but will also provide them with a knowledge and skills base that they can spread within their organizations and across organizations to develop the next generation of environmental justice leaders [and] sustain those gains in the long term,” ArmstrongBrown said.

The TCTACs are in the startup phase. RTI, for example, has not received any federal funding as of yet, though the organization is working to secure its first year of funding. In the meantime, the centers are working to build capacity and set up internal processing systems for requests.

Having 17 different TCTAC s gives communities a broad range of expertise to draw from. “What we’re hoping to do is build really strong collaborative networks across different technical assistance providers at [all] levels so that we can build a net that’s broader than just the capacity of any one technical assistance provider,” Keeler said. This can help to avoid “bouncing” communities around or seeing anyone go unserviced.

Schools in the backyards of disadvantaged communities have access to legal advice, academic resources, and physical infrastructure that communities can harness. Keeler notes that there will need to be a period of trust-building between the community and the educational institution.

Capacity is also an issue because the scale of projects can vary between communities. Program partners are focused on the needs of the community that they articulate for themselves. A program that provides limited resources and does not meet communities where they are will not go very far.

While the TCTACs are in the startup phase, they are building on other technical assistance programs that have been active for years. Two years ago, the nonprofit Environmental Protection Network launched a pro bono technical assistance program that focused on capacity-building. The program is intended to assist organizations and communities to “more effectively and meaningfully participate in government decision-making by helping them navigate EPA , potential grants, regulatory processes, federal policies, and publicly available data to support their work,” the website reads. EPN has provided assistance on over 400 requests, and helped communities access millions of dollars in federal funding.

EPN says it has partnered with ten of the awardees, and told the Prospect that it hopes to add all of them. “We currently assist with community-identified issues including cli-

“This is part of the administration’s effort to really disrupt the dynamic where paperwork favors the powerful.”

mate resilience, air quality, drinking water, hazardous waste, toxic chemicals, and more,” said Michelle Roos, executive director of EPN.

A step-by-step guide for the EPA’s Solar for All competition that EPN shared with the Prospect includes formatting guidelines, goal-setting examples, and other tools that stakeholders can use to become familiar with requirements and save time when applying. The $7 billion EPA program will award up to 60 grants “to expand the number of lowincome and disadvantaged communities primed for residential solar investment.”

Further, the EPA’s Technical Assistance to Brownfields (TAB) Communities Program has provided support for communities affected by brownfields, which are potentially contaminated swaths of land, since 2018. The TAB program provides knowledge on how to clean up brownfield properties, comply with requirements, and more. In May, the EPA announced an additional $53 million for the TAB program, as part of a $315 million package through President Biden’s “Investing in America” agenda to “expedite the assessment and cleanup of brownfield sites across the country while advancing environmental justice.”

Groundwork USA , a network of local organizations that also provides expertise to municipalities, was particularly instrumental in the community of Paris, Kentucky, and the revitalization of the city’s Westside. Anna Allen-Edwards, a former city commissioner, formed the Paris Westside Neighborhood Association. She was concerned with a transfer station, or city dump, located within a predominantly Black neighborhood. “We decided that was something that needed to go,” Allen-Edwards told the Prospect. “We didn’t know how to do that.”

In searching for support, the association came across Groundwork and the technical assistance work the organization does with brownfields. Groundwork helped the team form community engagement strategies and locate grants. The effort is now in the final stages of seeing the transfer station moved.

“Groundwork has been helping us navigate the bureaucracy and the different opportunities that are out there,” AllenEdwards said. “And they have been very conscious of helping us understand social environmental injustice.”

“We really kind of operate from the perspective of equity and environmental

justice,” John Valinch, senior manager of climate resilience and land use at Groundwork, said. Whether a community has just begun the cleanup process or they are about to finalize the project, Groundwork can provide in-house geographic information system (GIS) tools, help craft community revitalization or engagement plans, and connect with stakeholders.

“There are so many people in this field and we couldn’t do it without each other,” Valinch said. “Taken together, when you look at the TAB s, when you look at the TCTACs, and what Groundwork USA is providing, we really approach this from [an] integrated perspective.”

With so much funding available, and climate change accelerating every day, the moment could not be more critical for communities across the country. Stories like that from Paris, Kentucky, demonstrate how instrumental technical assistance can be to seeing a project through. These efforts will make or break environmental justice for years to come. “This is an all-handson-deck moment to see that this funding benefits the communities who need it the most,” Roos said. n

Research Triangle Institute is one of 17 TCTACs assisting disadvantaged communities across the country.

THE

DOBBS STRATEGY

It was hard to say who won the war of words at the St. Jerome Fancy Farm Picnic in western Kentucky, the summer festival of food, fun, and games that bills itself as “the world’s largest one-day barbecue.” What the 143-year-old Catholic church fair really does is kick off Kentucky’s campaign season with a rowdy, old-school beatdown starring candidates for public office.

Andy Beshear, the Democratic governor now seeking re-election, led the pack with all the positivity that an incumbent could radiate. He labeled the election “a contest over vision and di-vision.” Shouting over chants of “liar, liar, liar” from opponents in the crowd, Beshear pointed out how people responded to the severe storms that hit the area in July and underlined his administration’s three years of job creation, the billions of dollars of investment in the region, and the hundreds of bipartisan bills he worked to pass.

Daniel Cameron, the Republican attorney general trying to replace him, wound up his fans with one-liners on Bud Light’s marketing and new pronouns for the governor (“has and been”), and threw out GOP buzzwords like “law and order.” The Republican’s camp dutifully booed his Joe Biden mentions on cue.

A good time was had by all. Abortion never came up.

his “pro-life” stance and criticized the governor’s “desperate attack.” Three weeks later, Cameron retreated from his repeated stance on a total ban and said that he would support rape and incest exceptions.

Abortion isn’t the only issue shaping this November’s statewide elections in Kentucky. It certainly isn’t in Mayfield, a city of 10,000 people still recovering from a devastating tornado nearly two years ago and this summer’s torrential rains and massive flooding. Crystal Fox, the president of the Mayfield Minority Enrichment Center, had praise for the governor. “Since the tornado, he’s been on the ground a lot,” she told the Prospect “By contrast,” she claims, Cameron “hasn’t really been seen in the area as much.”

But she had questions about how donated tornado relief funds were used and thought that the money could have been “better spent.” Moreover, plenty of residents including Fox herself also got tangled up in the red tape that slows down FEMA aid to victims of natural disasters in a place where nearly one-third of people live in poverty. “Before the tornado, people didn’t have their basic needs met,” she says. “So, after this tornado, it just amplified those issues.” In Mayfield, Fox says, the community’s attention is in the “long process” of recovery.

Last year, when Kentucky voters rejected a proposed constitutional amendment that would have eliminated any constitutional right to an abortion, the vote in Graves County, where Mayfield is the county seat, was lopsidedly in favor of the measure. By a 69 percent to 31 percent margin, county voters backed the amendment, which said that the state constitution did not “secure or

By Gabrielle Gurley

ILLUSTRATION BY VICTOR JUHASZ

This uneasy silence on one of the most divisive topics in American politics ended during Labor Day weekend, however, when Beshear dropped a 35-second ad that put abortion front and center. “Daniel Cameron thinks a nine-year-old rape survivor should be forced to give birth,” intones Erin White, a Jefferson County prosecutor. Sidestepping both the critique and immense harms that victims suffer, Cameron had a surprisingly weak response to Beshear’s salvo. He touted

HEADS SOUTH

Gubernatorial elections this fall in Kentucky, Mississippi, and Louisiana may clarify where Democrats can, and can’t, run on abortion.

protect a right to abortion” or funding for abortion. Statewide, the amendment was defeated by a five-percentage-point margin.

In Mayfield today, Fox says, “I don’t think it [abortion] is one of the issues that we’re seriously focused on.” She recognizes that this year, the candidates “are also trying to get everybody backing them from all over the U.S., with speaking about gender issues and abortion issues and things like that, and not just focusing on issues that play just to Kentuckians.”

This fall, upcoming gubernatorial elections in Kentucky, Mississippi, and Louisiana will test just how deep the revulsion over these far-right Republican excesses runs in the South, and what those races may presage in abortion access politics beyond the region. All three states have Republican supermajorities in their legislatures. The Dobbs decision specifically affirmed a Mississippi statute devised to explicitly challenge Roe v. Wade. But many Republicans have been shaken by the backlash.

clearly hopes to win those voters and others who are sick of scandals and the state’s persistent health care crisis.

Louisiana holds its open primary in mid-October. Gov. John Bel Edwards, an anti-abortion Democrat, is term-limited. Republican Attorney General Jeff Landry, who is running to succeed Edwards, sticks to the loud and proud extremes favored by the far-right Republicans on abortion. If he survives attacks from his Republican opponents in the already nasty “jungle” pri-

The question is whether such a gambit will work for Beshear. It is a gutsy, risky departure from how Democrats in the state usually win by keeping to Kentucky-centric problems and staying out of national war zones. But the amendment’s defeat signaled that many Kentucky voters are uncomfortable with what Dobbs v. Jackson Women’s Health Organization means.

And not just in Kentucky. Since Dobbs, voters in Republican Kansas, Ohio, and Montana have rejected far-right overreaching ballot measures and affirmed their support for the right to abortion even with curbs in place. In last year’s midterm elections, voters’ concerns about the loss of that right helped keep the Senate in Democratic hands and blunt the Republican wave in the House that overconfident prognosticators repeatedly claimed was nigh.

Beshear heads into November with a page taken straight from the Democrats’ 2022 midterms playbook. In Mississippi, Republican Gov. Tate Reeves took up the abortion issue in broad strokes at the Neshoba County Fair to hit back at his Democratic challenger, Brandon Presley, a Mississippi Public Service Commissioner who oversees utilities issues in the state’s northern district. The governor was all but obliged to bring up the issue to deflect attention from his main electoral liability: being tangled up in a huge welfare scandal. Presley, who avoided the abortion issue altogether at Neshoba, prefers simple pro-life declarations while sticking to a Magnolia State script slamming the governor on corruption and the state’s health care crisis. Whatever exists of a pro-choice constituency in Mississippi, Presley isn’t playing to it, though he

Democratic candidates for governor in 2023 (L-R): Andy Beshear (Kentucky), Shawn Wilson (Louisiana), and Brandon Presley (Mississippi)

mary, he appears to be poised to romp over Democrat Shawn Wilson, an African American former state transportation secretary and first-time candidate with pro-choice proclivities and little statewide name recognition. Like their Mississippi neighbors, Louisianans mostly vote along racial lines.

The symptoms of Republican overreach have produced three different responses from the gubernatorial candidates in these states. Beshear hopes to beat back Republicans’ culture-war theatrics, and get women, people of color, young people, and disgruntled Republicans—particularly those conservative women who oppose

extreme abortion restrictions—to vote for him in the numbers he needs. Presley hopes that a pathway through homegrown crises can give him a chance. And Louisiana may indicate whether there’s a downside for a future governor in a Deep South state who promises even more extreme abortion restrictions.

Will cracks appear in the Republicans’ hold on the South due, in part, to abortion, and will they spread as the post-Dobbs realworld turmoil inflicted on pregnant people comes into full view?

Kentucky abortion supporters and opponents have been involved in near-constant litigation with a steady stream of limitations implemented in the years between Roe v. Wade and Dobbs. The state passed 17 abortion-related bills between 2010 and

2019 that restricted everything from public funding of abortions to licensing of clinics and dispensing of educational information, while instituting bans on telemedicine abortions and on certified midwives’ right to perform the procedure.

The 2019 trigger law, which came into effect after the Court revoked Roe, prohibits abortion except in cases when the person’s life is in danger or a medical procedure accidentally results in termination of the pregnancy. There are no exceptions for rape or incest. There is also a six-week ban on the books. That supersedes any other law, so even if the trigger ban were overturned, abortion would still be banned at six weeks.

The current situation is one of the most extreme in the country. With few medical professionals confident that they understand the statute’s real-world implications in clinical settings, a woman needing an abortion will most likely have to head out of state for the procedure.

Louisville had two abortion clinics before the Dobbs ruling; people from opposite ends of the state had to drive five or six hours to get to them. “Now people have to cobble together money to do GoFundMe’s, ask you to send money to their cash app in order for them to travel outside of the state to access abortion care,” says Attica Scott, a former Democratic state representative for a Louisville district. She worries that closing clinics also compromises other reproductive health services that these facilities offered, including gynecological examinations.

Fears are growing that birth control, too, may be targeted in the 2024 legislative session that begins in January. “There certainly were murmurings after the ballot win that we had in 2022,” says Scott. “But I will say, even during my time in the state House, there will almost always be some legislator who would say, ‘Hmm, we need to start looking at birth control,’ and whether or not that’s a form of abortion, which was a really ridiculous conversation.”

Republicans who take a no-exceptions stance supporting the state’s current law, which still bans abortion in cases of rape and incest, have handed Beshear an advantage. Strong majorities of Americans support the right to an abortion in pregnancies resulting from rape and incest. Raising the issue of exceptions is likely to help Beshear turn out the vote in the state’s liberal and prosperous “Golden Triangle” of Louisville, Lexington, and the northern Kentucky suburbs

of Cincinnati where opposition to last year’s constitutional amendment was strong, as well as in a number of Republican counties where opposition from women more narrowly tipped the amendment into defeat.

Before the Supreme Court reignited the controversy, Beshear had been keeping a relatively low profile on abortion. (“Roe v. Wade had it generally right ,” he has said.) The gap that’s now opened between Beshear and the Republicans in the post-Roe environment “helps mobilize pro-choice voters who now feel that they need to fight in a way they didn’t while operating under the umbrella of Roe v. Wade,” says D. Stephen Voss, a University of Kentucky political science professor. “But leaning into the abortion issue also helps with those swing voters who are neither prochoice nor aggressively anti-abortion, who form sort of the muddy middle on the issue.”

“We talk about abortion as if there are two sides: pro-choice people and anti-abortion people,” he adds. “But the vast majority of people [in Kentucky] did not support the permissiveness of the Roe v. Wade regime but still support abortion rights to some level.”

“Kentucky laws are no longer anywhere near the muddy middle, they’re very restrictive,” Voss continues. “Those nonideological swing voters now lean leftward compared to the status quo.”

This landscape helps Beshear go after the GOP’s extremism while leaving plenty of room for other issues. So far, some of the added sizzle in his campaign has come from his not revealing how he might respond if Senate Minority Leader Mitch McConnell’s health issues force him to step down. The Republican legislature passed a law requiring Beshear to select an interim successor from a list drawn up by McConnell’s fellow Republicans. Beshear has argued that since an “unelected and unaccountable” state GOP executive committee would compile this list, it violates the Constitution’s 17th Amendment, which pried the selection of senators away from state lawmakers and gave it to voters. Beshear may or may not contest—he is not commenting— that state law in court should McConnell resign.

Beshear is the popular son of a popular governor; his father served two terms beginning in the late aughts, and the son now ranks among the country’s most popular state chief executives, drawing some support even from Republicans. He’s been sure-footed particularly on education and closing the digital divide. His 2022-2024 budget includ-

Beshear ranks among the country’s most popular state chief executives, drawing some support even from Republicans.

ed an 11 percent pay increase for teachers, forgiving teacher loans, and establishing universal pre-kindergarten. Broadband expansion to under- and unserved rural communities has been a constant focus, too.

Former President Trump endorsed Cameron, a McConnell protégé, early on. So far, Cameron has been able to navigate the lines between the Trump and McConnell factions. Drawing on this year’s culture-war themes, he’s hit Beshear hard and often on transgender athletes in schools and his veto of a bill, overridden and now law, that places strict bans on reassignment surgery for minors and blocks other gender-affirming care.

Following the venerable Republican playbook, Cameron, who is African American, has also gone all in on law and order, proposing $5,000 in recruitment and retention bonuses for officers, the death penalty for police homicides, and denying subpoena power to civilian review boards. Embracing the GOP’s war on cities, he has singled out Louisville, the state’s largest city, for its surging crime rates. Conversely, he has been blasted, particularly by Black activists in Louisville, for failing to secure state charges against three of the four police officers involved in the death of Breonna Taylor. Taylor’s mother is actively campaigning against him.

Cameron has only cautiously weighed in on abortion. Before the May GOP primary, he said that he opposed a bill that would have allowed a woman who has an abortion to be charged with murder. In June, along with 18 other Republican attorneys general, he objected to a federal plan to “support reproductive health care privacy.” That rule would curtail the ability of state officials to access medical records of people who go out of state to get an abortion. When asked if the state planned to prosecute people who go out of state for care, Cameron replied that Kentucky would not “prosecute pregnant mothers.”

While voters in Kentucky have affirmed at least some level of support for abortion rights, most statewide political candidates in the Deep South, regardless of party affiliation, have long expressed strong anti-abortion stances if they wanted to get anywhere near a win.

Southern Democrats began their exodus to the Republican Party after Lyndon Johnson signed the Civil Rights Act—a development Johnson anticipated. In Mississippi, the parties split along racial lines, with Blacks voting Democratic and whites, Republican. Mis-

sissippi is 38 percent African American, the highest percentage in the United States. That means a white Democrat like Brandon Presley not only has to turn out the Black vote but has to attract white moderates, independents, and even some Republicans, who may not like Tate Reeves but may also resist crossing over to vote for the “Black party.” Presley’s pro-life stance is one way for him to convey to conservative whites, especially men, that he shares their values.

In Louisiana, where 33 percent of the population is Black, a conservative Democrat like John Bel Edwards, the outgoing governor, took strong stances on an issue like abortion that resonated with white Republican voters.

Owing to its Mountain South heritage, Kentucky has a stronger tradition of twoparty competition than the Deep South states. During the Civil War, the state never joined the Confederacy and tens of thousands of Kentuckians fought either for the North or the South. Later, Jim Crow Democrats became as entrenched here as they did elsewhere in the South. Many Black Kentuckians joined the Great Migration, and today, unlike Mississippi and Louisiana, Kentucky is predominantly white, with African Americans making up only 9 percent of the state’s population.

Democrats dominated state politics for most of the 20th century. Conservative Republicanism made inroads only beginning in the 2000s, and the numbers of registered Republican voters only surpassed Democratic voters for the first time last year. In certain regions, like the southeastern corner of the state, social conservatism melds with an economic populism that translates into Republican votes for Beshear.

In the South, abortion has a distinct racial component that rests on the othering of Black women. An unmarried woman having a child is a stereotype associated in many of parts of the South with African American women. Some religious African Americans, like some of their white counterparts, support abortion access but also want certain restrictions, such as a specified number of weeks.

The fight over the Equal Rights Amendment in the 1970s helped conservative Republicans split off some white women from the moderate wing of the Democratic Party, especially deeply religious Southern women with traditional ideas about women’s lives. The anti-ERA movement led by Phyllis Schlafly, a conservative Catho -

lic lawyer, joined forces with the Southern Baptist Convention, the largest Protestant denomination in the United States, to stigmatize abortion. Until the ’70s, the group had supported abortion in cases of rape or fetal abnormalities or for the mother’s mental or physical health. Linking abortion with feminism played a role in moving the region to an aggressively anti-choice position.

“Abortion really gets this shame label in a deliberate effort to galvanize religious white women to vote against the Equal Rights Amendment,” says Angie Maxwell, director of the Blair Center of Southern Politics and Society at the University of Arkansas. She explains abortion politics in the South as being more about identity than politics, which translates into pro-life women thinking, “I am a good person; I am a good woman; I meet standards of womanhood; I want to be a mom at some point; I care about children.” Abortion, she says “gets put into a category of a sinful, bad, shaming kind of woman.”

With the advent of Ronald Reagan, “the moderate Republican Party nationwide remade itself in this conservative, Southern white image, this Deep South image,” says Maxwell. “In a sense,” she adds, “Kentucky seems very Southern in its fight, when that was nationalized, even though historically it’s got a lot more two-party competition than a place like Mississippi or Louisiana.”

Mississippi passed an explicit abortion prohibition in the 1950s and added an exception for rape in the mid-1960s. In 2007, state lawmakers passed a ban that would be triggered if the Supreme Court ever revoked Roe. In 2011, however, Mississippi voters weighed in on an amendment to the state constitution that read: “Should the term ‘person’ be defined to include every human being from the moment of fertilization, cloning, or the equivalent thereof?” They ended up crushing the amendment, 58 percent to 42 percent,

Owing to its Mountain South heritage, Kentucky has a stronger tradition of two-party competition than the Deep South states.

shocking political observers who thought that they had the South all figured out on abortion.

What those observers had failed to take into account was how defining personhood came to be seen as governmental overreach, not only in urban areas like Jackson but especially in rural Black regions. Nor could antiabortion advocates fully answer questions about how far these amendments would go after medical professionals warned of a cascade of problems stemming from decisions that would grant fertilized eggs in in vitro treatments the status of persons and potentially could outlaw contraceptives.

Chris Kromm, executive director of the Institute for Southern Studies, a nonprofit research and media center, says Southern attitudes are not as “calcified” as the rest of the country thinks. “Part of the messaging that effective Southern candidates have done is to really paint this as extreme overreaching into people’s lives that limits the choices they can make and takes away health care from them,” he says. “When you frame it in that way, there’s definitely a lot more support.”

However, Mississippi’s conservative Republican establishment struck back in 2020. After voters passed a medical marijuana ballot initiative, the state supreme court, one of the most conservative in the country, found the state’s initiative framework unconstitutional on a technicality. (An outdated constitutional provision refers to

obtaining signatures from five congressional districts; the state has only four.) Although the legislature went on to pass medical marijuana legislation, the court ruling also ended up invalidating the entire ballot initiative framework, since the legislature had failed multiple times to change the language. The court’s decision also invalidated a Medicaid expansion ballot initiative that the secretary of state had certified. It also prevented future initiatives on abortion. State lawmakers’ failure to come up with a fix appears to be motivated by the fear that any vote involving abortion in Mississippi might go the way of Kansas, Ohio, and Kentucky.

Today, Mississippi law bans abortion except in cases where the life of the mother is threatened, and in cases of rape as long as there has been an official complaint to law enforcement. Such complaints are rare. Over a three-year period from 2019 to 2021, only 20 rapes were prosecuted in Mississippi.

To the degree that abortion is up for discussion this year in Mississippi, the debate isn’t between the two men running for governor; it’s between the women in the attorney general’s race: Democrat Greta Kemp Martin, a disability rights attorney, and the incumbent Republican attorney general, Lynn Fitch, the architect of Dobbs who argued the case before the Supreme Court. But though she’s way out in front in the polls, even a true believer like Fitch

doesn’t want to rile things up. She stayed away from the topic at the Neshoba County Fair, a premier platform for statewide candidates—save for a quick concluding mention of “crossing into the new Dobbs era” (“exciting,” she called it) that requires fixes with everything that’s wrong with family policies from child care to the state’s “broken” adoption and foster care systems. In 2022 at the fair, she stepped right up to the mic to take a victory lap on Dobbs.

The Pink House, the state’s lone abortion clinic for 23 years, operated by Jackson Women’s Health Organization, is now a luxury furniture and home decor consignment shop. The clinic closed the day before the state’s trigger ban took effect after the Dobbs decision. Jamie Bardwell, co-founder and codirector of Converge, which provides family planning care, describes the general reaction of Mississippians to the ban as “Wait, I thought abortion was already illegal.” It was, she says, “like the bomb that didn’t drop.”

The irony of the Mississippi gubernatorial race is that even though health care has emerged as a top issue, reproductive issues have received little attention. Mississippi is so far out in front in so many grim health metrics that it could be in a category by itself. In a country with worsening maternal health outcomes, Mississippi has continuously and conspicuously failed its women. Its infant

Jackson Women’s Health Organization, known locally as the Pink House, was Mississippi’s last abortion facility.

mortality rate is the worst in the country at 9.39 deaths for every 1,000 babies in 2021, a five-year high. Black women had a maternal mortality rate four times higher than white women. There is no neonatal intensive care unit in the mostly Black and rural Mississippi Delta. A person has to go to Jackson or Memphis for a maternal fetal specialist.

Contraceptive access isn’t any better. “A lot of providers, for example, would counsel especially Black women or young people to choose certain methods based off of what they thought was better for their bodies,” says Jitoria Hunter, Converge’s vice president of external affairs. “They didn’t have access to the wide range of FDA-approved options for contraception.”

Poor reproductive health joins a long list of health care burdens that contribute to Mississippians’ abysmal health profiles . What gives Medicaid expansion supporter Presley some leverage with conservative voters taken in by the health-care-for-lowincome-people-as-“welfare” argument that Reeves, an expansion opponent, regularly uses, is that neighboring Louisiana and Arkansas have both expanded Medicaid. The Arkansas example has some appeal for Mississippi lawmakers. Arkansas officials secured a waiver that allowed federal Medicaid funds to go to private health insurers instead of through state government departments, giving state lawmakers at least the appearance of backing a private plan rather than a government-sponsored one. With nearly half of Mississippi’s rural hospitals at risk for shutting down, Medicaid expansion could relieve some of the burdens of uncompensated care that these hospitals provide to the uninsured.

Yet hovering over that debate is health literacy, a far bigger problem. Heart disease is the state’s number one killer, but health care providers struggle to get people to seek treatments to control hypertension. Improved sex education (Mississippi is an abstinence only/ abstinence plus education state) as well as nutrition programs would make a tremendous difference. So would recruiting nurse practitioners and other professionals to provide preventive strategies and fill other gaps in rural areas where doctors are in short supply: When some people finally decide to see a doctor for a disease like diabetes, it may already be too late to save a limb.

In addition to calling for Medicaid expansion, Presley has vowed to get rid of the state’s grocery tax and cut car tag fees.

There is a 7 percent sales tax on groceries, the highest in the country. The exorbitant tax levied on vehicles, also among the country’s highest, can run into the hundreds if not thousands of dollars. Reeves prefers cutting or doing away with the income tax to help attract businesses and workers to the state. Business leaders, for their part, have resisted that idea, fearing that the move would create new financial problems.

If any one thing is going to drag Reeves down, it is the scandal that saw about $77 million in Temporary Assistance for Needy Families funds over a four-year period diverted to projects run by associates of Reeves. Those associates included Paul Lacoste, who held a fitness boot camp that Reeves attended, and former NFL quarterback Brett Favre, who secured $5 million in state funding for a University of Southern Mississippi volleyball stadium (USM is Favre’s alma mater and where his daughter had played on the school’s volleyball team). The governor approved the firing of Brad Pigott, the former U.S. attorney appointed to investigate these dealings. Reeves, who often touts his own “numbers guy ” skills (his official biography notes that “he holds the Chartered Financial Analyst designation”), was the lieutenant governor overseeing budget deliberations when these diversions occurred. The chief executive has not been directly implicated in the scandals.

Four years ago, Reeves won the governorship by only five percentage points, 52 percent to 47 percent, in a state accustomed to 60-40 Republican romps over Democrats. Today, between his wealth and reputation for cronyism, his bland speeches, the rural hospital care crisis, and the taint, if not the receipts, of a scandal that won’t quit, Reeves has been propelled into the ranks of the country’s most unpopular governors.

Presley’s key priorities could resonate with poor and white working-class voters if he can persuade them that Reeves hasn’t done much to materially improve their economic standing and is a corrupt pol. His biography is compelling: He lost his father as a child and grew up in a family headed by a single mother who faced stretches without electricity or running water and went on to become mayor of Nettleton, his small hometown, and a utilities regulator. Being a second cousin to Elvis (yes, that Elvis) doesn’t hurt, but so far that distinction hasn’t helped his anemic name recognition. An August Mississippi Today/Siena

College poll of 650 likely voters found that 35 percent of those surveyed didn’t know enough about him a little more than two months before Election Day.

“There is absolutely a move afoot amongst Black women for Brandon [Presley] because things have been so bad,” says Pamela Shaw, president of P3 Strategies, a Jackson government relations and public affairs firm. And not just among Black women, she adds. “From what I hear across the state in some of my interactions with white women who don’t like Tate, they really don’t like the Dobbs decision; they will vote for Brandon. They are not going to be public about it just because of their churches and their husbands.”

For Presley to get into the governor’s

mansion, he’ll have to navigate Interstate 55. The north-south artery, which runs from the Mississippi-Tennessee border down through Jackson (whose water crisis has not factored into the contest) to the Gulf Coast and New Orleans, practically divides the state into its racialized voting halves. White voters are largely east of I-55 and Black voters, in the Mississippi Delta to the west.

Presley also has to do better than Jim Hood, the Democrat Reeves defeated in the 2019 governor’s race , did on the Gulf Coast—Reeves’s own territory—in cities like Gulfport and Biloxi, while pulling in votes from the Mississippi suburbs of Memphis

and from his own northeast home base. Like Presley, Hood is from northeast Mississippi, but he lost all of those counties. He also lost DeSoto County, in the Memphis metro area, one of the state’s fastest-growing counties.

Louisiana’s deep evangelical and Catholic ethos makes an abortion discussion taboo in rural conservative areas of the state. Politics had divided Catholics in the south and southwest and Protestants in the north until Republicans brought them together around their shared opposition to abortion. In 2006, Louisiana passed a trigger ban that was signed into law by Democratic Gov. Kathleen Blanco. In 2022, the term-limited Edwards updated the law to include fines and prison

perch atop the polls before the state’s midOctober open “jungle” primary. The top two finishers will go on to the November general election if no one gets 50 percent of the vote. The issue that gets the most attention from the candidates is crime, which topped an August poll on the key issues facing voters.

The Democrat in the free-for-all, Shawn Wilson, is a first-time candidate who lacks both a statewide profile and the necessary megabucks. As the only Democrat in the open primary, he may well advance to November along with Landry. Since the end of June, they are the only two candidates polling above 20 percent. In the first debate of the campaign season, Wilson supported exceptions for rape and incest, left decision-

if privacy and travel issues come into play. It’s a devastating turn of events that threatens to increase the number of maternal care deserts in these still largely rural states.

In supporting abortion rights, Beshear is taking the greatest chance of any of this year’s gubernatorial candidates in what promises to be a tight contest in a favorable but still challenging climate. In Mississippi, Presley has so far shied away from making an issue of the Republicans’ abortion overreach and their support for government intrusion in people’s lives—a talking point that Republicans like to lob at opponents until they see their own reflections in a mirror. The impenetrable Black/white partisan divide means that a Democrat has to build

terms for doctors, and amended it to include specific “medically futile” exceptions for a fetus, such as profound and irredeemable congenital and chromosomal anomalies.

Abortion clinics in New Orleans, Baton Rouge, and Shreveport have all moved out of state. Earlier this year, state lawmakers failed to add rape and incest exceptions to the state’s abortion ban. Like Mississippi, Louisiana is a perennial bottom dweller in measures of poverty and infant and maternal health.

A crabs-in-a-barrel fight is now under way among the Republican contenders to dislodge Jeff Landry, the far-right Republican attorney general, from his so-far secure

making on abortion to his wife and daughters, and believes that voters should be able to weigh in on the issue via a ballot initiative.

No matter the outcome of this fall’s elections, all three of these states now have such severe restrictions on abortion that they could see some physicians, reproductive health care providers, and medical students depart for less restrictive states, particularly

an almost perfect electoral coalition to prevail against an incumbent governor who’s failing in every single category except a certain shade of whiteness.

The Dobbs decision opened the way for the region to pare back even the limited reproductive decision-making people had before Roe fell. As the South settles into a period of harsh government overreach and creeps toward more privacy restrictions, whatever the outcome of their upcoming gubernatorial contests, these three states likely won’t nudge the rest of the country toward any sort of acceptance of Dobbs and the turmoil it has unleashed. n

D. EASLEY, ROGELIO V. SOLIS, EVAN VUCCI

AP PHOTOS

Republican candidates for governor in 2023 (L-R): Daniel Cameron (Kentucky), Tate Reeves (Mississippi), and Jeff Landry (Louisiana)

For years, Donna Hope has helped landlords make their buildings greener. Two years ago, she told herself, “I’m going to walk the walk.”

The boiler at her two-family property in New Rochelle, New York, had just conked out. Hope inherited the cream-yellow house from her parents, and now leases out both units. When I visited in August, pear trees in the yard were dripping with ripe fruit.

Hope has degrees in civil and environmental engineering, and has made a career helping business owners comply with environmental laws, including work in the sustainability offices of two New York City mayors. So, she figured, why not switch to electric heat pumps? She reached out to several contractors, and to BlocPower, a green loan provider that also offers engineering and project management.

For over a decade, BlocPower has received

glowing press for its promise to make clean energy affordable for poor households and small businesses. It emphasizes air-source heat pumps, the focus of a growing drive to electrify buildings, as well as insulation and other repairs necessary to make the heat pumps work. The idea is to bring decarbonization to people who can’t afford to buy the equipment outright.

To customers, it advertises itself as a “turnkey” provider, offering no-moneydown financing, auditing buildings, and bringing in quality contractors. To governments, it has pitched itself as able to build community trust and convince building owners to use existing decarbonization incentives, while stretching every public dollar by combining it with private capital.

BlocPower’s lease is a separate payment from a customer’s electricity bill, but the company says customers will see such high

savings from more efficient power use that the lease will more than pay for itself. The commitment, then, is to save customers money, reduce local and global air pollution, and deliver returns for its investors—a win-win-win.

“I knew of BlocPower and their rise to fame,” Hope said, through mutual acquaintances with CEO Donnel Baird. She loved what she heard, and selected BlocPower as her project manager.

That’s where Hope’s troubles started. After facing a bevy of problems with the system, Hope reported her concerns to an adviser with the state energy agency, NYSERDA , and requested an inspection. Today, she told the Prospect, she is considering suing BlocPower for the retrofit they financed, which has saddled her with a 15-year lease for equipment she fears has been damaged, and a long-term relationship with a firm she distrusts. “God knows I’ve had my share of

EnergyInsufficiency

By Lee Harris

With a mission to create green jobs and bring green-energy loans to the poor, BlocPower has gained powerful backers in tech, finance, and government. Where are the results?

Insufficiency

shifty contractors,” she said. “This has been one of the most egregious.”

Ifirst wrote about BlocPower in 2021, when the company invited Environmental Protection Agency (EPA) head Michael Regan to tour a Bronx church it had retrofitted. In January of this year, I published a deeper dive on its business model.

On average, BlocPower says, its customers save 20 to 40 percent on their annual

heating and cooling bills by switching to heat pumps. But it offers no financial guarantee, and multiple HVAC contractors told the Prospect that such high average savings are unlikely.

Long popular in the Southeast, heat pumps have recently taken off in colder states like Maine as an electric-powered replacement for burning heating oil. But in states like California and New York, where electricity is expensive and most households rely on gas, it can be tough for conversions

to create value at the kitchen table. Heat pumps can also be harder to install in the older, more run-down buildings BlocPower says it targets.

Baird is forthright about the challenges of retrofitting low-income buildings, which often need structural repairs. “We hope to fix neglect WHILE making buildings green. Most times it works,” Baird recently wrote

Donna Hope of New Rochelle, New York, examines the condensers installed at her building through BlocPower.

on LinkedIn. “In 5-10% of our projects the Electrification has NOT gone well.”

But BlocPower is reluctant to provide referrals to that other 90-plus percent—the overwhelming majority of jobs that Baird says have succeeded.

For my story in January, I asked Baird to point me to satisfied clients, or a case study of the model, and he declined. In response to that article, I received a flood of feedback from clean-energy professionals in New York who doubted that BlocPower had achieved the scale it touts. Indeed, the company has repeatedly made contradictory

tion Act, the EPA will review applications by nonprofits vying to distribute $27 billion in new incentives for home retrofits and the deployment of green technology. Baird is an advisor at Rewiring America, a nonprofit at the center of the push to “electrify everything,” and a board member at the Coalition for Green Capital, which is widely seen as a top contender to run one of the national nonprofits that will centralize the distribution of funds. That puts BlocPower in a prime position to influence the rollout of subsidies.

BlocPower would hardly be the first disruptive startup to sketch out bold ambitions

had tough childhoods in tough neighborhoods when a lot of Brooklyn was still very rough.”

Baird has rare star power. Almost every single person I interviewed about him— critics, too—remarked that he is charismatic. But if Obama’s charisma is high-flown, Baird has the gritty intensity of an entrepreneur. He seems always to be conceding the hardness of the problem—bringing you in on ways it could fail—before explaining why he will succeed.

Baird grew up in Brooklyn, attended prep school in Buckhead, Georgia, and went on

statements on how many and what projects it has completed.

For this story, I asked BlocPower again for referrals to clients in New York. The company provided just three contacts, of which only one has had heat pumps installed. In that building, the landlord told me, energy costs for some units have actually risen. Multiple other customers found by the Prospect are in the same position as Donna Hope: frustrated about inferior quality or cost overruns, and seeking remedial action. And in Ithaca, where BlocPower won a flagship contract for citywide decarbonization of as many as 6,000 buildings, it has completed just a single heat pump conversion, according to a spokesperson.

This fall, as part of the Inflation Reduc-

and worry later about delivering the product. But it is not just operating in the frothy world of venture capital. It relies on a mix of tax-free philanthropic funds and government contracts. And its claims to consumers and investors have raced ahead of reality.

Turn Buildings Into Teslas

BlocPower inspires devout faith in its partners and investors. Baird and co-founder Keith Kinch are former community organizers for President Obama, who built BlocPower’s reputation by advertising the merits of retrofits for churches and other community institutions. Baird puts their origin story at the center of his sales pitch, saying in a recent interview, “Keith and I

to Duke University. In 2009, he became national field director of green jobs for the Change to Win Federation, a labor coalition. After the 2010 stimulus package put billions in federal funding toward clean energy, Baird has said, he helped pensions design a plan to invest some $90 billion in decarbonization.

Recognizing a potentially massive market in clean-energy retrofits, Baird enrolled in Columbia Business School, and soon received backing from the Clinton Global Initiative. He registered BlocPower as an LLC in 2012. By the following year, The Wall Street Journal had run a story on Baird’s pilot project.

“There’s a missed opportunity in American inner cities. There’s a $400 billion market, and because of the subprime mortgage crisis,

BlocPower would hardly be the first disruptive startup to sketch out bold ambitions and worry later about delivering the product.

the renewable energy industry has largely skipped that market,” he told The Washington Post in 2015. “Residents of inner cities over-consume energy per square foot, relative to more affluent, early-adopter consumers.”

Baird pointed out that poor families face higher borrowing costs for even basic repairs, let alone green upgrades, leading to a cycle of underinvestment in buildings. He was convinced he could make green retrofits affordable if small businesses, community institutions like churches, and low-income residential buildings could be tranched and bundled together into securitized “blocs,”

“Our bet is that we can do risk management better than a traditional Wall Street firm for this category of investment, because we’ve invested millions and millions of dollars in software,” Baird told the Prospect in an interview.

At a Bloomberg panel in April 2022, he elaborated on the model. “We analyze all of the physical characteristics of the building—the maintenance and financial records of the building—but then also analyze the characteristics of the building owner. Do they drive a Tesla? OK. Well, are they a member of the Sierra Club? Maybe this is someone that we should talk to. And what are the kinds of messages that we would offer to them, based on who they are.”

But scaling up from Tesla drivers to the general public will be tough. Is Baird right that better risk-rating software and securitizing loans will do the trick? Or do the bottlenecks to decarbonization have more to do with basic supply and demand: labor shortages, competent contractors, sourcing parts, and homeowner appetite?

One hard-to-avoid fact is that, in cities with high electricity costs, the cost of running air-source heat pumps often breaks even with gas—even after the IRA’s energy efficiency incentives. Instead of advertising relatively slim cost savings, several HVAC contractors and heat pump proponents told the Prospect , they prefer to market heat pumps for their other benefits, like improved air quality, more available floor space when radiators are removed, and the reduction of carbon emissions.

you would save money,” she told the Prospect. “If they do, then they’re lying to you.”

Clean-energy advocates are only beginning to share these caveats on the record. Privately, many say they are awaiting policy changes that will help put heat pumps on a more level playing field with gas. Multiple experts declined to describe this publicly, citing the highly charged political atmosphere. Electrification is “a cult,” one heat pump proponent in California, who asked not to be named, told me. “You can get excommunicated.”

BlocPower has remained steadfast that a major selling point is savings. At the Bloomberg panel in April, Baird put it this way: “What we want to do is come in and say, look, we’re going to remove the fossil fuels from your home, we’re going to save you a bunch of money, we’re going to reduce your energy bill, within this range, and then we’re going to help finance it.”

But in almost the same breath, Baird said, “We don’t guarantee energy savings … We don’t want to play those games.” In other words, if the homeowner doesn’t get any savings from their heat pump, investors won’t take the loss; the homeowner will. Other third-party financiers like Sealed, by contrast, do offer a financial guarantee, giving them some skin in the game.

spreading around the risk of default. Hence the name “BlocPower.”

The idea has a certain elegance: Perhaps an instrument like the mortgage-backed security—the trigger of the financial crisis, which wiped out so much Black wealth— could become the salvation for inner cities and the climate.

To rate and bundle properties for clean-energy loans, BlocPower has developed proprietary riskrating software. The company says this technology assesses the unique risks of an individual property, allowing the company to turn homes with lower credit into investible assets.

“These are capital improvements to your home that have real benefits. They make you more comfortable, healthier, safer, they may increase the resale value of your home,” said Andy Frank, co-founder of Sealed, a clean-energy and HVAC financier that has grown by targeting market-rate housing in Westchester, where electricity is cheaper than in New York City.

Of course, investing in comfort is an easier case to make to a richer client. “It’s one thing to go to a market-rate customer and say, ‘We’re going to do this project, it’ll improve your quality of life.’ It’s more difficult to go to the low-income market, and do a similar project, with the added challenge of needing to be bill-neutral or negative,” Frank added.

Rebecca Evans, who is now leading Ithaca’s decarbonization effort, was even more matter-of-fact. “Nobody can guarantee that

BlocPower’s sales pitch has proved attractive. BlocPower has raised capital from a who’s who of Washington, Wall Street, and Silicon Valley. Investors include Goldman Sachs’s impact investing arm, Jeff Bezos’s Earth Fund, Eric Schmidt’s Family Foundation, Microsoft’s Climate Innovation Fund, and CNN host Van Jones. Nonprofit foundations like the Kresge Foundation have made commitments, too. According to a press release, Vice President Kamala Harris recently invited the company to her residence for recognition.

Baird intends to capitalize on the moment. While BlocPower may work with grimy hardware, tearing out oil boilers and drilling through walls, it hopes to grow at the pace of a software unicorn. Baird recently said that he wants BlocPower to become the Amazon of home electrification. The company is building an “augmented reality construction platform,” he has said, and has developed a “blockchain based verification system,” according to an SEC filing.

Donnel Baird, right, co-founder and CEO of BlocPower, tweets under the name “Turn Buildings Into Teslas.”

Baird tweets under the name “Turn Buildings Into Teslas,” and the analogy to Elon Musk, whose brother Kimbal is another funder, is apt. Baird minimizes the role of government support (“It’s a rounding error,” he told the Prospect of Ithaca’s $100,000 in public funding for BlocPower’s initiative) and vaunts the company’s backing from venture capitalists like Kapor Capital, an early investor in Uber.

Baird has even talked about disrupting what he describes as a highly inefficient construction industry in the style of Katerra, a SoftBank-backed startup that attempted to vertically integrate homebuilding (and, after wiping out $3 billion, became one of the best-funded startups to go bankrupt in U.S. history).

But to achieve this exponential growth, BlocPower will need to do the hard work of convincing millions of households to lease its green technology. The company says it has projects under way in 26 cities, from Menlo Park to Baltimore. To understand the gorge between BlocPower’s discourse and what it has delivered, I went to Ithaca, where the company and city leaders made staggeringly ambitious promises to deliver cheap, clean energy, and fix historic injustices along the way.

“Stop Eating Sugar”

Ithaca is offbeat. A college town of scientists and academics, it likes to experiment on itself. In the 1990s, a community organizer launched a new currency, the Ithaca HOUR , equivalent to one hour of work, or about $10. Hundreds of businesses soon accepted the paper bills, though they were awkward to use—they didn’t fit in a standard wallet. The founder described HOURS as part of a movement toward ecological economics.

The currency didn’t last, but the environmental movement grew. So it felt natural that, as socialist politicians gained national prominence on a “Green New Deal” platform in 2018, students got in on the action. Activists at Cornell and Ithaca College, the city’s two major universities, started local chapters of the youth climate organization Sunrise Movement, and urged local politicians to pass a citywide Green New Deal.

In May 2019, Svante Myrick, a Cornell graduate and the youngest mayor in Ithaca’s history, announced his support. In a talk at Cornell, he reached for a story about Mahatma Gandhi, who could only tell a boy to eat less sugar after

he had reduced his own sugar consumption. Ithaca, he said, needed “moral authority.”

“It allows us to look our governor in the eyes, to look [at] our president, our senators, our congresspeople, and to tell them, ‘Listen, you need to stop eating sugar,’” Myrick said.

Some were skeptical. “I’m so fond of FDR’s original New Deal, because it invested in public works, not in subsidizing private companies, but building things under public ownership. It invested in prevailingwage jobs and progressive taxation,” Alex Hyland, a local electrician, told the Prospect. He thought Ithaca’s plan didn’t have those labor protections and focus on middle-class advancement. To him, it seemed more like a “press conference project.”

In 2020, the pandemic paused many of Ithaca’s plans, and city employees were furloughed. By early the following year, Myrick’s attention shifted as he announced a campaign to Reimagine Public Safety, in which he pledged to “abolish the police department while not abolishing policing.”

But the following year, the city plowed ahead, pledging to decarbonize the entire stock of 6,000 buildings. To manage the Green New Deal, Myrick hired an international climate rock star as the city sustainability director, charged with turning public comment periods into a plan. Luis AguirreTorres is an engineering Ph.D. who began climate work with Arnold Schwarzenegger, and was later honored by President Obama for running State Department green-jobs programs in Latin America. His interest in Ithaca was a stroke of luck: His wife is a professor at Cornell, and he had decided to take a break from jet-setting.

His first priority, he told a local news site in an interview, was community engagement. “We started a program called 1,000 Conversations,” he told Ithaca.com . “It’s about engaging people in having 1,000 conversations.”

Executive Drector Chavon Bunch was delighted when AguirreTorres showed up at a board meeting of the Southside Community Center. After all, it could use the attention. The center was built by the Works Progress Administration as part of a revitalization initiative of Eleanor Roosevelt, who attended its dedication in 1938. Only the gymnasium has central AC and heat. For years, the center had sought funding to

expand its kitchen, which is the size of a closet and feeds busy after-school programs.

Bunch hadn’t heard much about Ithaca’s Green New Deal until Aguirre-Torres walked in and promised to make Southside the centerpiece. They talked about installing heat pumps and induction cooking stoves, replacing windows and improving insulation. “We were all a little taken aback, like wow, this man is really passionate,” Bunch said. “He got really emotional and there were some tears.”

In a town that can move at a crawl, Aguirre-Torres soon announced that they had secured private financing for retrofits that far exceeded the city’s annual budget. On August 2, the city issued a request for proposals for a program manager to run its building electrification program, asking for submissions by the end of the month. Before applications for program manager were due, Aguirre-Torres was quoted in The Guardian , touting how he had helped the city “raise $100m by offering investors entry to a large-scale program he pitched as low risk with the potential for lots of cashflow.” No investors or partners were named.

The city council wasn’t briefed until September, after the application window had

Ithaca Sustainability Director Rebecca Evans stands outside Gimme! Coffee, the sole business in the city that had completed a heat pump retrofit through BlocPower, as of August.

closed. Some officials complained that Aguirre-Torres couldn’t supply all the details, even basic ones. Cynthia Brock, Ithaca’s longest-serving councilmember, asked whether, if a property was sold, the clean-energy equipment loan would follow the individual

“very, very low interest rates” for homeowners. He told local and national news outlets that rates would be equivalent to zero percent.

To achieve all this, Aguirre-Torres referred back to the record of the company

retrofits like insulation, heat pumps, and solar panels, on which BlocPower has built its reputation.

or the property. Aguirre-Torres told her he wasn’t sure, according to The Ithaca Voice.

Brock felt like the heady enthusiasm had outpaced the plans. She told the Prospect that she believes BlocPower was selected before the RFP was even issued. Either way, Aguirre-Torres recommended BlocPower for the RFP, which applied in a consortium, along with a local contractor. By November, they had been selected. Baird phoned into the city council meeting from Portugal, where he was en route to a climate conference in Glasgow.

In the storm of press coverage that followed, Aguirre-Torres emphasized a few things: The city had secured $100 million from investors; it would negotiate affordable deals with economies of scale; homeowners would save money by electrifying; and property values would rise. When I interviewed Aguirre-Torres in 2021 for the Financial Times , he said he had structured the deal to assure

they had identified as a program manager. With the help of BlocPower, AguirreTorres estimated in 2021, they could hit their target of 1,600 buildings in as few as three years. “When I say the government is not equipped to do this, BlocPower is,” Aguirre-Torres said.

Lisa marshall, then director of a regional clean-energy nonprofit, wrote to BlocPower with other local climate groups asking for a meeting, with basic questions like, “What is your upcharge for these services? Is it a flat fee or a percentage?”

BlocPower sent Marshall a report they had compiled on the Community Retrofit NYC program, a contract they had been awarded under then-Mayor Bill de Blasio. However, Marshall noticed, it dealt mostly with recruiting customers for smaller incentive programs, like installing efficient LED lighting, rather than the “deep”

BlocPower also arranged a virtual meeting with local climate groups. Marshall hoped her questions would be answered there, she said, but it was set up as a webinar-style virtual presentation, and meeting attendees were muted, so they could not participate.

“They did this like, ‘We would never harm anybody, I grew up in poverty, this is my story’ sales pitch,” Marshall recalled. “I left the meeting and I was like, did somebody just try to sell me a timeshare?”

In May, a local news site published an op-ed by a resident of Dryden, about 12 miles from Ithaca, who had applied for a BlocPower loan. Dan Antonioli, a local environmentalist, had used BlocPower’s software and was shocked by the quote he received: $750 a month, for a 15-year lease, at the end of which he would have to purchase the equipment, return it, or renew the lease.

Antonioli was outraged. Far from BlocPower using its risk-assessment technology to lower the cost of capital, it seemed, they were offering rates that were not even competitive with an ordinary bank loan.

Ithaca’s longest-serving councilmember told the Prospect that she believes Ithaca selected BlocPower before the RFP was even issued.

“No money down is all fine and good, but if in the end you wind up paying two to three times the amount then how is this contributing to ‘climate justice’?” he wrote.

Ithaca’s results to date call into question what BlocPower has contributed. BlocPower was hired to tackle all 6,000 building retrofits by 2030, with an initial goal of 1,600 within the first few years. As of August—nearly two years in—it had completed heat pump installation for just one client, a local business named Gimme! Coffee. It has 20 more heat pump projects in the pipeline, it told the Prospect in a statement.

After BlocPower hosted a ribbon-cutting on the front steps of the Southside Community Center, Chavon Bunch stopped receiving updates on the plan. BlocPower did involve her in an advisory committee on decarbonization, she said. But when it comes to her own center, she told the Prospect she was not sure what BlocPower had intended, “because it never got that far.”

As a councilmember, Jeffrey Barken supported the Green New Deal; he has since become disillusioned. “While we’ve been successful attracting grant $$ it’s hard to say what, if anything, we’ve managed to build or retrofit,” he wrote the Prospect in a note. “I could never get a very clear answer on these 2 questions of mine: What are we building right now? What / how many ‘jobs of the future’ will we / have we created?”

Mounting Concerns

BlocPower seemed like a perfect match for Donna Hope when she hired them in 2021. Hope is passionate about ensuring that the benefits of the energy transition reach Black, Latino, low-income, and other groups that are often left behind by public policy. So she was thrilled, she recalled, when BlocPower recommended “a particular BIPOC-founded and -staffed HVAC company that we think is one of the best.”

“I was like, ‘Oh my god, all around, I love it. Yes. Let’s do it,’” she said. BlocPower brought in Super Cool HVAC, a contractor serving Westchester and New York City.

The team warned from the start that it would be tough to obtain the necessary permit for retrofits, Hope said, and sure enough, their first attempt was rejected. She expected BlocPower to do most of the

When the team finally obtained the permit and installed the heat pumps, Hope said, the machines malfunctioned and repeatedly shut off. Hope complained for weeks, she said, and brought the problem to independent advisers, who suggested that it might be a refrigerant leak. When Super Cool finally addressed the issue, she said, they discovered a refrigerant leak on an outdoor condenser. A potent greenhouse gas had been leaking for weeks.

The condenser was fixed, but the heat pumps knocked and whirred so loudly that tenants couldn’t sleep. “If I was Björk, I could make an awesome audio track with this,” Hope laughed.

The closer she looked, the more “sloppiness” she discovered. While filming a heat pump as evidence of the noise, Hope noticed that it had cracked, and apparently been fas-

project management, but found herself “micromanaging” the team, “to the point where I went with them to the copy center to make sure they made the correct size copies of plans.”

While still in the permit application process, Hope said, she entered the building one day and smelled copper. She was shocked to find that Super Cool had started welding without the permit. “They’re just like, ‘While we’re waiting, let’s just do it.’” Horrified, she said, she asked them to hold off. Super Cool representatives did not respond to requests for comment.

tened with Scotch tape. In another place, she found that the contractor had bolted shut a breaker box that needed to be able to open.

Hope’s BlocPower representatives were dismissive, she said, so she decided to go directly to Baird, since she had connections to him through other climate professionals. After a few months, she reached him. At that point, Hope said, things moved quickly.

A representative from the heat pump manufacturer Daikin came to her home with Super Cool, and quickly noticed that a critical “anti-siphoning” device, a small red plastic part, was missing. “You mean that

BlocPower has made versions of the same claim for years: It has “greened” or retrofitted around 1,000 buildings.

piece we always throw away?” the Super Cool representative said, according to Hope. “We’ve never installed that.”

BlocPower eventually arranged for Super Cool to install the anti-siphoning devices. But the Björk soundtrack plays on. When I visited, the heat pumps periodically made a loud sucking noise, not unlike the sound of a dentist’s saliva-siphoning instruments.

Hope remains concerned that the initial improper installation may have damaged the heat pumps. She is stuck with a 15-year lease, paying BlocPower $75 per month, with a project manager and contractor she does not trust, she said.

In fact, she realized as she looked over her bills, BlocPower charged $175 each month for the first ten months, rather than the $75 she owed. When she discovered the error and reported it, she said, the

Asked about Hope’s case, a BlocPower spokesperson said, “We are in close coordination with this customer and appreciate her patience as we persistently continue to work to address any and all of the obstacles that must be overcome before, during and after installing heat pumps in old, leaky buildings—many of which don’t present themselves until after the project has begun.”

Even as BlocPower has raised millions in new funding, the company has made versions of the same claim for years: It has “greened” or retrofitted around 1,000 buildings.

In a 2019 Facebook post, when former President Bill Clinton visited a church the company was servicing, BlocPower wrote that they were working to make “another 1,000 buildings greener.”

In 2021 congressional testimony, Baird claimed that the company has “Greened 1100+ apartment and community buildings in NYC.” And multiple press releases that year echoed that same estimate: “Since its founding in 2014, the company has retrofitted more than 1,000 buildings in disadvantaged communities in New York City, with projects underway in 24 cities.”

Two years later, the company appears to have moved backwards. “Since 2012, our team has completed energy projects in nearly 1,000 buildings,” read multiple press releases from 2023.

Statements sometimes refer to completing 1,000 projects in buildings—implying individual units—or retrofitting 1,000 buildings, a considerably larger feat.

more than 1,200 buildings in more than 25 American cities.” A month later, the total count of cities had ticked up to 26, but the 1,200+ figure held constant.

And what exactly it means to “green” a unit—or a whole building—remains unclear. For this story, I asked BlocPower how many heat pump conversions it has completed to date, and what Baird meant when he said the company “greened” buildings.

A spokesperson replied, “BlocPower’s energy efficiency and green building upgrades in 1000s of buildings and homes include: LED lighting, fossil fuel furnace replacements, moving buildings off of oil, or gas, insulation, water waste reductions, smart pumps, smart valves, solar PV, weatherization and similar energy efficiency initiatives—all of which contribute to reductions in GHGs and increased comfort, health, and building decarbonization.”

Asked by the prospect to provide five to ten clients of completed retrofits in New York, a spokesperson for BlocPower provided just three references. The first was a nonprofit called Historic Ithaca, where, the spokesperson acknowledged, heat pump installation has not yet occurred. (“We liken the process of greening homes and buildings to an ‘electrification journey,’” the spokesperson said.)

Another reference was Pastor Demetrius Carolina of First Central Baptist Church in Staten Island, where BlocPower helped finance the installation of solar panels, but no heat pumps. The church continues to rely on natural gas. Carolina told the Prospect he was pleased with the work.

company at first shot back that she had only overpaid for eight months. “It’s not like I paid them cash,” she said. She used bank-to-bank ACH payments, and kept the receipts. After disputing the error, she said, they returned the money to her through multiple wire transfers, and she incurred fees.

“I was like, OK, it’s bad enough that the management on-site has been terrible. You referred an HVAC company that’s done sloppy work. But even the finance piece, which is supposed to be your bread and butter? Like, this is basic,” she said.

The company has also occasionally stated that it has completed projects in over 5,000 buildings, writing in December 2022 that it “completed hundreds of household retrofits across the country in 2022, bringing the total number of energy projects to over 5,000-projects.”

Claims about locations also raise questions. In April 2021, Baird said, “There are almost 900 buildings in Brooklyn that we’ve greened.” By March 2022, CNBC reported that BlocPower had “greened” more than 1,200 buildings in New York City. Yet later the same month, when BlocPower was featured in Time magazine and Fast Company ’s lists of influential and innovative companies, it wrote in press releases that it had “retrofitted

The third referral was Lincoln Eccles, who owns a 14-unit building in Brooklyn. When his fuel oil boiler broke during the pandemic, supply chain shortages delayed his ability to replace it. Eccles contacted BlocPower, he told the Prospect , which brought in the contractor Super Cool HVAC and helped him finance the installation of air-source heat pumps.

BlocPower negotiated a ten-year payment plan, Eccles said, which made his payments roughly equal to the cost of oil and maintenance for his old fuel oil boiler. This is surprising, since a competent fuel oil conversion to heat pumps should yield significant savings. Originally, BlocPower had discussed another contractor installing solar, helping provide tenants a discount on

Donna Hope inspects the red anti-siphoning device installed retroactively on one of her heat pumps.

their electric costs, but that part of the plan fell through, according to Eccles.

As building owner, Eccles said, he is pleased with the work, but energy bills for some of his tenants have gone up. He blamed tenants for using the system incorrectly. Heat pumps should be left to run continuously, he said, but they turn the system off and on too much. Eccles added that BlocPower is now adding “additional insulation.” This too is a red flag, according to experts on heat pump installation, who say buildings should be insulated first, in order to rightsize the heat pump system.

BlocPower has also discussed retroactively tightening the building envelope of churches in New York that it rehabbed as part of a project with Metro IAF, a community organizing group, according to Joe Morris, who runs the group’s cleanenergy initiative.

Metro IAF contracted with BlocPower for planning and project development for ten projects, he said. About half are now seeking to remedy problems with quality or cost. The other half seem to be done, Morris said, but Metro IAF is still reviewing them.

Asked about these congregations, a BlocPower spokesperson said, “Replacing 100-year-old heating systems with several hundred cutting-edge heat pumps has proved challenging in 4 or 5 projects, especially where there are installation issues or faulty equipment, but we’re committed to meeting all customer expectations, improving operations as we go, and partnering with manufacturers, scientists, and industry experts to leave no building behind.”

Monte Sion Christian Church, on Manhattan’s Lower East Side, is one of the relative success stories of the partnership. The project is not seeking remediation, and is likely to be closed out soon.

The Rev. Getulio Cruz told the Prospect that he has had a positive experience with contractor Super Cool and with BlocPower. “I have a unique experience, in that I’m very happy with the work that they did. I know that other congregations that didn’t have the same experience, and I think it’s because their buildings were more complicated,” Cruz said.

Still, he added, since BlocPower replaced Monte Sion’s gas heating system and airconditioning units with heat pumps, their heating bill has stayed about the same and

their cooling bill has soared. The congregation is now adjusting its use of the cooling system, Cruz said, and hoping that it will come down.

Green Planning

Energy efficiency initiatives have long been associated with President Jimmy Carter, a sweater-wearing moralist who deregulated power markets and touted the virtues of market-led capital allocation. Carter announced a war on energy waste with his 1970s Weatherization Assistance Program.

Barack Obama carried that legacy forward, putting billions in stimulus toward cleantech, with a special emphasis on energy sobriety. Federally funded smart meters, for example, were intended to help millions of homeowners moderate their energy usage.

In messaging, at least, Biden’s building electrification drive breaks with that legacy of market-led change plus individual restraint. It harks back to the New Deal, with its emphasis on long-range planning, public investment, and public health. The IRA made billions in incentives available to support insulation, heat pumps, solar panels, and other green appliances. To ensure that it is spent, the administration plans to create “centralized, long-term financing institutions with the scale required to transform financial markets.”

But this green-planning push raises strategic questions. Take the question of ownership, for example. The new, national financing institutions will be structured as nonprofits, and encouraged to draw on additional sources of capital, including private foundations.

Using nonprofits to manage the disbursal of funds could allow the administration to achieve more of its goals. For example, the federal government is subject to strict lending rules that prohibit explicit privileging of groups like Black and Hispanic homeowners. Using a nonprofit to distribute cash could give the programs more latitude to deliver on Biden’s goal for 40 percent of climate change investments to go to disadvantaged communities.

But reliance on philanthropic and private capital—a fuzzy distinction, given the growth of impact investment funds and charities’ increasing use of arcane financial strategies—could also make these entities more subject to the preferences of influential donors and investors.

Another debate concerns the role of community financing institutions, as the administration looks to scale up the distribution of funds. Organizations such as the Coalition for Green Capital have argued for a more top-down approach to lending, which they say would do more with limited public funds. Others argue that CDFIs and local lenders, as “capillaries of the financial system,” are better positioned to meet the distinct needs of individual communities.

That emphasis on community trust is part of why New York City selected Brooklyn-based BlocPower to implement its community retrofit program to begin with—and why some green-finance experts now question whether a startup that emphasizes its local roots should spin its financing model into the Amazon of home electrification.

And the revival of ambitious public investment carries with it debates over risk.

Baird’s move-fast-and-break-things mentality could inject some much-needed dynamism into the world of green finance, which is moving from the margins of the policy discussion to the heart of the national economic planning agenda. In existing green banks, the risks are too often the opposite sort—moving too slowly to avoid failure, and incurring huge, invisible opportunity costs.

But there are also risks to adopting Silicon Valley’s mode of destructive creation, which focuses on the financing first and delivering the product later. While it may

In Ithaca, little of the original team that promised a Green New Deal for the city is left.

work for software design, there is typically less human toll when those companies, as Baird put it , “go under.” If the complex work of decarbonization is left to captivating founders who succeed with tech investors by articulating big ideas, it raises the question of how to make the public sector dynamic while avoiding the reputational and real risks to the green transition of a failure to deliver.

In Ithaca, Southside Community Center Director Chavon Bunch has heard that the green building overhaul is unlikely to go forward.

“Your email prompted me to find out what is happening, because I haven’t heard a thing from anybody,” she told me. “It seems as though we are on the chopping block.”

Bunch is mostly determined to secure a

said of the funding for Southside. “But I pursued this aggressively because I felt the building had become symbolic, and that the perception of broken promises would be devastating for the Green Deal.”

Little of the original team is left. Myrick, the young mayor who spearheaded the Green New Deal, announced last year that he would resign to become executive director of People for the American Way, a progressive advocacy group. Shortly thereafter, Aguirre-Torres left his post as sustainability director. After a stint at Rewiring America, Aguirre-Torres is now director of financial planning and analysis and financing solutions at the state energy agency.

Implementation of the Green New Deal has fallen to Rebecca Evans, who got her start as a sustainability coordinator at Ithaca College. Evans saw Baird more fre -

has paused its participation in the program, according to founder Ian Shapiro. The emphasis on financing constraints, he argued, may have been flawed from the start. Contractors are oversubscribed, with monthslong waiting periods for heat pumps.

Commercial and multifamily developers are increasingly frustrated, Shapiro said, since they insist, “we know how to get low-interest financing. Our hurdle is getting competent contractors and doing good work.”

Ithaca’s electrification plans seem poised to keep trundling along. There may never be a reckoning. BlocPower said it is preparing to bid on a new RFP for energy audits of municipal buildings, and hopes to bring heat pump incentives to the local wastewater treatment plant, which has struggled to hire public employees due to uncompetitive wages, The Ithaca Voice reported.

renovation for the kitchen, which the city council had backed with an additional $200,000 in funding. Barken, the councilmember who championed that grant, recently resigned. He has increasing misgivings about the decisions Ithaca made to support its Green New Deal, he told the Prospect .

“In many respects it was entirely inappropriate for us to spend in this fashion when there were other city-owned operations that deserved funding and would be more accountable to city oversight,” Barken

quently at the start of the program. “I see him intermittently. I think he’s very charismatic,” she said.

The $100 million Aguirre-Torres and BlocPower had raised to finance the retrofits is no longer available, Evans told the Prospect, because “that financing was not locked in at current interest rates in 2021.” Evans said she believes BlocPower will soon announce that it is “shifting to a referral model,” in which it will direct potential clients to local contractors.

BlocPower’s engineering partner, Taitem,

To manage the staffing shortage, Ithaca brought in a private contractor, which came at a premium. If there is a gap between rhetoric and reality, here, it doesn’t look like it will be crossed anytime soon.

“I have mounting fears that electrification itself is not the answer,” confessed Barken, the ex-councilmember. “Our likely next mayor, Rob Cantelmo, seems eager to embrace the glitz of flashy green-deal slogans, but I question his ability to articulate the challenges that have hindered progress with the honesty necessary to really lead.”

There are risks to adopting Silicon Valley’s mode of destructive creation, which focuses on the financing first and delivering the product later.

How a culture of gross sexism in the airlines

A UNION OF THEIR OWN

By Robert Kuttner

The first thing to appreciate about the Association of Flight Attendants (AFA) is that it was born feminist. Its feminism and its militance have nourished each other. The second thing to appreciate is that AFA is among the most democratic of American unions. Every officer comes from the ranks

created America’s most militantly feminist union

of working flight attendants, so there is no gap between the lived experience of the rank and file and the union bureaucracy.

“The people who are representing you are people who work your same job, at your same airline, at your same base, and they understand directly what the job is,” says Sara Nelson, who has served as AFA president since 2014. “It also means you can also hold your leaders directly accountable.”

Nelson, 50, is among the most charismatic and admired of union leaders, even though AFA , with just under 50,000 members at 19 different airlines, is a relatively small union. After the death of AFL - CIO president Richard Trumka in 2021, Nelson seriously considered running to succeed him, but ultimately decided against it. (The labor federation is now headed by Liz Shuler, its former secretary-treasurer.)

The union is widely admired (or feared, depending on your viewpoint) for the ingenuity and sheer nerve of its tactics. One technique, which AFA has literally trademarked, is called CHAOS, which stands for “Creating Havoc Around Our System.”

CHAOS involves having a small number of flight attendants walk off the job just as a flight is boarding, with no advance notice to management. Unlike a conventional strike involving all workers, where management

can wear down a union whose strike fund goes only so far, CHAOS disruptions involve only a few workers and hit management where it is most vulnerable.

Nelson has also been very astute and audacious at using her political influence. When the airlines began incurring massive losses as the COVID pandemic took hold, it was Nelson who persuaded Congress to approve the Payroll Support Program, an airline bailout of $25 billion in grants and $25 billion in loans under the 2020 CARES Act. The federal money was conditioned on no worker layoffs, no stock buybacks, no dividends, and no raises to executives.

Nelson came up with the pro-labor terms after strategy sessions with four staffers for Elizabeth Warren. She sold the unusual bargain to key airline leaders and used her close alliance with House Transportation and Infrastructure Committee chair Peter DeFazio, a fellow Oregonian, to make sure that this would be the deal, or no deal.

American Airlines’ then-president Doug Parker, who had worked with Nelson for more than a decade since his days as CEO of America West and then US Airways, called Nelson at home on the evening of March 18, 2020, and enlisted her to come to the downtown Washington office of Airlines for America. Some 20 glum-looking executives

in suits had been working all day in vain to sell their idea of an unconditional bailout to key congressional leaders.

Nelson pitched her plan, picked up the phone, and called DeFazio. The execs realized that she had far more influence than they did. Parker credits Nelson for getting the deal done. “The airlines certainly didn’t put those [terms] in,” Parker told an interviewer. “It was good policy.”

The pandemic put off a long-awaited set of demands for flight attendants. For more than a decade after the attacks of September 11, 2001, the airlines lost money. In 2020, after several years of restored airline profits, several contracts were up for renegotiation. But just as bargaining began, the pandemic hit. The airlines collectively lost about $35 billion in 2020

Contracts are up again at several major airlines, and with passenger demand back and companies back to profitability, flight attendants are ready to win their due. But despite inspired leadership, creative tactics, and member solidarity, AFA faces a tough round of contract bargaining, because the airlines find themselves in a different sort of crisis—one that is self-inflicted.

The airlines stuck to the letter of the bailout agreements by not laying off workers, but they violated the spirit by offering

pilots generous early-retirement packages to reduce their pilot payroll. They then found themselves short of crews and vulnerable to chaos (lowercase) when passenger demand returned. It was part and parcel of an industry strategy to maximize profits by getting rid of all the slack in the system—all flights booked full, few standby planes, and few extra flight attendants.

Airlines offered reservations on flights that they lacked the crews to staff. Holiday weekends produced long delays and tens of thousands of flight cancellations. The Department of Transportation, which has handled the airlines very gingerly ever since the disruptions of 9/11, belatedly responded to consumer and media pressure and began levying fines for deceptive practices.

So the flight attendants are in the position of pushing for long-deferred gains in wages and work rules at a time when the airlines are preoccupied cleaning up a mess

of their own creation. Before this round of bargaining is over, industry chaos may well lead to labor CHAOS.

The first union of cabin attendants, the Air Line Stewardesses Association, was founded by United Airlines workers in 1945. All of the organizers were women, at a time when the labor movement was heavily male. The union’s founding president was Ada Brown, a registered nurse who was working as a stewardess. “In that era,” says Nelson, “there were not very many jobs that women were allowed to do, and not a lot of respect for women’s work. The union was formed to turn a job into a career.”

In just six months, Brown and seven other activists enlisted 75 percent of the stewardesses at United to sign union cards and won a contract in 1946. “The fact that it was women who formed this union and then demanded that it be a real democratic union means that our union is as close to the

membership as you can possibly get in terms of decision-making power,” Nelson says.

From the beginning of flight attendant unions, issues of gender and gender treatment have predominated. The first contract with United in 1946 included an innovative system that enabled stewardesses to bid for flights based on seniority. The bidding system allows a flight attendant to plan her schedule well in advance, to maximize time off or time with family, rather than being at the mercy of management. The system was also instituted, says Sara Nelson, “to make sure that managers couldn’t try to exploit flight attendants by trading sex for preferred schedules.”

At a time when retail, fast-food, and hotel workers at non-union hotels have no control over their schedules, the flight attendant bidding system seems far ahead of its time. It’s important to remember that in 1946, the labor laws were still well enforced and unions seemed here to stay. Steward-

Sara Nelson, AFA president since 2014, is among the most charismatic and admired of union leaders.

ess organizing gained a tenuous foothold at a historical moment when both the law and employer assumptions were far more benign than they are today. William Patterson, president of United in that era, was not hostile to collective bargaining. He was the first airline executive to hire stewardesses, in 1930, and he was fond of saying that stewardesses needed a union. His only daughter became a stewardess.

In 1949, the Stewardesses union became a semiautonomous unit of the Air Line Pilots Association (ALPA), which had its own subsidiary representing flight attendants at American. ALPA hoped the new affiliation would increase their bargaining power. But stewardess relations with the all-male pilots were at least as fraught as their relations with airline executives.

In principle, the pilots wanted to help all occupations in the airline industry to get organized. But in practice, they wanted to call all the shots and have final say over decisions made by the stewardess unit. “We were just sick and tired of the pilots telling us what to do,” says Diane Tucker, a longtime union leader who has held positions at every level of AFA and currently serves as the United AFA benefits chair.

In 1973, there was a relatively amicable breakup with the pilots, and AFA eventually got its own charter. “We had to leave a maledominated union, so that we could have our own say,” Nelson says. “We believe we are the only union in America that was formed by women and is still run by women.”

Stewardesses did not become feminists because the profession attracted young women with ideological motivations. The opposite was true. Most were attracted by the perceived glamour, the schedule flexibility, and travel opportunities, at a time when few occupations were open to women. This led to widespread demand for the jobs.

In 1961, United had some 50,000 applications for about 350 openings. It was a buyer’s market.

Nelson, from a conservative family in Corvallis, Oregon, became a flight attendant at age 22 in 1996 because it beat waitressing. Nelson says she had little knowledge or appreciation of unions until early in her career as a flight attendant based in Boston, when her union rep helped her collect delayed paychecks.

Only after being hired did stewardesses become feminists, because of the daily humiliations at the hands of male bosses and male norms.

In the 1950s and ’60s, stewardesses were subjected to an array of demeaning rules and inspections that seemed like a parody of sexism and male domination. They had height and weight limits, and were subject to girdle, bra, slip, and weight checks. Nail polish had to come from an approved list of styles and hues. Hair coloring was prohibited. They were not permitted to marry, and they could not work beyond age 32. None of these rules applied to male employees.

The airlines liked women who stayed for a few years, and then left to start families. Denying stewardesses long-term careers increased the airlines’ bargaining power and saved them money on pensions and health insurance. At United, the average stewardess stayed just 32.4 months. The New York Times quoted United senior vice president for personnel Charles Mason: “If that figure ever got up to thirty-five months, I’d know we’re getting the wrong kind of girl. She’s not getting married.” And this was in 1965, after the 1964 Civil Rights Act.

In that era, most passengers were male. Pilots were exclusively male. Airline executives were entirely male. And in the very era when second-wave feminism was taking hold, the airlines became more flagrant in their use of stewardesses as sex objects, presenting their workers both as wholesome girls next door who welcomed you on board, attended to your comfort, and served you food and drink—and who maybe were available to do more, if only in your dreams.

In 1971, National Airlines sponsored an infamous ad campaign portraying an actual stewardess, Cheryl Fioravante, with the double-entendre tagline “I’m Cheryl. Fly me.” More women were featured in the “Fly Me” ads, and the airline even named individual planes for stewardesses to reinforce the theme. This led to a protest at air-

line headquarters by the stewardesses and the National Organization for Women with signs that read, “Go Fly Yourself.”

Braniff devised a kind of in-flight burlesque where stewardesses had to change into six different progressively skimpier outfits during long-distance flights. The ad promoting this had another double-entendre headline: “Introducing the Air Strip … brought to you by Braniff International, who believes that even an airline hostess should look like a girl.”

Southwest, which used Love Field in Dallas, boasted, “We Make Love Eighty Times a Day.” Air France ran an ad asking, “Have you ever done it the French way?” Continental adopted the slogan “We really move our tails for you.” As late as the mid-1970s, Continental stewardesses were ordered to kiss all male passengers on the cheek as they departed the plane. As Nell McShane Wulfhart writes in her definitive history, The Great Stewardess Rebellion , “Many of the men would swivel their faces around at the last second to catch the stewardess on the lips.”

The ideal of Barbie, created in 1959, and the ideal stewardess were products of the same era and culture. There was even a Braniff Barbie, with four different outfits.

As early as the 1940s, some airlines had introduced male stewards and pursers, who were paid better and not subjected to height, weight, marriage, or age restrictions. In principle, all of this became illegal with the passage of the 1963 Equal Pay Act and more emphatically with the 1964 Civil Rights Act. But neither act was self-executing, and the airlines fought to keep the age, weight, and marriage restrictions that applied only to women. Every single one of these offensive practices was reversed by the flight attendants, either via collective bargaining or through litigation.

In the class action case of Sprogis v. United Air Lines, a federal district court in 1970 held that Mary Sprogis, terminated by United in June 1966 when the airline learned she was married, had been illegally fired and was entitled to reinstatement and back pay. United appealed, claiming that marital status was a bona fide occupational qualification under the Civil Rights Act. In 1971, the Seventh Circuit Court of Appeals found for Sprogis and settled the marriage issue once and for all. United had to pay some $33 million in back pay and reinstate any of the 475 flight attendants terminated

Stewardesses became feminists because of the daily humiliations at the hands of male bosses and male norms.

for marriage who wanted their jobs back.

It took another lawsuit, by Celio Diaz, for the courts to establish, in 1971, that men could apply to be flight attendants. Diaz had been turned down by Pan Am, for being the wrong sex. For a time, the airlines used the awkward terms “steward” and “stewardess” but eventually settled on “flight attendants.”

As late as 1968, Pan Am was actually tightening weight limits, and summarily firing any female flight attendant who was deemed overweight. That was finally ended by a mix of litigation and collective bargaining. Likewise the age limits.

Not until 1981 did the Supreme Court hold, in a class action lawsuit brought by Mary Laffey, a flight attendant employed by Northwest, that pay differentials for male and female cabin attendants doing the same jobs violated both the Civil Rights Act and the Equal Pay Act. Rather than accepting the decision, Northwest found reasons to appeal on a technicality, and the case was finally settled in 1984, when a three-judge appellate panel, made up of Robert Bork, Kenneth Starr, and Ruth Bader Ginsburg, no less, awarded flight attendants $63 million in back pay.

Airline deregulation, enacted in 1978, made the collective-bargaining climate that much more arduous. Previously, regulation of routes and fares guaranteed the airlines a fixed rate of return. So there was little to be gained by hammering down wages, because any savings could result in a downward adjustment of permissible fares to hold the profit margin constant. Most airlines opted for good labor relations. But with deregulation, the skies became a free-for-all.

At first, new entrants promised better service and lower fares. But smaller new airlines were either forced out of business by fare wars or acquired by larger airlines. The industry oscillated between the ruinous competition that regulation had been devised to prevent, and predatory unregulated concentration. All of the major carriers used bankruptcies to shed debts and cut costs. According to Ganesh Sitaraman’s new book, Why Flying Is Miserable: And How to Fix It, there have been 189 bankruptcy filings since deregulation. When airlines emerged from bankruptcy, one prime casualty was invariably steep cuts in flight attendant wages, benefits, and working conditions.

So just as the unions were triumphing over grotesque sexism, they were losing

crucial leverage to defend their members’ economic condition. Ronald Reagan set the hostile, anti-labor tone of his era when one of his first acts was to break the 1981 strike of air traffic controllers and destroy their union, PATCO.

The 1970s and ’80s were also the era of corporate raiding, and airlines were convenient targets. A corporate raider profits by overpaying to gain control of a company, using borrowed money, and then viciously cutting costs by slashing wages, laying off workers, and gutting pension funds, all the while paying himself exorbitant fees out of operating income, and piling the debt onto the balance sheet of the target company.

In 1985, Carl Icahn, one of the most notorious corporate raiders, got control of TWA , whose flight attendants were then represented by an independent union. Icahn took the company private in 1988, gaining $469 million in personal profit but adding $539.7 million in debt to TWA’s balance sheet. He put the company through Chapter 11 bankruptcy in 1992. After Icahn exited, TWA went into bankruptcy twice more, in 1995 and again in 2001, after which TWA was sold to American Airlines. Along the way, bases in Pittsburgh and St. Louis were closed, and profitable transatlantic routes were sold.

The Icahn takeover was a catastrophe for TWA’s 6,000 flight attendants. After Icahn became chairman of the airline in 1985, he demanded steep concessions, including wage cuts of 22 percent and work rule changes to save TWA another 22 percent . To add insult to injury, the wage cuts demanded of the mostly male mechanics totaled only 15 percent, on the premise that female flight attendants were “secondary” earners.

In 1986, the union called a strike. Icahn hired permanent strike replacements and was able to break the union. Thousands of flight attendants lost their jobs. Some were eventually hired back but at much reduced pay. It was in the aftermath of the TWA debacle that AFA came up with the CHAOS strategy.

CHAOS was launched in 1993 to deal with a protracted contract dispute with Alaska Airlines. The airline was enjoying record profits but was stonewalling the union. Negotiations had dragged on for nearly three years.

Unlike most labor-management disputes, which are covered by the 1935 National Labor Relations Act (Wagner Act), unions in the airline industry are governed by the 1926 Railway Labor Act. That earlier law was

passed to reduce the incidence of crippling strikes in a vital transportation sector, and was extended to the airlines in the 1930s.

Being subject to the Railway Labor Act rather than the NLRA has its pluses and minuses. We saw one drawback just last year, when Congress stepped in to block a freight rail strike, as it can do under the law. But one big plus is that in the event of a contract impasse, either side can request mediation by the National Mediation Board. If mediation fails to produce a settlement, the mediator can release the company to impose work rules and the union is free to call a strike.

Due to a quirk in the law, the strike need not involve all workers. Leaders of AFA realized that they were permitted to devise intermittent surprise labor actions—a few workers strategically walking off the job in a fashion guaranteed to maximize disruption, at minimal risk to most members. “Nobody had ever used the intermittent strike provision of the Railway Labor Act before,” Nelson says. Thus was born CHAOS.

In 1993, deliberate media publicity about the union’s new tactic and its disruptive potential was enough to cut Alaska bookings by 20 percent even before a single flight attendant walked off, according to Nelson. Alaska took the union to court. But a federal district court in Washington state ruled that intermittent striking is permitted under the Railway Labor Act. The ruling also prohibited the airline from imposing any discipline—including firing—for engaging in intermittent strike activity.

“We created what we called the guts list, of flight attendants willing to risk being fired for walking off the job during boarding,” says Sandra Morrow, who led the L.A.

Just as the unions were triumphing over grotesque sexism, they were losing crucial leverage to defend their members’ economic conditions.

local of Alaska Airlines workers at the time of the first CHAOS action and still serves on the Alaska negotiating committee. The first CHAOS strike took place at Sea-Tac in August 1993, when three flight attendants left an Alaska Airlines flight as passengers began boarding. This was followed four days later when attendants walked off the last Alaska flight out of Las Vegas. In September, AFA targeted five flights simultaneously in the San Francisco Bay area.

The 24 striking flight attendants all were summarily fired. But Alaska could not withstand the chaos and the passenger loss of confidence. It soon caved. So did AirTran, US Airways, America West, and Midwest Express, on the eve of threatened CHAOS strikes. Meanwhile, all the flight attendants got their jobs back as part of the Alaska settlement.

Today, Alaska Airlines is once again a prime union target. The airline is making record profits and is on track for net earnings of $1 billion in 2023. It plans to spend between $75 million and $100 million this year on stock buybacks, but flight attendants haven’t

had a contract with a real raise since 2014.

The sexism continues. The company considers the (nearly all male) pilots in short supply and the pool of (mostly female) potential flight attendants almost limitless. Alaska pilots were granted a 23 percent raise as part of this year’s contract, plus another 11 percent “snap up” to put them on an equal footing with the industry’s bestpaid pilots at Delta and American.

Not only is Alaska refusing to offer flight attendants anything comparable, but the airline wants a giveback in the form of a longer standard workday, known as a duty day. Under the current contract, a flight attendant must receive premium pay if she is scheduled for more than 10.5 hours a day. Alaska wants to extend that to 11 or 12 hours. Another issue in the Alaska negotiations and others is what’s known as boarding pay.

“In most airline contracts,” explains Nelson, “we get paid only from the time the door closes to time it opens,” even though flight attendants have to be at the airport well before departure time and be on the plane to manage passenger boarding, and check for safety equipment. The unpaid time can easily

exceed an hour on each flight when there are delays, plus more unpaid time at the airport waiting to board. In this round of negotiations with both Alaska and United, the union is demanding not just boarding pay, but compensation for ground time as well.

Delta, the only large non-union carrier, recently agreed to pay for boarding time as part of its strategy of matching or bettering union scales, as a union avoidance mechanism. As if to taunt union carriers, a Delta vice president wrote in her memo to flight attendants, “Our new boarding pay component—an industry first—further recognizes how important your role is on board to ensuring a welcoming, safe and on-time start to each flight and for each customer.”

Of course, without unions at competing airlines, Delta would never have been provoked into offering such a perk.

At Alaska, the issue of boarding pay and ground pay is connected to another issue of so-called commuter employees. All of Alaska’s five West Coast bases are in high-cost cities. According to Sandra Morrow, “40 percent of flight attendants are commuters. They can’t afford to live where they are based.”

Most flight attendants are only paid after the airplane doors close, despite time spent checking in passengers and stowing luggage.

Commuting time getting to work from other metro areas on other airlines, understandably, is not compensated; but neither is the time waiting around the airport. The airline has rigid rules that the union wants relaxed causing flight attendants to be punished if they report late due to the fault of another airline, which forces workers to arrive early and incur still more unpaid time.

The union has requested mediation under the Railway Labor Act. The mediation process, which includes a 30-day “cooling-off period,” still has a few months to run before the union can be released by the mediator to pursue a strike against Alaska Airlines, selective or otherwise.

In August, flight attendants picketed Alaska at six West Coast airports, from San Diego to Anchorage. They were joined by thousands of workers from more than a dozen other unions. The picket signs read, “Pay us or CHAOS.”

The complex early history of organizing stewardesses, combined with the saga of startups, bankruptcies, and mergers, has left a somewhat fragmented union structure. AFA is the largest of the flight attendant unions, with close to 50,000 members. It was once larger; Northwest workers were represented by AFA , but after non-union Delta absorbed Northwest, those attendants lost their union representation. In 2003, AFA became an autonomous unit of the Communications Workers of America, whose other units represent some 20,000 airline ground workers.

The more than 26,000 flight attendants at American have their own independent union, which was affiliated with the heavily male Transport Workers Union. The union at American went through a parallel odyssey to that of AFA , fighting rampant sexism in the industry and the parent union, and left the TWU in 1977 to become the Association of Professional Flight Attendants (APFA). The TWU organized and still represents the 15,000 flight attendants at Southwest, and represented Eastern Airlines attendants before that union went broke. And the Teamsters represent flight attendants at several commuter airlines.

There have been occasional talks about a possible merger, but none is in the offing. AFA and APFA display comparable militance and have cordial relations. The fragmentation doesn’t seem to harm the bargaining power of flight attendants, though it has led

to some jurisdictional spats over organizing campaigns. Unlike in industries such as auto or steel, there is no history of targeted, industry-wide pattern bargaining.

Next year will be a pivotal moment for the flight attendants. The airlines are finally very profitable again after a two-decade roller coaster.

Eight days after the September 11 attacks, as bookings fell by 96 percent, United laid off 20 percent of its employees, and furloughed another 2,300 flight attendants

in late 2002, when the airline declared bankruptcy, which gutted AFA’s pension and health plans. At United, the average annual salary for a flight attendant was over $44,000 in 2002, but under $36,000 in 2007. The union took a 9 percent pay cut in 2003 and another 9.5 percent cut in 2005.

The Great Recession was another body blow. But the airlines returned to profitability after 2011, with the four largest carriers averaging a total of about $12 billion in annual profits by the middle of the decade.

In 2022, more than 180,000 flights were canceled, which cascades through the system.

It was time for the flight attendants to get their share.

But COVID blew those plans to hell. Three years later, the flight attendants are back at the table, facing a flush set of airlines. In 2023, the International Air Transport Association projects that industry profits will be around $10 billion.

American Airlines’ stalled contract negotiations with APFA parallel those of airlines represented by the larger AFA. Between 2013 and 2019, when it was restraining worker wages, American issued stock buybacks totaling $12.9 billion, more than its total payroll.

On August 30, APFA announced that members had voted overwhelmingly to call a strike against American if stalled contract negotiations do not improve. “American’s Flight Attendants have not received cost-ofliving increases or any other quality-of-life improvements, even as they played an essential part in keeping American in the skies both during and after the pandemic,” APFA president Julie Hedrick said in a statement.

Contract negotiations are complicated by several perverse industry practices that do not lend themselves to the usual collective-bargaining subjects of wages, hours, or work rules.

Since COVID, there have been intensified bouts of air rage, in which angry passengers take out frustrations on flight attendants. A customer may be furious over long flight delays; fights break out over seat backs that passengers invariably slam into each others’ knees. During the pandemic, flight attendants also bore the brunt of passenger resentment for enforcing mask rules.

The Federal Aviation Administration reports that more than 9,000 “unruly passenger” incidents have occurred since the start of 2021. Diane Tucker also blames the influence of Donald Trump. “Passengers who might have found some inconveniences merely annoying now feel it’s OK to be belligerent,” she says.

The root cause of much passenger anger is shortsighted industry profit maximiza-

tion strategies that mash seat rows closer together to squeeze in more customers and push capacity to its limits, leading to cancellations and long delays in cases of mechanical and computer problems or weather delays.

It is compounded by the airlines’ strategy of short-staffing. “We used to be staffed at between 25 and 50 percent over the minimum staffing requirements,” Nelson says. “Today they’re running all the flights with minimum staffing and minimum planes. So when a flight cancels, there is no give.” In 2022, more than 180,000 flights were canceled.

The airlines’ sheer cheapness leads to other problems that frustrate flight attendants. At United, when delays or cancellations occur, flight attendants need to call a phone number to learn their reassignment or whether to go home. United doesn’t have enough schedulers to process the calls, so flight attendants end up waiting interminably on hold and everything backs up. “I might be sitting in Chicago and my flight is delayed,” says Diane Tucker. “I’m on the phone trying to call in, but I can’t reach anybody.”

You would think all of this would be automated. But the requirement of a live call is a relic of an earlier contract requirement intended to protect workers. As Nelson explains, “Airline officials used to leave messages for flight attendants through the pilots or gate agents, but signals would get crossed.” The system of requiring direct contact between the scheduler and the flight attendant worked well enough, according to Nelson, until United failed to keep an adequate staff of schedulers at a time when more and more flights were getting delayed or canceled. “The company has screwed itself here,” Nelson says.

In a more benign bargaining climate, with management less bent on short-term profit maximization, the union and the company would work something out. But rather than automating or hiring more schedulers, United’s proposed remedy is to extend the number of hours that a flight attendant has to hang around the airport waiting for an assignment from the current four hours to six, a nonstarter for the union.

In order to pursue durable gains in earnings and work rules, the flight attendants find themselves in the position of having to challenge the industry’s core business model, which harms workers and passengers alike. This is far from the usual stuff of collective bargaining.

In addition to the current negotiations with United, Alaska, and other airlines, AFA’s other major project is to finally organize the one longtime holdout, Delta. It’s been a long-term goal that would increase the union’s membership by more than half.

In the Delta campaign, three unions that have often been rivals over jurisdiction have agreed to a joint campaign. AFA is working to organize flight attendants. The Teamsters are organizing mechanics, and the Machinists are targeting ramp workers such as baggage handlers. This is a historic first that maximizes the energy among the workforce and the pressure on Delta.

Another plus is that when Delta absorbed Northwest in 2008, it also took on several thousand flight attendants who used to be represented by AFA and appreciated the benefits of a union. So the organizing drive begins with that pro-union core, who can organize other workers.

The Delta campaign is by far the largest current organizing drive against a single employer, according to Nelson. AFA has been circulating cards for two years, and the number of signed cards keeps growing. Under the Railway Labor Act, it’s harder for management to pursue a strategy of firing pro-union workers, and this would also be at odds with Delta’s benign image.

Unlike the fragmented efforts to organize fast-food or Starbucks workers in very small units, or immense anti-union corporations like Amazon or Walmart, the Delta effort has a real shot at succeeding. One reason is that Delta is the holdout in an industry that is heavily organized, with experienced unions in all the airline professions. The other three major carriers— United, American, and Southwest—are more than 80 percent unionized. At Delta, unions represent barely more than 20 percent, mainly pilots.

Delta has relied on benign paternalism to keep out unions. But without a union, the terms of employment can be changed on management whim. Delta laid off thousands of workers during the pandemic and its recent hires. As the airline has staffed back up, younger workers tend to be more pro-union.

“These flight attendants are watching the Starbucks workers,” says Nelson. “They’re hearing about Amazon. Unions are popular, and it helps that the president talks about unions. I don’t know that I’ve ever seen such a fertile environment for organizing.”

AFA’s major project is to finally organize the one longtime holdout, Delta.

The Cooperative That Could

How S Group became Finland’s most dominant retailer

By Ryan Cooper

HELSINKI – “The interesting thing about S Group is that it’s boring,” Evan Carr told me. We were standing in an S Market, a midsized grocery store chain, in the middle of downtown, near the train station. Sure enough, it was a completely unremarkable grocery store, somewhat fancier than Albertsons but less fancy than Whole Foods, with a large selection of all the usual foods, beverages, household goods, and so on. It was also packed with shoppers picking things up after the end of the working day.

Carr, a tech worker who was born in America but has lived in Finland for more than 20 years, pointed to various labels on the shelves for vegetarian, vegan, or organic items. “You can request items and get them stocked,” he said. “I’ve done it myself.”

The interesting thing about S Market, and what brought me all the way to Finland, is not this bog-standard grocery store. It’s the parent entity S Group, a cooperative network owned by its members—and one of the biggest

and most successful companies in Finland. S Group has about 2.5 million members—in a country of just 5.6 million inhabitants—representing 78 percent of Finnish households, along with 41,000 employees, 1,984 business locations, and an annual revenue of €13.5 billion last year. S Group accounts for fully 47 percent of the Finnish grocery market.

While nowhere near Walmart in absolute terms, relative to the size of the Finnish economy, it’s about twice as large as Walmart’s U.S. operations, which controls about a quarter of domestic grocery spending. And it’s member-owned.

From an American perspective, this is difficult to understand. Practically our whole society is built on the assumption that the only way to have a wealthy, productive economy is for entrepreneurs to be incentivized with massive rewards for building efficient businesses. It is necessary for people like Jeff Bezos and Elon Musk to become rich beyond the dreams of avarice, so the theory goes, because otherwise we wouldn’t have Amazon or Tesla.

One might attack this narrative empirically—Amazon was helped tremendously in

its early days by not paying state sales taxes, while Tesla has relied on large government subsidies for most of its existence—but S Group poses a more fundamental challenge. Here we have a hyper-efficient retail operation, run with cutting-edge management and logistics, dominating half the grocery market of a wealthy country, without minting a single billionaire in the process. It is not just competitive with capitalist businesses; it is more successful. It’s enough to make the ghost of Ronald Reagan cry.

How did it happen?

The answer is complicated. S Group’s history goes back over a century, to when Finland was a Russian colony called the Grand Duchy of Finland. For most of the 19th century, Finland had been granted relative autonomy by its Russian overlord (who stole it from Sweden in 1809), but in 1898 a new policy of Russification was imposed under Tsar Nicholas II. This created a backlash among Finns, and combined with the dis-

locations of incipient industrialization, this fueled a desire for economic institutions under local control.

One option was the cooperative movement, led by the economist Hannes Gebhard and his wife Hedvig, who studied cooperatives in the U.K. and Germany. Whereas a capitalist business is owned by a handful of entrepreneurs or investors to make as much profit as possible for themselves, a cooperative is owned by a large number of members who run it for their collective benefit, in which profit is one of many priorities. Blue Diamond Almonds, for instance, is a producer cooperative representing 3,000 almond growers. S Group, meanwhile, is a consumer co-op in which members own the stores at which they shop.

Gebhard “thought that cooperatives could be a very important vehicle against Russification, but it should be done in such a way that the Russians would not pay attention,” explained economist Samuli Skurnik, former CEO of Pellervo Society in the 1990s and early 2000s, who has studied the cooperative movement for decades. This helps explain the bland names of the cooperative institutions: The Pellervo Society was founded in 1899 as an umbrella organiza-

tion for all cooperatives, but its name is a random reference to a Finnish epic. SOK , embryo of the S Group, was founded in 1904 principally as an association of local agricultural cooperatives for farmers. The idea was to provide joint sales and purchasing institutions for farmers (then about 90 percent of the population), along with customer-owned retail shops, which would be controlled by Finns and keep money circulating within Finland. Later, another consumer co-op, E Group, was spun off for workers, who wanted their own institutions at a time of bitter political polarization.

Suomen Osuuskauppojen Keskuskunta (Central Finnish Cooperative Society, or SOK) was founded in 1904. Once the local co-op societies were founded, SOK evolved into a central coordinating body for S Group, while the Pellervo Society developed into a sophisticated outfit providing research, data, advice, and lobbying for all Finland’s co-ops. S Group grew steadily over the following decades, interrupted by the First World War and later the Finnish Civil War, but bouncing back afterward. By 1950, SOK was the largest wholesale business in the country, and later that decade S Group founded its first department store, Sokos.

Finland remained relatively economically backward compared to the rest of Northern Europe through the end of World War

II. But it began to catch up to its neighbors during the postwar European boom in the 1950s and ’60s, which led to problems for S Group. Being focused on rural communities worked well with an agrarian majority, but with rapid industrialization came rapid urbanization, along with expanding international trade and competition.

By the 1980s, S Group was on the verge of bankruptcy. Kesko, a private grocery company with a franchise model and the cutting-edge retail business practices of the time, was surging ahead. In desperation, SOK took the highly unusual step of bringing on a leader from outside: Juhani Pesonen. “This was the first ever outside director, in 1983,” Skurnik told me. “He was a real turnover specialist. He had turned over many companies before that.”

To survive, S Group would have to beat the capitalists at their own game. It was an “exceptionally harsh reorganization and structural reform,” said Sami Karhu, a historian of Finnish cooperation who was also CEO of Pellervo for 11 years. Under what the new management called “strategic renewal,” the cooperative structure was consolidated and simplified, from 202 regional co-ops

in the early 1980s to just 19 today. Several money-losing factories were sold off, and underperforming stores were closed. Management decided to focus on retail fundamentals—chains of grocery stores, department stores, hotels, and restaurants.

In broad strokes, this restructuring was an attempt to copy the model of successful private retail companies, with their sophisticated supply chain logistics, modern payment technology, data gathering, and analysis. But in other ways, S Group leveraged its peculiar advantages as a cooperative.

For one thing, since a co-op has no shareholders, and hence no strict need for profit maximization, it can compete quite ruthlessly on price. For another, cooperatives can inspire deeper customer loyalty than an ordinary business. Starting in the mid-2000s, S Group rolled out a new marketing strategy aimed at the upcoming generation of Finns, who did not have the emotional attachment to cooperative enterprises of prior generations, under the slogan of “Your Own Store.” The idea was to present the co-op as both a rational, money-saving decision, and something that would assist both local communities and Finnish society as a whole.

A new bonus system had been rolled out in the early 1990s, in which S Group members would receive up to 5 percent of their spending back as cash, depending on how much they spent. S Group’s green bonus cards are plastered everywhere around its stores to remind people to join up. These sums aren’t trivial either—last year, S Group returned €484 million to its members, or an average of €194 apiece.

An important part of the branding strategy is that the cooperative slogan is, you know, actually true. Each regional cooperative holds elections every four years to elect a council of representatives, which holds ultimate authority over matters in its own location. The council elects a supervisory board, which in turn appoints a board of directors led by a managing director, which runs the day-to-day cooperative operations.

Similarly, each regional cooperative elects one voting representative to attend a SOK cooperative meeting, which elects

SOK ’s supervisory board that appoints SOK ’s executive board and the CEO. The CEO is the closest thing S Group has to an overall leader, though the position is more like a city manager than a mayor.

This is a fairly complicated structure. But the democratic foundation is not a sham, as proved by the fact that turnout in the quadrennial elections typically hits about 25 percent—higher than many off-year elections in the U.S., and many, many times higher than, say, REI’s cooperative board elections (more on this in a moment). By all accounts, ordinary people often get involved in their local cooperative management, and that fact requires both the cooperative and SOK leadership to take their views into account.

I interviewed Arttu Laine, who is now deputy CEO of SOK , but was previously CEO of a regional cooperative for seven and a half years, and he said that in meetings between the council of representatives and management, member feedback was one of the most important topics. “Typically we might be spending an hour having all sorts of feedback … from the community. I think that’s a very valuable part of the governance model.”

The two strategies reinforce each other. Only by holding firm to the cooperative ethos could S Group convince Finns to become members, but by the same token only by implementing the most efficient possible business techniques throughout the whole S Group value chain could it fulfill its cooperative mission. “One of the biggest challenges in any cooperative is to handle and balance or benefit from this duality—at the same time a business and a community of members. Those who have succeeded to unite these two aspects, they prosper,” said Kari Huhtala, the director of cooperation at Pellervo.

The S Group’s reform process was a painful and close-run thing. E Group ran into very similar problems about the same time, and also tried to reform itself, but ended up going bankrupt instead. But after the reforms took hold, S Group thrived and expanded, going from about 16 percent of the Finnish grocery market in the early 1990s to 47 percent today.

Today, S Group owns the hypermarket chain Prisma, the supermarket chain S Market, the small grocery store chain Sale, the gas station/convenience store chain ABC, the department store Sokos, plus various hotels and restaurants. It has its own bank,

unsurprisingly called S Bank. The 19 regional co-op societies own SOK , which provides services to the regional cooperatives, as well as planning and management advice.

Skurnik took me on a tour of its main retail operations so I could see for myself. Prisma, which accounts for about a third of total company sales, is its most impressive and highest-revenue operation. It’s a classic European hypermarket—like the very biggest Walmart except a bit more upmarket—with clothing, electronics, sports equipment, housewares, groceries,

and more, plus several smaller spaces that are rented out to other companies, like hairdressers, pharmacies, or Alko, the state monopoly on high-alcohol drinks. If you can imagine any consumer good, from a four-foot 500-watt party speaker to any of about a hundred types of deli meat, chances are good that Prisma has got it somewhere.

A successful, cutting-edge retail company does not need to be run like a dictatorship.

One way to measure the effect of the cooperative structure is by comparison with Kesko, which is still making good money, even if it has been surpassed by S Group. In 2022, Kesko made €11.8 billion in sales, and paid its CEO and president Mikko Helander €4.9 million, plus a million euros in pension payments. The same year, SOK CEO Hannu Krook got just €1.1 million. In other words, Krook got less than one-fifth the compensation, despite overseeing a company that makes 14 percent more in sales.

One might respond that Helander is much more directly responsible for Kesko’s operations, and therefore “deserves” more money. But even if we grant that claim for the sake of argument, that is still more or less the point—a successful, cutting-edge retail company does not need to be run like a dictatorship, with one person calling all the important shots.

Another instructive comparison is to the outdoor retailer REI, the largest consumer

about how to vote. As a result, turnout for board elections is typically in the low single digits, and top managers claim a disproportionate share of the cooperative surplus.

In 2021, the most recent year for which figures are available, REI had total sales of $3.7 billion, and paid all its top executives over a million dollars: Chief Experience Officer Curtis Kopf got $1.1 million, CFO Kelley Hall got $1.3 million, technology and operations chief Christine Putur got $1.5 million, Chief Customer Officer Ben Steele got $1.7 million, and President and CEO Eric Artz got $4.6 million, for a total of $10.2 million. At the current exchange rate, that’s about €3.5 billion in sales and €9.5 million in compensation.

At SOK in 2022, the top management team aside from the CEO made €4.1 million put together, for a total of €5.2 million—or about 45 percent less than REI management, despite overseeing a company that is almost four times larger. (Amusingly, REI’s CEO gets an even larger share of the corporate surplus than Kesko’s CEO does.)

biggest companies in the country is still exciting and stimulating even if it means taking a salary hit. Not to mention that a salary in the mid-six figures or into the millions is still pretty great. And as we’ll see below, ruthless profiteering would threaten S Group’s business model.

But when I asked people who had served and studied S Group about why the executive salaries are so relatively modest, they started talking about morality and ideology. “S Group is a business enterprise … but at the same time, it’s in some ways an ideological, cooperative society,” Kari Neilimo, who was chairman and later CEO of SOK for over a decade during the reform period, told me. “The idea is to create a better life for people.”

Others pointed to the purpose of cooperation itself: equality, solidarity, continuous improvement. “The cooperative is for the members—to serve the members, to provide such products and services for the members that they need,” said Skurnik.

cooperative in the U.S., with some 23 million members (myself included). While members do legally own the company and get a share of the profits, in practice they have no say over how the company is run. Nominations for the election to the company board are controlled by the board itself, and management does not send out regular information

This discrepancy is fascinating. What inspires experienced business experts to work at S Group, when they probably could be making a lot more money in the private sector? Or why don’t they rig the S Group structures to benefit themselves, along the lines of the REI model?

Presumably, one reason is that big salaries are less attractive in a country with stiff taxation on the rich. Another is that for the ambitious, working at one of the

Part of this moral commitment surely has to do with Finnish culture. Traveling around the country, at first Finns seemed rather standoffish or even cold toward strangers, though always scrupulously polite. But this is a mistaken first impression. Once one manages to crack through the surface, Finns tend to be very kind and helpful, though in a calm way. Chatting with

an Iraqi immigrant bartender, he summed it up this way: “Finns are like coconuts— hard on the outside but soft on the inside.”

This isn’t a bad description of S Group itself. Its surface operations are all about extreme competence and professionalism. But at the core of the business is a warm regard for the ordinary working stiffs who make up the bulk of its members. The point of that competence is not to coldly stack up profits for a tiny handful of executives and shareholders who are already wealthy. It is to benefit the members—which happen to be practically everyone in Finland.

Of course, it isn’t all peace, love, and harmony at S Group. For one thing, the company’s market dominance gives it enormous leverage over its suppliers. “If you go to dairy farmers and ask them, they think SOK is a very hard negotiator,” Skurnik told me.

But that power is limited by countervailing forces, as well as the broader context of Finnish society. Valio, for instance, is a dairy farmer cooperative that produces about 85 percent of all the country’s milk. (A company representative declined to comment for this article.) Atria and HKScan occupy a similar position with respect to meat, and Munakunta in eggs. Finland’s largest timber company and largest bank are also cooperatives; relative to its size, it is certainly the most cooperative country in the world.

That context means individual Finnish farmers don’t have to face the mighty S Group purchaser alone—unlike, say,

American contract chicken farmers , who are squeezed to their very marrow.

Moreover, S Group gets about 80 percent of its food from within Finland, which is important on several levels. First, trying to squeeze every last nickel out of Finnish farmers risks driving them out of business, in which case it would have to source food from other locations that might be more expensive or of lower quality. (Egg, beef, pork, and chicken imports are especially tightly regulated to keep out salmonella.) Second, S Group’s business model depends in part on the perception that being a member and shopping at its stores benefits broader society. Ruthless bargaining threatens scandal and backlash.

Third, Finnish shoppers strongly prefer to buy food sourced from Finland, both for pro-social reasons and because of worries about food security. That extends to the government as well, which regards a secure domestic food supply as a nationalsecurity priority. Finland saw the last famine in Northern Europe from 1866 to 1868, which killed perhaps 8 percent of the population, and also experienced food shortages during World War I, the 1918 civil war, the 1940 Winter War, and World War II. Today, with Russia attempting to disrupt Ukraine’s farms and grain shipments as part of its ongoing invasion, domestic food security seems even more important. S Group squeezing suppliers, therefore, might bring down the regulatory hammer. In Finnish politics, nearly all agree that “we have to have enough food production, and our own food chain in Finland,” said Karhu.

Something similar is true with respect to S Group workers. The Finnish labor movement is extremely strong by American standards, with some 59 percent of workers union members, and about 89 percent covered by a union contract. Labor isn’t shy about exercising power, either. Back in 2019, then-Prime Minister Antti Rinne proposed a plan to cut the pay of a few hundred workers at Posti, the state postal service. This inspired a strike, then sympathy strikes, and then the withdrawal of the plan and resignation of Rinne, who was replaced by Sanna Marin.

If S Group were to become known as a place that, say, fired an estimated 10 percent of its warehouse workers every year for not packing boxes fast enough, or stationed paramedics outside its buildings during heat waves rather than installing air-conditioning (as Amazon has done in prior years), it would be a major threat to its business model.

In fact, most S Group workers are unionized, and by all accounts the unions and the workers have a good working relationship. Workers also have two seats on the SOK supervisory board; such worker representation in corporate governance is common in Europe.

To get the workers’ side, I spoke with Jani Pölönen, who has been a union representative for HOK-Elanto, the largest single cooperative in S Group, for more than 20 years. “We have a very good relationship with the CEO and other company leaders,” he said. “I try, and I know the company tries also, that all the disagreements we can solve inside the company, we don’t have to go to court.” He agreed that S Group would do just about anything to avoid developing a reputation for worker abuse. “If they are, it will go public quite soon.”

I asked a bartender at Amarillo, an S

S Group’s business model depends in part on the perception that being a member benefits broader society.

Group chain serving serviceable Tex-Mex, whether his job was any different than at a private restaurant and whether he liked it. “It’s about the same,” he said, shrugging. “I like it better though because there are three more S Group locations around the corner if I want something different.”

Taken together, this makes S Group remarkably uncontroversial for a dominant firm, which is in keeping with its history. It is not a capital-R revolutionary institution, and it was certainly intended to be more moderate than communist alternatives when it was first formed, long ago—alternatives, I might add, that have been dead and buried for 30 years.

S Group isn’t run by the government, nor does it propose to abolish private property. On the contrary, the competition from Kesko was quite important in motivating S Group’s successful transformation. “You need some external pressure. If you are just a monopoly, not only would it be bad for prices, but it would be bad for efficiency,” Panu Kalmi, a professor of economics at Vaasa University, told me. As such, S Group has no plans to conquer the rest of the retail market in Finland, or make extensive efforts to grow overseas.

A recent poll found that a cooperative economic model was the most popular among Finns with 70 percent support, ahead of capitalism or socialism. This makes sense. The vast majority of Finns shop at S Group stores regularly, it has a reasonably benign relationship with its suppliers and workers, and perhaps most of all, it just works.

That consensus support is reflected in the Finnish parliament, where a cooperative caucus has formed in the last few years with members from every single big party, including the far-right True Finns.

But despite its relatively modest aims, there’s still something inspiring and even a bit radical about a cooperative that is this successful. It proves there is much more to human motivation than base greed. In the right context, people can and do work hard to build an egalitarian project because it’s satisfying to help others, or because it’s exciting to participate in a grand project for the benefit of all, or simply because they think it’s the right thing to do. They can do this as part

of the management of an explicitly businesslike institution selling goods and services in the market. And they can even outcompete private entrepreneurs in the process.

Finally, I must consider the applicability to the United States. In general, it is all but impossible to imagine America adopting most Nordic institutions anytime soon. Even if simple policies—like, say, a Finno-Norwaystyle full year of paid family leave—could be easily implemented in theory, they are so far outside the political mainstream that they would get only a handful of votes in Congress. Trying to copy S Group exactly would be even more difficult. There is no quick way to replicate the long history of growth, cultural development, and success that gave S Group the working capital to reform itself in the first place. Financing growth out of current profits or loans (instead of taking investment from capitalists) means slow growth at best—and to ensure that the co-op does not end up like REI, a norm would have to be cultivated somehow that it’s wrong for its leaders to rig the system to benefit themselves. S Group’s benign dominance would require additional countervailing institutions to counteract its market leverage on both the supplier and worker side, plus a government ready to take action should things go sideways.

But that is just to say that any new institution or reform is of course going to be

rooted in local history and traditions, and America is a very different country than Finland. Despite this, we’re all human beings, and we can learn from each other. In times past—when the top marginal tax rate was 94 percent, for instance—America was a very different place. Finland also was very unequal and polarized in the early 20th century, when it was ruled by a foreign monarch, and then conservatives and communists fought a brutal civil war. There is nothing written in American national DNA saying we must tolerate stupendous inequality and political dysfunction forever. We can do better than this.

S Group’s quiet efficiency is instructive for American leftists as well. Perhaps thanks to the heavy influence of academics on the American left, we have a habit of producing analysis from 30,000 feet, or based on highly abstract metaphysical theories. S Group reminds us of the value of practical expertise and concrete benefits for the broader population. For any institution of serious size to benefit people, careful attention must be paid to the dull details of management and logistics. S Group might not be the most sizzling, eye-catching subject in the world. But sometimes, it turns out, great successes are like that. n

This article was produced with support from the People’s Policy Project, a crowdfunded think tank.

By Jarod Facundo

ILLUSTRATION BY ROBERT MEGANCK

The anti-labor law firm Littler-Mendelson’s reputation is a

It’s a scene replayed endlessly at countless corporate events: a bunch of old white men, clad in either business casual or their finest Tommy Bahama shirt, launching into a crappy dadcore cover of some old rebellious anthem. As Littler Mendelson, the notorious “union avoidance” law firm, celebrated its 70th anniversary in 2012, the top brass hit the stage as the Littler Mendelson Garage Band, to mangle the Talking Heads’ 1977 single “Psycho Killer,” while lanyard-wearing attorneys in the crowd bopped along in the least rhythmic manner imaginable. The opening line: “I can’t seem to face up to the facts.”

San Francisco–based Littler Mendelson ranks among an elite crop of about a half dozen law firms that have riled labor organizers for decades, alongside names like Jackson Lewis and Ogletree Deakins. But Littler is the largest employment and labor law firm exclusively representing management, with more than 1,700 attorneys in offices around the world. Since 1942, its sophisticated counsel has helped clients navigate America’s changing workforce, from the postwar labor boom to the civil rights movement, and later through the Great Recession.

In one of the few profiles of the secretive firm, a union lawyer explained, “It’s not just that they play hardball, but they’ll do [just] about anything to accomplish their ends. They push the line as far as they possibly can and eventually step over.”

Littler Mendelson’s notoriety supersedes its competitors not just because of its ruthless reputation. (A previous generation of labor lawyers and organizers snidely referred to the firm as “Hitler Mussolini Fascist,” a nod to the firm’s previous name, which included other partners: Littler, Mendelson, Fastiff, Tichy & Mathiason.)

Littler’s reputation is built upon the firm’s insistence that no anti-union employer is unworthy of their services. In other words, they aren’t just chasing high-profile cases, they’re scraping from the bottom of the barrel.

The firm has reportedly worked for 70 percent of the companies on the Fortune 500, and is the legal muscle for the largest current union-busting campaign in the United States: Starbucks’s bid to stall its more than 350 unionized coffee shops from getting a first contract, and to thwart any of its other thousands of stores from winning a union election. Other clients in the last decade have included Apple, Nissan, Trader Joe’s, Amazon, and McDonald’s, as it attempted to fend off the Fight for 15 campaign.

premier example of the limitations in existing labor law.

But Littler was also retained by the Southeast Alaska Conservation Council (SEACC), a nonprofit with ten employees at the time of its union election and only four members in the bargaining unit. The union won 3-1, prompting SEACC, under Littler’s guidance, to seek to delay and challenge the election results based upon the risk of “national ramifications” from a small nonprofit organization unionizing. (The National Labor Relations Board rejected this; then SEACC filed another challenge.)

Endless delays are part of a suite of tools Littler attorneys use to frustrate worker organizing. Littler’s influence is so farreaching, a 2022 article from the website of the Labor and Working-Class History Association described how its tactics are the gold standard for entire sectors of the labor market.

But while labor advocates would call Littler’s approach union-busting, the firm sits in a more vague space between that and the ordinary counsel that any attorney provides to a client, regardless of the field of law. Because of this, Littler’s activity can be protected by attorney-client privilege, something the firm assiduously covets to

prevent organizers from knowing about their involvement in active campaigns.

Even what little we know about Littler is enough to describe what appears to be its philosophy: prevent any worker anywhere from collectively bargaining for anything.

Founded by Arthur Mendelson and Robert Littler, the firm started as a regional leader on the West Coast before going national.

In 1980, Mr. Mendelson described his philosophy on working with employers: “Our clients pay a lot of money … If they want aggressiveness, they are entitled to it.”

One of Littler’s earliest key attorneys, Wesley Fastiff, helped transform the firm into the union-busting powerhouse it is today. His rise to fame came after filing an unfair labor practice complaint against the Teamsters in 1963, then represented by Jimmy Hoffa. Reflecting on the negotiations with Hoffa, Fastiff told his alma mater Harvard Law School in 2002, “I became a big hero of the trucking industry.” Littler Mendelson soon represented the California Trucking Association’s 150 companies.

Littler’s hardball tactics through the 1960s and ’70s proved so fruitful that by the

1980s, the firm pivoted for a period to focus on defending employers in cases over disability, sexual harassment, discrimination, wrongful termination, and pension issues.

Essentially, the firm is everywhere. A 1996 article in the San Francisco Chronicle detailed some of Littler’s clients; they included the Chronicle itself. Littler has so much experience with anti-union campaigns that it has created specialties by economic sector, from retail to health care to hospitality to financial services.

I realized that I had already profiled Littler without even knowing it. When I looked back on a story I wrote about the unsuccessful efforts of veterinary professionals organizing for a union, I uncovered that Mars, Inc., retained Littler as it stalled elections and first-contract negotiations. Mars would go on to close a veterinary practice in San Francisco that had organized with the International Longshore and Warehouse Union.

The company would repeat this tactic at a veterinary hospital in North Seattle. The head of the National Veterinary Professionals Union, Liz Hughston, described Mars’s bargaining tactics to me as the “edge of legality.” Shortly before the company eventually

At least 110 Littler attorneys have worked for Starbucks, on the largest union-busting campaign in the United States.

closed the North Seattle hospital, Hughston said that 60 to 75 percent of the bargaining unit had already left the hospital.

John Logan, a labor history professor at San Francisco State University, explained to me how Littler’s tactics of indefinite delay are among its most common. Delays often breed frustration among workers; thus support for the union drive dwindles, reinforcing narratives from management that the union won’t fulfill its promises. “Delay is often a killer for union campaigns,” Logan said.

Indeed, last year I spoke to organizers frustrated that a union drive in the Southwest was being delayed as they were waiting to hear back from the National Labor Relations Board about where the election would take place. They said they were running against the clock, and the bargaining unit of mostly Spanish-speaking migrant construction workers was losing hope.

A 2014 document co-written by Littler, its in-house think tank the Littler Workplace Policy Institute (WPI), and the International Franchise Association (IFA) contained other tips and tricks for employers seeking to prevent unionization, including advice on what they can and cannot legally say to workers and what elements of unionization they should play up as negatives. At one point, the authors urge employers to call the police on union officials when necessary.

The Workplace Policy Institute, founded in 2006, is Littler’s hybrid research hub and lobbying vessel, illustrating how the firm’s influence extends beyond the clients and sectors it advises. This April, the Workplace Policy Institute appeared on a coalition letter led by the U.S. Chamber of Commerce in support of the anti-union Employee Rights Act of 2023, a Republican House bill that explicitly seeks to neuter the NLRB’s role in

elections. WPI has also been active in fighting efforts at the state and federal level to reclassify workers as employees, and to improve labor protections for gig workers.

The Starbucks campaign is perhaps the best example of Littler’s handiwork. Starbucks engaged in a relentless campaign of “captive audience” meetings and spam texts to dissuade baristas from unionizing. When that didn’t work, the company tried to quickly hire new workers before union elections. And when that failed, Starbucks denied raises to workers at unionized stores while offering them to non-union employees, a tactic aimed at encouraging unionized workers to decertify their shops. Littler has had at least 110 attorneys working for Starbucks, as of last year.

Littler has also been at the forefront of using “data analytics” in its campaigns, to “predict union risk” at particular workplaces. The company has a “Robotics, Artificial Intelligence and Automation” practice group that helps overcome “legislative and regulatory obstacles” to employing these technologies.

Though U.S. labor law is the most forgiving among industrialized nations, Littler has expanded its union avoidance operations overseas, with offices in over 20 countries, including Singapore, Germany, and Venezuela. Littler Global even merged with labor and employment firms in France and the U.K. to build its business and manage the debate on global labor standards. Logan termed this “the new union avoidance internationalism” in a 2019 research paper.

A number of Littler’s attorneys have actually written labor law. William Emanuel, a Trump appointee to the National Labor Relations Board from 2017 to 2021, practiced at Littler before entering the government. Other Littler attorneys have gone through the revolving door.

Today, amid its growth, Littler has tried to pull back from its cutthroat image. Following the George Floyd murder and associated protests in 2020, in the same way as the rest of corporate America embarked on a “woke” soul-search, Littler Mendelson followed suit. Those efforts included a podcast on what law firms such as Littler could do to improve gender and racial diversity in their ranks, without a shred of reflection upon the fact that Littler’s anti-worker counsel most directly impacts women and racial minorities who work in the retail and service sectors. By 2021, the firm named its first ever chief inclusion, equity, and diversity officer.

Littler Mendelson did not respond to the Prospect ’s request for comment.

While we know a lot about Littler, its full scope is still largely unknown, because it does its best to avoid reporting requirements under U.S. labor laws. As long as Littler attorneys don’t directly speak to workers in the bargaining unit, they can classify their role as advising clients as legal counsel. The work of encouraging workers to reject unions falls to company supervisors, or specialized consultants known as “persuaders,” which are separate from the law firms.

Those persuaders are legally obligated to reveal their work for employers under the 1959 Landrum-Griffin Labor-Management Reporting and Disclosure Act (LMRDA) within 30 days of being hired. At its best, it’s an equalizer allowing employees to know the extent of their employer’s efforts to prevent a union in the workplace. But enforcement of these disclosure laws is lax; employers and consultants often miss the deadline or don’t report at all. Labor advocates I spoke with said it’s obvious why employers and consultants delay their reporting: You can inflict more damage on an organizing drive if the union doesn’t know who’s running the show.

Bob Funk, founder of LaborLab, a nonprofit that tracks union-busting, told me that if an “employer is spending massive amounts of money on persuaders,” that constitutes an “illegal and unfair advantage over workers who are entitled to information prior to an election.”

In 2011, the Department of Labor engaged in the most thorough investigation of the union avoidance sector to date by reviewing LM-20 and LM-21 forms. The LM-20 form requires consultants to file information on specific agreements with particular employers; the LM-21 is an annual receipts and disbursements report on overall spending.

The topline conclusion was that LM-20 forms only reflect 7.4 percent of the work consultants and employers actually used in anti-union campaigns. The Labor Department arrived at this by calculating the discrepancy in the total money paid to the union avoidance industry in the LM-21 forms and the specific money in the LM-20 forms. According to LM-20 forms, the industry was paid $25 million; the LM-21 forms showed $338 million. Using an updated analysis, the labor-backed Economic Policy Institute (EPI) estimated this March that companies

Littler has expanded its union avoidance operations overseas, with offices in over 20 countries.

spend $433 million a year on consultants. Of course, that doesn’t count the amount spent on law firms like Littler Mendelson.

Attorney-client privilege is critical for offering confidential legal advice, but if that tips over into general strategy conversations, employers and counsel could lose that privilege. The LMRDA exempts attorneyclient communications from disclosure, but technically speaking, other communications would be subject to reporting. In practice, the reporting requirement for lawyers is only triggered if they interact with a nonmanagement employee.

Former President Barack Obama’s Labor Department, over a seven-year period, tried reclassifying legal services provided by firms like Littler as subject to the same federally mandated reporting standards that persuaders are obligated to file by the LMRDA, regardless of their direct interaction with employees.

Labor advocates argue that the Obamaera update was not entirely necessary. They point to the LMRDA’s language under Section 203, titled “Reports of Employers,” which says that reporting requirements apply for indirect persuasion activities. It’s hard to argue that Littler and other law firms aren’t engaging in indirect persuasion. As Funk told me, “I’m shocked that the [LMRDA’s] language needs clarification since it says direct and indirect persuasion.” Therefore, advocates argue, an aggressive Labor Department could even enforce the LMRDA’s existing language. Nevertheless, they welcomed the Obama-era rule change.

Management-representing labor lawyers, meanwhile, strongly disagreed. Regarding possible changes in 2014, Littler’s Workplace Policy Institute described them as a threat to the “confidential nature of the attorney/client relationship … many small employers without in-house counsel to assist with the LMRDA’s reporting requirements would be placed at a disadvantage.”

But the changeover in power after the 2016 election extinguished the threat to anti-union law firms and consultants on several levels. Under Donald Trump, the Labor Department announced that it would no longer require employers to report anti-union work on the LM-21. A year later, LM-21 forms filed dropped by 38 percent, even though the number of NLRB elections dropped only 8 percent.

Trump’s Labor Department also issued a final rescission of the Obama-era rule in 2018. This triggered a large sigh of relief among the union avoidance legal industry; it’s plausible

that some firms would have left the business entirely if forced to reveal their pay rates and dealings with employers. That exodus would have tipped the scales in the legal battlefield between union organizers and hostile employers closer to an equilibrium.

The Prospect asked the Labor Department how it was ensuring timely antiunion activity reporting practices and if it was continuing the Trump-era policy that allowed employers to not report annual persuader spending. A spokesperson pointed to a blog and said that the Department’s Office of Labor-Management Standards “has no present plans to change the enforcement policy. It will remain in effect until further notice, which will be provided no less than 90 days prior to any change.”

The arguments over the LMRDA interpretation point to how the reporting requirements are effectively a loophole. As the law stands today, the most inexperienced antiunion employer would not have to report anything about a law firm like Littler Mendelson’s involvement. Simultaneously, as Sen. Bob Casey (D-PA) noted in a hearing earlier this year to Starbucks CEO Howard Schultz, fees paid to law firms can be deducted from corporate taxes. “Under federal law, Starbucks is able to write off those costs as a run-of-the-mill business expense,” Casey said, “meaning taxpayers are subsidizing union-busting in the United States.”

In 2019, EPI published a report on how 41.5 percent of employers are charged with violating federal law in union campaigns. One of the citations in the report included how in 1980, the U.S. House of Representatives concluded that the LMRDA’s reporting requirements were a “virtual dead letter, ignored by employers and consultants and unenforced by the Department of Labor.”

Failure to file an LM-20, the form’s instructions state, can subject someone to “criminal penalties” or “civil prosecution.” It sounds tough, but in reality, if an employer or consultant doesn’t file, the onus is placed on the Labor Department to track a missing report. How this plays out in real-life organizing drives was recently detailed in an investigation from HuffPost, which found that due to the lag between when a unionbusting campaign begins and the time the documents are available, the information is no longer useful. By the time a persuader is revealed in a union drive, workers have already likely endured captive-audience

meetings, firings of key organizers for frivolous reasons, and other anti-union tactics.

The disregard for complying with reporting requirements continues, even under a labor-friendly president in Joe Biden. Funk’s LaborLab evaluated LM-20 forms from 2021 and 2022, and uncovered that 82 percent of all LM-20 filings came after the 30-day deadline, translating to 522 late disclosures. Almost 30 percent of those late filings were more than six months late. Put differently, the reporting rules as they stand today are the Labor Department’s equivalent of how the IRS “requires” taxpayers to disclose income from drug dealing for taxation purposes.

The Obama-era update would not have remedied every deficiency in U.S. labor law. But in theory, it would have equipped unions with the ability to request public records documenting the extent of a law firm’s involvement in an anti-union campaign at workplaces they’re organizing. In other words, it would have provided at least a means for seeking accountability and transparency in the courts.

In theory, an ambitious litigator at the Labor Department could follow the advice of labor advocates and challenge union avoidance firms’ premises about attorneyclient privilege. But that would likely be met by employers and law firms throwing everything from their end to withhold documents from the public—an inevitable legal showdown dragged out for so long that the documents are no longer relevant for the pertinent organizing drive. And of course, the current makeup of the courts is not exactly friendly to union organizing.

The most inexperienced anti-union employer would not have to report anything about a law firm like Littler Mendelson’s involvement.

“It’s absolutely imperative that the Department of Labor get more aggressive,” Funk said. “We’re only seeing a slice … a lot of it’s still in the dark.”

Unraveling the consensus of pro-management labor lawyers would be a monumental task. For decades, the employer and law firm rationale citing privileged communications has been the status quo. Undoing this would require a multi-agency effort, amid annual debates over federal appropriations, in addition to the inevitable personnel changes from Democrats to typically anti-union Republicans.

The deficiency in tracking persuader and law firm transactions is matched by the aggressiveness with which law enforcement tracks union finances. Some experts argue that this is a relic of a bygone era. In the late 1950s, Congress put union racketeering in its crosshairs.

So labor unions are pressed against a mixture of severe underreporting and lax penalties levied against their adversaries. In addition, the legal brain behind the companies they want to unionize is effectively shielded from the law. Funk explained to me that organizers and pro-labor leaders only tend to discover Littler Mendelson’s

Barack

the NLRB away. That has in fact long been a Littler Mendelson specialty: A 1997 Washington Post article explained how the firm was “infamous for using the intricacies of labor law … to delay the bargaining indefinitely.”

In the most extreme example, they could advise companies to close facilities where union activity is present. It’s what companies that Littler has represented in the past have done, for example at veterinary hospitals owned by Mars, Inc.

Location closures have also become the latest move against the Starbucks union campaign, where Littler is an important partner to management. I spoke to former AFL- CIO organizing director Richard Bensinger, who is also serving as a senior adviser to the organizers at Starbucks. The first thing he told me was about how egregious it was of the company to close all the stores in Ithaca, New York, which were all unionized. “They’re trying to crush the aspirations of a whole generation of young workers,” he said.

involvement once a petition is filed to the NLRB . “[Littler] doesn’t show up in any other disclosures,” he said. “We know that companies are spending a lot of money on it. But unfortunately, they’re hiding that from workers and the public.”

Even though there is no push to re-amend the LMRDA reporting requirements, Biden’s labor regime has pulled different levers that could help unions in their organizing efforts. As my colleague Harold Meyerson recently reported, a recent decision from the NLRB over union recognition and the consequences against employers for interfering in organizing efforts could give unions an upper hand in the first hurdle of an organizing drive. The Cemex ruling states that any unfair labor practice incurred during an election campaign will lead to immediate and automatic recognition of the union.

By streamlining the election and recognition process, employers lose many of the key tactics law firms like Littler Mendelson deploy against an organizing drive: captiveaudience meetings, election delays, and the like. Importantly, however, election and recognition are just the beginning of a union drive. It’s likely firms like Littler will instead pivot resources toward delaying contract negotiations, bargaining just enough to keep

Bensinger has almost 50 years of organizing experience. In all those years, he said that no other union-busting campaign compares to what he’s seen the organizers at Starbucks experience thus far. I spoke to Bensinger days before the NLRB’s latest ruling. Still, Bensinger reflected on the toll Starbucks tactics had taken on the organizers he knew.

He told me about Alexis Rizzo, one of the first Starbucks employees who supported the union drive in Buffalo, New York. Despite working at the company for seven years, she was fired two days after Schultz testified this spring. The official reason was over tardiness, but according to Bensinger it was clearly a pretense for her long-standing support for the union.

Bensinger said that while Rizzo formally filed an unfair labor practice complaint to the NLRB, the union-crushing efforts have taken their toll. “I’m sure she’ll win her job back someday,” he said. But the damage has already been done. An official reinstatement could take years, Bensinger told me, referring to how when he was fired from a factory job for union activity it took six years for the NLRB to make a final decision on his case.

“She’s on to her new life. She’s got two jobs so she’ll be fine,” he paused. “The only answer for any of this is in the court of public opinion. It has to become socially unacceptable to fire and terrorize someone for organizing a union.” Otherwise, as Bensinger put it, “life goes on.” n

Obama’s Labor Department, led in his second term by Tom Perez, tried to make employerside law firms subject to the same federal disclosures as consultants. Trump’s Labor Department rescinded the rule.

A Hemmed-In Presidency

In The Last Politician, Franklin Foer unfolds Joe Biden’s record of achievement and command. But voters haven’t gotten to see it.

By David Dayen

The Last Politician: Inside Joe Biden’s White House and the Struggle for America’s Future

By Franklin Foer Penguin

“I’ve never done anything like this, where everything you write gets mined and turned into clickbait,” Frank Foer told me about his new book The Last Politician , a detailed study of the first two years of Joe Biden’s presidency. “Fox News and the New York Post pull something out and act like it’s a critique of Biden. And their audience buys the book and writes Amazon reviews that trash it, saying it’s a puff piece.”

I wouldn’t call The Last Politician puff piece or critique. It’s an attempt to understand a White House that has conducted much of its business outside the spotlight, perhaps to its detriment. It’s a chronicle of a presidency at a time of transformation, while it drives some of that transformation itself. It offers the opposite of lazy narratives about an old president, disconnected from events shaping the nation. But it also shows how the White House reinforces that narrative through its theory of politics.

The dichotomy between the book, released September 5, and a new Wall Street Journal poll, released September 4, can create whiplash. “By an 11-point margin, more voters see Trump rather than Biden as having a record of accomplishments as

president—some 40% said Biden has such a record, while 51% said so of Trump,” the Journal writes. Yet Foer recounts a lot of, well, accomplishments.

There’s the American Rescue Plan, which fueled a rapid economic recovery and achieved full employment only a year later; the decision to defy the military establishment and withdraw from Afghanistan; the spate of industrial-policy bills that signal hope for the planet; restoration of domestic manufacturing in critical sectors; a new role for American government (“a state that will function as an investment bank”); and the construction of a large diplomatic and military alliance backing Ukraine in its war with Russia.

But more than bullet points, Foer weaves

President Biden has deliberately shunned the spotlight as president, wanting to bring government-assideshow to an end.

in an undercurrent of transition: the burying of a market-dependent, globalization-adoring, diffident liberalism in favor of Bidenomics, with its interventionist public sector that stands with workers and the middle class, and fights concentrations of power that have pooled for the past 40 years. As I have written, this has been a somewhat uneven transition, because administrations contain multitudes. There’s practically no mention in the book of the struggles to rein in corporate agriculture, or wield the administration’s tools on drug and hospital prices, or manage the freight rail strike, or tackle immigration, one of the areas with the most continuity with the policies of the past.

But there is a trajectory to pick through. Foer unearths how Biden asked an aide to compile an oral history of the Obama stimulus to learn how to avoid its inadequacies. He spends time on the revival of antitrust and the reinvention of a foreign trade agenda that actually accounts for how it impacts the

average American. And he writes with clarity, for example, about the nearly forgotten, monumental logistical task of mass public vaccination, from a standing start because the Trump administration had no plan.

“The fact that you were within six months able to walk into a pharmacy and get a lifesaving shot is incredible,” Foer said, adding that it was a demonstration project of sorts for how government interventions can outperform private enterprises in critical areas. “It’s interesting to connect it to industrial policy writ large. They managed a complicated supply chain and were able to acquire a God’s-eye view to eliminate bottlenecks and allow for limited resources to be allocated.”

Yet attention to the vaccine rollout was quickly bulldozed in the 24-hour news cycle, as was the shipping of hundreds of millions of COVID tests through the mail, or the freeing up of the supply chain backlog at the ports. There was always some other flaring

crisis, hyped by partisan media and giving the impression of an administration chasing from behind. Biden’s “theory of the case [is] that democracy will succeed only if it delivers for its citizens,” Foer writes. So why do so few think he has delivered?

Part of the answer is that the problems are as present as the solutions. Inflation scarred the country in ways that continue to be felt. Also, a lot of Biden’s accomplishments don’t pay off until the future; factories under construction don’t yet create permanent jobs on assembly lines, mass student debt relief has been just out of reach, and drug price negotiations won’t show up in seniors’ wallets until 2026. Some were even taken away, like the pandemic-era welfare state expansions that have all been wound down.

A telling moment in the book finds Brian Deese looking at a chart showing improvements to economic stability—higher employment, greater enrollment in health insurance,

Foer depicts the chaotic Afghanistan withdrawal as a defining moment.

fewer bankruptcies, increased household net worth—and knowing he couldn’t use that as a platform, because given inflation it would look completely out of touch. Now that inflation has moderated, the White House is rolling out these numbers, and compared to the demands from the austerity crowd, they have the better argument

But this risk of sounding tone-deaf, while real, also keeps the administration in a kind of shell. While White House officials exhibit a lot of self-pity for not getting credit for tangible successes, they also might be responsible for some of that.

Trump was a performative president, with that performance standing in for and even becoming his record. Biden, by contrast, has deliberately stayed out of the way, wanting to bring government-as-sideshow to an end. Shunning the spotlight, however, means losing touch with one’s audience. It reinforces an enfeebling image that Foer says does not accurately capture the politician or the man.

“I’ve been invited to go into off-the-record sessions with Biden,” Foer told me. “If the public could see him talk they would think about him so differently. He has a mastery of policy. And yes, his stories are stale. But when he talks big-picture about strategy or getting things done, there’s a unique political intelligence on display.”

Foer attempts to pierce this veil by dramatizing principals briefings, not all of which make Biden look good (Foer gets at Biden’s infamous procrastination in decision-making, in particular with regard to how to respond to the Dobbs decision). But the depiction of him directing these meetings is so far from the public caricature that it almost called to mind the old Saturday Night Live sketch about Ronald Reagan as a secret mastermind . It’s incongruous because of the black hole of public evidence that would suggest this vibrancy.

Anytime the White House has “let Biden be Biden,” as it were, putting him up for press conferences or speeches, there’s

always one stray comment that has to be walked back and becomes the headline. This isn’t a function of age but of Biden’s historic loquaciousness, his penchant for gaffes that express what would be better left unsaid. Saying that Putin “cannot remain in power ” at a speech in Poland sounded too much like a policy of regime change; removing strategic ambiguity on U.S. military support for Taiwan risked an international incident.

Biden is clearly rankled about being managed so tightly. Foer writes that after the Putin incident, the president fumed to friends about whether John Kennedy was ever “babied” that way. But it’s possible, even probable, that the tight management is hurting more than it’s helping. Maybe a stray bad headline is the price of presence in a 24-hour news cycle. Lord knows Trump had his share of those. Maybe the administration’s constant handling of Biden is reinforcing the image they want to combat.

It’s also true that sometimes an absentee president is the right move. The betweenthe-lines tragedy of The Last Politician is this: A key theme of the book presents Biden as the inveterate deal-maker, someone who loves the give-and-take of compromise and sees it as a path back to restoring democratic norms. But he spends the last section of the book’s legislative wrangling over what would become the Inflation Reduction Act completely on the sidelines. Immersing himself in the weeds of the legislative scrum made things worse, creating irreconcilable tensions with Joe Manchin. The last politician had to remove himself from politics to get the win he can then tout.

Maybe it’s to his credit that the old senator recognized the baggage of the presidency makes it impossible to play on that field. “There is a nobility to shelving your ego so somebody else can come in and cut the deal,” Foer told me. “Narcissism is not knowing to get out of the way.” But it’s notable that a story about Biden really gets moving when digging into the play-by-play of getting the infrastructure and climate bills over the line, with the president out of the picture.

At times, the book reaches to find some pathos in a presidency dedicated to minimizing drama. An extended section on the Afghanistan withdrawal generally hews to the media-led narrative of an incompetent and chaotic scene marked by tragedy. The data point of 124,000 people airlifted out

of the country in an improvised mission arrives as an afterthought. And there isn’t enough room given for what Foer stated bluntly to me was the right decision.

If America reneged on its explicit 2021 deadline for withdrawal, the result would have been yet another indefinite extension of the Afghan war, with more dead American troops and civilian casualties alike. The war, in fact, had already been lost for at least a decade—proved by the ease with which the Taliban overran a ghost army and a venal leadership. (What’s more, those U.S. troops would have been an inviting target for Russian meddling during the Ukraine fight.) This was the one moment where Biden was let out of the West Wing to share his viewpoint, one in complete variance with the foreign-policy and military establishment. It was the right view, which made that establishment furious. And that played into the media’s pouncing on elements of the withdrawal, missing the forest for the trees.

Quietly, Foer lines up a brutal anecdote that reifies the shortcomings of Biden’s predecessors. Afghan helicopters were equipped with high-tech avionic systems that detected enemy fire. But the private contract for the equipment said only the U.S. government could use them. So when the Pentagon withdrew, they ripped the systems out of the choppers, destroying the Afghan army’s only tactical advantage of air cover. It doesn’t explain the entire Afghan army’s abandonment of its mission. But the inanities of a private, for-profit contract did contribute to the army’s inability to defend itself.

“I hadn’t realized how interesting [Biden] was as a foreign-policy thinker,” Foer said. “His contrarianism and his relationship to foreign-policy elites is fascinating.” In my view, that’s not necessarily true of Ukraine, where however valid they are, the old Cold War beliefs of creating a beachhead for democracy predominate. Still, Foer finds something novel here: Biden’s mild detestation of Volodymyr Zelensky, someone too eager to force the West into uncomfortable circumstances. At one point, CIA director Bill Burns had to give Zelensky “relationship-management tips” for dealing with Biden.

It fits, in a way: Biden is the ultimate politician, and Zelensky won office in Ukraine by running against politics. The Biden campaign is now running an ad of the two together, as the narrator talks of “the quiet strength of a true leader.” Maybe a bit too quiet. n

Maybe the administration’s constant handling of Biden is reinforcing the image they want to combat.

It’s the Global Economy, Stupid

By Lily Geismer

A Fabulous Failure: The Clinton Presidency and the Transformation of American Capitalism

By Nelson Lichtenstein and Judith Stein Princeton University Press

In December 2001, less than a year after Bill Clinton left office, The American Prospect ran an exchange between E.J. Dionne and Robert Kuttner, asking: “Did Clinton Succeed or Fail?” Kuttner noted, “As always with our Bill, we can emphasize the half-full or the half-empty glass.” After they unsurprisingly failed to reach consensus, Dionne ended the exchange suggesting that they “meet in five or ten years and figure out who was right.” The two never resumed their conversation (at least publicly), but since then, the question has served as dinner party conversation fodder among Democrats, and has been the subject of many an American Prospect article.

With the benefit of more than two decades of hindsight and none of the word count constraints of magazine articles, the eminent historians of labor and capitalism Nelson Lichtenstein and Judith Stein offer the most extensive response to the question. The title of their more than 500-page book suggests that they take the half-empty side. Yet the descriptor “fabulous”—a riff on Janet Yellen and Alan Blinder deeming the 1990s “The Fabulous Decade”—connotes their contention that the true travesty of Clinton’s presidency was the fact that his administration abandoned its progressive vision of statecraft, especially with regard to how to manage and reform capitalism.

Lichtenstein took up the daunting task of completing a project the late Judith Stein had started, seeking to understand why the Clinton administration had failed to

take advantage of a mostly peaceful and prosperous decade to construct a more stable economy and political order. Stein had focused primarily on U.S. trade policy. Lichtenstein combined it with his own expertise on labor, global supply chains, and specifically Walmart, and expanded its focus to include a much wider range of issues, including health care, workplace relations, and welfare reform. The result is a book that is dazzlingly impressive in its scope and depth. It draws on a wide range of archival materials and interviews and oral histories with key actors, which it fuses with the authors’ expertise on the history of the late 20th century.

A Fabulous Failure serves as an indispensable resource to anyone, providing fresh insight into topics like the health care debacle (including a careful discussion of why Obama succeeded where Clinton failed), the NAFTA debate, and the repeal of the GlassSteagall Act, all of which have been covered elsewhere. At the same time, it spotlights issues such as trade policy with Japan and workplace management that have been given short shrift by other historians.

In an argument Lichtenstein previewed in the Prospect in 2018, the book aims to go beyond the dismissive accounts of the Clinton years that write off the era as simply the heyday of corporate Democratic centrism. He and Stein are by no means Clinton apologists who look at the economic prosperity and low poverty rate of the 1990s as a symbol of Clinton’s effectiveness. Nor do they blame Clinton’s shortcomings and shifts solely on the growing power of the GOP. Instead, they seek to understand how the shift in Clinton’s thinking and policies became driven by larger economic and geopolitical forces. They also emphasize that Clinton was not simply a passive victim of globalization and financialization. Rather, his administration—especially the Treasury Department

under Robert Rubin—actively contributed to constructing these trends. In doing so, they remind us that success and failure are in the eye of the beholder; in amplifying the forces of unfettered free trade, runaway capital, and the deregulation of the tech industry, the administration absolutely succeeded.

A Fabulous Failure’s most novel and important contribution is in refocusing the narrative of late 20th-century history to show that the fall of the Berlin Wall was more significant to the U.S. and global economy, as well as the maturation of neoliberalism, than the election of Ronald Reagan. The book is notable as the rare study of neoliberalism that successfully connects domestic and global contexts and issues. Lichtenstein and Stein persuasively argue that the end of the Cold War was initially significant because it left no serious alternative to capitalism, which shifted the entire policy process toward pursuing market-based solutions to social problems. Second, it opened Eastern Europe and East Asia to export manufacture, which would fundamentally reshape the labor market and economy both domestically and globally.

Examinations of economic globalization in the 1990s have tended to concentrate primarily on NAFTA , and give China

A new book on the Clinton presidency reveals how it abandoned a progressive vision for a financeled agenda for economics and geopolitics.

The Clinton administration’s approach to China was more wide-reaching than NAFTA for the U.S. economy.

merely a passing reference. While Lichtenstein and Stein contend that NAFTA was politically and ideologically important, it was the Clinton administration’s approach to China that was far more wide-reaching for the structure of the American economy. The authors convincingly argue that the Clinton’s administration’s decision to delink human rights and trade and grant China “most favored nation” status in 1994 set in motion a chain of events that would lead to China’s admission to the World Trade Organization seven years later.

In addition to the rush by American manufacturing companies to China, the authors also emphasize the significant role that Wall Street money played in restructuring the Chinese economy, an activity that Robert Rubin recognized and encouraged. This codependency, as Lichtenstein and Stein illuminate, would intensify especially as China used its export earnings to buy more than $1 trillion of U.S. Treasury bonds, which put downward pressure on U.S. interest rates and contributed to Wall Street overconfidence and the debt-fueled housing bubble. Thus, they powerfully argue that “the road to the financial collapse of 2008 was paved … by China’s admission to the WTO.”

The Clinton administration’s China policy

also exposed the fallacy that free-market capitalism would usher in democracy across the Global South, and that new consumer goods would offer individual freedom to the billions of people who lived there. Lichtenstein and Stein argue that this was one of many instances of “wishful thinking” the Clinton administration both believed and promoted, with significant costs borne by the American people and the economy. The most notable and overarching version of this, they contend, was the faith in the “new economy” as the solution to seemingly every problem.

What makes this focus on Silicon Valley and Wall Street as salvation particularly disappointing to the authors is their contention that, when Clinton arrived in Washington, “the management and reform of American capitalism stood at the top of his agenda.” Clinton’s retreat from this agenda, they argue, came not from an abiding or pre-existing ideological commitment to neoliberalism, as many other scholars and popular accounts have contended. Rather, it emerged from a response to the restructuring of the global economy and the political dynamics of the moment.

In tracking the transformation in Clinton’s agenda, Lichtenstein and Stein concentrate

on the early influence on his thinking from a group of policy entrepreneurs, including Robert Reich, Ira Magaziner, Laura Tyson, and Jeffrey Garten, several of whom were founders and frequent contributors to The American Prospect. As early as the 1970s and 1980s, many were staunch proponents of the idea of industrial policy as the best way to help ease the transformation to a postindustrial society. Although careful to elucidate the fine-grained differences in their ideas, Lichtenstein and Stein suggest that they, and the ideas of industrial policy, were pivotal to Bill Clinton’s thinking while he served as governor of Arkansas and to his presidential campaign, undergirding the campaign manifesto Putting People First. After gaining high-profile posts in the administration, Reich, Magaziner, Tyson, and Garten sought to apply these ideas to arenas such as health care and trade with Japan. Lichtenstein and Stein argue that Clinton’s appointment of the “highest-profile advocates” of industrial policy reveals “the degree to which the label ‘neoliberal’ fails to capture the original ideological and policy thrust of his administration.”

This discussion returns important attention to the industrial-policy debates of the 1970s and 1980s, which have often been overlooked in accounts of the late 20th-century political economy, and provide new ways in which to understand Clinton’s famously complicated health care proposal. But it is worth pointing out that industrial policy itself is not inherently progressive. Progressive figures have been some of its staunchest advocates, including several writers for the Prospect (which Lichtenstein and Stein dub “a fount of industrial policy advocacy”). But industrial policy is a tool that can be adopted for a variety of different ends, and its importance rests more on its implementation. It could lead to a bolstered industrial manufacturing base and more socioeconomic equity or a series of corporate handouts that do not reach the vast majority of workers.

The version that Clinton pursued in Arkansas and the one advocated by Magaziner and Reich, as the authors concede, was hardly a carbon copy of the more socially democratic iterations that proved successful throughout Western Europe. Unlike the Swedish, West German, and even Japanese models, Magaziner and Reich’s approach (and less so Tyson’s) concentrated primarily on high-tech, non-union industries. Throughout the 1980s, each evinced deep and abiding skepticism for organized labor. In fact, this is one of the rea-

sons it was so appealing to Clinton, and why these iterations of industrial policy earned staunch opposition from unions. A United Steelworkers representative protested to Reich at a meeting in the early 1980s: “You cannot glibly write off whole segments of industries.”

One of the most distinctive—and surprising—claims Lichtenstein and Stein pursue is that Clinton and his top advisers operated at a remove from the Democratic Leadership Council. Indeed, they argue that the New Democrats and the Democratic Leadership Council lacked influence on Clinton. This distinguishes their argument from other accounts of the Clinton years (including my own). But in making such a case, they fail to acknowledge that many New Democrats were enthusiastic proponents of industrial policy, and that the DLC similarly entertained the idea in many of its early policy statements, seeing it align with their vision of how to remake the American economy.

In their efforts to draw a distinction between Clinton and the DLC, Lichtenstein and Stein also overstate the influence of progressive reformers in the White House. The fact that Clinton decided to listen to Rubin, Alan Greenspan, and others, and pursue deficit reduction and NAFTA as early as January 1993, essentially made most progressive ideas dead on arrival. The authors themselves argue that “when it came to virtually any financial issue, Treasury was by far the most important institutional force in the Clinton administration,” and in any battle with the more progressive-oriented Council of Economic Advisers, they would reliably win. The discussion of figures like Reich, Magaziner, Tyson, and Garten’s efforts to implement their ideas on investment, health care, and managed trade is most illuminating for the ways it shows the challenges of academic technocrats trying to translate untested ideas into policy. The chapter on Reich’s quixotic attempt to devel-

op a new program of labor-management cooperation that would empower workers and boost productivity is particularly instructive in this respect, as it crashed on the shoals of a corporate world that by the mid-1990s had become fully financialized and globalized. It would lead Reich and several others to retreat back to academia by the end of Clinton’s first term.

These interpretative differences aside, A Fabulous Failure provides a reconsideration of not only the Clinton years, but also of presidential history more broadly. Lichtenstein and Stein highlight the benefits of looking beyond the rhetoric and personality traits of presidents and instead focusing on the larger context, and in particular on other figures in administrations and how they and their ideas come to shape policy and statecraft. The lack of attention they pay to the Lewinsky scandal and Bill and Hillary’s enigmatic marriage is especially refreshing. With the exception of the chapters on health care, Hillary Clinton plays a notably minor role throughout the book, intimating that she was not a central player in crafting policies related to political economy.

The emphasis on policy and not politics offers a valuable model for analyzing not just

presidencies of the past, but the contemporary ones as well. Joe Biden’s presidency is perhaps the best proof of all of the need to look less at the ideology and the personality of a president and instead examine the larger context, both inside the administration and outside of it. In many ways, Biden’s administration has followed the opposite trajectory as Clinton. One of his most surprising moves has been the resurrection of the ideas of industrial policy through the infrastructure bills, the CHIPS and Science Act, and the Inflation Reduction Act, with a focus on manufacturing that was often absent from the Clinton-era proposals.

One of the key takeaways from the Clinton years is that the best way to keep industrial policy and other economic initiatives equitable is to ensure that the labor movement has a voice and a seat in key policy decisions, and that progressive and left policymakers and ideas remain integral to the process. Bearing these lessons in mind is but one way to ensure that the Biden years are not yet another “fabulous failure.” n

Lily Geismer teaches and researches about the history of liberalism and the Democratic Party at Claremont McKenna College.

A Fabulous Failure provides a reconsideration of not only the Clinton years, but also of presidential history more broadly.

Robert Reich was one of a group of Clinton’s high-profile advocates for industrial policy, focused primarily on high-tech, non-union industries.

Fixing Disinformation Online

What will it take to regulate the abuses of Big Tech without undermining free speech?

By Anya Schiffrin

Digital Empires: The Global Battle to Regulate Technology

By Anu Bradford Oxford University Press

Building Back Truth in an Age of Misinformation

By Leslie F. Stebbins Rowman & Littlefield

The online spread of misinformation and deliberate disinformation is worsening. COVID -19 denial and the spread of vaccine rejection, disinformation about the RussiaUkraine war, the growth of unregulated generative AI, and lies spread by politicians and social media sites make that clear. The 2024 elections in the U.S. and elsewhere have policymakers (or at least Democrats) worried about what is coming next. Any hope that the problem will just go away, or that Big Tech will “clean up the mess they created,” has evaporated.

There is no shortage of initiatives to

shore up democracy and clean up the information ecosystem. Nobel laureate Maria Ressa’s ten-point plan for fixing the internet, the 2023 launch of an International Panel on the Information Environment, and multiple recommendations from the Forum on Information and Democracy, organized by Reporters Without Borders, all offer strategies. Many of these initiatives call for enforcement of data privacy rights, together with audits and fines to incentivize social media platforms to stop promoting potentially harmful falsehoods (while still respecting freedom of expression) as well as increased transparency of algorithms and the strengthening of the media ecosystem as a whole. The United Nations Secretary-General’s office has launched consultations on its Code of Conduct for Information Integrity, while UNESCO is already organizing worldwide consultations and gathering comments in an attempt to come up with guidelines for regulating Big Tech while still protecting freedom of expression.

Tracking all the research and policy proposals can feel overwhelming. Two timely books, thankfully, guide us through the thicket.

Building Back Truth in an Age of Misinformation , by Leslie F. Stebbins, largely examines the pros and cons of “demand-side” solutions: fixes that focus primarily on individual responsibility. Anu Bradford’s Digital Empires is about “supply-side” solutions: those that are more structural in nature. Bradford’s approach is the more persuasive.

Back in 2017, I began writing about what I called “demand- and supply-side solutions” to make sense for my Columbia University students of the universe of fixes that had arisen for the problem of online mis/disinformation. The votes for Trump, Brexit, and Bolsonaro had led to a plethora of forums, papers, conferences, foundation

funding, and projects on the subject, and it became necessary to categorize the ideas floating around.

Demand-side solutions, I pointed out, are the solutions that focus on the individual. These emphasize media literacy training, fact-checking, labeling mis/disinformation, and journalists’ efforts to engage with audiences and build trust. Such solutions skirted the problem of how to regulate the tech

giants; Google and Facebook even funded some of these initiatives for PR reasons and in an effort to forestall regulation.

Demand-side responses are the American way. Instead of a role for government, the onus is on the audience not to be stupid by acting on claims that are obviously untrue. In the same way, instead of authorities researching and regulating chemicals that cause cancer, Americans are encouraged to make individual decisions not to smoke.

The rest of the world wasn’t buying it. The European Union called in the social media platforms early on and told them they had to start taking down illegal content. When

the companies didn’t do much, the Europeans began regulating. Their “supply-side” approach looks more to the producers, suppliers, and purveyors of information.

Supply-side solutions can be broken down into two parts: firstly, suppressing poor-quality, dangerous, or illegal information; and secondly, creating and/or promoting high-quality information.

Laws like Germany’s 2017 Network Enforcement Act , which fines social media companies for failing to remove illegal content despite multiple warnings, and the European Digital Services Act of 2022 both aim at suppressing false or potentially harmful mis/disinformation, as do defamation suits against purveyors of falsehoods and the use of AI to screen and filter information. Efforts to promote high-quality journalism include Google trying to provide accurate information in its search or on YouTube and government efforts to support public broadcasters, or programs to fund local news.

Of course, the divide is not absolute, and overlaps between supply- and demand-side solutions do exist. Fact-checking creates a supply of reliable information—but that doesn’t matter unless audiences actually want it.

In Building Back Truth in an Age of Misinformation , Stebbins, a former librarian, devotes several chapters to the importance of media literacy for young people and building trust in journalism. She is realistic about the limits of this approach. “Learning to think more critically about the information we consume—whether we are five or fifty years old—is no match against sophisticated microtargeting, expertly doctored images, and sensationalized content. Equipping people with media literacy skills will not decrease the amount of misinformation online. Media literacy skills are important but can only have limited effectiveness against platforms that are prioritizing profits over serving the public.”

She concludes by calling for alternatives to Big Tech, and by promoting small-scale local platforms, which she terms “New Digital Public Squares.” Stebbins optimistically describes grassroots attempts to found community-based public squares, such as the Front Porch Forum in Vermont, where people can send helpful and friendly messages to their neighbors. As an example, Stebbins quotes a message about a lost ball of mozzarella that “Ken in Montpelier”

picked up and wrote a cheery post about, saying, “I saw it rolling down the sidewalk … We have it safe in the fridge, hopefully it wasn’t for tonight’s dinner!” Stebbins cites research that, unsurprisingly, has found that this network “improves social cohesion and is improving the resilience of local Vermont communities.”

Local community platforms may be better for society than Facebook or Musk-controlled Twitter, but they’re clearly not going to solve the democratic deficit facing much of the world or defeat the deluge of disinformation. Stebbins’s book argues for the need to rebuild journalism and to require platforms to serve the public interest, but whether Americans like it or not, this will inevitably require government policies and regulation.

Digital Empires , by Columbia University law professor Anu Bradford (famous for coining the phrase “Brussels Effect,” referring to the outsize effect that European Union legislation has on the rest of the world), describes what governments are already doing. Bradford argues that three different paths to tech governance have emerged—that of the European Union, the U.S., and China—and says that in the coming years countries will have to choose between them, or their path will be chosen for them. Bradford explains that the U.S. digital economy followed a market-driven approach. Believing that free speech, free internet, and innovation are essential, the U.S. left the internet unconstrained. This lack of regulation has made the U.S. an outlier compared to much of the world. Because the U.S. has not regulated Big Tech, other countries are now well ahead. In Europe and the U.K., patience with self-regulation by the Very Large Online Platforms (VLOPs) has worn thin. The European Union is implementing the Digital Services Act, designed to curb online harms by making platforms produce regular risk assessments and plans to address the risks, and the U.K. is likely to pass the Online Safety Bill by the end of 2023.

While European attempts to regulate online privacy have not been as effective as hoped, regulators, and Bradford, believe that regulation will continue to evolve and that enforcement will improve. The EU has a long history of enforcement and the ability

to take measures that the U.S. government cannot do. It can, and has, levied large fines, and the EU is already staffing up the bodies that will oversee Big Tech. The Digital Services Coordinators, who under Article 38 are responsible for national enforcement and implementation of the DSA , will be appointed in 2024.

At the other extreme from the U.S., China has been able to keep a grip on its tech companies in a way U.S. antitrust regulators could only dream of. China is fining Alibaba a whopping $2.75 billion for antitrust violations. China has used tech regulation to expand its industrial policy, surveillance of its citizens, social credit system, extreme censorship, and repression of human rights. Not only has China done this at home, but it uses its foreign aid and technological prowess to spread this agenda abroad. China’s Digital Silk Road exports systems of surveillance to Kenya and the Philippines through its “smart city” technology, while its wiring of digital infrastructure in countries across Africa will create dependency on Chinese technology in the future, helping

Chinese tech companies grow their markets. As Bradford points out: “By nurturing leading tech companies such as Alibaba, Huawei, JD.com, and Tencent, China has shown to the world that political freedom is not necessary for economic success.”

Which path should prevail? For Bradford, there is only one answer. The EU is the region that is focused on social cohesion and fairness. Antitrust legislation shows citizens

that there is a level playing field and that big companies don’t get special treatment. The question of how to protect democracy from the harms caused by online mis/disinformation while still guaranteeing freedom of expression is also addressed by EU member states whose laws reflect the belief that free speech doesn’t mean the right to incite genocide or destroy elections. The EU has constitutional protections of free speech but balances this right against other constitutional rights and other rights including labor rights, social rights of platform workers, and economic rights of smaller companies. “Even though the EU shares the US’s commitment to protecting free speech, it is prepared to restrict that fundamental right in the name of other fundamental rights and important public policies, be it human dignity, personal privacy, public safety, or democracy.”

The European Union’s rights-driven agenda has made it the world leader in privacy regulation. So, too, the EU’s aggressive antitrust policies, including regular fines of Google and Meta, create benefits for the rest of the world, especially when countries like Australia and Japan follow Europe’s lead. Bradford explains that EU policies will spread, in part because it is easier for Meta and Google to roll out one standard across many markets than to have to customize according to different countries’

laws. Detroit building cars to meet Californian emission standards rather than creating different models for different states is a comparable example that springs to mind.

Similarly, Bradford believes that the new Digital Services Act’s requirements on algorithmic transparency and user choice will spread globally, partly because it is easier for Meta and Google to have unified standards across markets. The DSA requires companies to give researchers access to data, and that could have an effect globally. Researchers all over the world will be able to see more detailed information about platforms’ design choices, microtargeting, and algorithms. This legislating of microtargeting and privacy will inevitably affect the business models of Google and Facebook, which rely on targeted advertising and user impressions for their revenue. The DSA includes a ban on microtargeting of children and bans targeted advertising based on religion, gender, or sexual preferences.

The U.S. could learn from Europe and give up on its libertarian hands-off approach to Big Tech, but it’s not clear that it will. This is more about politics than ideology. Bradford writes that the U.S. tech companies are so powerful and have so much lobbying clout that they may succeed in remaining largely unregulated locally. However, she’s such a believer in the European model that she hopes that U.S. regulators will become tougher: “It is possible that this backlash against tech companies— unfolding in the US but also around the world—will pose the biggest threat yet to the American market-driven regulatory model. The coming years will reveal whether the ongoing debate about the downsides of techno-libertarian ideals, and the proposed legislation that harnesses that sentiment, will usher in a new era of regulation in the US.”

The 1990s was marked by its optimism that self-governance by Big Tech would work; a second wave in the 2000s was optimistic about how the state can assert authority over the tech sector—but the techlash has changed all that. Bradford writes: “We are now moving into an era where there is increasing consensus that tech companies’ self-governance does not work and gov-

ernments need to get involved, but there is increasing doubt about governments’ ability to do so effectively.”

Despite the massive concentrated power of the tech giants, Bradford still believes the state can exercise muscle: “The codes, community guidelines, and any other rules written by large tech companies ultimately remain subject to the laws written by governments possessing the coercive authority to enforce compliance with those laws.”

In the U.S., there has been some state regulation, with the main victory so far California’s extensive 2018 privacy law. Otherwise, no major federal laws have been approved by Congress. To name a few that have not been passed: the Journalism Competition and Preservation Act, which would push Google and Meta to pay for news they use; attempts to modify Section 230 of the 1996 Communications Decency Act so that companies can be held liable for harms caused by the mis/ disinformation they circulate; competition laws that might break up Big Tech; “know your customer” laws; and proposals that would limit campaign advertising online.

Stebbins’s proposals of more public education and the need to rebuild journalism—which Europe is also tackling—are also useful, but not enough. Bradford makes a persuasive argument that, for anyone worried about online mis/disinformation and corporate power and human rights, the EU path is the only way forward. European regulators have spent years developing muscle, and they are the only authorities (along with the U.K.) who are prepared to rein in Big Tech both as a monopoly and as a destroyer of democracy. n

Anya Schiffrin is a senior lecturer at Columbia University’s School of International and Public Affairs and director of the Technology, Media, and Communications specialization, and writes regularly on mis/ disinformation and regulation.

Legislating of microtargeting and privacy will inevitably affect the business models of Google and Facebook.

Your Guide to the

Hottest Fall Trends of 2023

The leaves may change but the bullsh*t remains the same.—FRANCESCA

FIORENTINI

Shutdown Chic

This fall is all about continuing resolutions. The resolution to wear that plaid blazer one more season, and the resolution to keep funding the government for at least a few weeks!

Cozy Solidarity

While curling up to binge some Netflix is always a fave activity when the weather turns cooler, the studios won’t give writers and actors a decent contract. So this season we’re ditching streaming for reading.

Red Apple Picking

The Republican primaries are a perfect place for some apple picking. The only problem is all the apples are mealy, worm-ridden, and being offered to you by an evil witch who keeps talking about banning abortions.

Designer Debt

Federal student loan repayments are in once again after three years of being fabulously off trend. They’re back like JNCO jeans, and both are absolutely hideous.

Sheer Impeachment

House Republicans are desperate to try on the same impeachment that Democrats flaunted twice with Trump, only it fits like a candy-colored wig on Kyrsten Sinema: cringe.

The Big Pumpkin Parade

No trending list this fall would be complete without the showstopper: a Trump trial. Sadly, for the next few years, every season will be Trump trial season, so plan to be utterly exhausted.

Cocktail Covid

Like a little black dress, this perennial is rearing her spiky head yet again this fall. Put your mask back on, ’cause this time the tests and vaccines aren’t free. Murica.

Taking on teacher burnout

By Randi Weingarten, President AMERICAN FEDERATION OF TEACHERS

Educators, like their students, have always felt a mix of joy and jitters at the start of the school year. What’s different these days is the stress plaguing educators. Teachers are burned out. They are overworked and underpaid. Now more than ever, they are called on to be caregivers and crisis managers. Educators are depleted by the difficulties of the pandemic and demoralized by the creep of culture wars into education. All this is contributing to alarming teacher shortages. But educator burnout is not inevitable. The American Federation of Teachers and Educators Thriving have identified ways to turn this around through strategies to reduce stress, improve well-being and support teachers and school staff so they don’t feel the need to leave the profession and the students they love. Our new report, “Beyond Burnout,” identifies research-based solutions to improve the chronic levels of stress and burnout afflicting educators, and it shows what can happen when these solutions are put into practice.

Educators Thriving developed an educatorgenerated gauge of well-being, in partnership with several AFT affiliates, with more than 1,300 educators taking the pilot survey. The findings suggest that educators are too often running on empty—half of them agree that “at the end of the day I’m too exhausted to do anything.” Yet 86 percent also agree that they “continually try to grow as an educator.” We can change the former and tap into the latter—and we must. We then moved from identifying the issues to action. During the summer and fall of 2022, more than 200 educators in six districts engaged in professional development developed by Educators Thriving to promote well-being. Participants learned proven strategies to increase well-being, including identifying and leveraging strengths, clarifying goals, prioritizing, having difficult conversations, and learning about common pitfalls that can lead to burnout. They spent time in small groups connecting with fellow educators and using these strategies in their personal and professional lives.

This work had a huge impact: 92 percent of participants believed it made their job feel more sustainable, and 94 percent said it helped improve their well-being. Participants also reported that,

over the next few months, they were less emotionally exhausted—a leading indicator of burnout. This is especially notable as many participants took the baseline survey during their summer break and took the end-of-program survey in October, which tends to be a high-stress month for educators. This work demonstrates there are tools and strategies school communities can use to make teaching a more sustainable profession. But this responsibility cannot rest solely on educators. As the AFT’s recent Teacher and School Staff Shortage Task Force report, “Here Today, Gone Tomorrow?” notes, the teacher shortage is actually a shortage of respect for teachers and school staff. We have a shortage of the professional working conditions teachers and school staff deserve, conditions that allow them to do their best for their students. And there is a shortage of pay for what is arguably the most important job in the world.

Teachers feel it. Sixty-six percent of U.S. teachers who responded to a new, nationally representative Rand Corp. survey said their base salary was inadequate, compared with 39 percent of working adults in the United States. The survey also found that teachers worked more hours per week during the school year, on average, than all working adults—53 hours compared with 46. And many of those hours were uncompensated.

It should be no surprise that enrollment in teacher preparation has been declining sharply, beginning years before the pandemic. I hear it all the time: Parents love their children’s teachers, but they don’t want their children to become teachers. A 2018 PDK poll showed that, for the first time in 50 years, a majority of Americans opposed their own children becoming public school teachers—and that was before the pandemic and before extremists made schools a battleground in the culture wars.

Educators care deeply about their students, and they want what kids need. That’s why we launched the AFT’s Real Solutions for Kids and Communities campaign—promoting solutions and strategies we know will help our students thrive. The campaign focuses on the challenges students face today and helps create opportunities for tomorrow, starting with tackling learning loss and loneliness and making literacy, career pathways and affordable college national priorities. As part of this campaign, we’re running ads calling for real solutions over politics and toxic attacks.

Making a difference in kids’ lives is a calling for educators—and they want to be able to stay in their chosen profession. Here’s my challenge to policymakers and politicians: Work with us—all the stakeholders in American education—to make every school a place where parents are happy to send their children, students thrive and educators want to work.

Weingarten, left, visits educators and students at Makowski Early Childhood Center in Buffalo, N.Y., on June 2, 2022.

Photo: Adam Derstine

We must support teachers so they don’t feel the need to leave the profession and the students they love.

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The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

—WILLIAM ARTHUR WARD