The American Prospect

The Uber Challenge steven Greenhouse

Trump: Perpetually Outraged, Perpetually Outrageous Paul Waldman

liberal intelligence

Race and Representation

Kirsten Mullen | Derrick Jackson

Winter 2016

Grace under fire Planned Parenthood’s Cecile Richards faces down a storm of attacks that may yet backfire on the right.

Rachel M. Cohen

Plus

Debating Inequality

Robert Kuttner

The Other Tech Bubble

Margaret O’Mara

Leading from the left E.J. Dionne

Vultures over Puerto Rico david Dayen

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contents

volume 27, number 1 Winter 2016

Page 84

Page 9

Page 20

Page 11

5 prospects Accelerating the Fight against ISIS by Paul Starr 104 Comment What We can do about Gun Violence by Harold Pollack

notebook 9 Going After the Big Bucks by Eliza Newlin Carney 11 Progressive California: The Long Road Back by Peter Schrag 16 Tickets Out of Poverty? by Jake Blumgart

Features 20 Grace Under Fire by Rachel M. Cohen 30 The Uber Challenge by Steven Greenhouse 38 The Other Tech Bubble By Margaret O’Mara 44 Vultures over Puerto Rico by David Dayen 50 Black Culture and History Matter by Kirsten Mullen 56 The New Inequality Debate by Robert Kuttner 62 Can The Democrats Channel America’s Discontent? by Harold Meyerson 67 The Likely Persistence of a White Majority by Richard Alba 71 The Budgetary Backdoor to Reduced Minority Representation by Adrien Schless-Meier & Gary D. Bass 72 Race and Representation in the Twilight of the Obama Era by Derrick Jackson 78 That Sinking Feeling by Nathalie Baptiste 84 Labor Goes South by Justin Miller

culture 89 Perpetually Outraged, Perpetually Outrageous by Paul Waldman 93 Leading from the Left by E.J. Dionne Jr. 96 The Big Financial Divide by Lisa J. Servon 98 Shall We Be Released? by Dana Goldstein 100 The War on the Poor by Peter Edelman 102 It Didn’t Start with Stonewall by Peter Montgomery Cover photo by Peter Yang / AUGUST

1

from the Editors

W

ith this issue of the Prospect, we are adding two accomplished colleagues to our editorial staff. After a period of necessary belt-tightening, it is a pleasure and an affirmation to bring on new senior staffers. Thanks to all who helped.

Longtime Washington journalist Eliza Newlin Carney joins us as senior editor, with special responsibility for editorial leadership of the Prospect’s website. Besides contributing to the magazine, she also writes a weekly money-and-influence column, “Rules of the Game,” and is in charge of the Prospect’s new election-law blog, “Checks.” Previously, Eliza worked at CQ Roll Call and National Journal as a senior writer and columnist covering national politics, Congress, and campaign-finance issues. She coined the term “super PAC.” The Prospect’s new deputy editor Gabrielle Gurley will contribute to both the magazine and the website. Gabrielle will help us launch a new project, Community Voices, spotlighting community activists and organizers. For the past decade, she has worked as a writer and editor for CommonWealth, a Massachusetts politics and public policy Carney magazine. Gabrielle’s beats have included municipal affairs, transportation and infrastructure, energy and the environment, and child welfare. Called “one of the Commonwealth’s most astute journalists” by the political blog Blue Mass Group, she has received several national awards and was a 2015 National Association of Black Journalists “Salute to Excellence” finalist.

Gurley

In our cover story, Prospect writing fellow Rachel M. Cohen profiles

Planned Parenthood’s president, Cecile Richards. This is not just the story of a tough progressive leader in the fight for reproductive rights; it’s also about the transformation of women’s health care into one of the central political struggles of our time. Forty years ago, women’s rights to contraceptive and abortion services seemed a settled issue; today, the opposition is more extreme and violent than ever, imperiling all the diverse services that Planned Parenthood and other women’s clinics deliver. Cohen tells us how Richards and her organization are standing up to the attacks.

With David Dayen’s article in this issue (“Vultures over Puerto Rico”), we also inaugurate a new series on the political and economic ramifications of hedge funds. Hedge fund operators are not only the personification of the very peak of the top one percent, but they exercise outsized influence on politics and policy paths of both parties, and on the perverse financialization of the economy.

Finally, the reader may notice a tension among several articles on race and ethnicity, particularly on how Americans are counted by the Census Bureau. In a provocative analysis, Richard Alba explains why highly publicized census projections of minority populations are too high and the United States will likely still have a white majority in the middle of the 21st century. And in a short piece (summarizing a longer one we published online), Adrien Schless-Meier and Gary Bass argue that because of budget cuts and changes in methods, the 2020 census may undercount minorities and the poor. Alba shatters a widely held misconception about the American future; Schless-Meier and Bass explain how littlenoticed moves in Congress may serve as a “budgetary backdoor” to reduced representation and government funding for marginalized communities. In a third article on race and politics, Derrick Jackson discusses the uncertain future of black political representation. All three pieces contribute to our understanding of the uneasy politics of race, including the politics behind the population numbers that we often too readily take as fact.

2 WWW.Prospect.org Winter 2016

co-editors Robert Kuttner and Paul Starr co-founder Robert B. Reich Executive editor Harold Meyerson Senior Editor Eliza Newlin Carney Deputy Editor Gabrielle Gurley art director Mary Parsons managing editor Amanda Teuscher associate Editor Sam Ross-Brown Writing Fellows Nathalie Baptiste, Rachel M. Cohen, Justin Miller proofreader susanna Beiser editorial interns P.R. Lockhart, Julian Notaro, Isaac Park contributing editors Marcia Angell, Gabriel Arana, Jamelle Bouie, Alan Brinkley, Jonathan Cohn, Ann Crittenden, Garrett Epps, Jeff Faux, Michelle Goldberg, Gershom Gorenberg, E.J. Graff, Bob Herbert, Arlie Hochschild, Christopher Jencks, Randall Kennedy, Bob Moser, Karen Paget, Sarah Posner, Jedediah Purdy, Robert D. Putnam, Richard Rothstein, Deborah A. Stone, Michael Tomasky, Paul Waldman, William Julius Wilson, Matthew Yglesias Director of Business Operations Ed Connors Development Manager Joseph A. Gallant Jr. board of directors Michael Stern (Chair), Sarah Fitzrandolph Brown, Lindsey Franklin, Jacob Hacker, Stephen Heintz, Randall Kennedy, Robert Kuttner, Mario Lugay, Miles Rapoport, Janet Shenk, Adele Simmons, William Spriggs, Paul Starr Fulfillment Palm Coast Data subscription customer service 1-888-MUST-READ (1-888-687-8732) subscription rates $19.95 (U.S.), $29.95 (Canada), and $34.95 (other International) reprints permissions@prospect.org

TheAbolition New Abolition The New W.Bois E. B. and Du Bois the Black Social Gospel W. E. B. Du the and Black Social Gospel The New Abolition Gary Dorrien

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It changes our African Americans andinstitutions challenges of churches and political today to reclaim the mantle and understanding of the religious and political history of political institutions of today toatreclaim the mantle of the prophetic, times even radical,and mission of the African Americans and challenges and of the prophetic, at times even radical, mission of thechurches black social gospel.”— Obery M. Hendricks, Jr., political institutions of today to reclaim the mantle and black social gospel.”— Obery M. Hendricks, Jr., Columbia University of the prophetic, at times even radical, mission of the Columbia University black social gospel.”— Obery M. Hendricks, Jr., “Gracefully written and carefully researched, Dorrien’s Columbia University “Gracefully written andAbolition carefully Dorrien’s The New isresearched, an impressive recovery of W. E. B. The New Abolition is an impressive recovery of E. B. gospel.

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Prospects

Accelerating the Fight against ISIS

by Paul Starr

ap images

W

e are at a dangerous moment in the interplay of foreign and domestic politics. Jihadist attacks are a boon to the right in Europe and America, and the right’s indiscriminate threats against Muslims at home and abroad are a boon to the jihadists. This is a familiar cycle, a spiral of violence and fear in which the extremes feed off each other. During the next year, there is no greater challenge than stopping that spiral.

In the United States, the challenge takes on particular urgency because of the 2016 election.

Donald Trump and other Republican candidates play upon public anxieties, fanning hostility to Muslims and promising a more aggressive military response to terrorism. Ted Cruz says, “Barack Obama does not wish to defend this country,” whereas he would “carpet bomb” the Islamic State in Iraq and Syria (ISIS). Trump also promises to “bomb the hell” out of the enemy and wreak vengeance on the families of terrorists, while calling Obama and the other candidates “weak” and “stupid.” The campaign has already degraded public discourse; the election could produce a sharp swing toward a bellicose xenophobia.

While Republicans bluster, the president has calmly insisted that the strategy he is following is the smart and ultimately more effective way to defeat ISIS and al-Qaeda. That strategy involves negotiating a cease-fire and resolution of the civil war in Syria and

building an international military coalition to defeat ISIS. Emphasizing his opposition to a large American ground war, Obama has nonetheless committed some forces to the fight against ISIS— limited special forces in Syria and a larger number of troops in Iraq.

That line has been crossed.

But will this effort be sufficient

necessary pressure would be the right way to proceed if there were no urgency to the situation.

Unfortunately, despite some success in recapturing territory from ISIS, there is reason to be skeptical that the president’s current approach will result in unmistakable progress, let alone the defeat of ISIS, by November. If

In January 2015, Kurdish forces drove ISIS from the city of Kobani on the Turkish border.

to make demonstrable progress soon enough—in particular, before next November’s election?

The longer ISIS enjoys the power and resources it now has, the more risk there is of additional attacks on Western cities, with increasingly dangerous political repercussions. ISIS’s offshoots and affiliates now operate in Libya and other countries. The hope among defenders of Obama’s approach is that as a quasi-state in its home territory, ISIS will collapse under pressure. This is a plausible scenario, and steadily applying the

for that reason alone, Hillary Clinton and other Democrats running in 2016 will need to put some distance between their position and Obama’s without repudiating the president. They will also need to provide voters with an alternative language of power and protection that explains why the simplistic and reckless approach on the right endangers Americans’ true safety and security.

There is probably no better illustration of the inadequacy of simplistic ideas about the world than

the two wars currently unfolding in Syria. One war pits rebel forces against the Assad regime, while the other (which also extends into Iraq) pits allied forces against ISIS. In each war, the local combatants are backed by external powers, but the alliances in one conflict do not match those in the other. For example, Russia and Turkey are on opposite sides in the Syrian civil war but are at least nominally on the same side in the war against ISIS. Anyone who assumes that the world is divided between good guys and bad guys and that we can protect ourselves by “bombing the hell” out of the bad guys will have a hard time understanding these wars, much less providing effective American leadership.

In both the diplomatic and military efforts under way, there is no way to avoid working with bad guys. In the civil war, the rebel forces fighting Assad include many such evildoers—exponents of “radical Islam,” as Republicans like to say—whose cooperation is essential to a settlement. In the fight against ISIS, the United States is relying primarily on Kurdish troops organized under a front group for the Kurdistan Workers’ Party, known as the “PKK ,” which the U.S. government designated a “terrorist organization” in 1997.

Under the pretense that this is not so, American officials avoid mention of the PKK front, referring to the somewhat broader “Syrian Democratic Forces” (SDF), though no one in the region is fooled. To make matters even more complicated, the PKK has ties to Russia

Winter 2016 The American Prospect 5

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and in some cities divides control with the Assad regime rather than making war against it.

Since airpower alone is insufficient to defeat ISIS, there need to be troops on the ground to complement U.S. airstrikes, and the Kurds have been the main source. As of mid-December, the combination of Kurdish ground operations and U.S. airpower had driven ISIS back from areas in northeast Syria close to the Turkish border that are primarily Kurdish. But to continue south and seize Raqqa—ISIS’s administrative center—requires taking Sunni Arab territory. “The plan seems to be,” writes Aron Lund, editor of Syria in Crisis, “to use the SDF to gradually glue more Arab groups onto a Kurdish core force while also separately standing up a nucleus of Sunni Arab fighters who belong to eastern Syrian tribes. Realistically speaking, these groups won’t be strong enough to dispense with the Islamic State and establish sustainable local governance on their own, and … there is a limit to how far south you can go with the Kurds.”

In his speech from the Oval Office on December 6, Obama said, “The strategy that we are using now—airstrikes, special forces, and working with local forces who are fighting to regain control of their own country—that is how we’ll achieve a more sustainable victory.” That strategy could work if there were local forces to carry it out. But as Washington Post columnist David Ignatius and others have pointed out, we have thus far failed to win over the local Sunni Arab fighters that the strategy requires. Iraq’s Shiadominated government has been a primary obstacle to getting that Sunni support.

In his December 6 speech, Obama also argued that the international efforts to settle the Syrian conflict could, if successful, allow countries allied with the United States as well as others, including Russia, “to focus on the common goal of destroying” ISIS. That, too, could work, but such a

coalition will need to put troops into the field. Many of them may be “local” (at least in a regional sense), but the United States will almost certainly have to share directly in the ground operations.

Again, the question is how quickly things will move. The Syrian conflict has already gone on for an obscene length of time, creating a humanitarian disaster and a flood of refugees that has destabilized European politics. Much depends now on Vladimir Putin’s calculations of Russia’s interests.

While Syria could become a quagmire and weaken Putin at home, Russian intervention has fortified the Assad regime, and advances on the battlefield could strengthen the regime’s hand in negotiations.

Whether Putin and Assad favor a cease-fire sooner or later may depend on how they read their military prospects.

On the other side, the rebel groups backed variously by the Gulf States, the West, and Turkey have had deep and persistent differences and show little promise of bringing peace or justice to Syria. The best hope now may be a federal system that would divide Syria into “cantons” with substantial autonomy for groups like the Kurds. But any such resolution would make Turkey nervous because of the PKK , with which it has long been at war. The Kurds were barred, partly at Turkey’s insistence, from the recent conference in Riyadh of Syrian opposition groups that created a joint commission to choose a negotiating team for peace talks with the Assad regime. Those talks are scheduled to begin in January in New York, but the continuing divisions among the Syrian opposition, as well as the conflicting interests of their foreign patrons, create innumerable stumbling blocks in the path to a settlement.

In short, Obama’s strategy—at least so far—lacks either the necessary local ground forces or the means of securing an expeditious resolution of the Syrian civil war and refocused international efforts

to defeat ISIS. The United States could ramp up the fight against ISIS, as Clinton has suggested, by arming the Sunnis. We could also accept offers of ground troops from Arab countries and increase the size of the very limited force of our own that Obama has so far committed. Those forces could tip the balance in pending battles with ISIS. In the Syrian civil war, the United States and its allies may need to accelerate a deal with Russia that reflects both the battlefield realities and the limits (and limitations) of the opposition to Assad.

The local and international efforts may come together in time, but the political clock is ticking, and without clear evidence of progress by next November, the Democrats are far more vulnerable to the Republicans. To put the political point in stark terms: Going into 2012, Obama had Osama. Going into 2016, the Democrats need the fall of Raqqa and Mosul.

of the liberal theory of power—the idea that liberal values and institutions deserve popular support not only because they are just, but also because they are durable bases of security and strength.

The response to Islamist terrorism brings out the differences between the right-wing and liberal worldviews. As many have pointed out, ISIS wants to destroy the “gray zones” in the West where Muslims live peaceably with others. When politicians on the right call for anti-Muslim measures, they are doing exactly what ISIS is hoping for. When they frame terrorism as a result of the “clash of civilizations” (as Marco Rubio did after the Paris attacks in November), they are equating Islam with ISIS. The liberal response—reassuring Muslims, distinguishing sharply between the small number of terrorists and the vast Muslim majority, and calling upon that majority to mobilize against

In 2012, Obama had Osama.

In 2016, the Democrats need the fall of Raqqa and Mosul.

Faced with the uncertain prospects of current policy, Clinton and the Democrats should push Obama to do more and to do it faster, while continuing to develop the language of power and protection that the president employs as an alternative to the right-wing conception of national strength. In the right-wing vision of a fortress America, the United States is safer when it summons its own overwhelming power, closes itself off to refugees and immigrants, and dispenses with legal niceties such as respect for human rights.

The alternative language of power emphasizes strength through diplomacy and alliances, through inclusiveness at home, and through the embodiment of the values of freedom and equality in national policy. These are elements

hatred and intolerance—is also the stronger and smarter course in the struggle against terrorism.

To be sure, neither Obama nor any other president can prevent every terrorist act. But clear and convincing progress against ISIS abroad will give the public more confidence that the government is doing all it possibly can to stop terrorism. Contrary to the voices urging patience and containment, Obama ought to be pressing the fight to defeat ISIS’s “caliphate” with a timetable measured in months rather than years. Americans need to see progress in 2016.

“Every time things gets worse, I do better,” Trump said on December 5 in the wake of the attack in San Bernardino. On that particular point, he may well be right.

December 14, 2015

Winter 2016 The American Prospect 7

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notebook

Going After the Big Bucks Pumping big money into the national political parties, as many now propose, would weaken the parties in the long run and invite another round of soft-money abuses.

By E l i z a N e w l i n C a r ne y

victor juha sz

T

he 2016 election has thrust populist candidates and bigspending outside groups to center stage. These trends further marginalize the traditional role of the national political parties.

Thrown on defense by angry voters, self-financed candidates, and billionaire donors who thumb their noses at the political establishment, party leaders are struggling to reclaim power. A growing chorus of political analysts, election lawyers,

and even some progressives argue that the solution is to give parties the same freedom to raise unrestricted, high-dollar contributions that super PACs and other outside groups now enjoy. That, presumably, would partly restore the influence of parties, and serve as a more democratic counterweight to freelance mega-money.

On paper, the notion that parties should operate by the same rules as freewheeling non-party players has

appeal. Parties fully disclose their activities, are accountable to and committed to turning out voters, and act as a moderating force on political polarization—so the argument goes. By contrast, unrestricted super PACs and politically active tax-exempt groups are beholden to ideological super-donors and often operate outside the disclosure rules.

“The most influential actors in elections should be those who also have to pay the price of

governance,” says Nathaniel Persily, a professor at Stanford Law School, whose book Solutions to Political Polarization in America proposes strengthening the parties by injecting them with big money.

But in the real world of American elections, turning parties into super PAC clones would only weaken them in the long run, as well as reinforce the dominance of super-donors in elections. Voters already disgusted over political money would turn their ire on parties aligned with billionaire elites. Political polarization, which reflects deep divisions within the American electorate, would not magically evaporate under new campaignfinance rules. Parties already enjoy more freedom to raise big money, moreover, thanks to a Supreme Court ruling last year and to new rules that Congress has tacked onto spending legislation.

“I think we would see the parties shift their focus from engaging average voters to instead engaging a handful of billionaires,” says Paul S. Ryan, deputy executive director of the Campaign Legal Center. “That doesn’t improve the parties; that doesn’t improve democracy.”

The strongest argument against liberating the parties to raise even more big money, however, is the obvious history lesson delivered by the soft-money era of the 1990s.

Before Congress banned unrestricted soft money in 2002, the political parties collected tens of millions in unlimited contributions from corporate CEOs, lobbyists, and moneyed interests. The upshot was a series of scandals involving Lincoln Bedroom sleepovers and special favors for big donors that gave the parties a black eye.

Loosening the Reins

To be sure, there’s agreement on both sides of the aisle that political party rules are due for an update.

Court rulings and changes in campaign-finance laws have almost

Winter 2016 The American Prospect 9

notebook

uniformly cut against the parties in recent decades.

The first blow came with the soft-money ban, best known as the McCain-Feingold law because it was authored by Arizona Senator John McCain, a Republican, and thenSenator Russell Feingold, a Wisconsin Democrat now running to recapture his old seat. The 2002 ban did not decimate party fundraising, as some had predicted. Indeed, the parties raised more in hard (restricted) contributions in the election immediately after the ban’s enactment than they had under the soft-money system.

But the McCain-Feingold law did trigger a spending spike by so-called 527 groups, a type of independent political organization, named for its tax-code designation, that may collect unlimited contributions. Such groups spent $424 million in 2004, according to the nonpartisan Campaign Finance Institute. And while Democrats have partly made up for the loss of soft money by collecting more low-dollar party contributions, Republicans have seen party receipts dip overall in the last three election cycles.

The soft-money ban hit state parties especially hard. That’s because state parties must now follow federal rules and restrictions even when they back state candidates and mobilize voters.

“This approach ignored the fact that there are 50 other campaign-finance regimes that regulate state and local elections, several of which are wholly incompatible with federal law,” argued election lawyers Neil P. Reiff, a Democrat, and Donald McGahn, a Republican and former Federal Election Commissioner, in joint testimony on Capitol Hill last year. “Also ignored was that our party committees had been a stabilizing force in our democracy for almost 200 years, and an effective way for citizens to participate in politics at the grassroots level.”

The second and more severe blow to the parties came with the Supreme Court’s 2010 ruling to deregulate independent political spending. That ruling ushered in a new generation of unrestricted super PACs, which may raise unlimited contributions as long as they act independently of candidates and parties, and politically

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active tax-exempt groups that operate outside the disclosure rules.

“They set up these outside organizations that are like tent circuses,” says Ray La Raja, an associate political science professor at the University of Massachusetts at Amherst, of the deep-pocketed donors now bankrolling influential non-party groups.

“They come into town, they put on a show, and then they disappear.”

La Raja is co-author with his colleague Brian F. Schaffner of an influential book that argues for lifting limits on the political parties, on the grounds that it would combat political polarization. In Campaign Finance and Political Polarization: When Purists Prevail, La Raja and Schaffner point to research showing that in states where parties can raise and spend money without limits, legislatures are less polarized. Parties are driven by pragmatism, La Raja argues, and will therefore put money behind moderates in primaries under more-relaxed fundraising rules.

“I just want things to be simpler, more clear, more transparent, more accountable,” La Raja insists.

Not So Fast

It would be an admirable goal—if only parties could live up to it. During the soft-money era, parties didn’t spend their extra money on grassroots get-out-the-vote activities, but on high-dollar campaign-style ads. Party cheerleaders portray them as disinterested players that temper the influence of big donors and promote lofty democratic goals. Yet the national political parties are typically run by elected officials immersed in fundraising and deal-cutting.

The parties, moreover, have far less power to counter the forces of political polarization than their champions allege, says Michael Malbin, a longtime scholar of the political parties who heads the Campaign Finance Institute. Malbin’s research has found that parties spend most of their money in general elections and not on contested primaries, though some would argue that Democratic leaders in particular have a history of investing in business-friendly candidates adept at raising money from the financial

There’s substantial evidence that freeing the parties to raise

unrestricted

money

would invite another round of soft-money abuses.

sector. In any case, as New America’s Lee Drutman has noted, the number of competitive House districts and Senate seats is now so small that parties have few opportunities to invest in contested races.

There’s substantial evidence that freeing the parties to raise unrestricted money would invite another round of soft-money abuses. The McConnell v.

FEC court record describes in detail how, during the soft-money era, party leaders asked lawmakers to raise soft money from donors who had business before their congressional committees; how donors were rewarded with plush ski getaways, dinners, retreats, cocktail parties, and special briefings with members of Congress; and how parties then directed the money raised to specific candidates at the request of donors.

Contributors complained of being shaken down, and lawmakers described how donors got what they asked for on the House and Senate floors.

“The political parties have taken advantage of the desire of donors for special access by structuring their entire fundraising programs to entice larger donations with the promise of increased and more intimate access to federal officials,” wrote U.S. District Court Judge Colleen Kollar-Kotelly in the lower-court ruling that referred the McConnell challenge to the Supreme Court. “The political parties have also pressured donors to give donations, playing off donors’ fears of denial of access or political retribution. From this record it is clear that large donations, particularly unlimited nonfederal contributions, have corrupted the political system.”

The memory of those soft-money days helps explain why political scientists are split over proposals to deregulate the political parties, and why such scholars as Malbin argue that limits should be lifted only up to a point. The danger of nixing party contribution limits altogether, as La Raja and others propose, is that big donors could then circumvent the $2,700 per-election cap on contributions to candidates by funneling money through the parties.

There’s a middle way between letting parties languish under old rules that disadvantage them and throwing out party contribution limits altogether.

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Parties should be free to spend as much money as they like in coordination with candidates, argue scholars at the Brennan Center for Justice at New York University’s School of Law, but only when that money takes the form of relatively low-dollar checks as opposed to supersized contributions.

The Brennan Center drew raised eyebrows earlier this year when it proposed lifting the cap on the amount that parties may spend in coordination with candidates. But in its report “Stronger Parties, Stronger Democracy: Rethinking Reform,” the center backs lifting the cap on coordinated party spending only when political parties are subject to “reasonable, fully-enforced contribution limits.”

The Brennan Center, along with a long list of reform advocates, congressional Democrats, conservative activists, and Tea Party Republicans on Capitol Hill, objected to Senate Majority Leader Mitch McConnell’s December campaign to lift the party coordinated spending limits.

A better way to revive parties, say a growing number of good-government advocates, would be to match lowdollar party contributions with public funding. It’s a model that is being tested on state and local candidates in Maine, New York City, and elsewhere, as Justin Miller reported in The American Prospect’s Fall issue.

La Raja and other scholars promoting party deregulation regard low-dollar donors askance, citing research that suggests donors giving small campaign checks tend to represent the ideological extremes. But in his research on New York City’s public matching funds system, Malbin found that matching low-dollar contributors actually diversified the donor pool. Encouraging parties to cultivate ties with average Americans would strengthen them far more in the long run than sending them back down the path of hitting up wealthy high-rollers.

It also diversifies the candidate pool.

“The parties’ most important function is to connect citizens, voters, to the political process by simplifying the choices and mobilizing them,” says Malbin. “A public match gives party officials a stronger incentive to do that work, instead of raising the easy money.”

Progressive California: The Long Road Back The Golden State is the nation’s most liberal— but it has yet to untie its fiscal knots.

by Peter Schrag

S

een from Washington or New York, California looks like a brilliant fiscal success, even without comparing it with the Republican moronarchy in Washington, the budget disasters of Sam Brownback’s tax-cutting Kansas or Bobby Jindal’s Louisiana, or the scandalous budgetary finagling that’s earned Chris Christie’s New Jersey the second-lowest credit rating in the nation.

In 2012, California voters, with a strong push from Governor Jerry Brown, passed Proposition 30, which raised the sales-tax rate and created a new bracket for the highest-income taxpayers. For those making more than $1 million, the marginal rate is now 13.3 percent, making California’s tax structure far and away the most progressive of any state in the nation.

And despite dire warnings from the right, there has been no great exodus of California millionaires rushing for cover in Texas, Arizona, or other lowtax states. California, moreover, has regained a significantly larger percentage of the jobs lost in the 2008–2009 recession than the nation as a whole.

The state’s unemployment rate, at 5.8 percent as of October 2015, is still higher than the nation’s 5.0 percent, but less than half what it was in 2008.

A year before Proposition 30 passed, Brown, ending a long and nasty battle with Amazon, had also negotiated and signed the so-called Amazon law, which, like those in a dozen other states, requires big Internet retailers to collect sales taxes on their California sales just as the brick-and-mortar stores on Main Street had long been required to do. In 2010, voters had also approved an initiative that ended California’s constitutional requirement, one of the few in the nation, that state budgets may only be passed by a two-thirds vote of the legislature. The majority-vote rule that replaced it thus

ended decades of filibuster-like budget battles. One veteran liberal activist, Lenny Goldberg of the California Tax Reform Association, says that in California even the Republicans have become “pretty reasonable.”

Now, as Kansas and other taxcutting states are starving education and social services, California’s tax increases are generating an additional $6 billion to $7 billion a year, most of it for the K-12 schools. The Golden State, famously enmeshed in budgetary impasses a few years before, inflicting major cutbacks on needed public programs, is for the moment again celebrated as the nation’s shining example of progressive public policies. Until recently, there had even been talk about the 77-year-old Brown again running for president.

But let’s not overdo it. California’s tax system—indeed its whole fiscal structure—is still a dysfunctional mess, nearly as illogical, inequitable, and inefficient as it has been for the previous 40 years. The tax limits and the restrictions on government imposed by Proposition 13, the sweeping property-tax reduction and limitation initiative passed by voters during the great tax revolt that began in 1978, are still on the books, and, according to the polls, as beloved by voters as ever.

Despite the infusion of the new money coming from the state’s hightech-driven economic recovery and the taxes generated by Proposition 30, California is still struggling to get its per-pupil spending up to the national average. In March 2015, the state was 29th in the nation, about $975 below the national average. It charges some 20 times as much in highereducation tuition and fees as it did 40 years ago—more than $13,000 a year for in-state students, versus $647 in 1975–1976. Students now pay more in

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tuition than the state contributes to university support.

Nearly all states have jacked up tuition at their public universities.

But when Berkeley and UCLA , like the universities of Michigan and Virginia, begin to skew their admissions policies toward out-of-state students, who pay vastly more than others, and become increasingly privatized institutions, the blow to talented instate applicants and to the very idea of high-quality public education is especially painful. No state had once prided itself more on its essentially tuition-free system of higher education than California had. Privately, Berkeley faculty members concede that they now have an increasingly hard time competing for the hottest faculty prospects with Stanford, the Ivies, and other better-endowed private institutions. Berkeley has an official student-faculty ratio of 17 to 1; Stanford’s is either 4 to 1 or 11 to 1, depending on whose numbers you use.

The list of Proposition 13’s casualties goes on: The condition of California’s roads, once models for the world, is rated as among the worst in the nation. Its huge public-employee pension funds and retiree health-care systems are dangerously underfunded.

A few months ago, the Public Policy Institute of California estimated that unfunded liabilities for the state’s future public-employee retirees had reached “historic levels”—roughly $135 billion—which, if not addressed, would consume an increasing share of state and local budgets, money that would be needed for current purposes, not to support the employees of the past.

(Those pension shortfalls, too, are partly attributable to the effects of Proposition 13: In tight years when there was no money for publicemployee pay raises, cities, counties, and school districts would appease cops, firefighters, and teachers with generous, though unfunded, retirement commitments.)

Worse, the crippling restrictions on state and local governments that Proposition 13 imposed in 1978 and the resulting distortions in the state’s tax burden remain firmly locked into the California constitution. Local

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governments can’t impose a parcel tax on property—a tax where each piece of property, whether mansion or hovel, pays the same tax, as opposed to advalorem taxes based on the value of the property—without a two-thirds vote of the local electorate. They can’t raise the ad-valorem property-tax rate at all.

That means that Californians, in the words of California Forward, a nonpartisan think tank, “do not have an effective mechanism to channel local citizens’ enthusiasm for local schools,” which before the passage of Proposition 13 were largely funded by local property taxes, and have since been supported by money from the state.

Nor can the legislature increase sales or income taxes without a two-thirds vote. On revenue issues in the California legislature, the minority rules.

Because Proposition 13 doesn’t allow property to be reassessed except when ownership changes, it creates huge inequities. Neighboring residents pay vastly different property-tax bills on identical homes, depending on when they bought those homes.

Similarly, Proposition 13 stifles business competition: The longtime retailer on Main Street is assessed according to what he paid in 1975 before Proposition 13 was passed, or whenever he bought or built his store in the years since; his new would-be competitor next door pays for an identical building on the basis of the elevated prices of the contemporary market.

That, as Goldberg points out, turns all the principles of good economics on their head. The system doesn’t capture gains in the value of a successful business or the increased value of the property next door; instead, it penalizes innovation and new enterprise. And since it doesn’t raise the assessment of unused parcels adjacent to successful businesses, it fosters speculation and does nothing to encourage the highest and best use of those parcels.

Worse, because the provisions of Proposition 13 on changes of ownership have allowed corporate lawyers to find great loopholes for commercial property transactions, usually through lease arrangements (rather than outright purchases) on blatantly under-assessed land, the initiative, purportedly designed to protect

Despite the infusion of revenues from its booming tech sector, California ranks

29

th

in per-pupil spending.

homeowners, has generated a huge shift of the tax burden from commercial to residential property. In 1978, homeowners paid 55 percent of property taxes; today, they pay 72 percent.

It has also distorted local planning priorities. For many years, property taxes on manufacturing plants didn’t generate as much revenue as sales taxes were thought to generate from retail developments on the same land. As a result, until about a decade ago, there were intense beggar-thyneighbor battles between adjacent communities for shopping malls and auto malls, but little interest in clean industry and the much better-paying jobs it would bring. Now, after some locals bent over backward and spent millions to build infrastructure to attract the shopping malls, some of those malls have been going bust.

Goldberg of the California Tax

Reform Association has long been working to promote a change to Proposition 13 that would require commercial property, but not residential property, to be reassessed periodically according to its current value, regardless of changes of ownership. He points out that in fact majority ownership of corporations, as shares of stock are bought and sold, probably changes every three years. Some legislators and a group of liberal organizations and policy experts, under the slogan “Make It Fair,” have been working on legislation to enact that change, which would pin commercial property assessments to current values.

But the prospects for enacting this kind of reform aren’t great. The most recent poll, from the Public Policy Institute of California in September 2015, shows voters narrowly favoring such an initiative (51 percent to 42 percent), but corporate and antitax groups almost always beat this kind of measure. Not surprisingly, Brown has shown no enthusiasm for it. He called it “a tar baby,” something he doesn’t want to get entangled in.

Brown, who in any case never lost his high Jesuitical regard for austerity and the morally salutary effects of hair shirts, doesn’t like involving himself in long shots.

For similar reasons, Brown has no

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enthusiasm for extending Proposition 30’s high-end income-tax rate, which expires in 2018. He’d promised it would be temporary when it was on the ballot in 2012, and he seems intent on sticking to that. A coalition of public-employee unions has launched a campaign to extend it, and while the PPIC poll cited above shows voters favor the extension by 55 percent to 37 percent, that lead is also likely to evaporate if the issue goes on the ballot.

There are valid reasons other than Brownian austerity for the governor’s reluctance to support any extension of Proposition 30’s upper-income brackets. Because of Proposition 13’s caps on local property taxes, the state and local governments have become heavily dependent on California’s progressive but highly volatile income-tax system. In good times, the income tax on high earners generates ample revenue, much of it from capital gains.

But in lean times, state revenues drop precipitously, producing the wild boom-and-bust swings from which California’s revenues have famously

The Old Jerry, at his worst: Governor Jerry Brown with Howard Jarvis in 1978, espousing extreme fiscal austerity in the wake of Proposition 13’s enactment.

suffered for more than three decades.

Bruce Cain and Roger Noll of Stanford, the former a political scientist, the other an economist, pointed that out some years ago: California, more than other states, relies disproportionately on the income tax. The state generates the revenue through the income tax, then transfers most of it to the locals, who spend it on schools, health care, public safety, and other major services. (This leads, they argue, “to a lack of clear accountability for the state’s recurring fiscal crisis.”

Is the problem poor fiscal management by the locals or by the state? Or, more broadly, is the problem rooted in what’s often called “ballot-box budgeting,” the programs created by initiative—tougher prison sentencing laws, for example—for which the voters don’t provide the needed additional revenues?)

Conservatives blame California’s high upper-bracket rates for the volatility of its revenues. But just as plausibly, the revenue swings can be pinned to the lack of sufficient property-tax

revenues, which are far more reliable and less dependent on the business cycle and thus serve as a kind of flywheel through the economic cycles.

So might an economically more rational sales-tax system that would tax major services—lawyers, accountants, business consultants, data processing—just as it now taxes the sale of cars and washing machines. The share of the economy generated by services is now much greater than the share generated by the sale of goods, and it continues to grow.

State Senator Bob Hertzberg, a Los Angeles Democrat and a former speaker of the state assembly, is pushing such a reform, combined with a reduced reliance on the income tax, which he believes would significantly reduce the boom-and-bust swings in state revenues. Hertzberg says many states tax some combination of services. Still, given the polls, the bill’s chances of eventually passing look slim. And in combining the sales-tax measure with the income-tax cut, obviously designed to draw voter support for the sales-tax measure, Hertzberg’s proposal might do little but exacerbate the effects of the state’s huge income gaps.

In November 2014, California voters passed the Rainy Day Budget Stabilization Fund Act, requiring the state to set aside a small percentage of boom-time revenues in a reserve account, which will soften the effects of the downturns, but in tight times for not much more than a year.

Add all that up and you get a glimpse of the governmental and fiscal messes that Proposition 13 and its plebiscitary progeny have generated.

In poll after poll, however, voters say they trust the initiative process more than they trust government. That’s hardly surprising, given the vicious cycle in which every ballot measure further constrains all branches of government, limiting their ability to raise

Winter 2016 The American Prospect 13

funds and allocate them to meet the most pressing needs and most important projects. The reforms of the past four or five years have put a dent in that process—but only a dent.

For anyone looking to California

for encouragement about the future, probably the most positive signs—and they are significant—are social and demographic.

In 1994, California voters overwhelmingly approved Proposition 187, sponsored by Governor Pete Wilson and other Republicans, one of the harshest anti-immigrant measures in modern American history. Until federal courts struck it down, it excluded undocumented immigrants, including young children, from the public schools and virtually all other public services, and it required teachers, nurses, cops, and other public employees to report to the authorities anyone believed to be here illegally. Two years later, voters also approved Proposition 209, which prohibited affirmative action in public education, contracting, and employment, an initiative that became a model for Michigan, Washington, and five other states.

But by 2010, when Arizona passed its notorious S.B. 1070 with its long

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The New Jerry, at his most visionary: With Japanese Prime Minister Shinzo Abe in San Francisco earlier this year, contemplating a bullet train simulator.

list of anti-immigrant measures, California had become a majorityminority state and firmly Democratic in party registration, in part because of the Latino backlash against Proposition 187. It now charges undocumented immigrants the same tuition as all other in-state students in its public colleges, and makes them eligible for financial aid. After a decade of political battles, the state now issues driver’s licenses to undocumented immigrants. California continues to lead the nation in environmental regulation.

Meanwhile, Jerry Brown—who in his first terms as governor (1975–1983) had looked down on and sometimes outright disparaged his governorfather Pat Brown’s progressive public projects in water, transportation, and education—has been pushing his own multibillion-dollar plan to build a European-style bullet train from San Francisco to Los Angeles, and his own immense construction scheme to move more water from one end of the state to the other.

There are serious doubts about each, and fierce resistance from many quarters to both, so that the chances that both would be finished within the next quarter of a century, if ever,

are slim. But for those who recall the (sometimes unjustifiably excessive) optimism of the postwar decades, even the hope of doing something so grand and ambitious has been refreshing.

Perhaps because of its sheer size, its ethnic and social diversity, and its economic heft—the eighth-largest economy in the world, as some Californians like to remind themselves—California’s ups and downs have always been magnified by outsiders. Californians themselves have often encouraged this. Things had better work here, Joan Didion famously said long ago, because this is where we run out of continent.

And in our treatment of a diverse and ever-changing population, California is, one hopes, a precursor of, and maybe a model for, the rest of the nation.

But on tax reform—by whatever definition—California’s baby steps have barely moved the state out from under the shadow of Proposition 13 and its other tax-limitation follow-ups.

They have not broken through most of the crippling restrictions on state and local government action or restored the progressive communitarian ethic that grew out of the Depression and the common effort of World War II. And because of the economic and cultural tribalism fostered by the Internet, the cell phone, and their associated technologies, we may never get it back. Democrats dominate the politics of California, in large measure because of the Republicans’ long disregard of the state’s ethnic minorities and their disdain for gender and other major social issues. But the state’s dominant streak has been individualistic and libertarian, not New Deal–progressive. With the increasing presence of Latinos in the electorate, that may be starting to change, but it hasn’t yet. Next to the California of a half-century ago, today’s tax policy and political culture still look depressingly backward. Compared with those of other states today, however, they look like a shining example.

Peter Schrag, a longtime writer and editor, is the author of Paradise Lost: California’s Experience, America’s Future and most recently, co-author of When Europe Was a Prison Camp: Father and Son Memoirs, 1940-1941.

jeff chiu / reuter s / l andov

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Tickets Out of Poverty?

Housing voucher recipients can move to better neighborhoods only if states and localities break down suburban barriers.

By J a k e Bl u m ga r t

F

or Lorraine Washington, a housing choice voucher, colloquially known as Section 8, represents escape and opportunity. Before her recent move enabled by the subsidy, she lived in the Blumberg Apartments, a public housing complex in one of the most impoverished corners of Philadelphia. Then the Philadelphia Housing Authority slated her building for demolition and offered its residents a choice: They could move to a new public housing unit in the city or accept a Section 8 voucher—which can, in theory, be used anywhere they might want to go.

“You should see the mob of people out here at night, drug dealers everywhere,” Washington said before her move. “It was terrible to come around here and try to walk around at night.

I’m used to being very clean, not this trash all over the place and people disrespecting you. I have had a lot of problems around here, with people I don’t even know. Me and my daughter don’t go out very much.”

Washington (not her real name, which we’ve changed out of concern for her safety) took her Section 8 voucher to Delaware County, just west of Philadelphia—a cross-jurisdictional move termed “porting” in housing lingo. She’s found a place in Folcroft, one of a patchwork of small municipalities just over the city line that have received generations of migrants from the city. These neighborhoods were part of the nation’s first wave of mass suburbanization in the early 20th century, predating the broader postwar boom, and have an infrastructure to match: 100-year-old sewer systems, still-functioning trolley lines, and a housing stock of brick row houses and stone twins.

In the 1950s, increasing numbers of white working-class families from Philadelphia began moving to Folcroft and other inner-ring suburbs in Delaware County as the city’s growing African American population expanded into their neighborhoods. The county

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line was a stark racial barrier, enforced by violence. In 1963, an African American couple moved into Folcroft. Their neighbors smashed all the couple’s windows and scrawled “niggers go home” on the house. Seventeen years later, neighboring Upper Darby was the center of a Pennsylvania Commission on Human Rights investigation of racial violence for repeated incidents of violence against black families moving into the borough.

After 1990, parts of inner-ring Delaware County began to diversify. The 0.7-square-mile borough of Millbourne became the first majority–South Asian municipality in the United States, while Yeadon became almost entirely African American.

Downtown Upper Darby is now a multiethnic shopping district, with Korean grocery stores, pupuserias, and Peruvian restaurants amid the fading Art Deco buildings. Asian and Hispanic immigrants and their businesses are particularly noticeable, but the majority of non-white residents are African Americans, fleeing the concentrated poverty and violence of West and Southwest Philadelphia. Folcroft is now 26 percent African American.

As communities like Upper Darby, Lansdowne, and Folcroft have become more diverse, many upwardly mobile white residents have moved further west in Delaware County or even to outlying Chester County. In some majority-black suburban communities, middle-class African Americans have begun moving farther out, too. Property values are declining as a result, draining resources from school districts just as those districts need more funding to provide services to lowerincome and English-learning students.

Many of the remaining working-class and lower-middle-class residents are stuck in dead-end, low-wage jobs.

These municipalities are also those attracting most of the Section 8 vouchers in their counties. The

Philadelphia’s thriving Pennsylvania suburbs don’t welcome residents with federal housing vouchers. Its New Jersey suburbs do.

pro-integration and smart-growth advocacy group Building One America analyzed data provided by HUD in 2008 and 2013 and found that about a fifth of the more than 4,000 housing choice vouchers in Delaware County were located in Upper Darby (22.8 percent in 2008 and 17.2 percent in 2013).

Neighboring municipalities, which are either diverse or majority–African American, also hosted triple-figure voucher households. Further west and north in the county, where median incomes are tens of thousands of dollars higher and the school districts well funded, there are comparatively few Section 8 vouchers. With almost five times the population of Folcroft, Radnor Township—the setting of Katharine Hepburn’s The Philadelphia Story—supports precisely one housing choice voucher. Folcroft has 111.

“You don’t get figures like that unless it’s the result of policy,” says John McKelligott, former school board president of the William Penn School District, which covers several of the smaller municipalities to the south of Upper Darby. “You are taking communities that are struggling, and it doesn’t take much to tip them over the edge, and you are trying to tip them over the edge. These communities in eastern Delaware County are doing their part. The whole point is not to drive out the population [of voucher holders] we have but to stop stressing us [with more] so that we can deliver services to the people who are here.”

This pattern is playing out to an even greater extreme in Montgomery County, the wealthier county to the northwest of Philadelphia, and home to some of the best school districts in Pennsylvania. More than 41 percent of its 2,849 housing choice vouchers are concentrated in impoverished Norristown, a city of roughly 30,000 and the only urban area in the county. By contrast, the municipality with the highest-funded schools in the state, Lower Merion, only hosts 4 percent of the vouchers—a comparatively high percentage for such a privileged area.

Philadelphia’s other suburban counties, Chester and Bucks, have similar configurations. The biggest concentration is in Philadelphia itself, which suffers the highest poverty rate

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of any big city in the nation. At the time of Building One America’s 2013 analysis, the city had 19,511 housing choice vouchers. That’s 7,165 more than the four suburban counties combined, which have about one million more residents than the city. Many of the region’s best jobs are located in far-flung suburban office parks.

Greater Philadelphia is anything but an outlier when it comes to the suburban perpetuation of racial and economic segregation. There are, however, notable exceptions to this rule. One is located just across the Delaware River from Philadelphia in Mount Laurel, New Jersey, where a long-running affordable-housing case resulted in a series of state supreme court rulings affirming the duty of all municipalities to allow affordable housing. The state’s 1985 Fair Housing Act reaffirmed that commitment. Recent research on the affordable units built in the leafy, affluent suburb of Mount Laurel shows that property values did not fall and crime rates did not rise when 140 units of low-income housing were built there. Another exception is in suburban Baltimore. There, a court order led to the formation of the Baltimore Housing Mobility Program, which featured counseling for voucher-holding tenants along with intensive landlord outreach in Howard County, one of the wealthiest areas in the nation. The program also provides a restricted pool of vouchers that can only be used to move to higher-income neighborhoods. Research by Stefanie

Re-concentrating the poor: Upper Darby, with the Philadelphia skyline in the background

DeLuca and Jennifer Darrah, based on 110 of the more than 2,000 families participating, deemed the program a success. According to Building One America’s analysis, 11 percent of the vouchers were used in areas of “maximum opportunity.” None of the vouchers in the Philadelphia area mobility program were and only 3.8 percent of overall vouchers are used in maximum opportunity areas.

In the past year, moreover, a series of challenges to the Philadelphia pattern of segregation have emerged. The unrest in Ferguson, Missouri, last year put residential segregation back in the nation’s consciousness. Last summer, the Supreme Court confirmed an expansive reading of the Fair Housing Act, strengthening the hand of groups like Building One America. HUD issued new rules to prompt local governments to pursue integrationist policies, while experimenting with a new Section 8 voucher arrangement that would make the subsidies of greater value to landlords in higher-opportunity areas. An influential study by Harvard University professors Raj Chetty and Nathaniel Hendren demonstrated that moving from impoverished to middle-class communities significantly increased the upward mobility rates of poor children.

Despite this newfound momentum, there are still immense hurdles confronting those who wish to reform housing policy to combat segregation. Just last year, a housing-mobility program involving four of the

Philadelphia region’s five housing authorities collapsed. Most of the Section 8 voucher holders were relocated to city neighborhoods offering limited job and educational opportunities.

“Affordable housing can be done in a way that benefits everyone, and the key there is to de-concentrate the housing,” says Douglas Massey, co-author of Climbing Mount Laurel, which describes the battle over affordable housing in the New Jersey suburb and its positive results. “Section 8 certificates can theoretically be used in any affluent area inside or outside the city; the important point is to scatter them around. If you put them in poor places in the suburbs or the city, then you are defeating the purpose. These programs have to be done on a metropolitanwide basis, de-concentrating poverty.

That’s what’s been going on in places like Upper Darby for a long time and you can see the effect it is having there.”

When the Housing and Commu-

nity Development Act of 1974 was crafted in the waning days of the Nixon administration, a big part of the appeal was that Section 8 vouchers could deconcentrate poverty. (They were also cheaper than public housing and more ideologically palatable to the Republican Nixon and Ford administrations.)

Two years after the much-dissected demolition of St. Louis’s Pruitt-Igoe public-housing towers, mobility was considered a top priority—in theory.

In practice, numerous policies limiting mobility were built into the Section 8 voucher program from the start.

Administrative fees are distributed to housing authorities using an incentive structure that privileges a quick turnaround, rather than rewarding agencies that help families move into higher-opportunity neighborhoods.

With authorities providing little guidance, voucher holders tend to gravitate to places where they already know people, or to lower-income areas where landlords are specifically seeking to attract Section 8 vouchers as a stable source of revenue.

“Typically, families are pretty much on their own in terms of finding available units,” says Philip Tegeler, president and executive director of the Poverty & Race Research Action

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Council (PRRAC). “The assistance a typical [public housing agency] might provide would be to either give people a paper list of available apartment units or to refer them to an online listing service like GoSection8. They tend to be units in higher-poverty neighborhoods where landlords are aggressively seeking Section 8 voucher tenants.”

Landlords are also allowed to systemically discriminate against Section 8 voucher holders, and are substantially more likely to do so in higheropportunity areas. This “source of income” discrimination is outlawed in some jurisdictions, including Philadelphia. But a city-only law is of limited use. Although there are plenty of stable working-class and affluent communities within the city limits, including the much-praised revitalization of Center City Philadelphia and its nimbus of gentrifying neighborhoods, the city as a whole is still more like St. Louis or Cleveland than New York.

Philadelphia’s school district is mired in a perpetual funding crisis, with many schools lacking basic supplies, the result of deep cuts made by former Republican Governor Tom Corbett.

“I’m one of these people who moved back to Philadelphia, but I wouldn’t be here if I had kids because the schools still haven’t come around,” says Paul Jargowsky, director of the Center for Urban Research and Urban Education at Rutgers University. “The local housing agencies on the Pennsylvania side are not seen as making an effort to help. They have to come up with regional plans to provide a broader array of choices for people who are benefiting from the subsidy programs.”

None of Philadelphia’s Pennsylvaniaside suburban counties have banned “source of income” discrimination, so landlords are free to deny their units to those bearing Section 8 vouchers.

Even if landlords in wealthier areas are willing to take vouchers, there is a ceiling on how much a voucher will cover.

The Fair Market Rent that dictates the amount of HUD’s rent subsidy is predicated on prices across the whole region, so it often cannot cover units in higheropportunity areas, which frequently don’t have many rental units anyway.

In New Jersey, by contrast, the Mount Laurel doctrine and the legislation that

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followed affirm that all municipalities have a duty to zone for their “fair share” of affordable housing, ensuring more cheap rental units in affluent areas. No such ruling exists in Pennsylvania.

Research published earlier this year

by Molly Metzger and Danilo Pelletiere found that minority voucher holders do use their federal subsidies to move to slightly higher-income areas, but also to areas with “high percentages of minority residents.” Between 2000 and 2010, there was a 12 percent population increase in diverse suburbs, such as Folcroft, which now house a quarter of the region’s people. Meanwhile, according to a 2011 analysis from Brookings, the share of voucher holders living outside the urban centers of the Philadelphia metropolitan region increased by 11.5 percent, one of the largest jumps in the nation.

Groups like Building One America, however, are concerned that these neighborhoods will not remain stable, racially mixed spaces and will instead re-segregate. “Integrated communities in the United States have a hard time staying integrated for more than 10 or 20 years,” reported a 2013 paper from the Institute on Metropolitan Opportunity. Allowing most of the voucher holders in the suburban counties to almost exclusively settle in these areas, advocates fear, will only speed that transition.

“Vouchers tend to be part of a residential transition in an area and become symptoms of the ongoing resegregation and decline,” says Myron Orfield, director of the Institute on Metropolitan Opportunity and an advisory board member of Building One America. “It should be just the opposite, they should be targeted to places that are strong and stable. If integration is about having two disadvantaged groups together, it’s usually a disaster. … If it’s about making a metropolitan area systematically more fair, it’s usually a big success.”

That’s not what’s happening in Philadelphia, where voucher holders who port out of the city are almost exclusively moving to Delaware County—516 of the 552 ported families move westward, the housing authority reports—which is already the suburban jurisdiction with the largest number of

voucher holders and the most troubled inner-ring municipalities. Not only are wealthier suburbs like Radnor and Swarthmore almost entirely devoid of voucher holders, the whiter areas of inner-ring Delaware County are also largely excluded. One such suburb, Springfield, on the western border of Upper Darby, is over 93 percent white, with a median income of $92,468. It hosts three voucher holders.

These trends have been clear for years. That’s why Building One America, in partnership with the region’s housing authorities, decided to do something about them.

Building One America is a coalition of suburban leaders from older, increasingly diverse suburbs who hope to provide the political support required to strengthen integration efforts and restrict the growth of sprawling exurbs that siphon off upwardly mobile residents. The group was formed in the early days of the Obama administration in the hope that the new administration’s HUD would be sympathetic with such efforts. In the early months of 2009, Building One America representatives met with the president himself, while high-ranking administration officials attended and spoke at their conferences.

In 2010, the coalition decided that a multi-county mobility program centered on the Philadelphia area would be their testing ground. The idea was to equip a small group of voucher holders in deeply impoverished or simply distressed areas with the means to move to higher-opportunity suburbs. In April 2011, it convened a meeting of 520 elected officials, clergy, and activists; the housing authority leaders of Montgomery, Delaware, and Chester counties; and HUD’s regional administrator, Jane Vincent: All of them professed support for the new approach to voucher housing.

(Bucks County, to the northeast of the city, declined to become involved from the beginning, an unfortunate irony given that Chetty and Hendren’s recently released data found that it is the best of the region’s counties for low-income children to grow up in.)

In October of that year, then–HUD Secretary Shaun Donovan told a

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meeting of housing leaders that he backed the mobility program. “[HUD] is willing, ready, and able to support that and do whatever we can to make that happen,” said Donovan.

By the time the project actually launched, however, both Montgomery and Delaware counties were no longer participating. Only the city itself and Chester County, which shares no borders with Philadelphia and has the weakest public transit infrastructure, remained in the mobility program.

“The history of this program getting off the tracks has a very Rashomon-type quality to it,” says David Rusk, one of the architects of the mobility program and a longtime advocate of regional approaches to housing and segregation. “The housing mobility program turned out to be a total failure from the point of view of regional equity. It became just another placement service for poor Philadelphians within Philadelphia.”

The Delaware and Montgomery county housing chiefs say they were eager participants until the Philadelphia Housing Authority (PHA) unilaterally dissolved the memorandum of understanding (MOU) and forged ahead on its own. “Everyone was very disappointed that the program didn’t move forward,” says Joel Johnson, the Montgomery County Housing Authority executive director. “I’ve heard the voucher households that moved as part of the program fell well short of the goals.” Building One America representatives, on the other hand, claim the two big suburban housing authorities were resistant from the beginning, and that it was HUD that unilaterally dropped them from the program.

HUD did not respond to repeated interview requests before press time.

“We reached a point where it became unproductive,” says Kelvin Jeremiah, president of PHA. “We did terminate that MOU because we didn’t see the willingness on the part of Mr. Johnson and others in terms of their genuinely wanting to participate in the program.”

Of the 122 moves executed under the mobility project, Building One America found that 23 percent of families moved within their original census tract and 30 percent moved to poorer census tracts. Of those that moved into areas

with less poverty, 46 of the 57 voucher holders moved within the city of Philadelphia itself. Of the 11 who made it into the suburbs, seven moved to inner-ring Delaware County municipalities or to impoverished Norristown.

Building One America’s executive director, Paul Scully, is bitterly disappointed by the outcome of the mobility program. The Delaware and Montgomery county housing authority chiefs say they are talking about a mobility program of their own, although nothing is official yet. Meanwhile, Jeremiah insists that the initial project was a success: “I am extremely, extremely pleased with the result. I see a lot of families who succeeded in moving into high-opportunity areas.”

Although opinions within Building One America differ about what to do next, representatives say they are heartened by the recent Supreme Court decision affirming a strong reading of 1968’s Fair Housing Act. Scully has been meeting with Michael Allen, the lawyer who helped bring a 2006 lawsuit against New York’s Westchester County for neglecting its fair-housing duties.

“A lot of [the mobility plan’s failure] was a lot of political infighting—I don’t know [the details] and I don’t care,” says Marlon Millner, a city council member in Norristown and a former Building One America member. (He estimates that 10 percent of the city’s rental housing stock is funded by Section 8 vouchers). “But [in] these places where mobility has been court-mandated [as in Baltimore], all of a sudden these barriers that people say they couldn’t overcome, they suddenly can.

We were betrayed both by the feds, the county housing authorities, and PHA .”

Building One America hopes to continue the fight in Pennsylvania. Leading figures like Scully and Rusk point to their eventual victory in New Jersey against Regional Contribution Agreements (RCAs), a bizarre loophole in the New Jersey Fair Housing Act that allowed affluent municipalities to pay poorer communities to take over their affordable housing responsibilities.

Building One New Jersey and its allies eventually overcame conservative suburban opposition and convinced thenGovernor Jon Corzine to abolish RCAs

in 2008. In recent meetings with Pennsylvania Democratic Governor Tom Wolf, leaders of Building One Pennsylvania have highlighted the parallels between the New Jersey RCAs and the failure of Philadelphia’s Pennsylvaniaside suburbs to distribute their housing vouchers in affluent communities. Wolf faces a Republican-controlled legislature, but he is well-versed on issues of segregation and sprawl, and could prove an able ally.

Lorraine Washington is not a part of

Landlords in Philadelphia’s Pennsylvania suburbs can reject tenants because they have Section 8 vouchers.

the housing mobility pilot program. For her, Folcroft has its problems, but compared to her former hyper-segregated North Philadelphia neighborhood, it looks like paradise. She had ended up in the Blumberg Apartments because her husband was killed by a stray bullet in 2001, after which she suffered a nervous breakdown that resulted in a period of homelessness and drug use. After Washington pulled her life together, she moved into the project.

“I went through a long process to get to this point and I just want to say that Section 8 for me is going to be a blessing if it works out,” says Washington. “The opportunity to at least live in a different neighborhood, with private landlords—I’m trying to get back to [being] a productive citizen so I can pay taxes and live normal.”

Asked if she had considered other areas in the suburbs, Washington says she wanted to move to Haverford, a Delaware County suburb closer to the Main Line. The median income there is $94,501 and the population is 91.2 percent white.

Before her move to Folcroft, Washington explained why she’d favored Haverford—and why she hadn’t been able to move there. “I wanted to move to Havertown [a section of Haverford] because it was close to some family I have. They have a YMCA and I have diabetes and when I keep my weight level down I do better. But it’s really hard [to find housing there] and you only have a certain amount of time to do it in. I’m really stressed out with it, but I’m trying to keep up with it because I want out of here.”

Jake Blumgart is a reporter and editor based in Philadelphia.

Winter 2016 The American Prospect 19

Grace Under Fire

Planned Parenthood President Cecile Richards is one of the nation’s premier political strategists and organizers—exactly what the cause of reproductive rights needs now more than ever.

B y R a ch el M. Coh en

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O

n a warm Tuesday morning in late September, Cecile Richards, the 58-year-old president and CEO of Planned Parenthood, went before Congress to defend her organization. A few months earlier, the Center for Medical Progress, an undercover anti-abortion group, had released a series of doctored videos that purported to show Planned Parenthood illegally profiting from the sale of fetal tissue. Planned Parenthood denied the accusations, but outrage spiraled furiously among conservatives.

Richards waits to testify before the House Committee on Oversight and Government Reform on Capitol Hill last September.

Republican officials launched state and federal investigations, while presidential candidates and members of Congress called for defunding Planned Parenthood entirely, threatening to shut down the government if their demands were not met.

Riding this whirlwind of righteous anger, Republicans eagerly anticipated their confrontation with Richards. Yet when she came before the House Oversight and Government Reform Committee, Republicans suddenly found Richards grilling them, not the other way around. “Mr. Chairman, you and I do disagree about whether women should have access to safe and legal abortion,” she said, staring into the eyes of Jason Chaffetz, the Republican from Utah who chaired the hearing. “At Planned Parenthood, we believe that women should be able to make their own decision about their pregnancies and their futures— and the majority of Americans agree. We trust women to make these decisions in consultation with their families, their doctors, and their faith, and not by Congress.”

A week later, Chaffetz admitted that after formally investigating Planned Parenthood, he and his colleagues had been unable to find any evidence of financial wrongdoing.

Eight states that launched their own investigations have also failed to produce any smoking guns. The absence of evidence, however, hasn’t deterred GOP-controlled state governments from attempting to cut funds for Planned Parenthood, or moderated Republicans’ demonization of the organization.

These attacks, though, have only inspired Planned Parenthood’s supporters to rally to its defense. Three days before Richards testified, a progressive coalition delivered a petition in support of Planned Parenthood to Senate Democratic Leader Harry Reid and Senator Elizabeth Warren; it had more than 1.2 million signatures. On the day of Richards’s testimony, hundreds of thousands of advocates across the country organized rallies and Internet campaigns to demonstrate solidarity, in what would be Planned Parenthood’s first ever “National Pink Out Day.” In 2016, the battle over reproductive rights will almost surely grow more intense. The Supreme Court is set to rule on two major cases: one concerning contraception cover-

age, and the other on abortion access. The latter, both sides agree, may be the most consequential case for abortion rights since 1992, when the high court ruled that states could not impose an “undue burden” on women who wish to end a pregnancy. State legislatures, which enacted 288 abortion restrictions between 2011 and 2015, will no doubt continue to test the limits of what such “undue burdens” really mean.

2016 also marks the centennial anniversary of Planned Parenthood, an organization that has become the target of an anti-abortion movement that steadily grows more aggressive and violent. The FBI reported an increase in the number of arson attacks and vandalism incidents at abortion clinics in the wake of the Center for Medical Progress videos, and the president of the National Abortion Federation said abortion providers have seen “an unprecedented increase in hate speech and threats” since the videos were released. In late November, a man opened fire in a Planned Parenthood clinic in Colorado Springs, injuring nine people, and killing three. After the shooting, the suspected gunman invoked the doctored videos, telling local authorities, “no more baby parts.”

Richards, who has spent a decade at Planned Parenthood’s helm, toils at ground zero of the culture wars being fought across the country. Every day she is flooded with hundreds of hateful messages on social media, calling her evil, a Nazi, a monster, a murderer. In 2006, Jim Sedlak, the vice president of American Life League and one of the nation’s most ardent Planned Parenthood critics, predicted she would never last more than a year or so as Planned Parenthood’s leader. (A mere “place holder” president, he dubbed her.)

Yet ten years later, Richards remains self-assured in her post, guiding the nation’s largest reproductive-rights organization through the most politically fraught period it’s ever faced. She comes well-suited for the challenge. Richards brings to her role decades of experience in political organizing, and a career as a premier coalition builder across liberal America. She brings as well a strategic and moral vision that has impelled her to push Planned Parenthood beyond where it’s been, to lead more forcefully in the broader cultural and economic battles for women’s autonomy and equality.

Winter 2016 The American Prospect 21

In 2006, just three weeks after Richards started her

new job as Planned Parenthood’s president, South Dakota’s governor signed a bill outlawing abortion, the nation’s first state-legislated ban. (It was soon struck down in federal court.) “Listen, the reason I took this job is, I feel like we need to go into the 21st century,” she told The Washington Post that year. “Clearly, with some folks in the country, we’re going to get there kicking and screaming.”

Hiring Richards, in many ways, signified a new moment for Planned Parenthood. The abortion issue had been growing increasingly more politicized and polarized since the mid-1980s. (In the 1970s, the share of pro-life Democrats actually exceeded that of Republicans.) The partisan polarization of recent decades first became evident in 1984, and by the 1990s, political scientists were noticing a new and statistically significant relationship between voters’ abortion attitudes and whom they cast their ballot for in elections.

The three presidents who preceded Richards came in with backgrounds in health care, nursing, and Planned Parenthood itself. Richards’s resume, on the other hand, listed years of experience in organizing, campaigning, and

political programs, the organization not only spends more money in elections, but it also takes greater control over how its money is spent.

For its critics, these efforts serve as incriminatory proof that Planned Parenthood falsely bills itself a woman’s healthcare network. Richards does not buy these accusations, but she can’t readily ignore them either. As both the CEO of one of the biggest national health-care organizations, which relies substantially on government reimbursements, and as the leader of a massive nonpartisan political outfit, engaged in one of the most polarized fights in the United States, Richards must always remain extra careful to keep the organization’s two halves legally separated, particularly when Republicans control both Congress and a majority of state governments. Forty percent of Planned Parenthood’s $1.3 billion in annual revenue comes from Medicaid and Title X, a federal family-planning program.

“Cecile had to grow into her [role] as CEO of a major health-care provider, that was something she had to learn,” says her husband, Kirk Adams, who served as vice president of the Service Employees International Union and is now executive director of the Healthcare Education Project in New York. “But on the other hand, she has always been first and foremost an organizer, and she continues to do that at Planned Parenthood at a very high level. It’s just fundamentally how she approaches a problem.”

As an organizer, Richards looks at the numbers—one in five women in the U.S. have relied on Planned Parenthood at some point in their life for health care. Learning how to motivate those patients to become advocates, volunteers, and pro-choice voters is what makes Planned Parenthood a “movement” in a way that your local hospital is not.

This strategy carries certain risks, but if you ask Richards how the politics and the direct health services fit together, her eyes light up. “We’re a better health-care provider because we’re a movement that advocates and pushes forward, and we’re a better movement because we have real experience every day with folks coming in and asking for care,” she says, grinning. This symbiosis, she’s convinced, only makes the organization stronger.

electoral politics. While Planned Parenthood had been inching toward political advocacy in the 15 years before Richards arrived, she came in prepared to steer Planned Parenthood to the front lines.

In practice, this meant investing more in strategic communications and developing a new generation of youth leadership; it also meant engaging more forcefully in political campaigns. In 2008, Planned Parenthood endorsed Barack Obama for president—its second presidential endorsement ever—and Richards spoke at the 2008 Democratic National Convention. That same year, the organization launched the One Million Strong campaign—a massive effort to mobilize pro-choice voters. Partnering with Catalist, a progressive voting database, Planned Parenthood worked to build the first national voter model designed to specifically target pro-choice women.

Planned Parenthood’s political spending has also increased throughout Richards’s tenure. While the organization’s overall election spending has grown, its direct campaign expenditures have also come to represent a larger piece of the pie. Today, with Richards shaping its

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The realpolitik inherent in Richards’s vision of

Planned Parenthood has at times created tensions with other parts of the reproductive-rights movement. This was evident during the 2009 health-care reform debates, when the entire law seemed to hinge on whether Congress could find a political compromise around abortion. Richards and Planned Parenthood were at the center of the debate, fighting fiercely for the law’s passage. Richards took great pains to emphasize that covering contraception and women’s gen-

photo previous spread: gary c ameron / reuter s / l andov

Richards toils at ground zero in the culture wars. Every day, she is flooded with hundreds of messages on social media calling her evil, a Nazi, a monster, a murderer.

d av i d z a lu b o w s k i / a p i m a g e s

eral health services—or 97 percent of what Planned Parenthood does—were the organization’s primary priorities. In effect, she accepted that abortion would not be treated like all other health-care services during those very heated, public fights. In the end, to the frustration of many reproductiverights advocates, legislators passed the historic health-care law with a provision that permitted states to ban abortion coverage in private plans in their state insurance markets.

Today, 25 states have done just that.

Pro-choice members of Congress shared Richards’s sense of what was politically possible. “It appeared questionable that the Affordable Care Act would pass, up until literally the last hours, because of the issue of abortion,” recalls Democratic Representative Jan Schakowsky, a member of the House Pro-Choice Caucus. “I think the ACA is as good as it can be; I think we did what we had to do if we had any hopes of passing the bill. I do not think we compromised too greatly or too soon: This was down to the wire on the day that the legislation passed.”

Erin Matson, the co-founder of Reproaction, a reproductive-rights activist group, disagrees. The health-care reform debate, she says, is a perfect case study in why reproductiverights advocates lose. “The whole strategy from pro-choice leaders [during the ACA debates] was ‘Let’s just be reasonable.’ Give me a break! When has that ever stopped the right?” Matson believes the women’s movement has been too co-opted by the Democratic Party, and that Planned Parenthood’s strategy of stressing that “just 3 percent” of their services were abortion-related “was a classic example of accepting that abortion is shameful.”

Nonetheless, the Affordable Care Act has brought about tremendous advances for women’s health. Insurance companies can no longer consider pregnancies “pre-existing conditions,” and more preventative services are now covered under health insurance. In 2011, the White House issued a new regulation adding birth control to the list of mandatory services an employer’s group health plan must offer, providing a major economic lifeline to millions of women.

Richards speaks at a rally in Englewood, Colorado, a few days after three people were murdered at a Planned Parenthood clinic in Colorado Springs.

Winter 2016 The American Prospect 23

key driver of the country’s political divisions, Richards’s background and experience leave her supremely well-positioned to lead Planned Parenthood. Born in Waco, Texas, in 1957, Richards lived most of her early childhood in Dallas until her parents relocated their family—Cecile, then 11, and her three younger siblings—to Austin. While her mother, Ann Richards, Texas’s one-term governor in the early 1990s, was a heroic figure to liberals across America, her father, David, was also somewhat of a state icon. An unapologetic labor and civil-rights lawyer, David litigated many social justice cases, including a voting-rights case before the U.S. Supreme Court.

Richards likes to say her house was just like any other,

Texas State Treasurer Ann Richards after delivering the keynote address to the 1988 Democratic National Convention, holding her granddaughter Lily as Cecile looks on

except the dining table was used for stuffing envelopes and sorting precinct lists, rather than eating. (This isn’t quite true: The Richards family often threw big dinner parties, perhaps one reason why Cecile loves to cook and bake.)

But it is true that she was politicized at a young age. Her first dance, at age 12, was a fundraiser for the United Farm Workers. By the time she was in middle school, administrators were reprimanding her for wearing a black armband in protest against the Vietnam War. In 1972, Sarah Weddington, a young feminist lawyer based in Austin, decided to run for state legislature. Weddington asked Ann Richards, who worked as a housewife, to help manage her campaign. Cecile, then 14, worked with her siblings and mom to help get Weddington into office. (Not long after her victory, Weddington would go

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on to present the oral argument in Roe v. Wade before the Supreme Court, the momentous suit that legalized abortion in the United States.)

As an undergrad at Brown University, Richards continued to direct her energies toward activism. On campus, she protested apartheid in South Africa, and nuclear power plants in New Hampshire. “It’s not like college got in the way of her organizing,” her brother Dan once quipped.

After graduation, Richards went to work in the labor movement. She spent the next decade organizing janitors, garment workers, hotel housekeepers, and nursing home staffers in Louisiana, California, and Texas. That experience, she says, provided her with “really the biggest education I ever had.” Those low-wage workers, she notes, are very much the same women who rely on Planned Parenthood for health care.

The values Richards learned in the labor movement are the same ones that inform her vision of Planned Parenthood. “It’s not only about direct services, which is incredibly important, but it’s also about empowering the folks who are turning to [us] for health care,” she says. “When you think of how many people have been to Planned Parenthood in this country, from every walk of life, if those patients were empowered to participate in our democracy, a lot of the conversations that are happening in Congress right now would not be happening.” Richards wants to provide women not only with STD screenings, abortions, and pap smears—she also wants to help those patients find their political voice.

In 1982, she met Kirk Adams, a fellow union organizer.

She became his boss, and three years later, his wife. In 1990, Richards and Adams worked on Ann Richards’s gubernatorial campaign, and stayed in Austin throughout Ann’s time in office. After one term in the statehouse, George W. Bush beat her in a landslide in 1994.

Her mother’s loss was painful, but Richards didn’t rest for long. She founded a new grassroots organization in 1995, the Texas Freedom Network, which aimed to curb the growing influence of the Texas religious right, particularly those activists seeking control of the school boards. “She always put herself in the line of fire, fighting for the most progressive values, in tough places, and in tough times,” Steve Rosenthal, a former AFL-CIO political director, says.

It was no easy fight, and Richards received heaps of vitriol from well-funded conservative opponents, foreshadowing her time at Planned Parenthood. Undeterred, she traveled all over Texas, rallying like-minded supporters who opposed teaching Bible stories in science class, expanding abstinence education in schools, and using public vouchers to send children to private schools. The Texas Freedom Network “started as a file box of names in Cecile’s kitchen and grew to many thousands of people,” her successor told the Texas Monthly in 2004.

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At a time when the reproductive wars have become a

Later on, Richards, Adams, and their three kids moved to Washington, D.C., so Adams could take a national position with the AFL-CIO. In 2002, Richards took a job working as deputy chief of staff for Nancy Pelosi, who was named Democratic whip in the House. Richards held that position for 18 months, though she says the experience helped her realize she was better suited to effect change from outside Congress, rather than within.

When Richards left Capitol Hill in 2003, she took a

job leading a new organization, America Votes—a coalition of progressive organizations that would work together to turn out voters for the 2004 presidential election. There had always been big, active progressive organizations, but their leaders mostly operated in silos, and did not talk to, or even know, one another. I asked Steve Rosenthal, one of America Votes’s founders, why they picked Richards to head this unprecedented $250 million effort.

“We thought we needed someone who was politically astute, who had the ability to work with people at a very basic level, who could get the trust of the organizations and mobilize them all into a new organization,” he says, explaining there was “really nobody else” they could have imagined fitting the bill.

At America Votes, Richards continued to do what she did best: organize. Specifically, she coordinated an electoral strategy among the nation’s largest and most influential unions and progressive groups—ranging from the American Federation of Teachers and the NAACP, to the Sierra Club and NARAL . She sought to help leaders understand how their efforts were, and really always have been, interconnected. She helped delineate which demographic and geographic groups each organization would target, and which would be most effective in delivering a message to a particular set of voters and getting them to the polls. It was a level of coordination hitherto unknown among the nation’s progressive organizations, and putting it together required diplomatic skills of the highest order.

Another innovation progressives introduced in the 2004 campaign was an effort to specifically target single women.

The organization Women’s Voices Women Vote had recently formed, and aimed to draw attention to unmarried women, a growing political constituency largely ignored by progressives in previous cycles. Page Gardner, the group’s founder, pointed to the 22 million single women eligible to vote in 2000 who did not cast ballots. Single women, Gardner found, more strongly identify as “pro-choice” than married women. This mattered, as reproductive rights were already a major issue in the 2004 campaign, with critical judicial appointments on the line.

Despite these novel efforts, however, George W. Bush

was re-elected, and the future of America Votes hung in the balance. Some of the biggest funders and backers wanted to scrap the project, and start with something fresh for 2008. Richards, who recognized how important this type of initiative was for the progressive movement, began appealing to all the major donors and partners, to convince them that this was not a project to abandon. “Just to be totally blunt, Cecile is the reason the organization still exists,” says Rosenthal. Greg Speed, the current president of America Votes, agrees. “I thought it was going to end after 2004,” he admits. “Cecile didn’t let that happen.”

I asked Richards why she felt it was so important to keep the organization alive after John Kerry lost. “How could we go back to a day where everybody goes, ‘Oh we’ll just do our own thing and see how it works out?’” she answers. “[2004] was really the first time that a lot of these big progressive groups had ever sat at the table together, and thought, ‘OK, how can we do our work in a smarter way, use our resources better, learn from each other?’ It was fascinating because not only did people build relationships that they perhaps did not have before, but there were even heads of progres-

After graduating college, Richards spent a decade organizing janitors, hotel housekeepers, seamstresses, and nursing home workers in Louisiana, California, and Texas. sive groups that had never door-knocked before that election!” Richards thinks one of the most important legacies of that campaign was building a common understanding of what grassroots advocacy and mobilization is really about.

When America Votes first formed, Planned Parenthood was only just beginning to dip its toe into politics. Though its founder, Margaret Sanger, was a radical birth-control activist in the early 20th century, Planned Parenthood itself eventually grew to be seen as a responsible, noncontroversial organization; family planning was considered bipartisan, sensible policy after World War II. Indeed, for many years Planned Parenthood garnered strong support from elite members of the Republican Party: Barry Goldwater’s wife was a founding member of the Planned Parenthood affiliate in Arizona.

These political dynamics began to change after the Supreme Court legalized abortion in 1973, and the religious right, a strongly anti-abortion faction within the Republican Party, increased its power over the course of the 1980s. In response, Planned Parenthood established a political arm in 1989, and a political action committee

Winter 2016 The American Prospect 25

in the late 1990s. In 2000, Planned Parenthood started to experiment with ads in battleground states, and by 2004, it made its first-ever presidential endorsement.

In deepening the organization’s political activities and solidifying its place in the progressive universe, Richards has drawn on her experience at America Votes. “To see how much [Planned Parenthood] has changed, even in the past ten years … I’m not saying that’s all a result of America Votes, but it certainly opened my eyes to what the opportunities were, partnering with a lot of these organizations,” she says. “In some ways, that was probably part of the reason I came to Planned Parenthood.”

In 2010, the Tea Party soared to power, running on promises to dismantle the new health-care law, cut taxes, and ban abortions. In 2011, as the new crop of conservatives took power in statehouse after statehouse, those lawmakers introduced more than 1,100 reproductive health and rights-related provisions, according to the Guttmacher Institute, of which 135 were enacted in 36 states by the year’s end. Ninety-two of the new provisions restricted

mandate on religious grounds. “We’ve always known that the right wing has been anti-abortion but some people thought, well, that doesn’t extend to contraception,” says Schakowsky. “We know better now. … That was made clear for the world after the Affordable Care Act.” In early 2012, the Susan G. Komen Foundation, under pressure from conservative activists and with a new antiabortion senior vice president, announced that it would no longer fund breast cancer screenings at Planned Parenthood. The backlash was swift and unprecedented—Planned Parenthood raised $3 million in three days, and a deeply embarrassed Komen reversed its decision within the week.

A whole new generation of supporters moved to social media to defend Planned Parenthood and express their outrage.

While Planned Parenthood and its allies pushed back against attacks on women’s health, other activists were growing worried about the tone and direction of the public conversation. They recognized that the reproductive-rights movement needed a new and bolder strategy—one that aimed to change cultural attitudes around abortion, not just laws and regulations.

Debra Hauser, the president of Advocates for Youth, an organization that focuses on young people’s sexual and reproductive health, says that in late 2010 and early 2011, as the Tea Party swept into power, her group heard from frustrated youth leaders who wanted to respond in some way to the incessant political attacks on abortion. They noticed that while many were worried about the future of reproductive health care, very few people were actually talking about abortions as such. The escalation of the right’s anti-choice rhetoric, says Hauser, was making any such discussion more difficult. “Honestly, the fear-based strategies and the vehemence makes it very, very difficult for people,” she says. “I think all of us have internalized some fear and shame [about abortion] that can be so immobilizing.” She and her team understood that this stigma, which limits the societal conversation, ultimately impacts how legislators think about abortion, too. New laws requiring women to undergo transvaginal ultrasounds and mandatory waiting periods, so they could “think more carefully” about their decisions, were little more than efforts to shame those who didn’t want to carry to term.

Advocates for Youth began to lay the groundwork for a public storytelling campaign, in which people could share their abortion experiences if they felt it was safe to do so.

The effort was named the “1-in-3 Campaign”, because the Guttmacher Institute found that a third of all U.S. women will have had an abortion during the course of their lives.

“If you tell one abortion story, people tend to shut it down.

They say, ‘Oh well she could have done this, or she should

After the Tea Party swept to power in the 2010 midterm elections, statehouse after statehouse enacted ninety-two new laws that restricted access to abortion. access to abortion, shattering the previous record of 34 abortion restrictions adopted in 2005. In Congress, the House voted to defund Planned Parenthood, and threatened to shut down the government entirely if a rider to defund the organization was not included in the federal budget deal. Congressional Republicans have been trying to defund Planned Parenthood ever since.

Republicans also started pushing for “religious freedom” exemptions for businesses and insurance companies, so that they would not have to offer birth control under their plans. As Katha Pollitt notes in her 2014 book, Pro: Reclaiming Abortion Rights, despite the fact that reliable contraception remains the most effective way to prevent abortion, “not one major anti-abortion organization supports making birth control more available, much less educating young people in its use.” In 2014, after a series of legal challenges, the Supreme Court ruled that closely held corporations could be exempt from providing employees with contraceptive coverage. This summer, the Supreme Court will decide if the government can even require nonprofits simply to fill out a form if they object to the birth-control

26 WWW.Prospect.org Winter 2016

have done that,’” says Hauser, who researched how storytelling has impacted other social movements. “But when you start to hear multiple stories at once, it becomes much harder to dismiss.”

Hauser admits that, initially, some mainstream reproductive-rights groups quietly pushed back on this de-stigmatizing campaign. But by 2013 and 2014, the groups started to embrace the strategy, and even more diverse efforts began to take shape. A new anti-stigma organization, Sea Change, formed in 2014 to conduct social science research on reproductive stigmas, with the goal of ultimately reducing them.

Another organization, SHIFT, formed in 2015 to amplify the voice of abortion providers—those who understand the complicated ways in which women relate to abortion as both a medical and a cultural experience. These efforts began to effect a real change in the zeitgeist—new film narratives and TV plots started to emerge, featuring women who ended their pregnancies in relatively nontraumatic ways.

And all of this activism has created the space for more women to come forward with their own stories. In 2014, in an essay entitled, “Ending the Silence That Fuels Abortion Stigma,” Richards described her own abortion experience in Elle magazine. She was already raising three kids at the time—Lily, and twins Hannah and Daniel—and felt an abortion “was the right decision” for her and her husband.

She said it “wasn’t a difficult decision.”

“Rarely do you see a leader of an organization putting her own skin in the game like that,” says Steph Herold, the managing director of Sea Change.

I asked Richards why, after leading Planned Parenthood for eight years, she had felt the time was right to share her own story. Though she had never hidden the fact that she had an abortion, she said she never really thought to share it so publicly, in a major women’s magazine, in part because her abortion was never a defining part of her life.

And it still isn’t.

But she’s glad she spoke out. “Women now come up and tell me their stories about having an abortion—and boy, if this makes them more comfortable about sharing that story with me, or with anyone else, and helps them lift whatever burden is on them, hallelujah!”

Richards’s decision to tell her own story is part of a new effort within Planned Parenthood to take on abortion stigma. “I think the biggest change that I’ve seen in Planned Parenthood is that instead of emphasizing that abortion is only a small percentage of their services, they’re saying that they’re proud to provide abortion care,” says Herold. “They’re moving to a point where they say, ‘Yes we provide all kinds of health care, and abortion is just one service in the spectrum of all health-care services we provide.’” Indeed, this past October, Richards published a piece in Cosmopolitan, articulating that message in a way

Planned Parenthood has generally avoided in the past. “If we want women to have fulfilling careers and economic stability, we have to give them full access to the full range of reproductive health care, including abortion,” she wrote.

“Of course abortion services are health care.”

Several weeks after the Cosmopolitan piece came out, I asked Richards for her thoughts on the “only 3 percent” talking point, and if she worried it unwittingly contributed to abortion stigma. Planned Parenthood is an unabashed, unashamed provider of safe and legal abortion, she says, and she’s “incredibly proud” of that fact. “It’s just superimportant to me that people understand that women have a whole range of health-care services that they need and being able to make decisions about reproduction is pretty fundamental,” she adds.

The effort to fight stigma coincides with another

development in the reproductive-rights movement: a shift away from rhetoric about “choice” and “rights” to broader themes of justice, access, and security.

After the 2012 election, the Democratic Party started to really grasp what Page Gardner had been trying to communicate for the past decade. Single women, a growing portion of the electorate, proved to be game-changers in Obama’s re-election campaign; he won their vote by a margin of 36 points, despite losing married women to Mitt Romney. In 2013, Democrat Terry McAuliffe was elected governor of Virginia, in large part because he won single women by 42 points. (He lost married women to the Republican candidate.) Campaign research conducted the following year revealed that women’s health and economic security were issues that strongly motivated both the progressive base and swing voters. Researchers also found that drop-off voters (those less likely to vote in midterms) were more motivated to cast a ballot if they felt they were going to be voting against a candidate who would endanger women’s health.

The New York Times ran a story in 2014 detailing how mainstream reproductive-rights groups were in the midst of reframing their advocacy to connect with more voters. The article—“Advocates Shun ‘Pro-Choice’ to Expand Message”—explored how Planned Parenthood had taken the lead in conducting public opinion polling after 2011, in order to find talking points, like “women’s health” and “economic security,” that resonated with more people.

In 2013, Planned Parenthood released a video, “Moving Beyond Pro-Life vs. Pro-Choice Labels.”

Gretchen Borchelt, the vice president for health and reproductive rights at the National Women’s Law Center, says that policy-makers have long separated economic issues from reproductive rights, which has meant that reproductive-rights groups generally worked apart from other progressive organizations. “But separating these issues doesn’t

Winter 2016 The American Prospect 27

make sense; it doesn’t speak to the reality of people’s lives,” she says. “There has been growing recognition of this in the last few years, making it a pivotal moment to push forward policy solutions that place reproductive rights alongside the other policies that help women and their families thrive.

Still, the struggle to push the reproductive-rights movement in new directions has not been without challenges.

Even as the Democratic Party and mainstream groups like Planned Parenthood have been linking their advocacy more with other progressive issues—either because they recognize its inherent value, its strategic worth, or both—some smaller organizations that have been making these arguments for years have, at times, felt sidelined. After the Times story ran in 2014, Monica Raye Simpson, the executive director of SisterSong, a reproductive justice group led by and focused on women of color, published an open letter calling out mainstream groups for failing to acknowledge their decades-long work making connections between reproductive choice and women’s health and economic prospects.

“We appreciate that you push us to do this more, and to do it better,” Richards wrote back in response. “And we hear you when you say that we are not doing enough.” A few months later Richards and Simpson met in person, and published

28 WWW.Prospect.org Winter 2016

a joint statement pledging to build a stronger partnership.

I asked Simpson how things have played out in the year and a half since that meeting. “We’ve really seen mainstream organizations reaching into the women-ofcolor-led organizations to get our expertise, and actually have us at the table and shape the conversation,” she says.

While Simpson acknowledges there’s still a long way to go in terms of truly making the reproductive-rights movement “intersectional” (a social justice concept that means reckoning with different forms of oppression and how they impact, and compound, one another), she does feel Planned Parenthood “is starting to show up more” for them.

One way that Planned Parenthood is “showing up” for a broader range of constituencies is through its membership in the All Above All coalition, a growing political effort to overturn the Hyde Amendment—the 40-year-old law that prohibits federal spending on abortions. Women of color and low-income communities most affected by Hyde have been leading the campaign.

During Cecile Richards’s testimony this past September, she told the House Oversight and Government Reform Committee that in her opinion, the Hyde Amendment “discriminates against low-income women.” Erin Matson, who

richard levine / demotix / ap images

Planned Parenthood supporters rally in New York’s Foley Square as part of a nationwide mobilization on the day of Richards’s congressional testimony.

has been frustrated by some of the rhetorical timidity of the reproductive-rights community, was surprised and encouraged by Richards’s comments. “That’s not how Planned Parenthood talked about Hyde in the past,” she says.

A week before Thanksgiving, Planned Parenthood’s

political arm launched its 2016 election effort, pledging to spend at least $20 million defending reproductive rights.

“We will organize and mobilize to elect lawmakers who are in our corner,” Richards announced in a video ad.

Most public opinion analysts suspect that the conservative strategy of targeting anti-choice voters in Republican primaries may backfire in the general election. An NBCWall Street Journal poll conducted in August found that Planned Parenthood has a significantly higher favorability rating than any other group or individual tested—including the Supreme Court, President Obama, both political parties, and key Republicans running for president. Handfuls of other recent polls and surveys have reported nationwide majorities opposed to defunding the organization.

Even on abortion, despite the high-profile attacks, public opinion hasn’t substantially changed. The percentage of Americans who believe abortion should be legal in all circumstances, in some circumstances, or under no circumstances has stayed relatively constant since Gallup first started asking the question in 1975. In 2015, Gallup found that 29 percent of Americans believe abortion should be legal under all circumstances, 51 percent believe it should be legal under some circumstances, and 19 percent believe it should be legal under no circumstances. While Republican candidates are staking out positions to appeal to those who oppose abortion under all circumstances, it turns out that not even all those voters are on board with the GOP attacks. A recent YouGov poll found that more than a third of Americans who support strict abortion restrictions nonetheless hold a favorable opinion of Planned Parenthood.

Republican presidential candidate Ben Carson, who compared supporting a woman’s right to choose to supporting slavery, has made clear that he’d like to see Roe v.

Wade overturned, along with laws that permit women to terminate pregnancies in cases of rape or incest. Marco Rubio, a candidate favored among GOP elites, also wants abortion to be made illegal with no exceptions for rape or incest. But in a CNN/ORC national poll taken just before the 2012 presidential election, 83 percent of all voters— and 76 percent of Republicans—said they favored allowing abortions in cases of rape or incest. “The RNC is not happy about this Republican primary,” says Anna Greenberg, one of the nation’s top Democratic pollsters. “This is not a strategy [for them], it’s a disaster.”

The anti-abortion rhetoric stands not only to motivate the progressive base, but also to agitate independent voters. Independent women in particular tend to be more socially liberal and economically conservative, and Greenberg notes that a lot of the misogynistic and anti–reproductive rights rhetoric has actually helped Democrats more effectively communicate with this swath of the electorate.

“While backing Republicans into a corner might gin up some primary votes, [these positions are] wildly, wildly unpopular with the general public,” says Erica Sackin, Planned Parenthood’s director of political communications. “When Romney said the first thing he’d do as president is defund Planned Parenthood, he lost the 2012 election by the largest gender gap in history.”

Planned Parenthood wants to help elected officials understand that being forthright in their support for abortion and reproductive rights is both better policy and smart politics. In effect, the organization, along with other women’s groups, is now engaged in its own anti-stigma work on the electoral level, pushing leaders away from the “safe, legal, and rare” abortion mantra that pro-choice Demo-

In 2014, Richards authored an essay in Elle magazine describing her own abortion experience—part of Planned Parenthood’s ongoing effort to de-stigmatize abortion. crats used, starting with Bill Clinton’s 1992 presidential campaign. The Democratic Party officially removed the phrase from its platform in 2012, and advocates are now urging politicians to think of abortion more along the lines of “safe, legal, and where we live.”

Richards believes the country has arrived at a real inflection point. “It’s just abundantly clear,” she says, that the assaults on Planned Parenthood are not about the organization as a health-care provider, but about “folks who resent that women actually have the legal right to make their own decisions about their pregnancies. That’s what they’re mad about, and they’re really mad.”

The stakes are high, but Richards is looking forward to the challenge. “I’m just grateful we’re getting to what is actually the real fight,” she says. “I believe this country is not going to go backwards. It has been incredibly inspiring to see young people, who I do think live their lives in a more public way, who really do want to throw off judgment and shame about so many things, including abortion. To me, that is a bright new day, and I hope, I think, it’s all going to come together in one place.”

Winter 2016 The American Prospect 29

The Uber Challenge The aggressive on-demand ride company is the focus of a new struggle for workers’ rights.

An Uber driver prominently displays the company logo on his windshield.

L

ast August 31, Takele Gobena, an Uber driver, stood alongside Seattle City Councilman Mike O’Brien at a news conference, complaining that his Uber earnings came to less than the federal minimum wage after factoring in gas, insurance, and other costs. At the press conference, Gobena, a 26-yearold immigrant from Ethiopia, hailed O’Brien’s plan to introduce legislation that would allow Seattle’s Uber and Lyft drivers to unionize and bargain collectively, even though those companies insist their drivers are independent contractors and not employees. A half-dozen drivers flanked O’Brien, holding signs saying, “Drivers need a voice.”

Toward the end of his remarks, Gobena, a member of the App-Based Drivers Association, said, “I know Uber will probably deactivate me tomorrow, but I’m ready because this is worth fighting for.”

It didn’t take that long. At 6:50 that evening, a few hours after several websites posted stories about the news conference, Uber emailed Gobena to notify him that he had been deactivated as a driver. The reason Uber gave: His auto insurance had expired.

Gobena rushed to inform the news media and Councilman O’Brien about his being deactivated (Uber-ese for dismissed). Not only that, Gobena sent them iPhone photos of his insurance certificate, which wasn’t to expire until December. Several reporters contacted Uber to ask

30 WWW.Prospect.org Winter 2016

about the sudden deactivation, and as if by magic, Uber reactivated Gobena around 9 p.m. (Uber denied deactivating him, even though news websites later posted a screenshot of Uber’s deactivation message on Gobena’s phone.)

“We have made Uber become a very valuable company, but they are treating us in an inhuman way,” says Gobena, who is studying business at the University of Washington.

“Some days, I spend 16 hours on the road. Most of the drivers do the same thing.”

Gobena jumped at the opportunity to become an Uber driver last year, after he saw advertisements saying Uber drivers earn at least $25 an hour. He borrowed money to buy a used Nissan Sentra for $14,000, and quit his $9.47-an-hour job at Sea-Tac Airport, where he helped dispatch wheelchairs and electric carts for passengers with disabilities. However, Gobena said that driving at least 55 hours a week—full-time for UberX and part-time for Lyft—he earns considerably less per hour than in his previous job, after subtracting gasoline and other costs.

“It’s more than hard to live on this,” he tells me. “Working at Uber, I can’t support myself.”

At any given moment in recent American history, one corporation has stood out as the “it” company, the symbol of the new and the cool—think of IBM, then Microsoft, Apple, Google, Facebook, Amazon—now it seems to

jeff chiu / ap images

B y Steve n Gre e n hous e

c o u r t e s y ta k e l e g o b e n a

be Uber’s moment. In just six years, Uber has gone from start-up to upstart to juggernaut, pushing its way into more than 250 cities and 67 countries. Boasting 1.1 million drivers worldwide and 400,000 in the United States, Uber is one of the fastest-growing start-ups in history, with an eye-popping valuation of $62.5 billion, more than that of General Motors. Uber has probably done more to transform—its executives would say “disrupt”—urban transportation around the world than any other company in the last half-century. Its investors include such heavyweights as Goldman Sachs, Microsoft, and Jeff Bezos.

Uber has also become the foremost symbol of the ondemand economy, with a super-convenient app that consumers love because it often gets them a car faster than it takes to find a taxi. The company sees and depicts itself as offering a cool, new, flexible employment model that is being copied by other companies, including Lyft, Handy (housecleaning), Caviar (food delivery), Postmates (on-demand delivery), Washio (dry cleaning), and Luxe (parking your car).

To many, however, Uber has become the foremost symbol of something else—something unlawful. Many labor advocates view Uber as the leading practitioner of illegal worker misclassification because it insists that its 400,000 U.S. drivers are independent contractors rather than employees.

Uber says its drivers—it calls them “partners”—are their own bosses who have the flexibility to drive whatever hours they want and even drive for competitors like Lyft and Sidecar.

Indeed, with its clout, cachet, and big-name backers, Uber has sought to redefine what an employee is. No way, it says, should its drivers be considered employees, asserting that its relationship with them is attenuated—even though the company hires and fires the drivers, sets their fares, takes a 20 percent commission from fares, gives drivers weekly ratings, and orders them not to ask for tips. For Uber, there are manifold advantages to treating its drivers as independent contractors. Not only does it avoid being covered by minimum wage, overtime, and anti-discrimination laws, but it sidesteps having to make contributions for Social Security, Medicare, workers’ compensation, and unemployment insurance. It also escapes the employer obligations of the Affordable Care Act. By some estimates, all this cuts Uber’s compensation costs by more than 20 percent per driver.

Uber’s aggressive expansion and unusual employment model—almost all driver interactions with the “boss” are through Uber’s smartphone app—have raised questions about what a 21st-century company’s responsibilities are to workers in—whatever you want to call it—the gig economy, the on-demand economy, the crowdsourcing economy, the sharing economy, or perhaps the unsharing economy. (I’m flummoxed why anyone, except for public relations reasons, would call Uber and Lyft part of a sharing economy when

they are in essence little different from a taxi or any other livery service that picks up riders and charges a fare.)

Uber’s critics say the company is shrewdly seeking to evade all of an employer’s traditional legal responsibilities and obligations, while enjoying all the benefits of being an employer—including taking a hefty percentage of what its workers earn. But many champions of Uber argue that the nation’s employment laws have grown obsolete and need to be updated because, in their view, Uber’s employment model is so different from, so much looser and less structured than, the models at traditional companies like General Motors and Procter & Gamble. In response, labor advocates often argue that the nation’s employment laws are not outmoded and that the problem is that many people simply fail to recognize that Uber has a fairly traditional employer-employee relationship (with its newfangled app and boasts of being a master disrupter confusing matters).

The company has even become a hot subject in the presidential campaign.

Republican after Republican attacked Hillary Clinton after she said, “This ‘on demand’ or socalled ‘gig economy’ is creating exciting opportunities and unleashing innovation, but it’s also raising hard questions about workplace protections and what a good job will look like in the future.” While any workplace expert would likely view her remarks as an anodyne truism, Rand Paul rushed to tweet: “Services like Uber, Airbnb, and Lyft stimulate our economy and work towards lower prices. How is this bad @HillaryClinton?” Jeb Bush and Marco Rubio were quick to boast about patronizing Uber, while Grover Norquist, the anti-tax crusader, said, “Did you notice what Hillary did? She just declared war on the future. She just declared war on Uber.”

A number of drivers have sued Uber, asking the courts to declare that they’re employees—a move that Uber asserts would hurt its business model and undercut the flexibility that so many drivers prize. If the drivers are declared employees, not only would they gain a raft of legal protections, but they would gain the right to unionize and bargain collectively. Taking another path to the same goal, the Seattle City Council, in an unusual move pushed by the Teamsters union, voted unanimously on December 14 to give app-based drivers a right to unionize even if they’re considered independent contractors.

Driver Takele Gobena was deactivated by Uber after seeking collective bargaining rights, then re-activated when the media reported what Uber had done.

Winter 2016 The American Prospect 31

Jeb Bush takes a spin in an Uber car—an emblem of the GOP’s support for the company.

cisco in 2009—it has been seen as bold and brazen. Its combative founder and chief executive officer is Travis Kalanick, 39, a UCLA dropout who founded and sold several companies before starting Uber.

“I’m a passionate entrepreneur,” Kalanick told Vanity Fair. “I’m like fire and brimstone sometimes.”

Kalanick and his company have been described as “creepy.” He once joked to GQ magazine that his company should be called “Boober” because it made it such a cinch for him to attract women. At a private dinner in November 2014, a senior Uber executive outlined a plan, disclosed by BuzzFeed, to spend a million dollars to hire four top opposition researchers to investigate and expose private details about journalists “and give the media a taste of its own medicine.” The executive had a particular female journalist in mind, a frequent critic of the company.

Kalanick views the taxi industry as his nemesis, as a medieval-like cartel that stifles competition and innovation and plies politicians with money to get its way. This attitude helps explain why Uber has often barged into cities elbows out, sometimes hiring scores, even hundreds, of drivers, before it has legal permission (which could be hard for it to get considering the taxi industry’s muscle and influence). “You can either do what they say or you can fight for what you believe,” said Kalanick, who sometimes calls his adversary “the taxi medallion evil empire.”

The taxi industry is hardly the darling of consumers—it is widely derided for poor service, underpaying drivers, and blocking efforts to authorize more taxis as a way of improving service. Moreover, in many cities, it is lambasted for shunning or shortchanging poor and minority neighborhoods—Uber boasts that it does a far better job serving such neighborhoods. All this has made the taxi industry vulnerable to Uber’s attacks—and expansion efforts.

“We’re in a political campaign and the candidate is Uber, and the opponent is an asshole named Taxi,” Kalanick said at a conference last year. “Nobody likes him, he’s not a nice character, but he’s so woven into the political machinery and fabric that a lot of people owe him favors.”

Much of Kalanick’s wrath is directed at taxi owners, but his company’s rapid growth is very much hurting struggling rank-and-file taxi drivers. Bhairavi Desai, president

32 WWW.Prospect.org Winter 2016

of the National Taxi Workers Alliance, says that as a result of Uber’s expansion, “the total number of fares is coming down” per yellow cab, in New York and many other cities.

Moreover, Desai adds, “the amount per fare is coming down” because UberX drivers are scooping up a lot of the bigger-ticket rides to and from airports.

Kalanick’s “make no small plans” approach seems to be, you can’t make the world’s biggest and best omelet unless you’re willing to break a whole lot of eggs. That’s been his modus operandi in city after city.

When New York Mayor Bill de Blasio sought to place a cap on Uber’s growth, the company steamrolled him and the City Council with a blitz of robocalls, TV advertisements, and a clever addition to its app that enabled riders to swamp the council with emailed protests. De Blasio withdrew his proposal.

When Uber began service in Las Vegas in October 2014 without getting the proper licenses beforehand, city officials declared it illegal and obtained a temporary injunction, while the police quickly fined numerous Uber drivers.

In Portland, Oregon, Steve Novick, the city’s transportation commissioner, was outraged that he didn’t learn of Uber’s plans to launch services at 5 p.m. on a Friday until a reporter texted him about it earlier that day. Novick recalled a top Uber official telling him, “We’re providing a service and there is great demand in Oregon.” Novick’s response: “Announcing that you’re going to break the law is not civil.”

“Lyft seems like a respectable company, and Uber seems like a bunch of thugs,” Novick told The New York Times.

In Paris, Uber continued to operate even as taxi drivers smashed windows and slashed tires of Uber drivers, and even after the French government had said the company didn’t have authority to operate. Uber told its drivers, “If you get fined, come to us and we’ll support you.” Uber finally suspended operations in France after Uber’s top official there was arrested and charged with six criminal counts, including running an illegal taxi service and using deceptive practices. Italy and Spain have challenged Uber’s legality, while South Korea brought criminal charges against Kalanick and 28 other Uber officials last March, accusing them of running an unlicensed taxi service.

“I think of them as robber barons,” Barry Korengold, president of the San Francisco Cab Drivers Association, told Vanity Fair. “They started off by operating illegally, without following any of the regulations and unfairly competing. And that’s how they became big. They had enough money to ignore the rules.”

John Billington made a good living when he became

an UberX driver in Los Angeles three years ago. “You used to make great money with these guys,” he says.

But no more. When Billington started, Uber’s fares in

eric risberg / ap images

From Uber’s inception—it was founded in San Fran-

L.A. were $2.50 a mile and 35 cents a minute, he said, but Uber (which charges different rates in different cities) has since reduced fares there to $1 a mile and 18 cents a minute—generally cheaper than taxi fares. “To go from the airport to downtown used to cost [passengers] $50; now you make $20 to downtown,” Billington says. “They got this commercial on the radio saying you can make $500 a day. That’s mission impossible.”

Billington, who says he has a 4.9 Uber rating out of a perfect 5, says he no longer provides bottles of water to passengers. “As soon as they dropped fares the first time, I stopped providing water,” he says. “With these low fares, how can people be expecting water?”

In his first year, Billington grossed $1,500 to $2,000 a week, but now that has dwindled to $700 to $800 a week, he said. And that’s before the $120 he spends each week on gas, not to mention the cost of insurance, a weekly car wash, a monthly oil change, and depreciation on his Nissan Altima. The company’s minimum fare in L.A. is $4.65 for a two-mile ride, for instance—and out of that, Uber takes $1.65 for its “Safe Rides Fee” (covering its expenses for driver background safety checks and other safety features) and a 20 percent commission (60 cents) on the remaining $3.

“So Uber gets $2.25 for the ride, and the driver gets $2.40,” Billington says. “When you consider gas and other things I pay for, Uber is making more than me off the ride.”

He scoffs at Uber’s assertion that its drivers are independent contractors, calling it “a load of nonsense.”

“They treat us like employees, but we get none of the benefits,” says Billington, who has joined a lawsuit seeking to have Uber drivers declared employees. “They’re telling us what rides we have to pick up. They dictate fares. We don’t get a say in what the fares will be. They keep close track on your ratings, and they threaten to deactivate you over various things.”

Billington, 47, isn’t covered by workers’ compensation or unemployment insurance and doesn’t receive paid vacation days or holidays. Nor does he have health insurance or paid sick days. “Hopefully I just don’t get sick,” he says.

d a n tay lo r / h e i s e n b e r g m e d i a

Though Uber has 48,000 drivers in Los Angeles,

35,000 in Chicago, 30,000 in New York, 27,000 in Washington, D.C., and lots more in other cities, the company vigorously asserts that it is not an employer. Rather, it insists it is merely a platform, much like Etsy or eBay, that connects buyers and sellers—in its case, riders and drivers.

Its drivers are their own bosses, it maintains; Uber bosses hardly enter the picture.

In a recent speech, David Plouffe, President Obama’s 2008 campaign manager and now Uber’s chief adviser, called the e-hailing company a godsend for drivers. “Platforms like Uber are boosting the incomes of millions of

American families,” he said. “They’re helping people who are struggling to pay the bills, earn a little extra spending money or transitioning between jobs.”

Plouffe cited an internal Uber study that found that 87 percent of drivers say a major reason they chose Uber was that they wanted to be their own boss and set their own schedule. In defending against a California class-action lawsuit that seeks to have Uber’s drivers declared employees, the company submitted declarations from 400 drivers who said they love their flexible hours and therefore prefer being independent contractors.

“Uber is not my employer,” said Jon Shehab, a driver in San Diego, in one of those declarations. “I can make a stronger argument that Uber is my employee than that I’m their employee. Uber books my business for me. Uber collects my money. Uber sends me statements about how much money I’ve made. Uber deposits money in my account. If anything, Uber is my employee.”

Shehab added: “Having been an employee and an independent contractor in the past, I’m definitely an independent contractor with Uber. I don’t have a supervisor, I don’t have a manager, and I don’t even have a telephone number for Uber.”

In a second declaration, Carlos Oliva, an UberX driver in Los Angeles, said: “Even if Uber wanted to make me an employee, I wouldn’t want to be one. I would quit before I would accept an offer to be an Uber employee. I value my freedom as an independent contractor too much, and I don’t want Uber to tell me when or where I have to drive.”

But Shannon Liss-Riordan, the plaintiffs’ attorney in that class-action lawsuit, says one of her paralegals spoke to 50 of the drivers who had submitted declarations and explained to them that under California law (unlike the laws of most states), if the drivers are considered employees, Uber would have to pay for business-related expenses including gas, insurance, and auto maintenance. Liss-Riordan says almost all 50 drivers responded that they’d love that and would therefore prefer to be considered employees.

Under California law, the principal factor in determining whether a worker is an employee or independent contractor is whether the employer “to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Other factors to be weighed include the amount of skill required, the length of time services are performed, whether the work is part of the company’s regular business, and whether the parties believe they have an employer-employee relationship. Uber trumpets that last factor, but it certainly wasn’t dispositive when California’s Labor Commissioner ruled last July that an Uber driver in San Francisco was an employee, not an independent contractor. That case involved just one driver, but Uber fears—and many drivers hope—that the commissioner’s ruling will be a harbinger for a far broader decision.

CEO Travis Kalanick has led Uber to hire hundreds of drivers in city after city without getting legal permission.

Winter 2016 The American Prospect 33

Many states have slightly different tests than California’s, often weighing whether the worker’s role is entrepreneurial. Uber argues that its drivers are indeed entrepreneurial because they decide when and where they drive, but many drivers say there is virtually nothing entrepreneurial about Uber work—yes, they pick their hours, but that isn’t terribly entrepreneurial.

In a similar lawsuit against Lyft, Vince Chhabria, a federal district court judge in San Francisco, complained that the multi-factor test for classifying workers is from “the 20th Century” and “isn’t very helpful in addressing this 21st Century problem.” He wrote that the court was being “handed a square peg and asked to choose between two round holes.”

“Some factors,” Chhabria added, “point in one direction, some point in the other, and some are ambiguous.”

But some leading employment-law experts say the Uber situation isn’t ambiguous. Benjamin Sachs, a labor law professor at Harvard, says, “The more I learn about Uber, the clearer it becomes to me that it is a relatively typical employment relationship and ought to be treated as such.”

In his view, if Uber’s drivers were truly independent contractors, Uber would give them more freedom, for instance, to do rides only to and from the airport, or wouldn’t bar them from giving their phone numbers to passengers so they can give them rides outside the Uber system.

To Jeremias Prassl, a law professor at Oxford University, Uber also presents a clear-cut case. “In figuring out whether someone is an employee or an independent contractor, we can save a lot of hassle by asking ourselves, Who is the employer?” he says. Under Prassl’s analysis, Uber is a fairly typical employer, performing all of an employer’s functions.

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It exercises firm control over the employment relationship from hiring to termination. It sets the wages (in this case, the fares). It provides the drivers with their work and pay (by funneling passengers to them through its app). It receives the fruit of the drivers’ labor (through its 20 percent commission and fees). And it provides an essential tool that makes the drivers’ work possible—the vaunted Uber app.

Wilma Liebman, former chair of the National Labor Relations Board, concurs: “There’s a strong case that Uber drivers are employees, given what I know about the nature of Uber’s control over its drivers and given that they are providing a service that is integral to the key business of Uber.” She points to two NLRB cases: The first involved Roadway Express, in which the drivers were found to be employees, largely because they were doing the work integral to the company’s delivery business. In the other case, drivers for Dial-a-Mattress were found to be independent contractors because their work was not integral to the company’s business of selling mattresses. The Uber drivers are like the Roadway Express drivers, Liebman says, in that their work is integral to Uber’s business.

Similarly, Sachs says it is clear that people who obtain, say, a snow-shoveling or painting job through TaskRabbit are not employees of TaskRabbit. He argues that TaskRabbit is much more like eBay—a mere platform and intermediary—than Uber and Lyft are.

Federal District Court Judge Edward Chen has scheduled the Uber trial for June 20 in San Francisco. Efforts to have workers at “on-demand” companies classified as employees aren’t confined to Uber. Liss-Riordan has sued numerous other such companies, including Lyft, Post-

e d u a r d o m u n oz / r e u t e r s / l a n d o v

TaskRabbit, where people go to find gigs, is more like a platform, says Sachs.

Uber is more like an employer.

lu c y n i c h o l s o n / r e u t e r s / l a n d o v

mates, Washio, and Caviar, seeking to have their workers declared employees. In addition, she has asked the National Labor Relations Board to declare that Uber’s ban on class-action arbitration claims is illegal. In weighing that case, the labor board will first have to decide whether Uber drivers are employees, and if it decides they are, that would open the door to app-based drivers unionizing.

Jessica Santillo, an Uber spokeswoman, has warned of grim consequences if the drivers are declared employees.

Such a ruling, she said, would mean the drivers “would drive set shifts, earn a fixed hourly wage and lose the ability to drive using other ridesharing apps as well as the personal flexibility they most value.” She added, “Drivers would have to drive when assigned to drive—in shifts prearranged by Uber, resulting in a loss of flexibility.” Drivers, she continued, would have “no ability to control earnings,” and that given their “fixed schedules, drivers would lose the ability to be entrepreneurial and maximize earnings based on when and where they drive.”

Disagreeing, Sachs says Uber would not be forced to adopt pre-arranged shifts for its drivers if they are deemed employees. Many drivers fear that if a court rules that they are employees, Uber would bar them from working more than 40 hours a week to avoid paying overtime, although Uber wouldn’t be required to set a 40-hour ceiling. Indeed, if Uber took moves its drivers disliked—adopting prearranged shifts and a ceiling of 40 hours—a smart competitor might seek to woo away drivers by promising them flexibility much like what exists now, with no pre-arranged shifts and limit of 40 hours.

“A finding of employee status doesn’t require that Uber do anything differently [in terms of scheduling] from what it’s doing now,” Sachs says—other than one minor burden: requiring Uber to comply with California’s rest break laws.

Liss-Riordan notes that many Uber fans complain that her lawsuit is seeking to bring down their beloved company.

“We’re not trying to bring Uber down,” she says. “We’re just trying to get them to comply with the law. Obviously a lot of people like the service that Uber has brought to the world. We’re just trying to make sure the drivers get what they’re entitled to under the wage and hour laws.”

For Inder Parmar, an UberX driver for nearly three

years in New York City, the job has grown worse as Uber has pushed to expand.

“If Uber brings in 1,000 more drivers this week, they will tell everyone to welcome them, but the business is being depleted,” Parmar says. “There’s one pie. Last year, the pie was shared by 20,000 Uber drivers. Now it’s being shared by almost 30,000. I am making less money. I don’t know about other drivers, but I don’t see how they can say they’re making more money.”

Parmar is upset that Uber is continuing to charge ahead in its effort to add more drivers in New York—part of its global strategy to increase market share and revenues. In late November, Uber ran advertisements on New York City buses, saying anyone who signed up to drive would earn a minimum of $7,000 in December.

Parmar, 53, who immigrated to the U.S. from India at age 16, receives no benefits through Uber, but he says he is fortunate because his family gets health insurance thanks to his wife’s job at a bank.

He, too, did well in his first year with Uber, but then the company dropped its New York prices by 30 percent. His pay receipts show that he used to average around $2,000 a week, driving 2 p.m. to 2 a.m. six days a week—but by last summer, his weekly gross fell to about $1,500 a week. From that he had to subtract around $100 a week for gas, around $100 a week for tolls, and $400 a week to rent a Toyota Camry with insurance.

For Parmar, grossing $1,500 a week for 70 hours of driving comes to around $21.50 an hour, before factoring in his many expenses.

That was substantially less than the $28 an hour that two researchers—Alan Krueger, a Princeton economist, and Jonathan Hall, Uber’s director of policy research—found to be the median gross pay for Uber drivers in New York in an analysis of October 2014 data. (The $28 an hour they found comes to $58,000 a year for a 40-hour-a-week driver, and is far below the $90,000 a year that Uber was boasting its drivers in New York averaged in 2014.) According to Krueger and Hall’s Uber-backed study, the median gross pay for Uber drivers in 20 cities was around $17.50 an hour—including $16 in Chicago, just under $17 in Los Angeles—and that was before subtracting the drivers’ costs and before Uber further reduced fares in 48 cities in January 2015.

“I went personally to Uber’s office in Queens and I said, ‘How do you justify this 30 percent cut in fares?’” says Parmar, who recently cut back his Uber hours to part-time so he could also drive for a friend’s black-car service. “They said, ‘Since we’ve dropped the price, we’re going to have more customers.’

“I told them, ‘I’m not selling apples, I’m not selling donuts. I’m driving a car. I can do 15 or 16 rides a night.

If the price is 30 percent less, I get paid 30 percent less.’

(Opposite page) Uber drivers and riders turn out to oppose Mayor Bill de Blasio’s plan to limit the number of Uber cars in New York. They prevailed.

(This page) Uber drivers in Santa Monica protest their working conditions.

Winter 2016 The American Prospect 35

When David Plouffe, the master strategist, gave a

Former Obama-for-President campaign manager David Plouffe is now Uber’s chief adviser and board member.

major speech in Washington in November, it contained a big surprise. While many in the audience expected him to defend Uber by saying its drivers make a good living, he took a sharply different tack, emphasizing that driving for Uber can mean a welcome, supplemental part-time income.

Plouffe told of a special-education teacher in Denver, who decided to drive an hour or two a week in her spare time so she could save money for a vacation to Ft. Lauderdale.

In his speech, titled “Uber and the American Worker,” Plouffe noted that half of all Uber drivers in the U.S. drive fewer than 10 hours a week and that most (Uber says 61 percent) have full-time or part-time jobs outside of Uber.

“For most people, driving on Uber is not even a part-time job,” he said. “It’s just driving an hour or two a day, here or there, to help pay the bills.”

Plouffe left unanswered why he took such a surprising tack. Was he signaling that Uber desperately needs more drivers and is targeting f inancially squeezed Americans who might want to supplement their income by ferrying riders around town a few hours a week? (One big problem Plouffe acknowledged is that just 40 percent of Uber drivers remain active a year after taking their first trip.) Or perhaps Plouffe was deliberately downplaying any notion that Uber work is a real job, to help convince judges and critics that Uber’s drivers aren’t real employees—hey, these are just minor, independent gigs. Indeed, Judge Chhabria, in the Lyft case, voiced uncertainty about this very issue, asking whether “drivers who work more than a certain number of hours should be employees while the others should be independent contractors.”

What is clear is that labor advocates and even a growing number of companies are worried that many on-demand workers, especially the full-time ones, receive no benefits—neither health insurance, nor paid sick days, nor unemployment insurance.

“We need to provide basic protections to people so they’ll be taken care of when they’re sick or when they want to retire,” says Shelby Clark, chief executive of Peers, a nonprofit that

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assists on-demand workers and companies. He acknowledges that some companies hesitate to give benefits to on-demand workers for fear that this will make it more likely that their workers will be ruled to be employees. He says the fear that workers might be declared employees has nothing to do with companies’ fear that their workers will unionize: “Unionization hasn’t even entered the conversation.”

But Katherine Stone, an employment law professor at UCLA , has the opposite view. “The reason they don’t want these workers to be employees is they want to stop a union,” she says.

In a somewhat surprising move, 39 business leaders, labor advocates, academics, and foundation heads joined together to sign a statement, posted November 10, that called for creating an elaborate system of portable benefits to help provide protections to on-demand workers. “As our country has at prior moments of workplace change,” the statement said, “we must find a path forward that encourages innovation … creates certainty for workers, business and government and ensures that workers and their families can lead sustainable lives and realize their dreams.”

Its signers included Logan Green and John Zimmer, the co-founders of Lyft; Andy Stern, former president of the Service Employees International Union; Apoorva Mehta, Instacart’s chief executive; and Anne-Marie Slaughter, president of New America.

The statement, called Common Ground for Independent Workers, went on to say, “We are in agreement that flexible work should not come at the expense of desired economic security. We need a portable vehicle for worker protections and benefits.”

The statement didn’t go beyond generalities, proposing vague “portable,” “pro-rata,” and “universal” benefits. It stopped short of saying what benefits workers should have.

The idea is that pro-rata payments, perhaps for each hour worked, would go into a fund or funds that help finance benefits—perhaps health insurance, parental leave, workers’ compensation, or all of the above.

The Common Ground statement contained more questions than answers. “Who should contribute financially (and how much)?” it asked, meaning, should the employer, the worker, or the customer contribute? (One can easily imagine that many companies will want the worker or customer—not the company—to pay the contributions toward the portable benefits.) The statement also asked, “What type of organization (or organizations) should administer these benefits and protections?”

David Rolf, a signatory of the statement and president of a large service employees’ union local in Seattle, acknowledges that some from the left and labor criticized the statement on the grounds that it might encourage employers to use more on-demand workers and jettison traditional

ross d. fr anklin / ap images

“They said the cheaper the price, the more customers you’ll have. I can’t drive 100 customers a night. I’m not a machine. I cannot work 18 hours a day.”

benefits in favor of these newfangled, perhaps cheaper, portable benefits. Some also criticized the statement for not stressing the advantages of full-time work and for doing little to define who is an employee and who isn’t.

The statement was inspired in part by an article that Rolf and Nick Hanauer, a Seattle-based investor and co-founder of Second Avenue Partners, wrote for last summer’s issue of the journal Democracy. In the article, “Shared Security, Shared Growth,” they proposed a system of robust, well-funded portable benefits—called Shared Security Accounts—that would cover a panoply of things, from health insurance to pensions to parental leave. Every employer would in theory pay into workers’ accounts, and because these accounts would be portable and universal, workers could tap into them, even when they change jobs.

Rolf would love to see dozens of companies lining up tomorrow to finance a smart system of portable, pro-rata benefits. He says he sees some interest in the idea, adding that things are moving forward, albeit slowly. His more immediate hope is that in a deep-blue city or state, like Seattle or San Francisco or California or New York, “workers would demand enactment of a citywide or statewide mandate requiring all employers” to make pro-rata payments for portable benefits—“X percent into a health-care fund, Y percent into a pension fund, Z percent into a paidtime-off fund, another percent for income replacement in case of loss of employment.” Such a law, Rolf says, would be a boon for workers in an era when more and more companies are moving away from traditional employer-employee relationships and from providing benefits.

In Rolf’s home city, however, some on-demand workers—namely, the Uber and Lyft drivers—are not waiting for such an idealistic scheme to be enacted. They’ve pursued a theoretically quicker strategy to win benefits and higher pay: unionization. Working with the International Brotherhood of Teamsters, hundreds of app-based drivers have helped persuade the Seattle City Council to vote approval—8 to 0—of a bill that would allow them to unionize. Seattle’s Mayor Ed Murray said he wouldn’t sign the bill, but since it was approved by a veto-proof majority, it will become the nation’s first law allowing app-based “independent contractor” drivers to unionize. Under the measure, companies would be required to give the City of Seattle a list of its drivers, and if a union wins the backing of a majority of a company’s drivers the company would have to bargain with the union. (Rolf and his powerful union local backed the effort, advancing several different strategies to improve the lot of workers in the on-demand economy.) Already, Uber drivers from numerous other cities have contacted the Teamster organizers in Seattle to ask for help in getting similar unionization statutes enacted in their cities.

Uber argues that the Seattle legislation has two big legal flaws—first, that cities can’t enact laws on unionization for private-sector workers because that subject is preempted by federal law, specifically by the National Labor Relations Act. Second, that when independent contractors cooperate to set prices, that constitutes an antitrust violation.

The legislation, Uber asserts, would create a conspiracy to artificially drive up transportation costs paid by the people of Seattle.

But Leonard Smith, a Teamsters organizer in Seattle, argues that since the National Labor Relations Act covers only employees—and not independent contractors—preemption doesn’t apply to such contractors. Smith maintains that cities and states are free to enact laws to help independent contractors unionize, as is the case with farm workers and government employees (also not covered by the NLRA). Elizabeth J. Kennedy, a law professor at Loyola University in Baltimore who is advising the Teamsters, adds that the City of Seattle would be creating a framework for the drivers’ cooperation that would in turn create a so-called state action immunity defense to help make the drivers’ cooperation legal under antitrust laws.

Uber and Lyft are likely to file lawsuits to block the measure. More than 300 Uber and Lyft drivers have attended pro-union meetings in Seattle. Not only do they want benefits like paid sick leave and workers’ compensation, but most Uber drivers are unhappy that the company slashed the per-mile fare to $1.35 from $2.35.

Many echo Takele Gobena in saying they earn too little and work too many hours. “We’re for a union,” Gobena said.

“The union will give us a chance to negotiate with the man.

Uber doesn’t see us. They tell us what to do. They don’t hear our concerns. When we have a union, we’ll have the power to negotiate. Right now we have no way to solve our problems.”

When one cuts through all this maneuvering and friction, it becomes clear that Uber drivers and their various allies are pursuing three strategies at once to make the company treat them better—have courts and the NLRB rule that the drivers are employees, have states and cities give them collective bargaining rights as independent contractors, and create a pro-rata benefits pool for app-based drivers and other gig-economy workers. While these efforts could pose a major challenge to Uber’s business model and bottom line, it could finally give Takele Gobena and tens of thousands of other drivers, as he put it, a “way to solve our problems.”

Seattle Uber drivers aren’t seeking to be deemed employees, but seeking collective bargaining rights as independent contractors.

Steven Greenhouse was a reporter at The New York Times for 31 years and was its labor and workplace reporter from 1995 to 2014. He is currently a visiting researcher at the Russell Sage Foundation. He is author of The Big Squeeze: Tough Times for the American Worker and is currently working on a book about the future of America’s workers.

Winter 2016 The American Prospect 37

The Other How tech companies became detached from urban life and its problems—even when the city is their home B y M arg a ret O’Mara

J

ust off the freeway 40 miles south of San Francisco, in the bedroom suburb of Cupertino, earth-chewing bulldozers and swooping construction cranes are busily at work on Apple’s colossal new campus, slated to open in late 2016. When it’s done, it will be unlike anything Silicon Valley has seen before. Rather than a scattering of nondescript office-park buildings, the campus consists of one enormous circular structure, an information-age Pentagon that will house up to 13,000 Apple employees in one place. Designed by superstar architect Norman Foster, the four-story ring of gleaming curved glass will be as sleek as an iPhone and look, as late CEO Steve Jobs put it, “a little like a spaceship landed.”

While building big, Apple also is building green. Parking lots have been sunk underground. Lush landscaping will cover 80 percent of the site on completion. In a nostalgic hat-tip to Jobs’s California childhood, when the Valley was filled with fruit farms, the thousands of trees to be planted will include small apricot orchards. But the single structure and extensive grounds also provide Apple with something it cares about even more than

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apricot trees: isolation. Internal planning documents have stated this quite pointedly, observing that the great spaceship will provide Apple with “the security and privacy required for the invention of new products by eliminating any public access through the site.”

Zoom up about 700 miles north to Seattle, and find another tech headquarters that seems quite different. Amazon and its founder and CEO Jeff Bezos have chosen to be in the city, not the suburbs, from nearly the start. After a number of years in a repurposed military hospital in the southern part of Seattle, the online retailer began in 2007 to take over buildings in Seattle’s South Lake Union built on spec by another tech titan (turned real-estate mogul), Microsoft co-founder Paul Allen.

Amazon’s neighborhood is right at the city’s geographic center, sandwiched between its two freeways, crossed by other major arterials, and gazed down upon by two of the city’s most populous neighborhoods, Capitol Hill and Queen Anne Hill. Instead of verdant suburban landscaping, Amazon has the city streets. Instead of in-house gourmet food courts and fitness centers, it has the neighborhood. Thousands of jeans-and-khaki-clad Amazon employees

flood the area throughout the day, their company badges dangling from their belts. South Lake Union restaurant servers call them “badgers.” In the eight years since Bezos and company moved in, South Lake Union has turned into Amazonia, and Amazon has become impossible for Seattleites to ignore.

But look a little closer, and Amazon and Apple aren’t all that different. As Amazon has grown, the famously unflashy company has started to build things in South Lake Union that are as monumental and futuristic as Apple’s infinite loop, including a set of spectacular “biospheres” now under construction that will be at the center of a new urban campus with more than three million square feet of office space. Slated to open in 2017, the giant domes of glass and steel promise the same security and privacy as Apple’s Cupertino retreat. They are in the city, but not of the city.

More and more tech companies are now like Amazon: urban by birth or by choice. Between 2004 and 2013, technology jobs in San Francisco grew by 109 percent while growing only 15 percent in Santa Clara County—the heart of Silicon Valley. In New York City, tech jobs grew 33 percent between 2010 and 2014, more than

Tech Bubble

rendering courtesy cit y of cupertino

A rendering of Apple’s new spaceship-like corporate headquarters in Cupertino, California

four times the rate of the city’s job growth as a whole. Major tech players like Twitter have made cities their home from the start. Others are moving back in, like Expedia in Seattle and Autodesk in Boston. Even those that have stayed in the suburbs, like Facebook and Google, have built headquarters designed to be private cities in miniature, encouraging casual interactions and sociability with volleyball courts and video arcades, custom eateries and coffee shops.

Wherever they go, large tech companies tend to build in the same way. They create workplaces as full-immersion experiences: places where employees can find all the things they need without straying too far from their desks. In a hotly competitive marketplace for tech talent, companies recruit and retain with built environments designed to encourage loyalty and love for the firm. “Work hard,” Amazon’s motto goes. “Have fun. Make history.”

What’s the result? There are hives of innovation in buildings and campuses that are literally sealed off from the public, even when they are located in the heart of the city. There are armies of bright, politically engaged, socially conscious techies working in and leading companies that can remain oddly disconnected from civic life.

This separation from the life of the city has ripple effects. Amazon’s influx of workers burdens an already strapped and crowded Seattle public transit system, but there’s little evidence the company is doing much to shore up that system. In San Francisco, Google runs more than 100 private buses down the freeways to bring more than 6,000 employees to work each day. Another solution might have been to improve the Bay Area’s fragmented mass transit system, but this is not one of the moon shots the audacious and deep-pocketed company has decided to make.

Twitter got a big tax break for locating in a gritty San Francisco neighborhood, but its employees contribute little to the surrounding community. Even the construction of Apple’s new campus has required the rerouting of streets and prompts hurrying drivers to zoom through quiet residential enclaves to avoid bottlenecks.

Similarly, the apps of the Web 2.0 economy, by creating a protective layer between their users and the messiness and inconveniences of urban life, create additional political flash points. Ballots bristle with initiatives to curb poster children of the sharing economy like Airbnb. Taxi drivers from London to Lille to

Los Angeles battle Uber and Lyft. The continued importance of proximity in an Internet-saturated, smartphonetoting world means home prices that spiral out of the reach of nearly everyone.

A reflexive response to all these changes has been to blame tech companies and their workers for all these social ills. Yet the onslaught of apps and the influx of tech people and wealth have had a huge impact on communities large and small because public infrastructure—from roads and transit to schools and housing— already was so fragile, and so full of holes.

Angst about tech also tends to overstate the impact of the sharing economy, whose drivers, delivery people, and TaskRabbits are only a very small fraction of the contingent, parttime workforce.

The current tech blame game tends to ignore not only the longer political history of cities, but also the history of the tech industry itself.

To understand why companies like Apple and Amazon have little engagement in civic life—unlike many other companies that play an active civic role—we need to dig deeper.

When we do that, we find an industry with a century-old habit of building self-contained

Winter 2016 The American Prospect 39

The tech industry has a century-old habit of building self-contained offices and labs set apart from the messiness and distractions of city life. offices and laboratories deliberately set apart from the messiness and distractions of city life. This isolation has arguably been a factor in the roaring success of some tech companies.

But their disengagement from the civic arena is increasingly hard to defend in an era when the tech industry has come to the city, or the city has come to tech—and the two depend uneasily on each other.

“Lawns, flowers and trees are good to look upon. Light and airy offices are pleasant to work in. An atmosphere created by wholesome natural conditions is conducive to cheery dispositions, and cheery dispositions are conducive to top-notch work.” This is what Architectural Record had to say in the summer of 1914 about what arguably was America’s first high-tech campus, a General Electric research facility seven miles outside of downtown Cleveland called Nela Park. Dubbed “The University of Light” by GE executives, the one-year-old facility was a far cry from the drab and smoky structures that housed most of the nation’s industry at the turn of the 20th century.

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With elegant brick buildings surrounded by rolling hills and manicured lawns, Nela Park had the look of a grand English manor and the amenities of a country club. In between hours at work in the lab and the engineering room, workers could play a round of golf or a game of tennis. They could kick back in comfortably furnished game rooms (one for men, one for women). They could visit the on-site doctor’s office if they got sick. An adjacent “Nela Camp” offered sports-filled weeklong retreats for top salesmen and clients. The firm took the full-immersion idea of the blue-collar company town and recast it for an educated, white-collar workforce.

The result of this extravagant outlay was a PR-worthy showcase. The smart people and fancy facilities of Nela Park regularly starred in national ad campaigns. Its Christmas light show became an annual ritual for generations of Cleveland families. But it also reflected deeply rooted cultural ideas, brought across the Atlantic from much older monastic and academic enclaves and blended with particularly American notions of propertied individual freedom.

After all, America is the place that invented the college “campus”—the grand name affixed to the lawn outside Princeton’s Nassau Hall in the 18th century. In a similar vein, Ben Franklin insisted that his University of Pennsylvania be located far enough away from Philadelphia to afford it “a Garden, Orchard, Meadow, and a Field or two.” Founding Fathers and 19thcentury transcendentalist philosophers alike propounded the notion that Americans’ deep thinking could occur only in peaceful, pastoral environments.

At the other end of the spectrum were the real and imagined perils of the 19th-century city. Noxious with smells and smoke, filled with immigrants, crime, and cheap amusements, cities endangered the life of the mind. Fear and hope were then joined together in a highly profitable real-estate proposition. Outside AngloAmerican industrial cities, from Manchester to Minneapolis, developers built leafy suburban enclaves that allowed people with education and money to take refuge from all the urban chaos.

By the time Nela Park rolled around, belief in the virtues of the countryside had paired with a mania for maximizing workplace efficiency and productivity. Management crowed that the new facility had allowed their scientists and engineers to shave half an hour off the workday. But Nela was also an exercise in team-building. “By locating the home office departments off by themselves,” one corporate history recounted, “they would develop an individuality and morale of their own.”

Just like generations of techies to come, the builders of Nela vowed that their campus was about something more than business as usual.

Placards hung throughout the campus bore an inspirational quote from one of its executives: “I had rather make men than money.”

Fast-forward three decades. Remark-

ably similar ideas propelled the development of another iconic and influential campus, Bell Laboratories, which moved from crowded Manhattan quarters in 1942 to the bucolic central New Jersey suburb of Murray Hill.

Conveniently close to the homes of its leading executives, but painfully remote for nearly everyone else who worked there, Bell Labs’ suburban facility provided its employees with airy lunchrooms and sunny lounges.

ohio historical societ y

America’s first high-tech campus: General Electric’s Nela Park, outside Cleveland

h å k a n d a h l s t r ö m / c r e at i v e c o m m o n s

That splendid isolation—along with the extraordinary resources the AT&T monopsony was able to lavish on its researchers— yielded brilliant results. Within a decade of the move, Bell Labs had produced the transistor and reinforced the image that the suburbs were the place for engineering-intensive industry to be.

By 1962, the whole operation moved into a midcentury analogue to Apple’s silver spaceship: a stunning glass-encased showplace designed by Eero Saarinen in Holmdel, New Jersey, whose sprawling and sleekly modern design aimed to maximize interaction and collaboration.

Of course, by that point, the suburbs were becoming the place where most everyone wanted to live and work. Giant corporations like General Motors joined AT&T in building elaborate suburban showplaces for industrial research.

Companies of all sizes and temperaments became part of the suburban exodus of the 1950s and 1960s, lured by cheap land and a cornucopia of tax breaks.

The same things enticed residential developers to plow up thousands of suburban acres and build millions of homes for families, rich and not-so-rich. Yet the booming postwar suburbs were not only a magnet but also a means of escape, separation, and segregation.

Through means legal and extralegal, developers, governments, and homeowners kept out most African Americans and people of color.

All this happened amid a huge boom time for tech, thanks in large part to the Cold War military-industrial complex. Along with turning little start-ups into million-dollar companies, public spending remade American economic geography, funneling resources, production, and an army of white-shirted and crew-cut engineers to defense hubs on the West Coast and in the Sunbelt.

The military further encouraged suburbanization of its contractors because of civil defense anxieties. Brochures given to prospective contractors asked, “Is Your Plant a Target?” and noted the military’s preference for

Oracle's headquarters in Redwood City, California

working with “dispersed” industry—dispersed in suburban areas at a safe distance from the central cities considered to be ground zero for Soviet missile attack. What’s more, the topsecret nature of a lot of this government work demanded isolation and privacy, far away from the prying eyes of curious passersby.

Even companies that didn’t rely as heavily on defense work found urban life impractical.

Crowded with people and filled with aging commercial real estate, cities became increasingly challenging places to build the high technologies of the computer age. The noise and vibrations of Lower Manhattan had disturbed Bell Labs’ experiments with delicate instrumentation before its move to Murray Hill. The first digital computer maker, Univac, started up in a ramshackle storefront in downtown Philadelphia that grew so hot when the roomsized behemoth was running that engineers had to strip down to their underwear. In the suburbs, companies could find the large floor plans and air conditioning they needed, not to mention real-estate prices that suited young companies with shoestring budgets.

Of course, not every suburb became a high-tech hub. The one that became the capital of them all—and the aesthetic and cultural model for suburban tech everywhere—grew

30 miles south of San Francisco in a fertile valley known prior to the 1950s mostly for its prodigious fruit harvests and its middling but remarkably wealthy private university.

By the time Silicon Valley got its snappy nickname in 1971, Stanford had turned into a research powerhouse and built a research park of its own, as the region became a showcase for a particularly Californian high-tech style.

Over at Hewlett Packard, founded by two Stanford graduates in 1939, executives traded corner offices for cubicles, everyone wore shirtsleeves, and managers and employees ate lunch together al fresco and played horseshoes on the lawn out back. By the early 1960s, national newspapers were talking about the “luxury trend in plant design” emerging in Northern California, where “glass and greenery dominate.”

A decade later at Xerox PARC, the engineers who would be instrumental in developing the personal computer and office networking held meetings in beanbag chairs and pulled allnighters playing video games. Ten years after that, East Coast reporters descending on Silicon Valley to chronicle the personal-computer boom raved about the perfect climate but decried the relentlessly beige, low-rise architecture and “the opaque veil of pink-brown smog” that hung over it all.

The dot-com boom of the late 1990s mag-

Winter 2016 The American Prospect 41

nified Silicon Valley’s problems of too little housing, too many cars, and too few options for people without millions in the bank. But little was done to reorient the industry, and a new generation of tech companies built grand suburban campuses of their own.

Enterprise software giant Oracle erected a cluster of gleaming blue-glass towers ringing huge fountains that, in an echo of Nela Park, became extravagantly lit up at night. In Seattle, Microsoft engulfed the small suburban community of Redmond, creating a sprawling campus of low-rise buildings interspersed with soccer fields and parking lots. Then Google took over a Silicon Valley campus built near a former garbage dump to create the mother of all tech paradises, the Googleplex, where the company provides free food, massage rooms, and bathrooms with heated toilet seats.

As the tech industry globalized in the 1990s and 2000s, the suburban, high-amenity tech campus went global as well. Builders created luxury “IT parks” on the far outskirts of cities in India and China, distributing glossy brochures to prospective tenants that showed techies playing soccer and lounging on the grass. Life in a suburban tech park, declared one, was “a unique lifestyle statement.”

Technological needs no longer demanded such spacious quarters. Employee demograph-

42 WWW.Prospect.org Winter 2016

ics were changing, as more young techies preferred to live in the urban neighborhoods of San Francisco, Boston, Bangalore, or Austin rather than out in the suburbs, near work. But tech’s commitment to the self-contained, totalimmersion campus remained.

This was partly from habit. But it also was because it yielded results. Having everything and everyone in one place meant that employees worked more closely together and worked longer hours (why leave for dinner if you have free food?). It helped retain talented workers in a market notorious for frequent job-hopping.

And—just like Nela Park’s manorial estate— it was a terrific PR tactic. It sent a message that these were different kinds of companies.

They were places where people worked hard, and played hard. They weren’t evil, old-style corporations. They were passionate, happy, and building the future.

Then things started to change. As com-

puters shrank from desktops to smartphones, technology companies started to migrate to denser urban settings. The real-estate costs that had kept tech out of high-cost, crowded places no longer mattered so much. Companies building apps did not need as much space as ones that build computers. Server rooms moved to the cloud. Fast coffee-shop Wi-Fi replaced

r e n d e r i n g b y n b b j c o u r t e s y a m a zo n & s e at t l e d e s i g n r e v i e w b o a r d

Amazon's biospheres are now under construction in Seattle.

hardwired networks. The cost of starting up fell from millions of dollars to only a few thousands.

What’s more, in a white-hot tech market with a shortage of top engineering talent, being in a cool neighborhood helped with recruitment and retention.

So starting around the turn of this century, tech began to come back to the cities it had left six decades earlier. Even companies that retained their suburban headquarters opened engineering and design offices in city neighborhoods, and redesigned their campuses to look less like parks and more like the Main Streets of a very hip, very cosmopolitan small town.

The pattern of exodus and repatriation came full circle when Google moved into a block-long building in Chelsea—just half a mile up the West Side from the building that Bell Labs had abandoned six decades before. Right about the same time, the iconic Saarinen-designed Bell Labs facility in Holmdel closed down. After a fruitless search for a new marquee tenant, the company (reconfigured as Alcatel-Lucent) has now embarked on a project to urbanize the abandoned suburban masterpiece into a mixed-use “town center” called Bell Works: “a rich and diverse community of forward-looking companies in a space that blurs the line between work and play, past and future, imagination and reality.”

Cities have gotten undeniable boosts from the arrival of tech. Municipal coffers have swelled as new companies and well-paid techies clamor to get into hot neighborhoods.

San Francisco closed out 2014 with a $22 million surplus; in Seattle, 25 percent of sales-tax receipts currently come from construction.

Even more, the millennial demographic employed by these kinds of companies has created strong market demand for the walkable, transit-oriented development beloved by urban planners since Jane Jacobs first wrote about the pleasures of “the sidewalk ballet.” Yes, some of these tech employees are young and transient, and not very engaged in civic life. But not everyone in tech is a 25-year-old brogrammer.

s e a n pav o n e / i s t o c k

There are singles and couples and families who are putting down roots: patronizing local businesses, volunteering in the community, sending their children to neighborhood schools.

The software designer Eric Raymond famously created the metaphor “the cathedral and the bazaar” to contrast the closed, cathedral-like worlds of proprietary software with the free, iterative open-source world. We can also use this as a way to think about tech and the city.

On the one hand, nowhere but in a dense, diverse city can you get the serendipitous encounters and mingling of people and ideas that you get in urban places. From ancient Mesopotamia to the modern Bay Area, the places where innovation grew were nearly always hubs of regional, national, imperial, or global trade and communication networks.

This is the idea of the city as grand bazaar, a mixing bowl of people and cultures and influences that fuel creativity and ingenuity.

But while you need chaos and serendipity for new ideas to be generated, you also need some cloistering and hard work to bring them into the world. So from the School of Athens to the modern university, institutions and places have been created that allow solitude and the cloistering of like-minded people. They are, in effect, cathedrals.

Over more than 100 years, American hightech companies have chosen to be cathedrals rather than bazaars. Propelled by technological needs, practicality, and a deeply rooted set of ideas about how environments shape productivity, technology decamped to selfcontained, suburban places. They built their own cathedrals; they rejected the bazaar.

The technology now has changed, and demographic preferences have changed, but the ideology hasn’t—yet.

The way to get there is to have a clearer-eyed understanding of what sorts of workplaces foster innovation and creativity. Tech executives firmly believe the campus model works because they look at their competitors and their predecessors. But what they don’t take into account is the many reasons that Bell Labs and Hewlett Packard and Microsoft and others ended up in the suburbs in the first place. Some of those reasons simply don’t exist anymore.

Google's Chelsea outpost in New York City

To be active and productive urban citizens, tech companies need to break out of their heads-down, it’s-all-about-the-technology attitude.

The design principles behind both suburban and urban tech campuses—open work spaces, keeping people on one floor, all the amenities you need in one place—are so strongly held by so many tech executives because they believe that their predecessors succeeded as a result of inhabiting these kinds of spaces. The historical evidence simply doesn’t bear this out.

When it comes to the innovative process, the longer history indicates that you need the cathedral and the bazaar. It demands population densities and ways to make connections across diverse sets of people. One reason for the success of Silicon Valley (even though it is a suburb) is that it has consistently drawn so many people with different skill sets into a geographically concentrated area. And yes, innovation also requires places to think, experiment, and take risks. But these places don’t have to be protective bubbles.

There are ways both of these things can happen in American cities, if urban leaders and techies are willing to meet one another in the middle. The apps of the on-demand economy are not responsible for San Francisco’s housing

shortages or the long wait for the bus in Seattle.

They have made these problems more visible.

Cities and their taxpayers have to recognize that the only true fix will be filling the deep holes in public infrastructure that tech apps have exploited so successfully.

But by the same token, tech companies need to break out of their heads-down, it’s-allabout-the-technology attitude that has kept them from being more active and productive urban citizens. The firms of Silicon Valley are no longer obscure little clusters operating off to the side of the American economy. They are now some of the richest and most powerful companies in the world, with billions of people using their products on a daily basis.

They need to come out of their cathedrals and into the streets.

Margaret O’Mara is an associate professor of history at the University of Washington. She is the author of Cities of Knowledge: Cold War Science and the Search for the Next Silicon Valley and is currently working on a book about the politics and culture of the high-tech industry.

Winter 2016 The American Prospect 43

Vultures Over Puerto Rico How hedge funds deepen Puerto Rico’s debt crisis B y D av i d D aye n

T

r aul rosa / istock

‘‘

his is a distress call from a ship of 3.5 million American citizens that have been lost at sea,” Puerto Rico Governor Alejandro García Padilla said on December 1, begging the Senate Judiciary Committee to help protect his homeland from an unspooling disaster. After issuing bonds for over a decade on everything not nailed down, Puerto Rico now carries $73 billion in debt, a sum that García Padilla had termed “not payable” in June. Successive governments have enacted punishing austerity measures to service the debt, despite a stubbornly depressed economy and poverty rates near 50 percent.

Now, after defaulting on smaller loans, it’s likely that much of the $957 million due January 1 will go unpaid, bringing more chaos and suffering at the hands of Puerto Rico’s creditors.

In many ways, the Puerto Rico situation is sui generis, resulting from a patchwork of laws and obligations on an entity that is not really a country and not really a U.S. state. But looked at another way, Puerto Rico is just the latest battlefield for a phalanx of hedge funds called “vultures,” which pick at the withered sinews of troubled governments. In Greece, Argentina, Detroit, and now Puerto Rico, vultures have bought distressed debt on the cheap, and then used coercion, threats, and legal action to secure a massive windfall, compounding the effects on millions of citizens.

The legal wrangling masks an irony: as creditors demand that Puerto Rico pay back everything it owes, hedge fund managers have used the island as a tax haven to avoid their own responsibilities. Wealthy investors don’t just want to make money in Puerto Rico; they want to use their leverage to effectively buy an island playground.

Puerto Rico has labored under colonial rule since Christopher Columbus arrived in 1493 and claimed it for Spain. After the Spanish-American War in 1898, the United States acquired Puerto Rico in the Treaty of Paris, and ruled it as a territory. Since then, Puerto Ricans are considered natural-born citizens, but must abide by U.S. laws without a voting member in Congress.

For decades, the island was a jewel of the Caribbean, with the highest per capita income in Latin America. But in his December 1 testi-

mony, García Padilla pinpointed the beginning of Puerto Rico’s troubles: 1996, when a Republican Congress and the Clinton administration agreed to a ten-year phase-out of Section 936, a tax exemption for U.S. manufacturing on the island. Clinton supported it as a deficit reduction measure, promising it would save the federal Treasury $10.5 billion over ten years.

But Congress did not replace Section 936 with an economic development plan for Puerto Rico to offset the impact.

Nelson Torres-Ríos, an attorney and professor at the City University of New York’s Hostos Community College, believes that letting Section 936 go was a political gambit. Puerto Rico’s political parties are aligned with options for future status, with pro-commonwealth and pro-statehood parties being the dominant factions. In the 1990s, the pro-statehood party then in power thought shedding Section 936 would eliminate the economic viability of the commonwealth arrangement and increase support for their position.

“In actuality, the opposite happened,” says Torres-Ríos. Washington had no interest in taking on a 51st state, especially one in economic crisis. In an era of massive offshoring to destinations with even cheaper labor, Section 936’s expiration led to recession, as manufacturers fled Puerto Rico, leaving few job-creating industries behind. According to World Bank data, after Section 936 was established in 1976, Puerto Rico enjoyed 28 out of 29 years of economic growth. Since 2005, as the tax credit faded away, the island has experienced negative growth eight out of ten years, with its gross national product falling 10 percent.

The recession, combined with the broader economic downturn (Puerto Rico, like warmweather U.S. states, experienced a housing bubble and collapse), exposed structural problems derived from the island’s unique status. Though Puerto Ricans pay the same payroll taxes as mainland workers, the island receives sharply lower reimbursement rates for Medicare and Medicaid. Its poorest citizens are ineligible for the Earned Income Tax Credit. A monopolized power company derives nearly all its electricity from diesel fuel, despite trade winds and sun being the most plentiful resources on the island. With few exploitable natural resources,

Puerto Rico has to import oil (giving it some of the highest electricity rates in the United States and loads of unpaid bills) and most of its goods.

And a 1920 law called the Jones Act restricts cargo carriage between two U.S. ports with a foreign-flagged ship. This means that foreign ships carrying U.S.-bound goods must stop at a U.S. port, transfer goods headed to Puerto Rico to a separate U.S. ship, and send them along.

These shipping costs result in an exorbitant cost of living. The Virgin Islands, a U.S. territory near Puerto Rico, have an exemption from the Jones Act; Puerto Rico doesn’t.

As unemployment soared and the economy crashed, Puerto Rico papered over problems by issuing debt. Wall Street asset managers and investors egged them on, because Puerto Rican municipal bonds are free from federal, state, and local taxes. Usually Americans must reside in the state whose bonds they purchase to get “triple tax-exempt” status. But anyone from Arizona to Maine can buy triple tax-exempt Puerto Rican bonds.

Wall Street also covets the bonds because of a 1984 congressional amendment denying Puerto Rico’s municipalities access to Chapter 9 bankruptcy protection. Plus, under the territorial constitution, general obligation debt gets a senior position above virtually all other items in the budget. So investors receive all the upside benefit of tax-free bonds with little downside risk—except, of course, the risk of default.

The commonwealth’s government created 18 different vehicles to issue Puerto Rican debt. They linked bonds to nearly every available revenue source, from the Highway and Transportation Authority to the Electric Power Authority (PREPA) to the Aqueduct and Sewer Authority to a government-owned corporation called COFINA , which links bonds to sales-tax receipts. “They [the government] haven’t come up with any solutions besides issuing more debt for the past 15 years,” says Carla Minet, a reporter with the Center for Investigative Journalism in Puerto Rico.

Public debt increased every year since 2000, according to a government report from former World Bank Chief Economist Anne Krueger.

Debt levels expanded from $25 billion in 2000 to $73 billion today, totaling more than 100 percent of the island’s gross national product.

Hedge

Hog$

Winter 2016 The American Prospect 45

One-third of all Puerto Rican revenue now goes to debt service.

To pay back the debt, Puerto Rico has delayed tax refunds and payments to suppliers, cut back on health care and public transportation services, fired 30,000 public-sector workers, closed 100 schools, increased the sales tax by more than 50 percent, and even forced community credit unions to take IOUs in exchange for cash.

The poverty rate on the island is around 45 percent, and only 40 percent of the labor force has a job. Trapped in an economic death spiral, the tax base has eroded, amid massive out-migration to the U.S.: Puerto Rico has lost 300,000 citizens since 2006. “In Puerto Rico today, the hardest thing to find is a suitcase,” says Eric LeCompte of the faith organization Jubilee USA. “They can’t keep them on the shelves.”

Puerto Rico’s creditors initially consisted

of traditional municipal bond investors; mutual fund managers like Oppenheimer and Franklin Templeton remain major bondholders (one Franklin Templeton fund is actually called the “Opportunistic Distressed Fund”). But starting in December 2012, credit rating agencies began to downgrade Puerto Rican debt, leading to a fire sale, with many investors heading for the exits.

For the last year, Puerto Rico has been locked out of international credit markets. Benchmark bonds currently trade as low as 30 cents on the dollar, with interest rates up to 11 percent.

This was when “vulture” hedge funds like Fir Tree Partners and Appaloosa Management and Och-Ziff made their move. “They started to buy debt on the secondary market at 30, 40, 50 cents on the dollar, and tried to get a complete dollar [repayment] plus interest,” says Manuel Natal, an at-large member of the Puerto Rican House of Representatives. “They see Puerto Rico as an opportunity for huge earnings, just like in Greece.” Poor performance by other recent hedge fund plays makes them even more desperate for a payday from Puerto Rico.

Hedge funds also became the sole investors willing to lend to the commonwealth, making up nearly all the participants in the 2014 sale of $3.5 billion in low-rated, 8.7 percent general obligation bonds, the biggest U.S. municipal junk bond sale in history. Hedge funds were prepared to lend even more to Puerto Rico in the summer of 2015, until the governor warned

46 WWW.Prospect.org Winter 2016

about inability to pay. But vulture funds DoubleLine Capital and Avenue Capital were still buying up discounted debt as recently as November.

Jeffrey Gundlach of DoubleLine recently called Puerto Rican debt his “best idea” for investors.

The situation is similar to vulture investors who bought Argentina’s discounted debt and tried to force repayment. Argentina refused, despite a U.S. court order, creating a stalemate.

But a newly elected conservative government in Argentina will likely renegotiate a debt deal, giving the vultures their windfall of close to full valuation of debt bought for pennies on the dollar.

Unlike Argentina, Puerto Rico has scant opportunity to avoid its creditors. Because of the constitutional guarantee on general obligation bonds, vulture funds could secure a claim

Trapped in an economic death spiral, Puerto Rico’s tax base has eroded, amid massive outmigration to the U.S. mainland. on Puerto Rican revenues. The commonwealth must follow orders from the U.S. judiciary, where vulture funds could appeal to recoup their money. Puerto Rico’s municipalities and public corporations cannot access Chapter 9 bankruptcy, and they have no alternative lender available to sovereign nations, like the International Monetary Fund. Talk of a federal bailout elicits laughter in Washington. And an outof-court settlement would require wide participation from creditors; even if vulture funds control a fraction of the debt, they can hold out for better terms and upend negotiations. Marc Lasry of Avenue Capital recently said about Puerto Rican debt, “It’s hard to get hurt now.”

It’s nearly impossible to get good information about the magnitude of this scheme; hedge funds don’t have to report their bond purchases to the Securities and Exchange Commission, whether bought directly from the issuer or traded on the secondary market. In August

2014, the Fitch ratings agency claimed hedge funds owned 24 percent of the debt; a June article in Fortune put the number closer to 50 percent. “This is a $3 trillion industry that operates largely in the shadows,” says Democratic Representative Nydia Velázquez of New York, who has introduced legislation to bring more transparency to hedge fund operations.

Even as hedge funds became a fixture on the island, meeting with lawmakers and suggesting policies to free up funds for debt repayment, their names remained secret. “We started doing interviews with public officials and legislators,” says journalist Carla Minet, whose Center for Investigative Journalism devoted several months to identifying the hedge funds. “They said, ‘We have been meeting with them, we had them in our offices.’ But when you ask who they were, they say they couldn’t recall their names.”

Minet and her colleagues discovered that the Puerto Rican government contracted a private company called BondCom to identify debt holders, but the government refused to give up the information. The Center for Investigative Journalism sued the government in July to release the names; the case is under appeal.

In the meantime, between press reports, offthe-record conversations, and an inadvertently released document that named all PREPA (the electric power utility) bondholders, the center verified 36 firms with some share of Puerto Rican debt. Since then, additional media reports uncovered eight others involved in Puerto Rico, for a total of 44 known firms.

Incredibly, 22 of the center’s 36 named hedge funds had additional holdings in other distressed countries and cities, like Argentina, Greece, and Detroit. Three hedge funds—Aurelius Capital Management, Monarch Alternative Capital, and Canyon Capital—bought debt in all four cases.

So lending to Puerto Rico is no accident; it’s an investment strategy. Michael Novogratz, formerly of Fortress Investment Group, active in Puerto Rico, Greece, and Argentina, calls the countries they invest in “so bad, they’re good.”

Several informal creditor groups have formed, based on the debt they hold. The Ad Hoc Group of reportedly 34 hedge funds owns about $4.5 billion, mostly in constitutionally guaranteed general obligation bonds.

The PREPA Group has holdings in the Electric Power Authority. There are also groups for

r o b y va n n u c c i / i s t o c k

the Goverment Development Bank and bondholders in COFINA . Three vulture funds have acquired almost all of the debt of the Aqueduct and Sewer Authority, believing that high water costs on the island assure profits.

In public, the hedge funds claim that Puerto Rico’s problems are manageable as long as they repay the debt. “It’s a willingness to pay problem, not an inability to pay problem,” Knighthead Capital Management co-founder Tom Wagner recently told Bloomberg. In fact, Puerto Rico could pay only by destroying what’s left of its economy.

Behind the scenes, creditors have prepared for war. They have hired high-powered law firms, like Davis Polk, Quinn Emanuel, Venable, Gibson Dunn, and Robbins Russell, which won the Supreme Court case on Argentina’s debt. This signaled that the vultures would sue to compel repayment, using favorable debt terms to their advantage.

The PREPA Group successfully overturned a Puerto Rican law that would have allowed public corporations to restructure their debt.

BlueMountain Capital Management, active in the Ad Hoc and PREPA Groups, filed the suit; they hired Ted Olson of Bush v. Gore fame to argue the case. BlueMountain and other firms, including Marathon Asset Management and Angelo, Gordon & Co., have also lobbied to stop Congress from allowing Puerto Rican municipalities to access Chapter 9 bankruptcy to restructure a portion of their debt.

Ad Hoc Group leaders include Aurelius Capital Management, one of the largest holders of general obligation bonds. Founder Mark Brodsky has been nicknamed “The Terminator,” because he just keeps coming after distressed debt. Brodsky was one of the biggest holdouts in Argentina negotiations, and made a side deal with Ukraine that paid back his bonds at 100 percent. With skills honed by working with noted vulture fund manager Paul Singer, Brodsky is known for his unyielding approach, refusing to compromise or even negotiate.

The vultures have deep political ties, amplifying their voice in Washington. Most hedge fund managers are major donors to both parties. Former Obama Treasury official Lee Sachs runs an asset management firm funded by BlueMountain; one of their lobbyists is Republican ex-Representative Connie Mack.

Hedge fund manager John Paulson’s investments in Puerto Rico include Banco Popular, the island’s largest bank.

Obama/Clinton economist Larry Summers used to work for D.E. Shaw, a member of PREPA Group and Ad Hoc Group. Chelsea Clinton worked previously at Avenue Capital, which recently walked away from negotiations. Chris Christie’s wife worked for Angelo, Gordon & Co. Centerbridge Partners owner Mark Gallogly sat on President Obama’s Economic Recovery Advisory Board. Summers, now away from D.E. Shaw, ominously referenced the hidden power of the hedge funds in The Washington Post, arguing that the Puerto Rican case represents “an important test of whether Washington is, as some allege, controlled by financial interests.”

Puerto Rico has already defaulted once, missing a $58 million payment on Public Finance Corporation bonds in August. A more consequential $354 million payment on December 1 included constitutionally guaranteed Government Development Bank bonds.

Puerto Rico made the payment, but only after an executive order redirected money earmarked for $7 billion in non-guaranteed public corporation bonds, including those for highway, general infrastructure, and the convention center. The January 1 payment will almost certainly not be paid in full. “In simple terms we have begun to default on our debt,” García Padilla told the Senate Judiciary Committee on December 1.

Several options exist to resolve the Puerto Rican crisis. Clearly, a bankruptcy write-down of unpayable debt—the remedy available to distressed corporations via the more familiar

Chapter 11—is the sensible solution for Puerto Rico. That way, the pain would be spread around, bondholders would take some losses, and the island could begin economic recovery.

But this is the one solution vulture hedge funds have united against.

The White House road map for Puerto Rico identifies multiple congressional actions, including giving municipalities and public corporations Chapter 9 bankruptcy authority, extending the Earned Income Tax Credit to Puerto Rican citizens, equalizing Medicaid and Medicare treatment, and instituting strong fiscal oversight. But while Democrats support the changes, congressional Republicans have been unmoved. They have mostly stressed the need for budget transparency in Puerto Rico as a prerequisite to action, in contrast to the complete lack of transparency on the part of the creditors. “In Congress, we’re hearing more posturing than solutions,” says Eric LeCompte of Jubilee USA .

Despite the White House’s focus on Congress, many believe they could use executive action or Treasury Department intervention to compel negotiations. Senator Elizabeth Warren raised this in an October hearing, relating the situation to the 2008 federal bank bailout: “I urge Treasury to be just as creative in coming up with solutions for Puerto Rico as it was when the big banks called for help.” In a December 9 speech at the Peterson Institute, Antonio Weiss, a counselor to the Treasury Department who is coordinating federal efforts on Puerto

Winter 2016 The American Prospect 47

The Vultures Are Circling

Hedge funds active with distressed public entities

fund manager John Paulson. The Advisory Committee of the Federal Reserve Bank of hedge funds firms Puerto Rico Greece Argentina detroit New York includes managers of five funds Aurelius Capital with bond holdings in Puerto Rico.

Monarch Alternative Capital Canyon Capital Puerto Rico did catch a break on Marathon Asset Management December 4, when the Supreme Court Appaloosa Management LP agreed to hear a case that could allow the Perry Capital LLC Third Point commonwealth to restructure some debts.

Fir Tree Partners The Puerto Rican government adopted Knighthead Capital Management a bankruptcy law for its public corporaFortress Investment Paulson and Company Inc tions in 2014, but bondholders sued, arguFarallon Capital Management ing that federal restrictions on Chapter 9 Och-Ziff Capital Management Group preempted the territorial statute. Lower Davidson Kempner Capital Redwood Capital courts agreed, but the Supreme Court will Centerbridge Capital take the appeal. Conservatives who conScoggin Capital trol the Court must choose between comAvenue Capital Group Brigade Capital Management peting ideological imperatives: support Blue Mountain Capital Management for federalism and a weak central governDoubleLine Capital ment, or support for creditors over debtStone Lion Capital Partners Maglan Capital ors. Justice Samuel Alito recused himself MatlinPatterson from the case, because he owns tax-free Highbridge Capital Management municipal bond funds from Puerto Rico Apollo Schoenfeld Asset Management creditor Franklin Templeton.

Arrowgrass Capital Partners Without a federal response, the only Fundamental Advisors option is direct voluntary negotiations Meehan Combs Candlewood Investment Group between Puerto Rico and its creditors.

Angelo Gordon and Co. While the Supreme Court threat of debt Sound Point restructuring could push bondholders Carmel Asset Management D.E. Shaw Galvanic to the bargaining table, so far talks have Pine River Capital Management been scattered and unproductive. After a Autonomy Capital year of negotiations, PREPA announced a Claren Road Asset Management Fore Research & Management debt exchange on $5.7 billion in bonds in Solus Alternative Asset Management November, with creditors taking a 15 perArchview Investment cent “haircut” (capital loss) in the largest MacKay Shields Principal Global Investors municipal bond restructuring ever. But New York Capital Management this has not been consummated because data courtesy Joel Cintron and Carla Minet, Center for Investigative Journalism, Puerto Rico / Bloomberg / The New York Times / LittleSis.org. bond insurers are still deciding whether to insure the new bonds, allowing them to achieve the required investment-grade ratRico, said the administration has convened an interagency council to develop a solution, but ing. A similar debt exchange offer to consolidate that “resolving Puerto Rico’s crisis requires general obligation, COFINA , and Government congressional action.” With each branch of gov- Development Bank debt into a new “superbond” ernment insisting that the other help Puerto yielded some positive responses from hedge Rico, the likely outcome is no help at all. funds. But COFINA bondholders, secured by Many activists believe the Federal Reserve sales-tax revenues, warned that any deal involvcould extend emergency financing to Puerto ing their funds would violate creditor rights.

The difficult discussions reflect divergent Rico. Mindful of this, hedge funds have strengthened ties with former Federal Reserve officials. creditor incentives. Mutual funds like Franklin Ex-Fed Governors Donald Kohn and Jeremy Templeton and Oppenheimer, which together Stein are advising Alliance Partners and its main own $10.8 billion in Puerto Rican debt, bought investor BlueMountain Capital, respectively. the bonds at 100 percent and want to limit any Former chair Alan Greenspan advises hedge losses, whereas vulture funds with discounted

48 WWW.Prospect.org Winter 2016

debt have more wiggle room to extract profits.

Bond insurers like Assured Guaranty, National Public Finance, and Ambac cannot afford payouts on a broad-based default; when Governor García Padilla called the debt “not payable” in June, bond-insurer stocks sunk. And hedge funds have different strategies. Some want to force a haircut on less-senior public corporation debt, to free up money to pay general obligation bonds. Others with larger holdings in public corporations fight any changes, even attempting to secure side deals as a condition for allowing restructuring to advance. “Everyone’s out for themselves. … They don’t really care who they take advantage of as long as they make a profit,” says Eric LeCompte. This, of course, is why bankruptcy was invented, to reconcile divergent interests in a general settlement.

The hedge funds’ main plan for a resolution appears to be sticking it to the island’s citizens.

In July, they hired former IMF official Claudio Loser to write a paper suggesting that Puerto Rico can fix the debt crisis without defaulting.

The recommendations in the paper included firing teachers, increasing regressive sales taxes, rolling back labor laws like overtime and vacation benefits, slashing the minimum wage, and privatizing public assets. Loser threatened lawsuits and “a long period of uncertainty” for Puerto Rico if they tried to avoid paying their debts. Future access to financing for the island may depend on crushing austerity today.

In an October hearing, Senator Bernie Sanders addressed a more obscure option for Puerto Rico. “I’ve heard that some of the debt was incurred in an unconstitutional way,” Sanders noted, echoing a sentiment for nullifying some debt that has been proposed by academics and a handful of Puerto Rican lawmakers. This may sound far-fetched, but it rests on solid constitutional ground.

Puerto Rico has two constraints on how it can spend: a balanced-budget amendment and a debt limit. Debt payments must not exceed 15 percent of internal revenues in a given year. In 2016, the government projects that number to reach 42 percent. This resulted from off-budget public corporations that issue bonds indirectly, paid for with government revenue. For example, in 2006, to resolve a budget crisis between the pro-commonwealth and pro-statehood parties,

the government created COFINA , and used it to issue debt against the island’s new sales tax.

The government gave itself away by calling the COFINA bonds “extra-constitutional debt.”

An 1885 U.S. Supreme Court ruling in Litchfield v. Ballou found that bonds created in violation of a municipal debt limit were unenforceable, and did not have to be repaid.

Adherents of this theory aren’t merely depending on century-old jurisprudence; Litchfield v. Ballou was actually trotted out recently, in Detroit. Creditors ended up losing $1.2 billion in an out-of-court settlement on debt similarly issued to skirt that city’s debt limit. At the least, raising the nullification issue could give Puerto Rico more leverage with the creditors. “I would urge the Puerto Rican government to examine this issue,” says U.S. Representative Velázquez.

Puerto Rico Representative Manuel Natal has been pushing the government to use the unconstitutionality argument to nullify at least the $15.2 billion in COFINA debt, if not more.

“We believe 72 to 75 percent of the outstanding debt is unconstitutional,” Natal says. But while García Padilla agreed with Sanders in Senate testimony that unconstitutional debt should not be repaid, a November 6 government financial report said they have no reason to believe there was any violation, barring an investigative audit.

Natal actually passed a bill through the Puerto Rican legislature in July, signed into law by the governor, authorizing a full audit.

Since then, García Padilla has only installed one of nine audit committee members, despite being required to name them within ten days.

Natal attributes the delay to Wall Street pressure. “You can see them in the halls of the Capitol building; you can see them in the meetings with the executive branch,” Natal says. “Their presence is everywhere.”

Attorney Nelson Torres-Ríos was invited to a panel discussion on the island’s finances at a meeting of the Puerto Rican diaspora in Orlando in October. He was told not to talk about constitutionality. “A lot of people are afraid to go down that route; people [in the government] may have been involved in the creation of COFINA , there would be a few arrests,” Torres-Ríos says. He decided to bring up constitutionality on the panel anyway; observers claim that his microphone was cut. But one panelist, Judge Steven Rhodes, who oversaw the Detroit

bankruptcy and now advises the Puerto Rican government, responded that debt nullification was a reasonable strategy that improved the terms of settlement in Detroit. Despite this, the government refuses to address the issue.

“There’s blame to go all over the place,” Torres-­R íos concludes.

While hedge funds coax, threaten, and

demand Puerto Rico meet its obligations, they’ve figured out how to use the island to shirk their personal obligations. Puerto Rico’s idea of economic development in recent years has been to bribe the wealthy to come to the island. Acts 20 and 22, passed in 2012, tax corporate profits on hedge funds at just 4 percent, and grant personal tax exemptions on

A write-down of unpayable debt— the remedy available to distressed corporations—is the sensible solution for Puerto Rico. dividends, interest, and capital gains. Because Puerto Rico is a U.S. territory, Americans seeking the benefits don’t have to renounce their citizenship; they just have to spend over half their time on the island.

More than 200 traders have already moved to Puerto Rico, and the biggest evangelist for this scheme is hedge fund manager John Paulson, who has called the island “the Singapore of the Caribbean.” Paulson’s investments in Puerto Rico include Banco Popular, the island’s largest bank, and more than $1 billion in beachfront resort property, including the Condado Vanderbilt, the La Concha Renaissance, and the St. Regis Bahia. Paulson & Co. has expressed interest in constructing additional resorts on what are currently parking lots.

Other funds have followed Paulson’s lead.

Stone Lion Capital, which raised $500 million to invest in Puerto Rico, has considered opening an office in the tax haven. Fortress Invest-

ment Group already has an investment company there. Knighthead Capital’s Tom Wagner told Bloomberg, “Puerto Rico is really an amazing untapped resource that should be attracting a lot of capital.” Real-estate agents claim there are not enough high-end properties to satisfy demand from the new millionaire invasion. Financial interests are also trying to purchase the government. “They’re contributing to political campaigns of people that don’t believe in Chapter 9, don’t believe in restructuring the debt,” says Natal. “That’s the last piece of the puzzle.”

As the hedge funds move in, Puerto Rico’s citizens have moved out. “More people have left Puerto Rico over the last two years than all of the 1980s and 1990s,” says LeCompte of Jubilee USA . Austerity measures hurt the poor much more than the nouveaux riches. And this suffering creates a vicious cycle: Puerto Rican out-migration erodes the tax base and causes a severe talent drain, increasing desperation. “A doctor a day has left the island,” says TorresRíos. “I was at an emergency room, someone said ‘I’ve been waiting 13 hours.’ There’s no staff to handle it.”

Washington calls the situation in Puerto Rico a humanitarian crisis. But the crisis has been roiling for close to two decades, a function of the island’s colonial status. Without some change in the dynamic, political power will shift even further from citizens to hedge fund expats. “Bringing in millionaires from the U.S. that create three jobs and get all these benefits is not going to work,” says Minet of the Center for Investigative Journalism.

Even if Congress won’t fix Puerto Rico now, they might change their opinion later. Puerto Ricans are U.S. citizens, eligible to vote as soon as they arrive in America, and 850,000 have already settled in the swing state of Florida.

Outrage at the abandonment of their homeland is sure to reverberate at the ballot box. As one labor leader told Democracy Now!’s Juan Gonzalez: “We’re planning to register 200,000 more Florida Puerto Ricans in the next six months. Then we’ll see if they ignore us.”

David Dayen is a contributing writer to Salon.com. His forthcoming book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud will be published in May 2016.

Winter 2016 The American Prospect 49

Black Culture & History Matter It took 150 years after America officially abolished slavery to get a national museum on the black experience.

B y K ir st en Mul len

50 WWW.Prospect.org Winter 2016

T

michael barnes / smithsonian

he new National Museum of African American History and Culture occupies a prominent space on the National Mall, between the National Museum of American History at 14th Street NW and the base of the Washington Monument. When the new museum opens in September 2016, it will be America’s first national museum dedicated to the full breadth of the black experience, and the largest in terms of size, scope, aspirations, capacity, and budget. Seen from the corner of 14th Street and Constitution Avenue, the 380,000-square-foot structure, a striking sculptural bronze-colored edifice in a sea of white Indiana limestone government buildings, blocks the view of the Washington Monument—as if to declare, Before you celebrate America’s founding president, pause to reflect on the Republic’s great omission.

The fact that it took more than 150 years after Emancipation for this museum to open reflects a complex story of America’s tangled understanding of its racial history—compounded by the challenge of raising money for its support. America, uniquely among the world’s wealthy nations, finances its great museums substantially with private donations.

Though whites as well as blacks are free to contribute, the tacit assumption has been that black philanthropy would provide the bulk of the museum’s support. And here, the gross disparity in black wealth and white wealth reverberates, both in the under-funding of black institutions and in the delicate narrative dance needed to attract complementary government and white philanthropic help.

After the Civil War, many black museums did manage to get established. The Hampton University Museum, the nation’s first institutional repository of African American history, art, and science, was founded in 1868 and is still going strong. Hampton itself was established by the Freedmen’s Bureau. According to Samuel W. Black, president of the Association of African American Museums, the first half of the 20th century was a golden age for black collectors: Carter G. Woodson, Arturo Alphonso Schomburg, and Jesse E. Moorland were scholar antiquarians who amassed large collections, which formed the nucleus of library holdings at Howard University (from Woodson

and Moorland) and the Schomburg Center for Research in Black Culture, which became part of the New York Public Library in 1972.

Given limited black wealth, it’s hardly surprising that major black cultural institutions have been heavily reliant on periodic infusions of public funding. The new National Museum (NMAAHC) is no different. In 2003, after decades of extensive debate, Congress committed half of the $500 million needed to pay for the design and construction of the building and the installation of exhibitions, all under the aegis of the Smithsonian Institution. The balance, $250 million, had to be raised from non-federal sources. Annual staff salaries and operations expenses, estimated at $44 million, are to be paid by the Smithsonian.

The NMAAHC is the first major museum to “open” on the web before its physical structure is even built. “We [combined] amazing artifacts” with “technology that will make history accessible,” says the museum’s founding director, Lonnie G. Bunch III. He and his fledgling staff mined archival material and oral history interviews to co-produce interactive shows like “Marian Anderson: Artist and Symbol,” a profile of the celebrated vocalist who gave a free concert in 1939 on the steps of the Lincoln Memorial before a crowd of 75,000, having been barred from the DAR’s Constitution Hall; “Slavery at Jefferson’s Monticello: Paradox of Liberty,” presented at Monticello in partnership with the Thomas Jefferson Foundation; and “Ain’t Nothing Like the Real Thing: How the Apollo Theater Shaped American Entertainment.”

Among the tens of thousands of objects already acquired by the new museum are the tin wallet a freedman fashioned to store his freedom papers for safekeeping, the hymnal that belonged to Harriet Tubman, Nat Turner’s Bible (which underwent an extensive authen-

tication process involving scientists and history scholars), a 77-ton, 80-foot-long restored Southern Railway Jim Crow car from about 1918, a prison guard tower from Louisiana’s notorious Angola prison, and the silver dancing shoes and shimmering skin-tight dresses R&B group En Vogue wore in the video for “My Lovin’ (You’re Never Gonna Get It).”

The museum also has acquired a mother lode of artifacts from Barack Obama’s first presidential campaign—detailed strategy notes; commercially manufactured and handpainted buttons and banners, including a sign that hung in a Falls Church, Virginia, office that declares, “Obama’s not your mama—you have to clean up after yourself”; scripts and campaign literature in various languages; and furnishings from the “children’s center,” chief curator Jacquelyn Serwer told The Washington Post. Materials from the São José-Paquete de Africa, the Portuguese slave ship that crashed with a cargo of more than 400 enslaved bodies off the coast of Cape Town, South Africa, in 1794, have been made available for an initial ten-year loan.

Yet what exactly is the museum’s mis-

sion? The country has long debated how the black experience should be presented to the world, and so has the black community. Many blacks seeking sympathetic white allies believe the only way to tell that story is to present it as a universal experience. In 2014, in his “Address to the Nation on Immigration,” President Obama subscribed to this view. “We are and always will be a nation of immigrants,” he said, delicately sidestepping the fact that most ancestors of African Americans were forced immigrants, not to mention Native Americans whose only migration occurred when they were violently displaced from their homes.

But must the particularities of the African American experience be dissolved or diluted in the process of universalizing it? Must the framing of the black experience become a mechanism for further assimilation? Director Bunch, who began his professional museum career as the founding curator at the California AfroAmerican Museum in Los Angeles more than 30 years ago, walks that tightrope by depicting the black experience as the redemption of the nation’s original ideals. “The African American

Winter 2016 The American Prospect 51

The Museum’s fundraising challenge is

“arguably the largest philanthropic effort in history driven by African Americans,” Black Enterprise magazine declared in 2012. Fund­ raising has been proceeding for more than a decade. To date, the museum has raised 91 percent of its $250 million target, or about $227 million. Of that sum, nearly 100 foundations, corporations, and individuals have donated at least $204 million. The largest gift, $20 million, is a donation from the Oprah Winfrey

52 WWW.Prospect.org Winter 2016

Foundation. The Bill and Melinda Gates Foundation and the Lilly Endowment each gave $10 million, and ten institutions have contributed at least $5 million each.

Winfrey, one of fewer than ten African Americans with a net worth in excess of half a billion dollars, serves on the museum’s 29-member advisory council. Her initial gift of $1 million came in 2007, two years after Bunch was hired. The structure will include a

The museum’s founding director, Lonnie G. Bunch III

state-of-the-art theater with a seating capacity of 350 that bears the media giant’s name.

At least two African American families are among the 13 donors at the $2 million level— Robert L. Johnson of Black Entertainment Television (BET) and of Charlotte Bobcats professional basketball team fame, and Amanda Stafford and her husband Earl W. Stafford, Unitech founder and creator of the People’s Inaugural Project that hosted more than 400 “disadvantaged” citizens at Obama’s 2009 presidential inauguration events. At least $68 million has been raised, $1 million at a time, from corporations, foundations, and 23 family

groups—such as actors LaTanya and Samuel L. Jackson and their daughter Zoe, and Mellody Hobson (Ariel Investments and Dreamworks Animation) and her husband George Lucas (Lucasfilm). Twelve of the 29 members of NMAAHC ’s advisory council have contributed $1 million to the capital campaign.

Like other nonprofits, the museum has created multiple tiers of giving. An Ambassadors program invites personal donations of $5,000 to $24,999, with gifts paid out over a one-to-five-year period. Now numbering 250 members, the group, which is mostly people of color, has raised more than $1 million, says Tasha Coleman, senior manager for donor and board relations.

In exchange for their gifts, Ambassadors are granted special access to the collections and to the education, IT, and curatorial staff, whose job it is to define the aesthetics and logistics behind the exhibitions. They are invited to explore history, generate ideas for research and exhibitions, beta-test exhibits and technology, and share their opinions about contemporary issues. The Ambassadors program also has become a vehicle to bring myriad academics and museum professionals together to share in the excitement of NMAAHC. The problem, of course, is the very limited pool of African Americans capable of large-scale giving.

By contrast, the National Museum of American History, successor to the original 1846 Smithsonian Institution (“America’s Attic”), opened its doors in 1964 with a 750,000-square-foot structure, almost twice the size of NMAAHC . In 2014, a single contributor, philanthropist and education advocate Phyllis Taylor, donated $7.5 million for “educational outreach and a new learning space” that will bear the name of her late husband Patrick F. Taylor.

This stark difference in the amount and size of donations given to black-centered and other museums is not surprising. On average, white families’ net worth is 13 times that of blacks.

Studies based on the U.S. Census Bureau’s Survey of Income and Program Participation data found that the net worth for the median white family was $111,146, versus $7,113 for black

j.m. eddins, jr. / l andov

experience has … made real the statements of the founding documents,” he says. “And in some ways, our notions of what citizenship really means, what freedom means, really has been burnished, embellished, made real by African Americans.” In that respect, Bunch adds, “The museum’s task is very simple … to use history and culture as a way to make a better America, to give America an opportunity to close the chasm between its stated ideals and the reality of life.” What the museum is not, Bunch insists, is “an attempt to celebrate black culture for black Americans.”

Instead, it “is an attempt to say, this history and this culture have profoundly shaped our notions of freedom, of citizenship, of who we are as Americans.”

The NMAAHC is opening at a point when many whites are taking a hard look at their own heritage. South Carolina State Senator Paul Thurmond, son of ardent segregationist and longtime U.S. Senator Strom Thurmond, has acknowledged the many accomplishments his ancestors have made but repudiated his family’s role in the preservation of white supremacy. “I will never understand how anyone could fight a civil war based in part on the desire to continue the practice of slavery,” he told The Washington Post.

How, then, will the museum present the institution of slavery? “When it comes to slavery,” Bunch says, “our job is not to get beyond it … [but] to recognize that it still casts a large shadow over us today, and that until we understand its history, understand its legacy, only then can we really come together and begin to overcome the racial distinctions that divide us.”

families. When you look at families whose head of household had earned a college degree, the average white family’s wealth grew to $180,500, whereas the wealth of the average black family whose head of household had earned a college degree was only about $23,400. Even when you look at families whose head of household had earned a graduate or professional degree, the gap between white and black families was more than $200,000, with the average white family accruing $293,100 and the average black family accruing only $84,000. (See Darrick Hamilton et al., “Still We Rise,” in The American Prospect’s Fall 2015 issue.)

All told, there are 19 Smithsonian museums and galleries, and 20 libraries in the U.S. and Panama. Museums kindle broad interest, which in turn generates support—or they languish, says Hamza Walker, director of education and associate curator at the Renaissance Society and co-curator of Los Angeles’s biennial, Made in L.A. 2016. The National Museum of African Art (NMAA) began in 1964 as a private institution in the Capitol Hill townhouse where abolitionist Frederick Douglass had lived from 1871 to 1877. It became a Smithsonian property in 1979, and opened on the National Mall in 1987. Since 2009, Johnnetta Cole, the first African American female president of Spelman College, has been its director. In 2013, when the NMAA announced a $1.8 million gift from the sultanate of Oman “to explore linkages between Omani and East African arts and culture,” it was the museum’s largest gift in its history.

The Smithsonian’s National Museum of the American Indian was established in 1989 by an act of Congress. The NMAI took on the daunting responsibility of re-imagining the historic relationships native people across the entire hemisphere have had with museums, and to tell that story collaboratively, through the eyes of multiple indigenous tribes and nations.

When it opened its doors in 2004, more than 20,000 individuals marched in a triumphant Native Nations Procession. “The initial point was to celebrate the ongoing existence of these native peoples,” said Kevin Gover, director and member of the Pawnee Nation. With 40,000 members and a budget of $35.8 million, the NMAI has nonetheless been criticized because of its relatively low visitorship, which reached

2.2 million the year it opened and settled around 1.4 million each subsequent year. In 2014, Natural History (opened to the public in 1910), Air and Space (opened in 1976), and American History (opened in 1964) welcomed 7.3 million, 6.7 million, and 4 million visitors, respectively. In its second decade, NMAI will unveil a bold exhibit that looks at the incalculable consequences of native peoples’ “contact” with Europeans, “Nation to Nation: Treaties Between the United States and American Indian Nations.”

Happily, membership at the NMAAHC is unparalleled within the Smithsonian con-

The gap between black and white personal wealth is reflected in the lower support for black cultural institutions. stellation. “We have 80,000 members and we haven’t even opened our doors,” says Coleman.

“We [launched] the charter membership [program] early,” she adds, a strategy that has paid off. “This is an expensive proposition and we wanted the public to have ownership, so we let the drive be part of spreading the word and getting the museum opened.”

Is this feat the work of a large staff? “My staff? Hilarious!” Coleman says. In 2015, a decade after she came on board, Coleman gained the aid of a single program assistant.

NMAAHC ’s development staff includes Adrienne Brooks, director of development, and five development officers, three associates, and five or so others. By comparison, the American Museum of Natural History in New York City, one of the world’s preeminent scientific and cultural institutions, has an institution-

al advancement staff of about 60—including those who work in individual giving, membership, foundations, special-event planning, corporate relations, and government relations—as well as another 35 or so full- and part-time membership staff who work on the museum floor and attend to the needs of members and visitors when the museum is open.

The U.S. Holocaust Memorial Museum in Washington, D.C., which opened in 1993, has hosted 38.6 million visitors to date (24 percent schoolchildren, 12 percent non-U.S. residents, and 90 percent non-Jewish). It may well have the most effective membership program in the country. Begun in 1978, when President Jimmy Carter established the President’s Commission on the Holocaust, the museum was dedicated 15 years later by President Bill Clinton, after a four-year construction period. For the 2015 fiscal year, the institution—which is not part of the Smithsonian—requested an operating budget of $98 million, about half from federal sources.

The Holocaust Museum, which has an endowment worth about $400 million, has established a new fundraising goal of $540 million for its “Never Again: What You Do Matters” campaign, which extends through 2018. In addition, the museum maintains five regional offices across the country, where programming includes exhibits, galas, and opportunities to meet citizens whose work advances the museum’s mission.

Given the sheer disparity of resources and political influence, as well as the fraught history of race in America, it’s remarkable that the new NMAAHC is doing as well as it is. While there was never an assumption that financing the construction of the NMAAHC would be the sole responsibility of blacks, African Americans’ more limited resources are devoted primarily to funding the next generation’s higher education and homeownership, and to aiding their communities of faith.

The NMAAHC has been long in the mak-

ing—100 years, to be precise. Its genesis dates to 1915. Fifty years earlier, in May 1865, President Andrew Johnson organized a Grand Review of the Armies to honor the troops. But black soldiers who had fought in the Civil War were not allowed to join the military procession from Capitol Hill down Pennsylvania Avenue.

Winter 2016 The American Prospect 53

In 1915, at the 50th anniversary of the original Union victory parade, black Union veterans were permitted to participate. A Committee of Colored Citizens was organized to help defray expenses. The veterans group would evolve into the National Memorial Association, which lobbied Congress to authorize the construction of a Negro Memorial.

During the 1920s, several bills were introduced, but funding was not forthcoming. Then, in 1929, as he was exiting the White House, President Calvin Coolidge signed Public Resolution 107, creating the National Memorial Commission and authorizing it to construct a memorial building at a cost of $500,000 as “a tribute to the Negro’s contributions to the achievements of America.” But the entire enterprise was shelved after the October stock market crash.

President Herbert Hoover appointed a 12-member commission that included Mary Church Terrell and Mary McLeod Bethune and, in 1930, the Senate voted to allocate $12,500 to the commission to fund an exploratory study, but the measure was defeated by the House. President Franklin D. Roosevelt somewhat surprisingly, given his reputation as a progressive, abolished the commission, then tasked the Department of the Interior with constructing the building, only to turn down the agency’s request for development expenses. In 1934, he rejected a proposal to make the memorial a WPA project.

Interest was rekindled after Martin Luther King Jr. was assassinated in 1968, but no concrete plans developed until the 1980s, when congressional legislation mandated that a national museum of African American history and culture would become a part of the Smithsonian Institution and an “African American Institutional Study” was undertaken. This, too, proved too divisive to receive funding.

During this period, Tom Mack, an African American and the president of Tourmobile, a sightseeing bus service based in the capital, began to advocate for an independent national black history museum to be built on the National Mall and won the support of Representative Mickey Leland, a Texas Democrat. Leland’s nonbinding resolution (H.R. 666) passed in the House in 1986, but went no further. Ultimately, the measure became

54 WWW.Prospect.org Winter 2016

a catalyst for public conversations about the absence of black curators, researchers, conservators, and upper-level administrators across the Smithsonian, and the paucity of exhibitions that referenced the black experience. It also helped to clarify two key proposals that were circulating among national black history museum advocates: The Smithsonian should not acquire an existing black cultural institution; instead, a national black history museum should be created under the auspices of the institution.

In 1994, Republican Senator Jesse Helms of North Carolina blocked the museum project

Federal support for the museum finally materialized in the era of George W. Bush—before the bipartisan window closed. on the grounds that it would be duplicative— he cited the existence of the Anacostia Community Museum and the National Museum of African Art, both Washington, D.C.-based Smithsonian affiliates, and he inflamed opposition to the legislation by charging that “black separatist groups” like the Nation of Islam would be allowed to participate.

Enduring support for the project ultimately came from an unexpected source. After discussions and legislative debates spanning 88 years and 16 presidencies, it was George W. Bush who formed the Plan for Action Presidential Commission (Public Law 107-106) that would make the recommendation, in 2003, to establish the museum as an act of Congress.

Bipartisan support from Republican Senators Rick Santorum and Sam Brownback and Democratic Representatives John Larson and John

Lewis was key. Bush also would sign H.R. 3491, an act establishing the National Museum of African American History and Culture within the Smithsonian Institution, and affirm that the structure should be built on the National Mall. The NMAAHC would be dedicated to the “legacy of African Americans [which is] rooted in the very fabric of the democracy and freedom of the United States.”

The museum itself is a stunning structure.

Ten stories in all—five of them aboveground— the NMAAHC is sheathed in a three-tiered bronze-colored corona consisting of 3,600 panels that fit together to form a lacey scrim reminiscent of the ornamental ironworks executed by free and enslaved African American artisans in Charleston and New Orleans.

It was designed by a collaboration that includes architect of record Phil Freelon of the Freelon Group (North Carolina), lead designer David Adjaye of Adjaye Associates (London and New York), and Davis Brody Bond (New York, Washington, D.C., and São Paolo), with engineering support from the SmithGroup (Detroit). Together they brought prior experience in planning, programming, and designing African American–themed museums, including the Birmingham Civil Rights Institute, the Martin Luther King Jr. Center for Nonviolent Social Change, the Reginald F. Lewis Museum of Maryland African American History and Culture (Baltimore), the Museum of the African Diaspora (San Francisco), and the Studio Museum in Harlem. (Disclosure: I was a consultant to the Freelon group.)

Just as a corona inspired by Yoruba art and architecture sits atop the NMAAHC, the museum sits on the shoulders of the African American museums, galleries, libraries, archives, and cultural centers that precede it. All told, there are more than 160 museums large and small (mostly small) devoted to the black experience in America. Most struggle to stay alive.

Many of the older institutions have budgets of less than $1 million and are run by their founders, says Samuel Black. “What does the board look like? Friends of the director,” he says.

Some have gone under or barely survived.

During the 1950s, a handful of black museums were founded by “self-taught museum directors, who used [their] own funds to build a

collection,” Black observes. Icabod Flewellen, founder of the Cleveland African American Museum, “one of the first independent African American museums in the Americas,” was one such director, says Black. “He did not have an academic degree in the field—learned on the job,” Black says. The Cleveland museum closed in 2005 after the founder’s death, and reopened part time in 2009, staffed by volunteers.

When cultural centers fail to define clear missions or find their audiences, financial shortfalls are sure to follow. The Hispanic

recent years, the HSA has partnered with the Dominican Studies Institute at the City College of New York to make some of the collection’s early maps of the Dominican Republic available online. “I call it a new age,” Institute Director Ramona Hernández told the Times.

“We’re doing wonderful things with the Hispanic Society.”

Some institutions have introduced admission-free days in an attempt to make their collections accessible to a broad audience. The Studio Museum in Harlem introduced “Target Free Sundays” with the support of the Target

f r e e lo n a d j ay e b o n d / s m i t h g r o u p

A rendering shows the museum’s central hall, which will feature multimedia displays. Softly lit wooden planks form the ceiling.

Society of America (HSA), a “free museum and reference library for the study of the arts and cultures of Spain, Portugal, and Latin America,” located in New York City’s largely Dominican Washington Heights neighborhood, is home to a coveted collection that includes works by Spanish painters Joaquín Sorolla y Bastida and Diego Velázquez, and mapmaker Juan Vespucci, Amerigo Vespucci’s nephew.

The HSA’s physical constraints were noted in 2011 by The New York Times—“inadequate exhibition space, no cafeteria or gift shop, and a facade and roof that need major work,” but those concerns are dwarfed by the institution’s decades-old problem: how to relate to the largely Latino neighborhood where it resides while keeping faith with its mission to collect art objects that capture “the soul of Spain.” In

Corporation and also offers a range of benefits to members that includes special guest points for reservations at the Aloft Hotel and discounts for a “Pitcher of Mimosas” at restaurant Harlem Shake. Like the NMAAHC, Studio Museum has announced a major capital campaign to build a new facility. The planned fivestory structure will provide about 50 percent more space for galleries and the Artist-in-Residence Program. Tanzanian-born Ghanaian architect David Adjaye, co-designer of the new NMAAHC, will design the structure. He is the 1993 winner of the Royal Institute of British Architects award, and his work includes the Nobel Peace Centre in Oslo, Norway, the UK’s London Idea Store Whitechapel—“a radical rethink of the public library”—and the Museum of Contemporary Art in Denver. New York

City’s Mayor’s Office, the City Council, and the Office of the Manhattan Borough President have committed $35 million of the $122 million cost. Thelma Golden, Studio Museum’s virtuosic director and chief curator, has developed a well-deserved international reputation both for identifying new and exciting artists of color and for conceiving provocative and groundbreaking exhibitions.

According to Ford W. Bell, former president of the American Alliance of Museums (AAM), “unlike the model found in most of the world, where museums are largely supported by the national government, American museums keep their operations going by cobbling together a mosaic of funding sources, from government sources, from the private sector and, increasingly, from earned income.”

“We’ve been screaming very loud for 20 years that the major funding sources are ignoring us or giving us what we call ‘Negro money,’” Samuel Black, the black museums association president, told The Washington Informer. “Negro money means if we ask for $4 million, we get $15,000, which really is money to go away, money that can’t help us reach our projected goals.”

The opening of the National Museum could hardly be more timely. America is in another of its episodic engagements with the meaning of its racial history.

There is belated recognition and debate of the fact that police violence against blacks did not end with the civil-rights movement, and that the opening of all-white universities to blacks did not end institutional racism.

From the other end of the political spectrum, racial suppression has again become open and ugly. The year 2003, when Congress at last approved partial funding of the museum, feels like another era of cross-partisan collaboration. Today, it is hard to imagine Tea Party–afflicted conservatives voting for such a project. (Perhaps the Smithsonian’s next project should be a museum of bipartisanship.) In a sense, the NMAAHC made it just in time, before the window closed yet again.

Kirsten Mullen is a folklorist and arts consultant and the founding president of Artefactual.

Winter 2016 The American Prospect 55

$

The New Inequality Debate More mainstream economists now find that the income mal-distribution reflects the political sway of elites, not economic imperatives

By Ro b e rt Ku t t ne r

M

Share of total income accruing to top 1% 250

Index: 1970 = 100

200 150 100

1970

2012

The top has pulled away, far beyond their contribution to the economy. Data source: Jason Furman and Peter Orszag, “A FirmLevel Perspective on the Role of Rents in the Rise in Inequality”

ore and more mainstream economists have lately discovered a phenomenon that their discipline too often assumes away.

They have discovered power. And this fundamentally changes the nature of the debate about inequality.

In the usual economic model, markets are mostly efficient.

Power is not relevant, because competition will generally thwart attempts to place a thumb on the market scale. Thus if the society is becoming more unequal it must be (a favorite verb form) because skills are receiving greater rewards, and the less-skilled are necessarily left behind; or because technology is appropriately displacing workers; or because in a global market, lower-wage nations can out-compete Americans; or because deregulation makes markets more efficient, with greater rewards to winners; or because new financial instruments add such efficiency to the economy that they justify billion-dollar paydays for their inventors.

Increasingly, however, influential orthodox economists are having serious second thoughts. What if market outcomes and the very rules of the market game reflect political power, not market efficiency? Indeed, what if gross inequality is not efficient, and there is a broad zone of indeterminate income distributions consistent with strong economic performance? What if greater liberalization of financial markets produced tens of trillions of costs to the economy, benefits that are hard to discern, and billiondollar paydays for traders that don’t comport with their contributions to general economic welfare? Evidence like this is piling up, and hard to ignore.

Anthony Atkinson’s new book, Inequality: What Can

Be Done?, is both emblem and evidence of this shift in mainstream economic thinking. Atkinson, of the London School of Economics and Oxford’s Nuffield College, is the dean of economists who study inequality. After an exhaustive com-

56 WWW.Prospect.org Winter 2016

pilation of data and trends, Atkinson bluntly attributes rising inequality directly or indirectly to “changes in the balance of power.” Thus, he adds, “Measures to reduce inequality can be successful only if countervailing power is brought to bear.”

Though it has not attracted the celebrity attention, in many respects Atkinson’s work is more important than Thomas Piketty’s pathbreaking Capital in the TwentyFirst Century, and is the perfect sequel. Where Piketty explained the tendency of wealth and income to concentrate, Atkinson digs deeper into what drove this shift and why conventional remedies will not reverse the trends. He has a far surer grasp than Piketty of the political dynamics that made possible the anomalous egalitarian era of the 30 glorious years after World War II. In Atkinson’s telling, the postwar social bargain drastically reduced inequality using several levers. Progressive taxes and welfare-state transfers were part of the story. Likewise a more highly regulated form of globalization. Worker and trade-union power resulted in a larger share of the total national product going to wage and salaries. Antitrust and some public ownership helped, too. All of these instruments, and more, have been reversed since about 1980—due mainly to a shift in political power. This shift increases the influence as well as the wealth of the rich, which leads to a selfreinforcing circle of more such policies, and more inequality.

In the labor market, the greater “flexibility” long promoted by many economists, Atkinson writes, has produced “a transfer of power from workers to employers. The growth of multi-national companies, and trade and capital-market liberalization, have strengthened the position of companies vis-à-vis customers, workers, and governments.” Even technology, he adds, needs to be understood in terms of power. “Technological progress is not a neutral force but reflects social and economic decisions. Choices by firms, by individuals and by governments can influence the direction of technology and hence the distribution of income.”

d av i d a u s s e r h o f e r / g e t t y i m a g e s

He adds that inequality “is embedded in our social and economic structure, and a significant reduction requires us to examine all aspects of our society.”

Isn’t this account familiar? Yes, and no. Some further to the left have long made these arguments. But for most of the economics profession, widening inequality of earnings has been primarily a reflection of widening differentials in worker skills in the face of changes in technology that require more advanced workers. Therefore, the logical cure is better education and training. Lawrence Mishel and colleagues at the Economic Policy Institute have been challenging this account for years. But only lately has the mainstream conceded that the EPI view is substantially right. Three of the principal proponents of the view, Harvard’s Lawrence Katz, MIT ’s David Autor, as well as Prospect co-founder Robert Reich, have walked back their previous embrace of the skills explanation, known in academia as skill-biased technological change, or SBTC. As Paul Krugman recently wrote, “While one still encounters people invoking skill-biased technological change as an explanation of rising inequality and lagging wages—it’s especially popular among moderate Republicans in denial about what’s happened to their party and among ‘third way’ types lamenting the rise of Democratic populism—the truth is that SBTC has fared very badly over the past quarter-century, to the point where it no longer deserves to be taken seriously as an account of what ails us.”

This revisionism has huge implications for economic theory, for possible remedies, and for politics. If greater inequality does not reflect market efficiencies, then market distributions of income are not efficient. And policies that produce greater equality will, at worst, do no damage to economic growth—and quite possibly will improve it.

As an illustration of how pervasive was the previous consensus, consider a piece that the Prospect published in 1995 by Barry Bluestone, a well-known left-of-center economist. Bluestone’s article, “The Inequality Express,” invoked Agatha Christie’s detective mystery Murder on the Orient Express, which contained the surprise twist that all of the suspects did it. Bluestone listed ten suspects on the Inequality Express: technology, trade, a shift from manufacturing to services, deregulation, declining unionization, downsizing, winner-take-all labor markets, capital mobility, immigration, and trade deficits. Each of these factors played a part, Bluestone concluded. They all did it.

Invoking another classic, Michael Young’s essay “The Rise of the Meritocracy,” Bluestone fretted that the new inequality was substantially earned. It was meritocratic.

Better-equipped people simply commanded higher wages, while routine workers were swamped by outsourcing, offshoring, and technology. And if inequality is earned, it

becomes much harder to justify tampering with it. Atkinson’s list of causes is not all that different from Bluestone’s—but with one huge difference: Atkinson doubts that today’s increased inequality is earned. Thus the obstacles to reversing it are not economic, but political.

Reich’s influential 1991 book, The Work of Nations, shared the view that skills accounted for widening earnings disparities. In his new book, Saving Capitalism: For the Many, Not the Few, Reich recants. The real story, he writes, is a powershift. Reich previewed those ideas in our Spring 2015 issue.

Reich’s new work is the best statement since Karl Polanyi’s 1944 masterwork, The Great Transformation, of how markets are creatures of government and politics rather than a default state of nature. As Reich writes, “Government doesn’t ‘intrude’ on the ‘free market.’ It creates the

market.” (Polanyi likewise wrote, in a famous oxymoron, “Laissez-faire was planned.”) Reich’s latest book is a compendium of all the ways that political power by economic elites rigs the rules of how markets work—in favor not of efficiency, but of the rich and the powerful—increasing both inefficiency and inequality. With increased market power comes increased concentration of wealth, and still more concentration of both political and economic power.

More and more mainstream economists have been paying increasing attention to the connection between political power, market power, and the income distribution. As David Dayen wrote in a recent Prospect piece, anti-trust has ceased to be a meaningful brake on economic concentration, just as new business models have come up with new ways to exploit market power. Jason Furman, current chair of the Council of Economic Advisers, in a research paper with Peter Orszag, former head of the Office of Management and Budget, confirms that increasing numbers of firms enjoy monopoly or oligopoly profits not reduced by

The Sleuth: Anthony Atkinson’s new book provides the evidence.

Winter 2016 The American Prospect 57

The Seer: Joseph Stiglitz has been ahead of the curve for decades.

powerful firms,” recognizing that concentrated economic power undermines efficiency as well as equality.

A further example is revisionism of the relationship of inequality to consumption and debt, and the knockon costs to economic efficiency. In traditional economic theory, mainstream economists ignored the role of income distribution in one’s propensity to consume, as well as its macroeconomic effect. In recent decades, however, people with stagnant or declining earnings maintained consumption levels by running up consumer debt. A Federal Reserve substantially captured by bankers cooperated by lowering interest rates and blessing new, risky debt instruments like securities backed by subprime mortgages. What the British economist Colin Crouch termed “privatized Keynesianism” went abruptly into reverse when the crash of 2008 came, deepening the slump. Thus, widening inequality set off dynamics that resulted in an intensified collapse.

In a new book, Income Inequality: Why It Matters and Why Most Economists Didn’t Notice, Matthew Drennan explains how traditional theories of consumption, shared by relatively liberal economists such as Franco Modigliani and conservative Milton Friedman (both Nobelists), got the story wrong by leaving out the income distribution.

Still other examples include Joseph Stiglitz’s latest book, Rewriting the Rules of the American Economy. He writes, “Today’s inequality is not the result of the inevitable evo-

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lution of capitalism. Instead, the rules that govern the economy got us here.” Stiglitz has always been something of an outlier, but enough of a mainstream economist to have won a Nobel and have served in senior posts in the Clinton administration and at the World Bank. At a festschrift conference for Stiglitz last October, people more mainstream than he, from Robert Solow to Jason Furman and Peter Orszag, paid tribute to the prescience of his work. “In Joe’s honor,” Furman and Orszag wrote, “we thought it appropriate to collaborate on a paper that explores two of his core interests: the rise in inequality and how the assumption of a perfectly competitive marketplace is often misguided.”

At the festschrift, Solow, another eminently mainstream economist with a history of challenging received assumptions, observed that we would never solve the problem of extreme inequality without dealing with wages—an issue that is as much the consequence of power as of marginal productivity. Solow was coming back to his own roots. In 1990, he wrote a book titled The Labor Market as a Social Institution, challenging the idea that this is a market just like others, since workers are also human beings and “participants, on both sides, have well-developed notions of what is fair and what is not.”

For progressives, who have assumed since Teddy Roosevelt that the state is the logical counterweight to the market, the new insights about the connection between political and economic inequality illuminate a huge practical problem. When large corporations and mega-banks capture the machinery of the state, regulation itself is undermined as remedy. The standard liberal story—that we need government to help tame the market for the benefit of ordinary citizens—loses credibility as well as veracity, since the plutocrats are inside the gates. This helps explain why right-wing populists have some credibility: Wall Street and Washington are all the same crowd.

Conservative economists, going back to public-choice theorists such as Gordon Tullock and James Buchanan, have long argued that regulatory capture by interest groups is inevitable; hence, the best policy is to minimize the role of the state altogether. This is why Atkinson is so refreshing. Not at all, he says; with a shift in political power, the state may yet be redeemed as an instrument of greater and more efficient equality.

Atkinson’s book closes with a short manifesto of remedies. The good news: We could return the income distribution to something more like the one that prevailed during the postwar boom, a golden age both for income equality and for dynamic managed capitalism. His policy package calls for using “the whole of government” to reverse inequality on all fronts and “rebalancing power in the economy.”

The inequality of earned income began creeping up in the

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competition, as free-market theory would predict. Once, in the postwar era, when unions were stronger, oligopoly profits were shared with workers. Today, they go to CEOs, shareholders, and hedge fund operators.

Another emblem of the shift in mainstream economic thinking is the award of the 2014 Nobel Prize in Economics to the French economist Jean Tirole. The citation explicitly credited his contribution to “the science of taming

late 1940s, Atkinson reports, but until the 1980s an expanding redistributive welfare state and the entry of women into the labor market were sufficient to keep inequality of final household income from rising. Since then, wage inequality has far outstripped redistributive capacity.

First, he proposes, we need a restoration of progressive taxation. Specifically, he calls for a top personal tax rate of 65 percent, higher than the current top rate but lower than the top rate in the Eisenhower era. Yet he also observes that inequality has become so extreme that more progressive taxes and more generous social transfers can no longer solve the inequality problem. That will take a drastic shift in primary income from wages, salaries, and capital.

To illustrate just how the shift in power from citizens to capitalists has made progressive taxation far more difficult politically, Atkinson quotes the current British Chancellor of the Exchequer, George Osborne, boasting to the 2014 Conservative Party Conference, “In a modern global economy where people can move their investment from one country to another at the touch of a button and companies can relocate jobs overnight—the economics of high taxation are a thing of the past.” Standard economics interprets these shifts as expressions of economic efficiency. Atkinson explains them as shifts of power.

In addition to calling for stronger trade unions, Atkinson calls for reducing the unemployment rate to 2 percent, a goal that was achieved throughout Europe in the early postwar era, with guaranteed public employment as one of the strategies. To equalize wealth, he calls for the creation of public sovereign wealth funds, with the aim of “building up the net worth of the state by holding investments in companies and in property,” and the payout of a universal capital endowment, or inheritance, to all citizens upon their reaching adulthood. That way, the wealth that allows the affluent to pass along inherited advantage to their children would be spread around.

He also has a wonderfully creative proposal to replace estate taxes with a “progressive lifetime capital receipts tax.” At present, estate taxes (which cover less than half of 1 percent of estates) are paid by the donor’s estate. Instead, Atkinson suggests, all gifts including bequests should simply be treated as income. They should incur taxes to be paid by the recipient, with the rate based on the income of the recipient, not the giver. Atkinson also calls for a different set of rules for globalization, consistent with a more equitable income distribution at home.

So after decades of market-loving economists helping to push politics to the center-right, we now have the anomalous spectacle of some influential economists being on the left edge of mainstream politics—a happy throwback to the prophetic role of John Maynard Keynes in the 1920s and 1930s. As Atkinson himself points out, most of these

ideas are not especially radical compared with the norms and policies that were prevalent during the postwar era.

The bad news: They are far to the left of what passes for mainstream politics today.

Nonetheless, the news that egalitarian policies are both attainable and salutary should be tonic for the liberal soul. It’s also propitious that the unmistakable increase in inequality to levels that violate broadly shared norms of what’s reasonable is a useful embarrassment to conservative economists and their political allies.

Since Reagan, America has embraced much of the con-

servative package. Taxes are lower and less redistributive.

Many benefits to the poor have been drastically cut. There is far less regulation, and the regulation that does operate is largely pro-corporate. Global trade is freer than ever and outsourcing easier. However, the basic growth trajectory has not changed and if anything is slightly slower than it was in the postwar decades. Financial deregulation caused growth to take a huge hit beginning in 2007, from which the economy is only now recovering. But inequality has soared. While some of it can be justified as meritocratic, billion-dollar hedge fund managers have few defenders and even some Republican presidential candidates want to increase their taxes.

On the inequality conundrum, conservative economists divide four ways. Some are denialists. Rising inequality is simply a mirage if you make the right adjustments to the data. Scott Winship of the Manhattan Institute operates a small cottage industry purporting to demonstrate that if you correct for a variety of factors ranging from household size to counting health insurance as income, the statistical rise in inequality mostly vanishes.

A second group concedes increasing inequality but blames it on the deterioration of values.

Marry everyone off and poverty largely disappears. The income distribution is indeed much flatter if you limit the sample to married couples. The trouble with this view is that it still has to reckon with immense and widening wage and salary inequality.

A third group, latter-day supply-siders, insist that if we really get government out of the way, then the poor as well as the rich will share in a burst of entrepreneurship.

That, of course, has been the conservative story ever since Reagan, yet inequality keeps increasing.

The good news: a more equal and dynamic economy is attainable. The sobering news: the remedies are to the left of Bernie Sanders.

Winter 2016 The American Prospect 59

And then there are the self-described “reformicons,” who seek to define a conservative version of government anti-poverty policy, more or less in the spirit of Jack Kemp.

Last year, a group of conservative intellectuals led by Yuval Levin, editor of National Affairs, and Peter Wehner, a former adviser to three Republican presidents, published a pamphlet titled “Room to Grow.” The piece begins by frankly acknowledging trends that liberals usually emphasize—persistent poverty and reduced mobility, flat earnings for the broad middle class, a general sense of diminishing life horizons. The trouble with the reformicons, however, is the disconnect between their analysis and their remedies—which are mostly small-bore, such as the expanded use of tax credits. Nor do they address the policies that have produced grotesque inequality at the top.

The new left-right policy consensus on incremental ways to reduce poverty is far too liberal for the Republican Congress.

Meanwhile, back inside the Reading list Inequality: What Can Be Done?

by Anthony B. Atkinson Capital in the TwentyFirst Century

by Thomas Piketty Saving Capitalism: For the Many, Not the Few

by Robert B. Reich Income Inequality: Why It Matters and Why Most Economists Didn’t Notice

by Matthew P. Drennan Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity

by Joseph E. Stiglitz

Capital Beltway, a group of centerleft and center-right policy experts (mostly non-economists) have sought to reckon with power in a very different sense.

They have been working for 14 months to see whether a new policy consensus is possible to reduce poverty. The group, under the auspices of the American Enterprise Institute (AEI) and the Brookings Institution, deliberately focused on poverty, not inequality, expressing a very different conception of political realism.

After a good deal of horse-trading and nearly breaking apart at several points, the group delivered an 85-page report in early December titled “Opportunity, Responsibility, and Security: A Consensus Plan for Reducing Poverty and Restoring the American Dream.” The working group included anti-poverty scholars Lawrence Aber, Sheldon Danziger, and David Ellwood on the moderate left, and Stuart Butler, Ron Haskins, and Lawrence Mead on the right. Basically, the liberals in the group conceded more than they really wanted to in terms of blaming poverty on family structure, and the conservatives conceded more than they wanted in accepting that low and stagnant wages were a big part of the story.

The manifesto blends suggestions ranging from increasing work and the rewards for working, to promoting marriage and “delayed, responsible childbearing” as well as parenting education. The liberals on the panel did win some important concessions. Conservatives agreed to a higher minimum wage and major improvements in pre-

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school and post-secondary education. The liberals beat back demands to attach onerous conditions to food stamps.

The price that the liberals paid was that the larger issue of the income distribution was not part of the discussion or the report. It focused on a relatively narrow stratum of the income distribution—the working poor and near-poor. The group largely ignored the struggles of the very poor, of the sort addressed in Kathryn Edin and H. Luke Shaefer’s new book, $2.00 a Day: Living on Almost Nothing in America (see our review, page 100). Nor did the report engage the downward mobility and economic stress on the broad, working middle class. Nor did the group did address the extreme pulling-away of the top.

And unlike the Atkinson book, the panel did not discuss power. To read the report, one would think that cuts in outlays on the poor, the brutal slashing of welfare benefits in TANF, wage stagnation, and what the authors delicately termed “weakening” of “collective bargaining” just happened. The elephant in the room, in more senses than one, was the Republican war on the welfare state. This was never mentioned. Instead, there was the usual imputation of partisan symmetry to legislative blockage (“When one political party offers a proposal, the other usually disagrees…”), of the sort that Jacob Hacker and Paul Pierson so powerfully refuted in their book, Off Center, and in other research. The report also clings to the largely discredited story that low earnings are mainly a reflection of low skills.

Despite these omissions, a large majority of Americans would probably accept these policy ideas as a reasonable way of combating poverty, if they could just get a legislative hearing. I interviewed several members of the working group and they generally agreed that these policy proposals, if accepted, would probably reduce the rate of poverty in America by a few percentage points—no small achievement.

The aspiration of serving as a kind of role model for Congress, to show that sensible right and sensible left can agree on a core common program, is not a crazy idea. But as one of the panelists ruefully admitted, “these proposals do not stand a snowball’s chance” of making it through the current Congress. Just as Atkinson’s newly mainstream ideas are somewhere to the left of Senator Bernie Sanders’s presidential campaign, the report of the Brookings-AEI working group is to the left of the entire Republican House—thus neatly proving Atkinson’s point that it really is about power.

The conservatives in the group, looking over their shoulders at their political allies, demanded and got some changes that bordered on the absurd. The report is emphatic on the point that child-bearing should be delayed—but the report distances itself from the most effective form of contraception, long-acting reversible contraceptives (LARCs), the new generation of IUDs that are far safer and more effective than earlier ones, and which have dramatically

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reduced unwanted pregnancies. Why the distance? As the report tactfully puts it, some opponents of LARCs see them “as potentially a form of abortion.” Yet the concessions by the liberals on the panel are unlikely to change a single Republican vote in Congress.

A report such as this one would nicely fit an era when there were still moderate Republicans in Congress. Indeed, the groundwork for the 1996 reform “ending welfare as we know it” was laid by similar left-right academic efforts.

And because of the hard line of the Gingrich Congress, the welfare reform that Clinton signed, after vetoing two even worse versions, features a TANF block-grant design that is brutally punitive on people who really need help. Indeed, three subcabinet members who had designed the original Clinton welfare reform resigned in protest.

Conservatives organizing liberals to support centerright policies in the name of realism dates at least to the Reagan era. In 1987, AEI organized a similar working group that published a report titled “The New Consensus on Family and Welfare.” The participants ranged from Charles Murray on the right to Robert Reischauer and Alice Rivlin on the moderate left. The recommendations, many of which parallel those of the latest report, are more Murray than Reischauer. The working groups on deficit reduction grew in the same soil of centrist policy intellectuals (including some of the same people) desperately seeking bipartisanship and mostly getting rolled by conservatives, culminating in the disastrous Bowles-Simpson Commission. That commission utterly failed to win popular support, but it created an elite policy consensus that combined with Republican political hardball to lock a Democratic administration into a decade of relentless budget cuts in domestic social programs, one that moots the calls for increased spending in the AEI-Brookings report.

The keynote speaker at the December 3 event unveiling the Brookings-AEI report was New York Times columnist David Brooks. That choice speaks volumes. Brooks is emblematic of the sort of moderate conservative who no longer exists in the Republican caucus.

If one can indulge optimism bordering on euphoria, it’s possible to imagine a scenario in which Donald Trump wins the Republican nomination, Hillary Clinton is elected in a landslide, and the Senate goes narrowly Democratic, though the House is virtually certain to stay Republican.

In those circumstances, some of the modest Brookings-AEI ideas might actually become law.

Paul Ryan, the new House Speaker, professes to care about poverty. His own anti-poverty program, unveiled when he was chair of the House Budget Committee, was more or less reformicon. It accepted that increased poverty was a problem, and he even made some policy proposals. But as critics noted at the time, Ryan’s

numbers didn’t compute. They added up to massive cuts in existing outlays and largely precluded new ones.

However, it’s possible that with a Democratic president, a Democratic Senate, and a Republican House with a reduced majority, some elements of the Brookings-AEI package might make it through Congress. At the same time, Republicans are still working to turn food stamps into a block grant, which would drastically cut benefits, and they have continued to try to kill the Affordable Care Act and slash other social outlays. If everything breaks right politically in 2016 (which is a big if), poverty could be modestly reduced, especially for the working poor, but the larger problems of income inequality will continue to worsen.

So which group represents the greater realism?

Is it the pursuit of incremental policy changes aimed at modest reductions in poverty? Or is it work like Atkinson’s, acknowledging that a real improvement in the broader income distribution would require a sure grasp of power dynamics as well as policy changes well to the left of anything currently in mainstream debate?

I suppose you might say we need both. The AEI-Brookings effort seems more rooted in the near-term politics of the possible, though, as noted, the several members whom I interviewed don’t believe that the current Republican Congress will touch even these toned-down ideas. The Atkinson analysis reflects a deeper understanding of the economic realities. Possibly, the AEI-Brookings effort will serve as a role model to a post–Tea Party generation of Republicans picking up the pieces from what could be a 2016 blowout, though if Trump self-destructs and Marco Rubio is the nominee, it’s a whole other story. One must also hope that the work of Atkinson, Reich, Stiglitz, Solow, and others will energize a muscular progressive realism that pushes outward the politics of the possible.

The Speaker: Paul Ryan professes to care about poverty, but his numbers don’t compute.

Winter 2016 The American Prospect 61

Can the Democrats Channel

America’s Discontent?

The party has moved left in response to hard times.

That should help it at the polls—but will it?

By Ha ro ld M e ye rs o n

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ome July, when the Republicans and Democrats hold their back-toback national conventions, those attending both (overwhelmingly, journalists) will experience their accustomed quadrennial culture shock—and then some. At first, the shock registers visually: For years, Republican delegates, party leaders, and funders have been overwhelmingly white, while their Democratic counterparts have constituted a steadily more diverse racial palette. This summer, however, the Republican convention will in all probability be not just overwhelmingly white but white nationalist as well, doubtless prompting the Democrats—who need no prompting—to proclaim that their own delegates are a microcosm of America’s future.

Are they? The Democrats do represent an emerging majority, but to empower it, they must motivate it to vote despite the pervasive cynicism about politics and the right’s efforts to suppress turnout. To deliver for it, the Democrats will have to overcome the financial influence of the one percent on both parties. The rainbow on display at the Democratic convention could be the next progressive governing coalition—or it could preview a deepening of troubling trends, in which increasing numbers coexist with dwindling influence.

Not only do the parties look more different than they ever have, they also think more different. A Wall Street Journal/NBC poll recently compared Republicans’ and Democrats’ ideo-

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logical self-descriptions from 1990 to those in 2015, and found the two parties racing apart as if propelled by some political cosmological constant. In 1990, just 12 percent of Republicans called themselves very conservative; today, 28 percent do. Sixteen percent of them said they were liberals in 1990; today, that’s down to 6 percent. Among Democrats, those calling themselves conservative declined from 21 percent to 10 percent during those 25 years, while those calling themselves very liberal doubled, from 13 percent to 26 percent.

The ascent of Donald Trump, who represents something new and ominous in American political life (roughly analogous to George Wallace taking over one of the two parties in 1968), has understandably dominated news coverage in recent months. The Democrats’ move leftward, however, is as fundamental a development as the Republicans’ descent into racism and ultra-rightism. Both are responses to the massive racial shifts in the nation’s demographics, the failure of American capitalism to sustain a vibrant middle class, and the blockage of conventional politics. A Pew Research Center survey released in December showed that the share of America’s adult population in the middle class declined from 61 percent in 1970 to 50 percent in 2015, while the share of Americans in the upper stratum rose from 4 percent to 9 percent. The shift in shares of aggregate income was more dramatic: That of middle-income households declined from 62

percent of all income in 1970 to 43 percent in 2014, while that of upper-income households rose from 29 percent to 49 percent.

It’s not the bottom that has been falling out of the American economy; it’s the middle. So, too, has the middle of the political spectrum.

Widespread economic dysfunction and dislocation have prompted the Democrats to adopt more-progressive economic policies and prodded Republicans to intensify their racial scapegoating and to oppose all government programs they rightly or wrongly believe help minorities.

Despite the Republicans’ evident success at winning midterm elections—and with them, statehouses and Congress—some believe the Democrats’ hold on the growing sectors of the American electorate guarantees the party eventual long-term political predominance. Pollster Stan Greenberg has noted that in the 2016 election, 54 percent of voters will come from the Rising American Electorate—millennials, minorities, single women—and that this share will relentlessly rise in elections thereafter.

Whether this ensures Democratic dominance, Greenberg correctly adds, depends on how the party responds to the economic challenges that Americans will continue to face, and on how well they can turn that demographic majority into an enduring political force. In a few places around the country, that process has begun, and the trajectories of both Hillary Clinton’s and Bernie Sanders’s presidential campaigns suggest that millions of Democrats would welcome

such a transformation. The challenge of building a distinctly progressive party with clear majority support is obviously daunting, however, and depends in some measure on events over which Democrats will have no control.

That said, they have a shot.

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arties change through processes of addition and subtraction. Over the past half-century, the Democrats have waxed by capturing the lion’s share of the growing number of immigrants and racial minorities, and by winning over a majority of professionals, who used to be a Republican mainstay. Scientists, academics, and journalists have become heavily Democratic (due in some small measure to the GOP ’s rejection of empiricism). As Democrats have defended the safety net and such family-friendly policies as paid sick and parental leave and child-care subsidies, they’ve won over a majority of women, unmarried women in particular.

The GOP ’s embrace of the tenets of fundamentalist religions has driven millions of increasingly secular young people into the Democrats’ column.

But Democrats have waned as well. The biggest shift of the past half-century is that of the white South into the Republican column, initially in presidential voting but now at every level of government.

That shift is part and parcel of the flight of the New Deal coalition’s linchpin, the white working class, from Democratic ranks.

While a much shrunken share of the total electorate—it comprised 65 percent of the voters in the 1980 presidential election and just 36 percent in 2012—the white working

class has been voting Republican by increasingly overwhelming margins, in 2014 favoring GOP House candidates over their Democratic rivals by 30 percentage points. As racial politics have been key to the re-alignment of the white South, so de-unionization has played a decisive role in the shifting voting patterns of white workers in the North. Since the 1970s, white bluecollar union members have voted Democratic at a rate roughly 20 percentage points higher than their non-union counterparts. But as the rate of private-sector unionization has shrunk from close to 40 percent in the mid-20th century to just 6.6 percent today, so has the party’s hold on that once solid Democratic constituency. The poor, who are most reliant on policies championed Presidential contenders Bernie Sanders and Hillary Clinton

by Democrats and eviscerated by Republicans, have largely stopped voting at all.

At the other end of the economic spectrum, Wall Street has warmed, then partly cooled, to the Democrats in recent decades. In the 2012 presidential election cycle, Democrats pulled in just 32 percent of campaign contributions from the finance, insurance, and real-estate sector, their lowest share since 1990. This, of course, was still a ton of money—$168 million. Should the two presidential nominees facing off next November be Hillary Clinton and Donald Trump, it’s possible that the Democrats’ share will rise again. Nonetheless, the long-term sectoral shifts among the Democrats’ mega-donors—losing the oil and gas barons who funded the Lyndon Johnson-Robert Kerr Democrats of the mid-20th century, and now much of Wall Street, while picking up the moguls of Hollywood and Silicon Valley— have also propelled the party leftward, not just on social and cultural issues, but more recently on economic issues as well. In the spring of 2015, the leading consortium of liberal Democratic donors, the Democracy Alliance, prioritized funding projects that tackled economic inequality, as well as those that built the kind of ongoing political organizations that could turn out votes in otherwise GOP-dominated midterm elections. Yet among the Democrats’ mega-donors, the Democracy Alliance progressives co-exist uneasily with billionaires well to their right on financial issues and anything but enamored of the party’s shift toward economic populism.

Wall Streeters may not feel comfortable around Republicans who deny the existence of climate change and question many of the premises of modernity, but these are secondary concerns compared with the growing number of Democrats who want to rein in finance and question the premises of current American capitalism. A recent CBS/New York Times poll, for instance, found that 56 percent of Democratic primary voters held a positive view of socialism. Granted,

Winter 2016 The American Prospect 63

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Partnership and the Keystone XL pipeline, and her proposals for increased regulations on banks and other financial institutions, is evidence of her own movement, and her understanding of her party’s movement as well. So are such documents as the Summers-Balls report from the Center for American Progress, which calls for a vast investment in infrastructure and for boosting unions by making collective bargaining more easily accessible. Likewise the steadily rising minimum wage advocated for by the party’s center: President Obama proposed setting it at $10.10 in November 2013, but as cities have raised their own levels to as high as $15, Obama has since endorsed a bill raising it to $12.

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ever before have cities played such an outsized role in inf luencing the national Democratic agenda. That’s not just because virtually every major American city is under Democratic control, or because cities are the place where the Rising American Electorate has clustered. It’s also because of the weakness of Democrats at the state level. Democrats have full control of state governments—that is, a governor and majorities in both legislative houses—in just seven states, six of them small (Hawaii, Oregon, Connecticut, Vermont, Rhode Island, and Delaware) and only one big (well, the biggest: California). And it’s because no Democrat in Congress is able to get significant legislation enacted: To the extent that the federal government can promote progressive policies, they’re the result of President Obama’s executive orders and departmental decrees.

In 2013, as I reported in my article “The Revolt of the Cities,” from the May/June 2014 issue of the Prospect, a group of progressive mayors was swept into power across the country, their victories largely powered by coalitions of longstanding liberal groups, immigrant organizations, the successor groups to ACORN in black communities, unions with substantial immigrant and African American memberships (disproportionately privateand service-sector locals), affordable-housing advocates, environmental organizations, and others. The newly elected mayors and council members have responded to such campaigns as the Service Employees International Union’s Fight for $15 by passing ordinances raising the local minimum wage, mandating paid sick days, extending immigrant rights (Bill de Blasio’s New York City has issued them identification cards, enabling them to open bank accounts), establishing universal pre-K programs, and requiring inclusionary zoning policies with the goal of creating more affordable housing.

New York Mayor Bill de Blasio Seattle, perhaps the most creative of the progressive cities, has grappled with the rise of ondemand workers laboring without employee status for companies like Uber by granting collectivebargaining rights to independent contractors in personal transport. (Since such workers are excluded from coverage under the National Labor Relations Act, Seattle reasons, there’s no reason why a city can’t extend them those rights as it does, say, to another category of the NLRAexcluded, public employees.) Increasingly progressive cities in conservative terrains—Birmingham, Alabama; Louisville and Lexington, Kentucky— have raised their local minimum wage. Nashville’s

d e n n i s va n t i n e / s i pa / a p i m a g e s

that doesn’t mean anywhere near that number define themselves as socialists, or that they necessarily mean anything more by socialism than Bernie Sanders did in his November 19 Georgetown speech, when he identified it with the policies of Franklin Roosevelt (creating Social Security), Lyndon Johnson (creating Medicare), and Martin Luther King Jr. (demanding civil rights and more economic equality). Nonetheless, the figure still demonstrates a widespread desire among Democrats to significantly alter the nation’s economic institutions, laws, and practices. It’s also worth noting that this 56 percent exceeds, by 24 percentage points, the share of Democrats in the same poll who supported the presidential campaign of Bernie Sanders. That means a substantial share of Hillary Clinton’s supporters also looked favorably on socialism, whatever that term may mean. Clinton’s delicate dance on the issue of deeper financial reform both reflects and reinforces the tension between the Democrats’ Wall Street elite and their base.

Whether through the arrival of new constituencies or the departure of old ones, those base Democratic voters are unquestionably moving left. This year, Gallup found the share calling themselves liberal had risen from 29 percent in 2000 to 44 percent today; Pew found a similar rise since 2000, from 27 percent to 41 percent. Millennials are among the party’s most left-leaning constituents—understandably, since they are disproportionately minority and have borne the brunt of the Great Recession.

A December poll by the Harvard Institute of Politics among 18-to-29-year-olds found that Democrats in that age cohort favored Sanders’s candidacy over Clinton’s by 41 percent to 35 percent (and among Democratic women by 40 percent to 38 percent). Both candidates have targeted programs to the young, with Clinton pledging $350 billion to make college affordable again, and Sanders promising to make public colleges and universities tuition-free. The Sanders advantage among the young is likely due less to specific youth-targeted proposals than to a combination of his gruff-grandpa authenticity and his no-holds-barred assault on economic inequality and the financial interests that have structured and profited by it.

It’s not just that the left has grown; the center of the party has also moved left in recent years.

Clinton’s opposition to both the Trans-Pacific

newly elected mayor, Megan Barry, supports gay marriage and a minimum-wage hike. Phoenix lobbies for immigration reform while Arizona has sought to deprive immigrants of basic rights.

Precisely because so little progressive legislation is emerging from statehouses, the cities are today the Democrats’ laboratories of democracy. Seattle’s new approach to on-demand workers, for instance, quickly became the focus of labor’s advocates everywhere, just as its enactment of a $15 minimum wage in 2014 set the standard for many Democrats nationally. Ironically, were the Democrats able to turn out more legislation at the state level, it would likely be less groundbreaking than the cities’ product.

In California, where Jerry Brown is governor and Democrats have sizable majorities in both legislative houses, a bill that would raise the state’s minimum wage to $13 has stalled in the Assembly, where centrist Democrats from the San Joaquin Valley have bottled it up.

California is exceptional, however, in that it still has a bloc of centrist Democratic officeholders: In many parts of the nation, these have all but disappeared. There are no longer any Democrats representing majority-white congressional districts in the Deep South. In 2009, according to Atlantic Media’s Ronald Brownstein, Democrats represented 76 majority-white working-class districts in Congress; by 2015, they represented just 15. This decline is a function of drop-off voting among Democrats in midterm contests, of Republican gerrymandering in the decennial redistricting, of the midterm-election advantage to the nonpresidential party, of the failure of the recovery to boost white working-class incomes, and of the shifting politics of that white working class.

All these factors have combined to effectively liquidate a class of centrist Democrats and to further distance Democrats from what once had been their most loyal constituency.

Coupled with the move of many Wall Street bankers to the Republican column, the nearelimination of prominent Southern Democrats at any but the municipal level of government has meant that Third Way Democrats have largely vanished as well. There are no Bill Clintons or Sam Nunns on the Democratic political landscape today, only such lonely and obscure figures as Jack Markell, governor of corporate-haven Delaware, who has argued

In 2009, Democrats represented 76 majority-white working-class congressional districts. Since the 2014 elections, Democrats have represented 15. that “the economic system isn’t so much fundamentally rigged, as the populists contend, as it is fundamentally, unalterably, never-to-bethe-same-again changed” by globalization and technology. Markell ducks the question of who rigged globalization and the new technology (such as those Uber apps) so that the revenues they produce go to the few rather than the many.

But most Democrats don’t really talk that way anymore. The politics of triangulation, as New America’s Mark Schmitt has argued, don’t really fit a party whose members increasingly recognize the reality of class conflict and polarized partisanship. Sharing a podium with progressive champion Elizabeth Warren, Hillary Clinton has said of the wealthy: “The deck is stacked in their favor. My job is to reshuffle the cards.”

Not Bernie Sanders thunder, to be sure, but not the kind of rhetoric with which the Democratic Leadership Council of old would be comfortable.

Democrats who formerly scurried to Wall Street’s defense—New Jersey Senator Cory Booker, for one—have prudently opted to shut up when the subject is now raised. Few centrists have flip-flopped more floppingly than New York Governor Andrew Cuomo. Chastened by a surprisingly strong progressive primary challenge from Zephyr Teachout, a previously unknown Fordham University law professor, and compelled to make policy concessions to the left-leaning Working Families Party in return for its support, Cuomo has reversed his opposition to a $15 statewide minimum wage,

and used his executive power to grant that raise to state employees and fast-food workers. (The extent of Cuomo’s conversion won’t be fully apparent until this year’s state senate elections: In previous years, he has refused to campaign for a Democratic takeover of the state senate, which, through the miracle of gerrymandering, Republicans control, thereby bottling up much progressive legislation.)

Unions are key to the Democrats’ leftward evolution. To be sure, with a bow to the demands of realpolitik, most have endorsed Clinton, not Sanders, and in many elections for lower office where centrists and progressives square off, unions have been known to back the centrists in return for deals that benefit their members. Nonetheless, virtually none of the progressive urban regimes that have come to power in recent years could have done so without substantial union support, and the Fight for $15 campaign has served as the necessary second act to Occupy Wall Street—adding a concrete set of demands to Occupy’s critique of our plutocratic economy.

There are clear limits, however, to what city-led liberalism can accomplish. States with Republican governments can and do obstruct cities from enacting progressive ordinances.

States with Democratic governors may ultimately adopt policies first advanced by cities, as New York state did when, following the adoption of anti-fracking zoning ordinances by many cities, Cuomo announced a statewide fracking moratorium. Problem is, there are few Democratic-led states. Mayors, moreover, aren’t governors; they’re not deemed presidential material unless they’ve moved up to statewide office— one reason why the Democratic bench is so bare.

T

he Democratic Convention may offer a microcosmic glimpse of America’s future, but is it a true reflection of the American present—of an electorate with sufficient heft to hold the White House and win back Congress and the states?

In presidential years, high turnout gives Democrats a structural advantage, provided their remaining support among working-class white voters doesn’t completely collapse. Should the GOP nominate Trump, Republicans will likely forfeit the votes of enough college-educated party members to guarantee a decisive defeat.

Winter 2016 The American Prospect 65

Trump’s strength among aging working-class whites, however, may give Democrats anxious moments in Rust Belt states that have experienced little in-migration over the past 30 years, such as Ohio (which is 80 percent white) and Pennsylvania (which is 78 percent white, while the nation as a whole is just 62 percent white).

Besides the unions themselves, the only progressive organization trying to persuade the white working class to vote Democratic is Working America, the AFL-CIO -backed operation that over the past decade has canvassed with considerable success in white workers’ neighborhoods, on the doorsteps of non-union members in critical swing states. “This will be a real challenge this year,” says Karen Nussbaum, Working America’s director, “but we can’t have the white working class getting entrenched on the right, as it is in much of Europe.”

The challenge before Working America is to move voters from a right-populist racist politics to a left-populist economic politics. To put it mildly, that’s a daunting task. Even at the height of its power and popularity, the United Auto Workers in the 1940s and 1950s could routinely persuade its members to vote Democratic for national and state offices, where economic issues dominated, but seldom for its endorsed liberal candidates for local offices, where issues of housing and police practices— that is, issues where race was the dominant factor—were its white members’ key concerns.

There are issues, however, on which left and right populists—indeed, on which left, right, and center—converge. Recent polling by the Public Religion Research Institute found that 77 percent of Americans (including 67 percent of Republicans) believe corporations are not paying a fair share of their proceeds to their employees, and that 79 percent of Americans (including 63 percent of Republicans) believe our economic system unfairly favors the wealthy. Proposals that involve establishing or enlarging government programs, of course, are anathema to Republicans and rouse the ire of many working-class whites who believe such programs are generally a payoff to minorities. (The one exception to this rule might be lowering the eligibility age for Medicare—a government program with substantial mass, if not elite, conservative support—to 50 or 55.)

Universal programs that don’t involve tax-

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With Washington gridlocked, and Republicans in control of most statehouses, Democratic city governments are setting much of the party’s agenda. ation or expanded government programs, however, have commanded substantial rightleaning support, as in 2014 when the electorates of Alaska, Arkansas, Nebraska, and South Dakota approved ballot measures hiking their state’s minimum wage. Proposals to change the pre-tax division of proceeds within corporations—say, by scaling corporate tax rates to the ratio of CEO -to-median-worker pay, or cutting the taxes of corporations that divide their corporate board seats between shareholder and worker representatives—might have some traction on both the left and the right.

Democrats not only need to arrest their decline among working-class whites, they also need to boost turnout of their base voters in midterm elections. One hundred years ago, the party’s big city machines maintained a constant presence in working-class neighborhoods.

Today’s party needs a latter-day version of these standing armies—minus, of course, the corruption endemic to the classic machines. The only organization that has even begun to assemble such organizations is the Working Families Party—which, its name to the contrary notwithstanding, functions largely within the Democratic Party. Funded largely by unions, the WFP employs a staff and mobilizes a volunteer base that dwarfs those of any Democratic state party. In New York, the state where the WFP has been around the longest (and whose election fusion laws permit candidates to run on multiple party lines—most frequently, on

both the Democrats’ and WFP ’s), the party’s Pipeline program conducts regular candidate trainings for roughly 1,000 liberal aspiring officeholders, provides staff and resources to perhaps the 100 most electorally and politically attractive of those aspirants in campaigns for local offices, and positions the winners to seek higher office when those seats come open.

Today, WFP-backed candidates constitute the majority on the New York City Council, where they function as a distinct caucus and promote the candidacies of other progressives.

Can the Democrats’ progressive base mount such endeavors in other blue cities and states, and the occasional purple one? Such an effort obviously requires a massive and patient commitment of resources, a capacity to combine and prioritize elements of diverse constituencies’ agendas, and a lot of dedicated, and disproportionately young, Democrats of the kind that the Sanders campaign has activated.

Dan Cantor, the WFP ’s national director and a veteran of Jesse Jackson’s two presidential bids, cautions that “mounting a presidential campaign is not the same as building a durable organization.” The more likely prospect is that Sanders’s backers, once the campaign is done, will become a generational cohort with a distinct if fuzzy ideology and a skill set that a number of them will carry into their future political endeavors, much as the veterans of the campaigns of Gene McCarthy, Robert Kennedy, and George McGovern once brought their perspectives and experiences to subsequent Democratic campaigns. That will be helpful, but not sufficient, to the party’s needs.

The Democrats need an organized left—if only because the prospects for building an organized center are nil, and because a progressive economic program that limits corporate and financial power with the countervailing power of workers, consumers, and citizens would unite the Democratic base, strengthen the party’s ability to recapture workingclass voters now lost to it, and help rebuild the country’s shrunken middle class. Defeating the candidacy of a Donald Trump or a Ted Cruz may strike many Democrats as victory enough in 2016, but unless the party can amass the power to build a more equitable and prosperous nation, another Trump or Cruz will surface from some dank pool in elections yet to come.

The Likely Persistence of a White Majority How Census Bureau statistics have misled thinking about the American future B y R ich a rd Alba

i g o r s t e va n o v i c / i s t o c k

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as the notion of demography as destiny ever enjoyed so much credence? The disappearance of a white majority in the United States by the middle of this century is now widely accepted as if it were an established fact. Projections by the Census Bureau have encouraged those expectations, and people on both the right and left have seized on them in support of their views. On the right, the anxieties about the end of white majority status have fueled a conservative backlash against the growing diversity of the country. On the left, many progressives anticipate an inexorable change in the ethno-racial power hierarchy.

Numerous sites on the web offer advice and counsel on how whites can handle their imminent minority status.

But what if these different reactions are

based on a false premise—actually two false premises? The first stems from the Census Bureau’s way of classifying people by ethnicity and race, which produces the smallest possible estimate of the size of the non-Hispanic white population. Whenever there is ambiguity about ethno-racial identity, the statistics publicized by the bureau count an individual as minority.

This statistical choice is particularly important for population projections because of the growing number of children from mixed families, most of whom have one white parent and one from a minority group. In the Census Bureau’s projections, children with one Hispanic, Asian, or black parent are counted as minority (that is, as Hispanic or nonwhite). The United States has historically followed a “one-drop” rule in classifying people with any black ancestry as black. The census projections, in effect, extend

the one-drop rule to the descendants of other mixed families. A great deal of evidence shows, however, that many children growing up today in mixed families are integrating into a still largely white mainstream society and likely to think of themselves as part of that mainstream, rather than as minorities excluded from it.

Under alternative ways of counting, the potential range of variation in the size of the white population is quite large. In unpublicized tables, the Census Bureau itself provides a measure of how wide that variation is. If we were to go to the opposite extreme from the bureau’s official projections and adopt a white one-drop rule—that is, to classify anyone with some white ancestry as white—the data show that whites would make up three-quarters of the population at mid-century, when the Census publicly claims that whites will be in the

Winter 2016 The American Prospect 67

minority. To be sure, neither extreme is credible; the white share of the population will lie somewhere in between these poles.

A second reason to be skeptical about the excited talk about the end of a white majority is that it ignores the potential for blurring the boundary between mainstream and minority. The United States has previously seen excluded minorities such as the Irish, Italians, and Jews assimilate into the mainstream. Although the channels of assimilation are narrower today because of heightened inequality, many recent immigrant families seem to be on the same path as their predecessors. The likely result will be to enlarge the mainstream and alter the circumstances under which individuals are seen as belonging to marginalized minorities.

To raise these questions is not to minimize the significance of the growing diversity of American society, stimulated above all by the mass immigration since the late 1960s. Nor is it to deny the loss by whites of majority status in many parts of the United States, such as California. But it is to peer beneath the surface of census data to the little-understood processes behind their construction and to correct distortions of social reality that the official population statistics encourage. And it is to suggest that longstanding processes of assimilation could produce a white-dominated mainstream at the national level and in many regions for the foreseeable future.

The Census and Children of Mixed Families

Population projections, whether by the Census Bureau or anyone else, are not properly understood as forecasts. As any demography textbook can tell you, a projection is a numerical exercise for working out the implications of a set of assumptions about demographic variables such as birth and death rates. Over an extended period, the assumptions are virtually certain to diverge from demographic realities. Nonetheless, the Census Bureau and, more recently, the Pew Research Center have not hesitated to project an exact year when whites will lose majority status—2044 and 2055, respectively—encouraging the popular view that they are making forecasts.

Projected changes in the racial and ethnic

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Ethno-racial Mixes Infants, 2013

whiteAsian white9% black 10% other white mixes 18%

white-Hispanic 39%

other mixes 19% blackHispanic 5%

Median Household Incomes

for mixed, two-parent families with infants, 2013 (father’s origin listed first, mother’s origin second) white-white black-black Asian-Asian Hispanic-Hispanic black-white white-black Asian-white white-Asian Hispanic-white white-Hispanic white-mixed race mixed race-white black-hispanic all other mixed families

composition of a society also depend on the rules for classifying people. The Census Bureau assumes that every individual is either white or minority and resolves the complexities of multiple heritages by assigning people with any mixed background to the minority side of the white/nonwhite divide. Individuals with both Hispanic and non-Hispanic ancestries cannot even be identified as such in census data; according to the bureau’s rules, they are only Hispanic. Since 2000, individuals with a mixed racial heritage can claim it on census forms, but they are, without exception, considered minorities in population statistics.

The Census Bureau’s report on its latest projections declares that a minority group is “any group other than non-Hispanic white alone.”

Most readers probably cannot decode the full implications of this formulation.

The bias in the Census Bureau’s practices has its largest impact in estimating the ethnoracial backgrounds of children, because it is among children that we first see the consequences of the rapidly rising number of mixed families. To estimate how many children are from mixed families, I used data for 2013 on the families of infants from the American Community Survey, which is conducted by the Census Bureau. (I focused on infants because the chance of obtaining data on both parents is greatest when a child has recently been born, and we need to look at parents’ own reports to avoid the biases inherent in the census data for the children themselves.)

Although the Census Bureau declared in 2012

$75,000 $46,000 $90,000 $38,000 $51,000 $79,400 $110,000 $107,900 $63,000 $73,100 $78,300 $73,000 $37,300 $60,000

that nonwhite births for the first time outnumbered white ones, 60 percent of the 2013 infants have a white parent. About 10 percent, then, have both a white and minority parent.

These infants are counted as minorities in census statistics. And they are regarded as permanently so in census projections.

Overall, about one of every seven infants comes now from an ethno-racially mixed family. The largest group by far of these infants, as the pie chart shows, consists of those with one non-Hispanic white and one Hispanic parent.

They are nearly 40 percent of the total. Other sizable groups are mixed white and Asian, white and black, and white and mixed-race parentage.

Social-science research on children from mixed families is limited. But three kinds of evidence, in concert, indicate persuasively that the Census Bureau data exaggerate the decline of the white population by failing to take into account that many children from mixed backgrounds will likely be integrated into largely white social milieus and identify, at least some of the time, as white. This evidence involves the incomes of mixed families, the social identities of individuals with mixed backgrounds, and their marriage patterns.

Income of mixed families: The household incomes of many mixed families indicate that they are closer socioeconomically to mainstream white families than to disadvantaged minority ones.

As the chart above shows, unmixed Asian families have higher median incomes than unmixed white families, and mixed Asian

t e d c r u z c a m pa i g n

and white families have the highest incomes of all. The incomes of mixed Hispanic and white families are also very different from those of unmixed Hispanic parents. When the non-Hispanic white parent is the father (true for about half of the white-Hispanic mixed infants), the median family income is scarcely any different from that of white-only families.

When the Hispanic parent is the father, the average income is lower but still much higher than is typical for Hispanic-only families.

Since income is a primary determinant of where families reside, these patterns imply that many of the mixed white and minority children are growing up in neighborhoods where many whites also reside, and outside of areas of minority concentration. These ethnoracially mixed children will have peers from white families and likely learn to get on with them from an early age.

There is one major exception to the pattern in family incomes. Although white-black families have incomes close to those of whites when the father is white, that is not true when the father is black, which is the more common situation in black-white families. The infants with mixed, only-minority parentage also come predominantly from families with incomes between those of black-only and white-only families.

Social identities: Unlike census data, data from a 2015 survey by the Pew Research Center illuminate the feelings and experiences of individuals with mixed backgrounds. According to “Multiracial in America,” the Pew report based on the survey, most Americans from mixed backgrounds do not think of themselves as multiracial. For those who are white and Asian, the affinities with the white group are strong. By a two-to-one margin, they say that they have more in common with whites than with Asians. They report, in addition, feeling more accepted by whites and having more white than Asian friends. Those who are white and black exhibit a very different profile. The majority believe that others see them as black.

They also have much closer ties to their black relatives and are very likely to report encountering discrimination, including being “unfairly stopped by the police.”

The Pew survey found many more multiracial Americans than the census does, which implies that adults with mixed backgrounds

often appear in the census in single-group categories (that is, as unmixed white, black, and so on). In fact, an internal Census study, “America’s Churning Races,” shows that large numbers of people who identify themselves as multiracial in one census identify themselves as white in another.

For instance, of those who reported a mixture of Asian and white parentage in either 2000 or 2010, 36 percent appeared as only white in the other census (and 22 percent as only Asian).

Those who report mixed white and Hispanic family backgrounds to the census are counted as Hispanics of white race, a huge group that includes about half of all the nation’s Hispanics. Yet, of the individuals who appeared in this group in either 2000 or 2010, 12 percent said they were non-Hispanic and white in the other year. In other words, many Americans with mixed Asian or Hispanic family origins identify with the white majority some of the time.

The one exception to this pattern of “leaning” white involves individuals of mixed white and African American heritages, who are much more likely to indicate that they are only black than only white (33 percent versus 16 percent). This exception conforms to the consistent research finding that Americans with visible African ancestry confront more virulent everyday prejudice and discrimination than other minorities do. The one-drop rule appears not to have lost its power in their case.

Intermarriage: Finally, there are the marriage patterns associated with mixed backgrounds, which are indicative of the social milieus into which individuals have been integrated. For individuals who are partly white and partly minority, the likelihood of choosing a white spouse is much higher than it is for those with the same minority ancestry only.

A powerful demonstration of this pattern comes from a unique study of Mexican Amer-

A Minority Majority? The Census Bureau classifies children of mixed marriages as members of the “minority” population. Under those definitions, three of the four people in this picture—Senator Ted Cruz and the two children he has had with his wife Heidi Nelson Cruz—are part of the minority population that the Census projects to be a majority in 2044. In popular media, this projection is routinely equated with the end of a white majority and an emerging majority of “people of color.” Cruz himself is the son of a mother of Irish and Italian extraction and a father born in Cuba.

Winter 2016 The American Prospect 69

icans, which followed families from 1965, when the original survey was conducted, to the late 1990s, when researchers tracked down the original participants who were still alive, as well as their children. In their book, Generations of Exclusion, based on these data, the sociologists Edward Telles and Vilma Ortiz report that the odds of intermarriage were five times higher for the children of intermarriages than for those from Mexican-only backgrounds. These intermarriages were overwhelmingly with non-Hispanic whites. Scholars of intermarriage have also found higher rates of marriage with whites among individuals who are mixed white and Asian compared with those who are Asian only. In sum, many partly white adults appear to have been integrated into largely white social worlds.

These data about family income, social identity, and intermarriage raise serious questions about the Census Bureau’s practice of counting children of mixed families as members of ethno-racial minorities. In collecting data, the Census relies on what parents say about their children’s ethno-racial backgrounds. Parents are very likely in doing so to try to honor both sides of their offspring’s family origins. When their children grow up, however, many of them may view themselves as whites. Future white counts are therefore likely to be substantially larger than one would predict from current census data.

Assimilation into the Mainstream

Children from mixed backgrounds are only one aspect of a broader social process under way that is mixing together different groups in American society. Multicultural critics of assimilation have rejected it as a goal, but the concept remains essential for sociological analysis if we are to understand important changes taking place. Some people from minority as well as mixed backgrounds are being attracted into a still heavily white mainstream, changing the mainstream even as it continues to be dominated by whites.

The mainstream, of course, is not the whole of American society. Rather, it is the part that mistakes itself for the whole. In a society where racial and ethnic origins historically have confined Americans to different social strata, the

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mainstream has been long associated with the social spaces and cultural practices of white Americans. That is now changing as the boundaries of the mainstream expand.

One momentous change involves the rapidly growing presence of Americans from recent waves of immigration at the top of the U.S. workforce, in domains that were previously monopolized by native whites. Guillermo Yrizar Barbosa and I have analyzed this change in an article that appears on the website of the journal Ethnic and Racial Studies. We focus especially on the upper quarter of all workers who hold top occupations as defined by annual earnings. Until recently, 85 percent to

“Whiteness” is a malleable concept, and it is on its way to changing again, as it has before.

90 percent of these workers were whites (and non-Hispanic). But among the young workers who have entered this tier since about 2000, the share represented by whites has dipped below 70 percent. The Great Recession did not reverse this trend. Since the socioeconomic ascent by minorities closely correlates with the declining white share of young adults, it is a safe prediction that it will continue as ethnoracial diversity rises among youth.

The expanding groups in the upper ranks of the workforce are Asians, both immigrant and U.S.-born, and U.S.-born Latinos. Black Americans are also increasing their numbers, but not to the same extent as the others.

The growing diversity at or near the top of the occupational ladder does not mean that whites on these rungs have lost all their advantages, at least not yet. With educational level taken into account, we found that whites generally are better placed occupationally than minorities, and when compared with minori-

ties in the same occupation, they earn more on average. White advantages could decline as the numbers of individuals from minority backgrounds increase in the top tiers, bringing more of them into positions of authority where they can make decisions about hiring and promotions. But it is premature to predict how the struggles of whites to hold onto their diminishing advantages will turn out.

Individuals from minority backgrounds who hold prestigious and visible posts in the workforce, or positions of civic leadership, are part of the mainstream, in any sensible definition of it. Their ascent echoes an earlier transformative moment in our history. In the quarter-century after World War II, the mainstream was joined en masse by the descendants of Irish and southern and eastern European immigrants, Jews, Catholics, and Orthodox Christians. Assimilation today is more selective, not as massive. But as in the earlier period, when hyphenated identities became acceptable, it does not require the obliteration of ethnic and racial identities, just their muting, to allow individuals to function in social worlds that, while increasingly diverse, are still home to many whites. The motive for assimilation is, as before, to gain for oneself and one’s children access to the greater opportunities that are available in mainstream settings.

This assimilation should disabuse us of the fantasy of the imminent demise of the white majority and its loss of power. Not all the newcomers to the mainstream will identify as whites, and its visibly growing diversity will be a key development of the early 21st century, as the election of the nation’s first black president unmistakably signals. “Whiteness,” however, has never been fixed; it is a malleable concept, and it is on its way to changing again, as it has before.

Yet it is critical not to lapse immediately into another fantasy, namely, the belief that assimilation will prove a panacea for still-glaring ethno-racial disparities. Contemporary assimilation is simply not on the same scale as that of the mid-20th century, when, for example, Italians caught up to other whites in education and socioeconomic attainment in just a 25-year period after World War II. Assimilation today is crimped by greatly heightened inequalities and is leaving many outside its

reach, including many Hispanics, such as the undocumented and their children, even those who are U.S. citizens because they were born here. In one respect, however, the earlier and current patterns of assimilation are similar: African Americans are participating only to a limited extent. Indeed, one could even say they are being bypassed.

To think clearly about the American future, we need not only the right concepts but also accurate data. The Census Bureau, the public agency we all rely on for neutral representa-

tions of social realities, is failing us. Not only do its rigid and illogical classifications distort important new realities, the bureau is also not forthcoming about the errors and uncertainties involved. Instead, it continues to promulgate “firsts”—in June, it declared that for the first time minorities are the majority of children under the age of 5—as if the data were unimpeachable. Given the political resonance of its statistics, which reverberate on the right and left of the spectrum, there is not a moment to lose in demanding that, in its official projec-

tions and pronouncements, the Census present a more nuanced view of the nation’s demographic future and acknowledge the alternative ways in which Americans may come to think about themselves.

Richard Alba is a Distinguished Professor of Sociology at the Graduate Center, City University of New York. He is the recent co-author of Strangers No More: Immigration and the Challenges of Integration in North America and Western Europe.

The Budgetary Backdoor to Reduced Minority Representation

The political and economic ramifications of a tightened Census budget By Adrien Schless-Meier and Gary D. Bass

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epresentation in the U.S. House of Representatives and $400 billion in annual federal funds are allocated on the basis of the decennial census. Many other critical functions, such as enforcing civilrights laws, also depend on accurate census data.

For the first time ever, however, Congress has mandated that funding for a census be lower than for the previous census ten years earlier. Even though the Constitution requires the census to count everyone, this budget straitjacket will make it much tougher in 2020 to reach the hardest-to-count households. The results could be disastrous for all manner of public purposes that depend on accurate data, but especially for minority and low-income communities.

Although Congress had not yet passed a final budget for the Census Bureau

at press time, the spending bill calls for cutting the president’s request by around 10 percent, much less than the 40 percent to 50 percent earlier expected. Nonetheless, the new cut follows earlier ones, and a report by the Senate Appropriations Committee says that the Census Bureau will have to spend less for the 2020 census than for the census in 2010, “with the goal of spending less than the 2000 census.”

The Census Bureau has a plan to deal with previously imposed budget constraints, but many of the changes it is planning are untested. In a dramatic departure, the bureau is going to rely on the Internet to collect about half of responses to the decennial census questionnaire. Americans will receive a card in the mail asking them to go online and respond. The Government Account-

ability Office, Congress’s watchdog, warns that without substantial upfront investments and preparation, we could be facing “another Healthcare.gov”—this time with about eight times the daily volume of visits. Since many people are unlikely to return if they are unable to fill out the questionnaire the first time, any system malfunction would be disastrous for data collection. Even if the census website operates smoothly, many advocates are concerned that people with low incomes and limited access to the Internet are unlikely to use it.

As a result of prior budget cuts, the bureau is also planning to reduce its use of canvassers in preparations for the census. Instead of sending canvassers to walk every street in America to compile an accurate address list, in-office staff will rely on a combination of aerial

imagery, U.S. Postal Service records, and targeted canvassing. Using these methods, the bureau may not know whether they’ve missed people, particularly in nontraditional housing such as basement units or unmarked houses on tribal lands.

In addition, the bureau plans to cut the number of field staff deployed to follow up with households that don’t respond to the census by mail or online.

The best way to ensure that people in marginalized communities are accurately counted is to talk to them face-to-face.

The Census is planning to count some non-responding households indirectly through records in other government agencies or commercial data—a plan that raises serious concerns about data security, accuracy, and compatibility. Administrative and commercial records often do not include critical

information the census gathers, such as data on race and ethnicity, or the information is inaccurate.

To pull off its planned changes in technology and methods, the Census Bureau would need substantial, sustained investments every year through 2020. Instead, Congress is moving to reduce those funds to a level that seriously threatens the bureau’s constitutional obligation to count everyone. An undercount is not merely a technical matter.

In a democracy that allocates money and power on the basis of the census, an undercount is a matter of justice.

Gary D. Bass is the executive director of the Bauman Foundation and affiliated professor at Georgetown University’s McCourt School of Public Policy.

Adrien Schless-Meier is program associate at the Bauman Foundation.

Winter 2016 The American Prospect 71

Race & Representation in the Twilight of the Obama Era Will the eight years of America’s first black president lead to more political voice for black citizens—or less?

By De rric k J ac ks o n

W

hen Barack Obama became the first black president of the United States, I received a warning of sorts from my late greataunt, Myrtha Overstreet. She lived to be almost 101, and when she was 98 she voted in Cleveland for Obama’s first election.

She did so with a sage’s sobriety. I called her to ask her if she ever thought she would live to see a black president. She told me, “No, but now that he’s in there, he’ll be just another politician.”

My great-aunt’s wariness understated what was coming. Seven years later, as Obama’s presidency enters its final year, the collective optimism that African Americans had at the beginning of his presidency has collapsed.

At the beginning, the percentage of African Americans saying race relations were good soared from 29 percent to 59 percent in New York Times polling. It was back down to 28 percent this past summer.

This feeling of letdown is well justified.

Obama’s historic individual achievement has been upstaged by collective ugliness, ranging from videotaped police brutality, the Charles-

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ton church hate killing, and race-baiting by Republican presidential candidates.

Astonishingly, many blame Obama himself for racial dissonance. The same New York Times poll also found that white Americans were nearly three times more likely to say the Obama presidency itself has driven black and white people further apart, while African Americans were nearly three times as likely to say Obama has brought the races closer together.

Obama did not come close to winning the majority of white voters in either of his victories, despite economic disaster at the end of the George W. Bush administration and political paralysis after 2010 inspired by the Republican-dominated Congress, both of which furthered economic divides for most Americans, white as well as black. In fact, Obama’s percentage of the white vote slipped from 43 percent in 2008 to 39 percent in 2012, according to exit polls.

From the anti-immigrant rhetoric of Donald Trump, to the blacks-want-free-stuff imagery of Jeb Bush, and Chris Christie’s bombast that not even Syrian child refugees should be

admitted to this country, the Republicans seem dedicated to living out Martin Luther King Jr.’s observation that many white politicians reacted to the 1965 Voting Rights Act with a “witches’ brew of bigotry, prejudice, half-truths and whole lies.” Ohio, which Obama won both times, also elected Republican Governor John Kasich, who eliminated same-day registration and voting. Wisconsin, which Obama won both times, elected Republican Governor Scott Walker, who slashed early voting. North Carolina, which voted for Obama the first time, then for Republican Mitt Romney in 2012, enacted a voter-ID law that is being contested in court.

All of this is compounded by blatant gerrymandering, bolstered by the 2013 decision by the conservative-leaning Supreme Court to end federal pre-clearance of redistricting plans in states with racist histories of districting.

The fact that this is happening in the era of the first black president is no surprise to historians and civil-rights legal experts who recall the backlash of half a century ago, even a century and a half ago. Khalil Gibran Muhammad, director of the Schomburg Center for Research

alex br andon / ap images

President-elect Barack Obama walks offstage after speaking at his election night party at Grant Park in Chicago, Tuesday night, November 4, 2008.

in Black Culture in New York and author of the 2010 book The Condemnation of Blackness: Race, Crime, and the Making of Modern Urban America, said there are clear parallels to how Emancipation and Reconstruction after slavery were met with the wall of segregation codified by Plessy v. Ferguson, and how the brutally won civil-rights gains of the 1950s, 1960s, and early 1970s were slowly dismantled by the 20 combined years of President Reagan, both President Bushes, and the conservativeleaning Supreme Court they left behind.

“To the degree that Obama represents an apotheosis of what the nation can achieve,” Muhammad told me, “his presidency has also revealed a nation unable to sustain an enduring commitment to civil rights. Obama also represents the unfinished business of America

as we’re seeing attacks on voting rights and the evisceration of equal protection and due process rights in our criminal justice system. If we think of Plessy v. Ferguson as the beginning of one era in our long racial saga, Shelby v. Holder represents another milestone. And not one we, as a nation, will look back on and be proud of.”

Janai Nelson, associate director-counsel of the NAACP Legal Defense and Educational Fund, says the Obama backlash “has come at such a fast clip, it’s difficult to wrap your mind around it.” Nelson noted how a concealedhandgun license is sufficient to vote in Texas, but a student photo ID is not, and how someone in Alabama can vote with a government employee ID, but not with a public housing ID. “When you think of the demographics of who is in public housing and who is in the public work-

force, it tells you a lot,” Nelson says. “Just when we should be leveraging the gains of the civil-rights movement, we’re instead redoubling and retracing our steps in the face of severe retrenchment. It’s as if some people are saying, ‘You had your black president for two terms and now you should go quietly into the night.’”

Such sentiments run deep even in the white generation that voted most heavily for Obama.

Two years ago, in the aftermath of George Zimmerman’s acquittal for his Florida killing of unarmed 17-year-old Trayvon Martin, the Pew Research Center found that a majority of white Americans 18 to 29 years old felt the topic of race was “getting too much attention.”

Since then, an onslaught of videotaped police brutality has created somewhat more awareness by white Americans of injustice dealt to

Winter 2016 The American Prospect 73

African Americans. But the moment the topic drifts away from undeniable visual evidence on CNN and YouTube, collective white denial and delusion remain operative. In a CNN/ORC poll this year, half of white Americans believe the Voting Rights Act is no longer necessary and 81 percent believe African Americans in their community—despite a trove of modern job and housing discrimination data to speak to the contrary—have as good of a chance as white people in getting “any kind of job for which they are qualified.”

Is it possible that Obama did something that legitimated white voters circling the wagons? Not likely—the wagons were circling long before he took office. The best example is guns.

During the first seven years of President George

La Salle University told CNN last year, “Whites walking down Main Street with an AK-47 are defenders of American values; a black man doing the same thing is Public Enemy No. 1.” That certainly rings true in a country where white men cheerfully plop down in Starbucks with handguns exposed to show solidarity for open-carry laws while 12-year-old Tamir Rice and 22-yearold John Crawford were gunned down in split seconds in Ohio for holding toy guns.

Nearly seven full years into Obama’s presidency, September polls by Public Policy Polling and CNN/ORC respectively found that 54 percent and 43 percent of Republicans think he is a Muslim. Depending on the poll, a third to two-thirds of Republicans believe Obama was not born in the U.S. or are unsure. Republican leaders, from Obama’s emergence to the pres-

Despite the growing number of people of color in the U.S., the Congressional map has increasingly created a white echo chamber.

W. Bush, the nation averaged 9.2 million gun sales a year with little fluctuation, according to the FBI data on background checks.

In 2008, as Obama closed in on the White House, there was a new record of 12.7 million background checks for gun purchases, according to the FBI. From there, gun sales soared to insane levels for a so-called developed nation, to an average of 20.5 million checks a year from 2012 to 2014. That is more than double the counts of the Bush era.

Many historians and sociologists see clear parallels, also reaching back to Reconstruction, to gun procurement frenzies by white Americans coinciding with cycles of political attacks on black enfranchisement. The late Ben Agger, a sociology professor at the University of Texas at Arlington who co-edited a book on the Virginia Tech massacre, told the Chicago Tribune in 2008, “I almost hate to say it, but there is a deep-seated fear of the armed black man, because Obama now commands the military and other instruments of the justice system.

They are afraid Obama will exact retribution for the very deep-seated legacy of slavery.”

Race relations scholar Charles Gallagher of

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ent, insist on inciting voters to believe Obama is not as patriotic and Christian as white people.

Sarah Palin, the 2008 GOP vice presidential candidate said of Obama, “I am so fearful that this is not a man who sees America the way that you and I see America.” Mitt Romney, the 2012 presidential nominee, said he was “frightened that we have a president that fails to understand America.” More recently, leading Republican candidate Donald Trump refused to correct a supporter at a town hall event who insisted Obama is a Muslim, and former New York City Mayor Rudolph Giuliani flat-out said at an event for Wisconsin’s Walker, then a candidate for the GOP nomination, “I do not believe that the president loves America.”

With all the innuendo and animus, not to mention the imagery of angry white men more armed than ever, Obama was almost in an impossible position to do what certain white people feared—enact policies to overtly overcome racial economic, education, and housing discrimination and the resulting disparities.

With a Supreme Court chipping away at affirmative action and taking aim at voting rights, Obama was a political Jackie Robinson. No

matter how much the Republican Party spiked him with inflammatory politics, he could not dare respond in kind.

Despite the growing number of people of color in the U.S., the congressional map has created a national white echo chamber.

A 2014 Washington Post analysis found that 75 percent of Republican House constituents are white, well above the 62 percent national non-Hispanic white population. Democratic districts are far more racially balanced. In the states, politics against immigrants and taxes and suburban and rural resistance to bolstering urban infrastructure, public education, and anti-poverty programs reflect a historic collapse of local and regional Democratic power.

According to The New York Times, Republican control of governorships has increased from 22 to 32 since 2009. Democratic losses in state legislatures since Obama was elected are among the worst in more than a century, with 816 Democratic lawmakers ousted and Republican control of legislatures doubling. The Times quoted Tim Storey, an analyst for the National Conference of State Legislatures: “Republicans have more [state] chambers today than they have ever had in the history of the party.”

Though the non-white share of the electorate is increasing, this shift is not showing up in the share of representation. In an analysis by National Journal earlier this year, lawmakers of color represent only 15 of the nation’s 318 majoritywhite congressional House districts. That small percentage contrasts dramatically with the 38 percent of districts that are majority of color but represented by white politicians (44 of 117).

Those contrasts stand to sharpen. Mostly white suburban and rural enclaves change slowly compared to economically volatile urban congressional districts, where voters of color were historically packed. While no one would bet against Overland Park, Kansas, remaining wealthy and overwhelmingly white for years to come, places like Harlem, which sent Adam Clayton Powell and Charlie Rangel to Congress, are changing before our eyes in an influx of Latino immigrants and white gentrification. Such districts could conceivably go from black to Latino to white representation.

Among the few African Americans entrusted with a majority-white district is Keith Ellison of

tom williams / roll c all / ap images

Minnesota. His Fifth Congressional District reasonably mirrors America’s current colors at 69 percent white, 16 percent African American, 9 percent Latino, 6 percent Asian, and 1 percent Native American. Being in one of the liberal pockets of the U.S., and voted into office in 2006, two years before Obama, Ellison says the toughest questions about his electability were more over him being a Muslim than African American.

“The district never had a black rep, but the issue never came up because everybody asked me what it felt like to run as a Muslim,” Ellison laughs. “I never was interviewed by anyone in the media as the first black member of the Minnesota congressional delegation.”

In a district that cast more than 70 percent of votes for both him and Obama in 2012, Ellison says he can go to any Minneapolis urban corner or suburban coffee shop and have a Representative Keith Ellison of Minnesota is a practicing Muslim whose liberal district is majority-white. serious talk about the meaning of Black Lives Matter. Minnesota voters, with education, and Africa,” Bass says. Latinos are or Latinos to be on their second, third, or fourth overwhelming “no” votes from the Minneapo- similar with immigration and Latin American mayor or congressional representative, yet suclis area, rejected a 2012 referendum to enact issues added in. White groups want to hear cess has been elusive. The most obvious cases are restrictive voter-ID laws. about the economy, transportation, the envi- Chicago and New York, which today are less than For Ellison, his constituency and the Obama ronment, Israel, Iran, and other environmental half white yet have had white mayors for more years give him some hope that more enlight- issues. “The theme that runs through them all than two decades, and just one black mayor each. ened politics and broader acceptance of black is the economy and jobs, so I try to make sure In Chicago, Rahm Emanuel won a second term, politicians will prevail in the years to come. everyone feels connected that way.” wooing the majority of black votes on the south There are other liberal places where black and west sides of town to blunt the grassroots “What you can’t take back is that he has shown that a black person can be a good president politicians connected broadly. Massachusetts, coalition efforts of Latino Jesus “Chuy” Garcia. and not just a quarterback or a beauty queen,” the epicenter of gay marriage and a national In New York, Bill de Blasio put together a strong Ellison told me. “He was headed where the leader in green energy and energy efficiency, multicultural coalition, with a major promise to country is largely headed, on climate change, gave two terms to African American Governor end police practices abusive to African Amerimarriage equality, public transit, and expand- Deval Patrick. He governed a commonwealth cans such as “stop and frisk.” Interestingly, both ing opportunity. It was always relatively easy 83 percent white, 11 percent Latino, and only cities are currently under a harsh national spotlight for police brutality, most notably the chokto have those conversations in my district, and 8 percent black.

Obama made them easier.”

And there are a noticeable number of major- ing of Eric Garner in New York and the riddling Similar to Ellison but half a continent away ity-white cities that display a willingness to of Laquan McDonald in Chicago.

Other cities where African Americans are is Representative Karen Bass, from California’s vote for African American mayors. Denver and Kansas City, Missouri, are both on their 37th Congressional District. It takes in much the leading numerical group but have returned of west and south Los Angeles, with a hodge- second black mayors. Over the years, African the keys to white mayors include Detroit and St. podge that is 39 percent Latino, 22 percent Americans have been mayors of other trendy Louis. That adds up to an uncertain trajectory black, and 11 percent Asian. Coalition building or economically stable cities where African to David Bositis, who analyzed black electoral for her is talking a different political language Americans are in a decisive minority, such as participation for many years at the Joint Center San Francisco, Seattle, and Minneapolis. to her different constituencies. for Political and Economic Studies. “Do blacks But there are also plenty of places where one overall have more power now, because Obama “African Americans want to hear about the economy, jobs, criminal justice, child welfare, would think it natural for African Americans has been president? No,” Bositis says. “Not

Winter 2016 The American Prospect 75

when Republicans control state legislatures and both houses of Congress. I think Obama himself has done a ton of things that are good for the country. The Affordable Care Act is essentially a civil-rights bill. He’s negotiated with Iran, creating new relations with Cuba, dealt with the recession when he took office.

“But I don’t know how far you can extrapolate that. There [have] not been a great deal of other black statewide election successes around the country, other than say, Cory Booker [former Newark mayor who became New Jersey senator] and Kamala Harris [the African American and South Asian California attorney general, currently the presumptive front-runner for the Senate seat of retiring Barbara Boxer]. She’s a heavy-hitter, but to win statewide like she did is still very hard for a black candidate.”

In a report this year commemorating the 50th anniversary of the Voting Rights Act, the Joint Center estimated that the number of black elected officials has grown from less than 1,000 in 1965 to more than 10,000 today. But they are still vastly underrepresented. African Americans are about 13 percent of the votingage population, but 10 percent of members of the U.S. House, 8.5 percent of state legisla-

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tures, 5.7 percent of city councils, and 2 percent of the U.S. Senate. Latinos, who make up 11 percent of the voting-age population, comprise 7 percent of the House, 5 percent of state legislatures, 4 percent of the Senate, and only 3.3 percent of city councils.

Part of this reflects the much lower turnout in local and off-year elections. The most recent poster child for that was Ferguson, Missouri, a 67 percent–black town outside St. Louis that riveted the world with the turmoil over the police killing of Michael Brown. Prior to the killing, municipal turnout was about 12 percent, only one of the six members of the city council was black, and its police force was overwhelmingly white. This year, with the eyes of the nation on its elections, turnout was 30 percent and the council became half black.

But the normally low turnout deeply concerns Ellison and Bass, who wonder aloud if there will be an emotional slump by black voters in 2016, compounded by the Republican assault on voting rights. The turnout in the November 2014 non-presidential general election (36.4 percent) was the lowest since World War II, and it cost the Democrats dearly as Republicans energized by their opposition to Obama

cristina fletes-bout té / ap images

City Council candidate Ella Jones, right, greets voters at the polls in Ferguson, Missouri, on Tuesday, April 7, 2015.

solidified their hold on Congress.

Many major states that Obama won both times were below that 36.4 percent average, including Ohio, Pennsylvania, California, New Jersey, and New York. In fact, New York was fourth-worst at 28.8 percent.

It was enough for Ellison to call for a fresh voting-rights campaign, asserting that the cost of low turnout was the biggest Republican majority in Congress since the Truman administration. “We seem to have forgotten that state legislatures and governors set the rules for who can vote in elections and draw the district lines,” Ellison wrote in a Nation op-ed. “In 2012, congressional Democrats won 1.5 million more votes than Republicans, but lost seats in Congress due to Republican domination of district maps.”

That domination could be solidified very soon as the Supreme Court is hearing and has heard more votingrights cases this term. They center on disputes in Texas and Arizona over whether the “one man, one vote” concept allows for districts to be drawn up based on total population or only on eligible voting population. Districts based only on eligible voters would clearly advantage more homogenous suburbs and rural areas at the expense of cities, which have more children of color, undocumented Latino residents, and disenfranchised felons, who are disproportionately African American and Latino.

A decision from the high court that exacerbates gerrymandering favoring more sparsely populated white voters, plus the vigorous voter suppression efforts represented by voter-ID laws might not exactly spell doom for those who want to see progressive politics based on a more diverse America. But it surely will mean a war against passivity and cynicism as a new generation of voters of color questions anew the worth of its vote.

James Jennings, urban policy professor emeritus at Tufts University and author of several books on African American and Latino empowerment, says, “This very resistance, however, will help to move black electoral politics further within a progressive framework calling for greater expansion of racial and eco-

nomic democracy.” He says the Black Lives Matter movement may be an early indication of a call for “greater electoral mobilization in black and Latino communities.”

Despite the politics of backlash, Obama’s

presidency will be remembered as transformative on several levels. Expanding family healthcare coverage to young adults up to 26 benefited Americans of all races. The Affordable Care Act lowered the uninsured gap between African Americans and white Americans from about 11 percentage points to about 7, according to an October study in Health Affairs done by researchers from the Urban Institute. By turning the EPA loose to set quasi-national environmental policy through new pollution and fuel-efficiency standards, Obama can proudly take credit for unprecedented domestic adoption of renewable energy and for finally making the U.S. a major player on the world climatechange stage. The economic stimulus and auto industry rescue saved jobs in struggling cities, and to the permanent chagrin of the far right, he was the president who got rid of Osama bin Laden. His ending of the ban against openly gay servicemen and servicewomen was an honorable discharge of history, extending the American civil-rights legacy to others.

Obama did do major things he could do on his own, such as doubling the percentage of women and people of color appointed to federal judgeships and other senior government positions. His administration included infrastructure projects for historically black colleges in American Recovery Act stimulus money.

But other Obama actions or inactions are painful reminders of the likelihood that the nation’s first black president always had a whitebacklash calculator in the back of his mind.

Clarence Lusane, political science professor at American University and author of the 2011 book The Black History of the White House, told me, “Obama’s in the White House, but lives are being ruined at the local level after program after program is being cut by states that were blue for Obama, but red in state government.”

Lusane said the unrest among ordinary African Americans who deal daily with discrimination, disparities, and increased risk of disenfranchisement reveals how the black political structure has lost a progressive

groove. “Most black mayors are now technocrats,” Lusane said. “That’s fine up to a point, but in most cities, massive gentrification is happening and they’re just sitting there letting it happen. We’re just sort of flopping and there’s no second string behind Obama.”

Could it have been different? Historians will long debate whether a stronger, more resolute Obama who fearlessly led America to engage in its unfinished economic and racial business would have succeeded in bridging differences— as he signaled in the 2004 keynote address that brought him to national prominence—or merely would have invited even more vicious backlash.

One of the most senior African American Democrats in Congress, South Carolina Representative Jim Clyburn, told me that “Obama’s election was the topping out of a leftward drift,

backward into backwater politics. Yet racial progress in America has always been fitful.

In retrospect, I should have been as sober as my Aunt Myrtha. The week before heading to Chicago, I visited my dad in the Veterans Administration hospital in Milwaukee, where he was recovering from heart surgery.

He wanted to vote absentee, so I went to Milwaukee City Hall to get a ballot.

The clerk told me that the deadline had passed for absentee ballots. I explained that my father was in the VA and surely there must be a provision for someone who had unexpected surgery. She said sorry, you’re out of luck.

I went back and told my dad the bad news.

But listening in was his nurse, who happened to be the patient advocate for things like voting.

“Oh, they’re just being lazy down there,” she

Would a more forceful Barack Obama have produced more racial progress—or only more hate-filled backlash? following the last rightward drift. The moment he was elected, the pendulum swung right back right. This country has never moved on a linear plane with one historical event building another. We’ve always gone back and forth.”

And the question is: Back to what, or forth to what?

Seven years ago, I was on a press riser at

Grant Park in Chicago, awaiting the appearance of the first African American president-elect of the United States. When the crowd was asked to recite the Pledge of Allegiance, I quickly realized it was the most multicultural multitude I had ever seen, saying the pledge with a conviction that rumbled through the riser.

Unlike the almost all-white and visibly older crowd watching John McCain’s concession speech, the scene in Grant Park was multi-colored, multi-gendered, multi-sexually oriented, multi-generational. People who wouldn’t have been caught dead boasting they were proud to be an American had their hands over their hearts. If American history were indeed a linear plane upward, that should have been the beginning of an America that would never go

said. “You just wait a minute.” A few minutes later, she reappeared with a piece of paper.

“You take this back to City Hall. Your dad as a vet in the hospital has a right to vote absentee past the official deadline.”

I went back down and the same clerk who turned me down before was there. She looked at me with stern eyes and said, “I told you that you were too late.”

I said, “You read this paper. The VA says he can vote.”

The clerk huddled with her supervisor. After many minutes of shuffling their feet, probably to figure out how to save face, the clerk gave me a ballot with no apology for my inconvenience.

I took the ballot back to my father and held his trembling hands as this native of segregated Mississippi voted for the first black president of the United States.

Derrick Jackson is a contributing columnist at The Boston Globe. He is a 2001 Pulitzer Prize finalist and has won numerous other awards, including from the National Association of Black Journalists and the Education Writers Association.

Winter 2016 The American Prospect 77

That Why is Miami—America’s most vulnerable metropolis to sea-level rise—having yet another beachfront development boom?

By Nath a lie Ba pt iste

E

ven from thousands of feet in the air, it’s obvious that Miami is disturbingly low-lying. Luxury sky-high buildings, bridges, and cranes tower over swampy marshlands and the slowly rising sea. The latest development has resulted in a sprawling metropolis on sinking land.

Rising seas combine with porous limestone— which is like Swiss cheese—to allow saltwater to infiltrate under the land during floods, and makes the greater Miami area the most

78 WWW.Prospect.org Winter 2016

climate-vulnerable place in the United States.

In Southeast Florida, the sea could rise three feet by 2060, and that doesn’t count temporary storm surges from increasingly intense hurricanes. Seventy-five percent of Florida’s population lives in coastal counties that generate 79 percent of the state’s total annual economy. The infrastructure in these coastal counties had a replacement value of $2 trillion in 2010 and is estimated to increase to $3 trillion by 2030.

Of the 2.6 million people who live in Miami-

Dade County, nearly 129,000 of them are living less than three feet above sea level. The county alone has more people living less than four feet above sea level than in any other state except Louisiana. The county’s estimated beachfront property value is more than $14.7 billion—not including infrastructure.

You might think, therefore, that developers, investors, and homebuyers would be very gun-shy about putting more money into Miami real estate. One good-sized hurricane,

Si nki n g Feeling

or another decade of relentless sea-level rise, and their investment will be washed away. At the very least, values are likely to fall because escalating climate threats will scare off other investors and falling demand will depress property values.

But you’d be wrong on both counts. Miami is enjoying yet another real-estate boom, one in a long series of boom-and-bust cycles that date back to the first Florida real-estate craze in the 1920s. The previous boom halted briefly after

the 2008 collapse, but by 2011 it was on again.

As of June 2015, more than 355 new towers have been proposed in South Florida. More than 70 of those will be in the greater downtown Miami area. The popular and wealthy Brickell neighborhood, the heart of the region’s financial sector and a place where one can work and play, is the site of extensive construction.

At 500 Brickell Condos, a 46-floor skyscraper completed in 2008, a 754-square-foot apartment with one bedroom and one bathroom

rents at $2,050. The same tiny apartment can also be purchased for $300,000.

Florida International University’s “Eyes on the Rise” web application lets users input addresses and see how much sea-level rise it would take before their homes become part of the sea. At three feet, which could happen by 2060, multiple roads in Brickell are underwater. At six feet, which is projected to occur at the end of the century, the neighborhood is completely submerged.

Winter 2016 The American Prospect 79

Real estate is famously cyclical, yet this boom is harder to explain, given the new and very real physical threat. So what explains the seeming irrationality of investors who added a staggering $2.7 billion worth of new construction into Miami real estate in 2014 alone?

A series of interviews and some back-

ground research suggest five major reasons. One is the short time horizons and magical thinking of homeowners. All seem to believe in their ability to anticipate the precise moment when the reality of climate disaster sinks in, so to speak, and to sell just before the market collapses.

For homebuyers, “the risk of sea-level rise 60 years from now is just small potatoes,” says University of Pennsylvania Professor Robert Meyer, who is co-director of Wharton’s Risk Management and Decision Processes Center. “When you buy in real estate,” Meyer explains, “you care about location, amenities, and investment risk. … Sea-level rise is in the distant future. They’re more concerned about

Americans who want to live in Miami, maybe now, maybe later, or want to stash money in the U.S. rather than in shaky economies at home, adds to the overheated demand. And finally, federal flood-insurance policy and disaster-relief outlays create the moral hazard of promoting investment in disaster-prone areas. The federal government shelled out more than $136 billion on disaster relief from fiscal year 2011 to fiscal year 2013. An effort that began in 2012 to increase flood-insurance premiums to align them more accurately with risks was postponed by Congress in 2014 after a huge political backlash.

So despite increasing risks, property values in prime neighborhoods of Miami are actually rising. The median value of a home in Miami was $286,700 as of November 2015, up from $269,000 the previous year. In neighboring Miami Beach, the median value rose from $373,000 to $406,800 in the same period of time. In popular neighborhoods overlooking the ocean or Biscayne Bay, the median home prices are closer to $1 million and higher.

measures that will protect their investments.”

One major culprit is the federal government’s National Flood Insurance Program.

Created by Congress in 1968 and administered by the Federal Emergency Management Agency, NFIP enables renters, homeowners, and businesses in communities that are participating in the program to purchase discounted flood insurance. Rates are set nationally and depend on when the building was built, and on its level of risk—which has been consistently understated.

By 2012, the NFIP was $24 billion in debt, which comes as no surprise. The discounted flood insurance created incentives for building in climate-vulnerable areas; repeated payouts after major disasters allow people to continue living and building in these vulnerable lowlying places, like Miami.

For communities that participate in the National Flood Insurance Program, there’s a voluntary rating program that provides communities with discounts on flood insurance.

what happens if [they] try to sell this week.”

Secondly, developers have even shorter time horizons than homebuyers. Once the property is sold, they are gone and the climate risk is somebody else’s problem. A third reason is the close linkage among Miami’s huge real-estate industry, the local economy, and the behavior of politicians. Bigger floods are surely coming, but few politicians want to rain on the realestate parade.

To compound this trend, some Florida politicians are climate-change deniers, a posture reinforced by their affiliation with developers.

In 2010, Governor Rick Scott told the Tampa Bay Times that he didn’t believe in climate change. Republican senator and presidential hopeful Marco Rubio says he doesn’t believe that human activity is the main cause of climate change. Politicians also have relatively short time horizons. If the big flood comes in 2030, most will have moved on.

Further, a huge influx of money from Latin

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“Contrary to popular belief, the devel-

opment industry is one of the most heavily subsidized,” says Florida land-use attorney Richard Grosso. The government builds the roads, the seawalls, and the bridges that protect buildings from the encroaching sea. The federal government also offers subsidized beach-nourishment projects for coastal communities.

Beach erosion is exacerbated by storms and rising sea levels. To combat this problem, nourishment projects take new sand from inlets or the sea floor to widen the beach. Between 1995 and 2002, the government spent $787 million on beach nourishment and has historically subsidized two-thirds of the costs. And the idea that the government will save the day persists in Miami.

“There’s an awful lot of expectation that government won’t let it happen,” explains Grosso, “and that those folks who own prime real estate will be able to influence government to fund the infrastructure and other

The Community Rating System runs on a class scheme; each class obtained comes with a 5 percent discount. Miami-Dade County is a Class 5, meaning they’re receiving a 25 percent discount on their flood insurance.

The NFIP has essentially become the sole provider of flood insurance for most homeowners and small businesses across the nation. Many private insurance companies have canceled flood insurance for areas repeatedly devastated by flooding. In 2007, climate change prompted Allstate to cancel or not renew policies in Florida, Louisiana, and Mississippi because recent hurricanes had decimated all of the profits the company had made in its 75 years.

And because the NFIP establishes taxpayer-backed subsidized insurance options, taxpayers are on the hook for major disasters. In response to the NFIP ’s mounting debt, Representatives Maxine Waters of California and Judy Biggert of Illinois co-authored the Biggert-Waters Act in 2012.

photos previous spread and opposite: k a d i r va n lo h u i z e n / n o o r / r e d u x

Subsidized Federal flood insurance and disaster relief outlays promote otherwise irrational investment in low- lying areas.

The Brickell City Centre under construction in downtown Miami

The act was an attempt to keep the NFIP soluble and sustainable by eliminating low rates and discounts. According to FEMA , one out of five NFIP policies receive discounts. The Biggert-Waters Act increased insurance rates of subsidized policies for business properties in Special Flood Hazard Areas and for properties that experience severe or repeated flooding.

The rate increases set by FEMA ended up being 25 percent each year until they reflect the true risk of flooding.

The backlash was severe. Members of Congress, including Waters, were outraged at the premium increases that would happen seemingly overnight. She released a statement saying that she was “outraged by the increased costs of flood insurance premiums that have resulted from the Biggert-Waters Act. I certainly did not intend for these types of outrageous premiums to occur for any homeowner.”

In a rare form of bipartisanship, Congress passed the Homeowner Flood Insurance

Affordability Act of 2014, which delays the reforms for four years.

Grosso can sympathize with those experiencing the skyrocketing premium increases. For many middle-class families, flood insurance would become wildly expensive. “I would have liked to see the reaction be more surgical,” he says. Since the NFIP remains frozen, the same old problems remain. A gradual increase, and perhaps increases that focus on the value of the home, could have been more effective. “There is no private-property right to a taxpayer subsidy,” says Grosso. “There is zero legal reason why we should continue to fund our own problem.”

Not surprisingly, Miami-Dade County officials speak kindly of developers, a key industry in the regional economy. “We have to assume they have looked into the same risks,” says James Murley, the county’s chief resilience officer. Since Hurricane Andrew blew through Florida in 1992, he says, codes have changed.

“They’re building quality buildings that go

50 feet into the bedrock and can withstand 150-mile-per-hour winds.”

Even if new buildings are built to withstand the effects of climate change, what about the surrounding infrastructure? If you can’t drive to your home or new office building, what’s the point of building climate-ready buildings? “A flood is an event, and it recedes,” says Murley.

But the porous limestone underneath Southeast Florida is making it harder for floodwaters to recede—and the intrusion of saltwater is already poisoning Florida’s drinking water.

“We’re looking at implementing a pilot project to identify an area that’s more vulnerable to flooding,” Murley says, “and what we can do to reduce that vulnerability.” The project aims to educate the public about what they can do to protect their homes, such as elevation. “We think we’ll be able to stay on top of these events and protect our people and our property values.” And protecting property values is of the utmost importance. Because the

Winter 2016 The American Prospect 81

state of Florida doesn’t tax individual income, the state relies heavily on property and sales taxes for funding. In 2010, nearly 43 percent of the state’s revenue came from property taxes.

Others are highly skeptical. “I’m not sure what a climate-ready building is,” says Harold Wanless, a professor of geological sciences at the University of Miami. “At lower elevations, the only climate-ready building would be a boat.”

Just how serious is the threat of sealevel rise for South Florida? Hurricanes have always been a menace to the Florida coastline.

In 1926, Miami took a direct hit resulting in 372 deaths and, after adjusting for inflation, $165 billion in damage. In 1992, Hurricane Andrew—which was mainly a wind event— devastated the community of Homestead, just south of Miami. Because of Andrew’s size and the location of its landfall, Miami was spared.

Hurricane Wilma slammed into the state in 2005. Since then, one million more people have

82 WWW.Prospect.org Winter 2016

moved to the state, and Florida is currently in a hurricane drought.

Scientists don’t believe climate change will make hurricanes more frequent, but they do calculate that the ones that do come ashore will be stronger—and more devastating. Stronger hurricanes coupled with rising seas will also produce dangerous storm surges. Sooner or later, Miami will take a direct hit, the way New York City did with Superstorm Sandy, but with even more lethal effects.

Storms aren’t the only events that f lood Miami. High-tide flooding, exacerbated by sea-level rise and heavily developed coastlines, is only expected to get worse in the coming decades. Miami is currently experiencing about six tidal floods annually; by 2030 that number will have skyrocketed to more than 45.

By 2045, the city can expect an average of 230 minor floods every year, according to the Union of Concerned Scientists. Coastal residents aren’t the only ones who will face

flooding, as the waters will be reaching farther inland. Today, people in Florida are buying homes that are likely to face regular flooding within 30 years—the lifetime of a mortgage.

Wanless thinks that six feet isn’t even in the ballpark. “That’s probably low,” he says. “The models don’t include the accelerating we’re seeing with ice melt.”

Dozens of new condominiums have been built in Miami-Dade County. “I don’t believe they’re designed to handle sea-level rise,” Wanless says. “They’re not designed for storm surges on top of three-to-four-foot sea-level rise, but builders are trying to get away with whatever they can before the bomb drops.”

Some states and locations threatened with rising seas have drawn up resiliency plans, but Wanless doesn’t put much faith in climateready infrastructure.

“We’re pouring all our FEMA money into helping people rebuild. We have to get more practical,” he says. “We should be setting aside

c a r lo s b a r r i a / r e u t e r s / l a n d o v

Streets flooded in Key Biscayne after Hurricane Katrina.

money for helping people to relocate; that would be one of the more responsible things to do.” But even after storms like Sandy devastate coastal communities and cost the government billions, “the sense of ‘you have to rebuild’ sets in,” Wanless says. “People seem to want to stay where they are. Even if it becomes inconvenient.”

“Don’t let anybody tell you it’ll be okay,” he warns. “Global warming is heating up the ocean and that is something we can’t turn around. … I think people are going to be fleeing from the coast.”

The great cliché of the real-estate business is that location is everything. That’s especially the case with buildings vulnerable to climate change. A truly green building is structurally sound, energy-efficient, low-cost, and in an area that isn’t vulnerable to sealevel rise and climate-change impacts. So a green building in a bad place is a bad building.

In a place like greater Miami, the problem is both too many buildings in the wrong places,

when what they want does not align with reality.

Like Chester, she does not know of any regulations that require realtors to disclose climatechange and sea-level impacts. “At this point, it seems to be both a moral and ethical decision.”

Saving South Florida from becoming part of the Atlantic Ocean would cost billions of dollars, and would require strict zoning as well as shifts in federal spending priorities to incentivize prudent construction rather than high-risk development. The real-estate industry doesn’t “want to scream too loudly” about sea-level rise, explains Meyer. “People would stop moving in; property values and the tax base would plummet.” The state would be left with no money for fixes. “If people become afraid and move, you have collapse of the local economy,” he adds, hypothetically, “and the place would be empty before the sea came up.”

The inevitability of a coastal property crash in South Florida doesn’t seem to deter many people. “It’s all about money,” says William Hardin, the director of Florida International

there’s a slow slide. “A lot of people ask me, ‘How much time do I have?’” he says. He tells them they don’t have to sell this year, but if it’s their intention to sell, they shouldn’t wait ten more. He also considers the homeowner’s financial situation. “It depends on if your financial well-being is dependent on your home equity. If so, your time horizon should be short—I would suggest you sell.”

“As the reality of seawater rise sinks in, mortgage companies may conclude that 30 years is too long of a time to gamble on,” says Stoddard.

“Maybe they’ll only issue 15-year mortgages.” If that were to cause people planning to sell later to change their minds and try to sell now, the result would be a run on the market.

Stoddard offers a scenario in which an event leads to an overnight crash. “If you owe $250,000 on your house, but you can only get $50,000, what do you do then?” When properties lose value, underwater homeowners end up with no resources to relocate, essentially becoming refugees.

Today, people in Florida are buying homes that are likely to face regular flooding within 30 years—the lifetime of a mortgage. and standards that aren’t stringent enough.

There’s an eco-village being proposed in western Miami-Dade County called Green City.

“But it’s in a low-lying area close to the Everglades, where we shouldn’t even be building any new development,” says Richard Grosso.

Developers can build climate-ready buildings—or not—but realtors are not currently required to disclose any information about sealevel rise to potential homebuyers. Mitchell Chester is a South Florida–based lawyer who wants to change that. “I’ve heard this one story of a realtor who is refusing to sell if [the potential buyers] don’t understand sea-level rise,” he says. But for the most part, realtors don’t want to lose sales and commission.

One realtor, Valerie Amor, says she’s atypical when it comes to the real-estate industry.

“I am forthcoming and perform a feasibility study before I assist in either buying or selling property,” she says. The reactions she gets from potential homebuyers are not always positive

University’s Tibor & Sheila Hollo School of Real Estate. “If somebody is going to buy it, they’re going to build it.”

Hardin doesn’t think that potential buyers are unaware of the risks. “Flood insurance shows you the probability of f looding,” he explains. But people still buy homes in known flood zones.

Continuing to subsidize flood insurance and incentivizing developers to build in risky and vulnerable areas can eventually lead to a major economic disaster if Florida’s hurricane drought comes to an end. Philip Stoddard is a biology professor at Florida International University and the mayor of South Miami. He is the rare Florida elected official who takes climate change very seriously. He bases his predictions of what could happen to coastal property values on hurricane behavior.

Stoddard’s goal is to explain to people what’s happening so that instead of a market crash,

“After a storm,” Stoddard explains, “it’s harder to sell your house.” If a devastating storm comes through and decimates South Florida and people move out, the city ends up with a lot of vacancies. A drop in the property taxes would erode city and county coffers. The first thing to go would be municipal services, Stoddard adds.

With limited sanitation and maintenance services, cities and towns begin falling apart.

Despite this threat looming on the horizon, there doesn’t seem to be enough planning for how to handle the impending crash. “We know it’s coming—but nobody is taking preparations,” says Stoddard. “The federal government hasn’t developed a legal framework on how to help people deal with it.” Stoddard’s goal is to try to explain to people that the crash is coming. “My goal is to make it a slow slide, rather than a crash. … The slower the change happens, the more people are able to adapt to it.

It can be bad or it can be really, really, really bad—take your choice.”

Winter 2016 The American Prospect 83

Labor Goes South

Can the movement rebuild itself below the Mason-Dixon line, and change Southern politics in the process?

A

t the AFL-CIO’s 2013 convention in Los Angeles, the Savannah, Georgia, Regional Central Labor Council offered a resolution with a rather simple message: Quit messing around and get serious about organizing the South. Global corporations were flooding into the region, the council argued, paying workers wages so low they were bringing down pay in the North as well as the South. It was time, they said, for the labor movement to come up with a concerted effort to rebuild power in the South.

The resolution emerged from years of frustration. With organizing in decline across the nation, and with the traditionally anti-union South becoming only more so, American labor had largely abandoned the South—even though the region was becoming more ethnically diverse and its cities more liberal. Across the South, labor “was not there, and we felt it needed to be,” says Brett Hulme, president of the Savannah council.

But this time the national movement responded, passing the resolution, making a commitment to a new “Southern Strategy” one of the AFL-CIO’s priorities. Also at that convention, Tefere Gebre, an Ethiopian refugee and California labor leader, was elected AFL-CIO executive vice president and has since become one of labor’s foremost proponents of a new Southern strategy.

“As trade unionists, if we have to fix what ails us, we have to go where it’s the hardest to function,” says Gebre, who now spends much of his time traversing the South. “Unless we raise wages and fight in the South, I don’t think we’re safe in the North or the Midwest or anywhere else. What happens in the South sooner or later comes to the rest of the country.”

84 WWW.Prospect.org Winter 2016

Since that 2013 resolution, some signs of life have emerged from the Southern labor movement—not so much in workplace organizing, but in political victories at the municipal level. The AFL-CIO has targeted five Southern “mega-cities” as starting points for building up progressive power hubs. From the Piedmont to the Gulf Coast, emboldened by the surprising momentum of the Fight for $15, Southern cities are passing local wage ordinances in states that have no chance of getting the wage hiked at the state level. (Indeed, the five states with no minimum-wage laws are Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.) Labor strategists, accordingly, are looking toward the future, thinking carefully about how to translate rapidly shifting demographics into a new Southern political paradigm.

To be sure, the current state of organized labor in the South is bleak. With “right to work” the law of the land in the South, and government employees stripped of collectivebargaining rights in most Southern states, the region has the lowest union density, with the rate of union membership bottoming out at 1.9 percent in North Carolina and 2.2 percent in South Carolina. A small number of unions persist in workplace-organizing campaigns, most prominently the United Auto Workers in the factories of German and Japanese automakers. But what’s new in labor’s approach to the South is its focus on cities.

The AFL-CIO’s new Southern effort isn’t an

attempt at mass organizing. Rather, it’s more about clearing away the rubble that obstructs Southern unions. As a starting point, the plan is to target five major Southern cities—Dallas, Houston, Atlanta, Miami, Orlando—which

combined are home to 4.5 million people, with millions more in the surrounding metropolises. All have rapidly shifting demographics that are representative of what the future American workforce and electorate will look like.

Urban centers all over the country have increasingly diverse populations, making them ideal laboratories for the progressive agenda.

Four out of five of the AFL-CIO’s Southern target cities have Democratic mayors (Miami’s mayor is a Republican, but the mayor of Miami-Dade County is a Democrat). And each of the five cities’ counties voted for Barack Obama in 2012— all, except Houston’s surrounding Harris County (a notorious swing county that Obama only carried by 1,000 votes), with resounding majorities.

Though the cities are home to the new Democratic majorities, labor leaders argue that too many of their elected officials are still acting like old-school Southern Democrats. The Southern cities lack the kind of cohesive political coalitions that progressives have built in Northern cities to keep elected officials accountable.

The AFL-CIO is working to build those coalitions, in the hope that progressive change will emanate out from the cities and shift the center of political gravity in the South from the Republican rural areas to the blue cities. “It doesn’t matter how much the demographics are changing if we don’t pay attention and organize … unless we bring in new energy,” Gebre says.

In a pilot run of the five-city strategy, the AFLCIO campaigned in Atlanta to bring back public transportation to the majority-black, workingclass suburbs of Clayton County. For many of the county’s residents who work in Atlanta—including at the bustling Hartsfield-Jackson Airport, the busiest hub in the country—getting to work was a challenge after the county commission cut

pbardocz / fotolia

By J u s t in M ille r

erik schelzig / ap images

UAW supporters outside Volkswagen’s Chattanooga factory on the day its skilled-trades workers voted to unionize

the area’s transit system in 2009—a casualty of years of public disinvestment coming from the state’s Republican statehouse.

So in 2013, labor joined with faith, environmental, and civil-rights groups to help pass a ballot measure in the county that would raise taxes to fund the transit expansion. It was an ambitious effort, particularly since similar measures had failed in other Atlanta metro counties. The AFL-CIO launched a local Working America affiliate (Working America is the federation’s political arm that reaches out to non-union working-class members) to lead on-the-ground canvassing, knocking on a total of 20,000 doors and talking to working-class voters about the benefits of the measure.

Despite resistance from some county commissioners, the initiative resonated with residents. In the 2014 election, 74 percent of voters approved the measure. Building off labor’s display of power, unions are using the campaign’s momentum to organize workplaces. The Amalgamated Transit Union is working to unionize the bus drivers in Clayton County. At the airport, UNITE HERE is in the midst of an organizing drive for many of the lowest-paid service workers.

The win was just a taste of what the AFL-CIO is aiming at in the South. “We found when you put people together, things happen,” Gebre says.

“The question is, How do you get that to scale?”

The federation has been working hard to

take such victories to scale in Houston—a city with numbers that suggest it’s ripe for progressive change. Fueled by its lucrative oil industry and a steady influx of Latino immigrants, the Gulf Coast metropolis of more than two million (with a total metro area of six million) is on pace to overtake Chicago as the country’s third-largest city by 2025. In 1970, Hispanics were 11 percent of the population; in 2010, they made up 44 percent.

The city’s demographics—and its electoral outcomes—have more in common with Los Angeles than with anywhere in the South. Yet progressives have struggled to translate the growing potential into substantive change.

“There isn’t a mechanism underneath to make those election results actually do the work for workers and communities,” Gebre says.

“That is what we want to build. … To do that, you need permanent, well-functioning labor councils and well-functioning community organizations to come together, hand in hand.”

That will take some doing. In many Southern cities, decades of both attacks and neglect have made the local labor movements badly weakened, without resources, and often lacking a clear sense of purpose or path forward. So the AFL-CIO is sending resources down South and offering guidance to labor councils on how to build up the capacity for progressive politics.

In Houston, that has meant linking labor organizations to like-minded faith and com-

munity groups—as local labor leader Zeph Capo puts it, to get rid of the old artificial boundaries and find a single, collective voice.

Particularly with labor so small, “we can’t afford to be separated into fiefdoms,” says Capo, who is both president of the Houston Federation of Teachers and secretary-treasurer of the Texas Gulf Coast Area Labor Federation.

Some progressive initiatives were already in the works. In 2013, labor advocates pushed the city council to pass an ordinance that combats wage theft and keeps violators off the city contractor payroll. A band of young Houston progressives started the first Texas chapter of the New Leaders Council, an organization that recruits and trains potential progressive leaders from outside the traditional political networks. They hope this will create a pipeline for more young Hispanics to get active in the local political scene.

This year’s mayoral election was a major test of the new coalition. Early in the process of selecting a successor to incumbent Annise Parker, Houston progressive organizations came together to host forums and decide on a candidate who’d champion their collective agenda.

They found that candidate in Sylvester Turner, who grew up working-class in a predominately black part of Houston and has served in the Texas House of Representatives since 1989. In a December 12 mayoral runoff election, Turner narrowly defeated Bill King, a Houston businessman and Republican who vociferously opposed the recent Houston Equal Rights Ordinance, the anti-discrimination ballot initiative that was struck down by voters in November.

Even with low union density in the area, organizing is not absent. In just the past few years, the American Federation of Teachers has launched several new locals in Harris County, which has about 25 school districts.

Capo sees new teachers, who are often burdened with student debt, as far more receptive to union membership than previous generations. Still, with an antagonistic statehouse, and with bargaining rights limited by a “meet and confer” state law that restricts unions’ ability to influence pay scales, the union has mostly been stuck in what seems like perpetual damage control. In Texas, “wins are in how much you’re able to limit harm,” Capo says.

Still, he’s optimistic about Houston’s pros-

Winter 2016 The American Prospect 85

pects. “We already have the majority; it just hasn’t been activated,” Capo says. “We’re starting to gain traction, to gain critical mass. Then the dominoes start to tumble. We’re on the precipice of getting there in the next few years.”

Two hundred and forty miles north on Interstate 45 is Dallas, another mega-city organizing target for the AFL-CIO. With the city’s labor movement in disarray, the national organization came in with resources and expertise on things like community benefit agreements and power mapping. “We started by getting back to basics and opening up our doors to all our community partners, ... getting us all under one roof so we can communicate better across lines on common ground,” says Mark York, secretary-treasurer of the Dallas AFL-CIO. Since then, organized labor has redefined its participation in Dallas’s local politics. No longer just rubber-stamping endorsements of all Democratic candidates, it now has an endorsement process that puts candidates through the wringer on everything from mass incarceration to living wages. “We have a more pro-worker progressive agenda in Dallas,” York says, because the vast majority of labor’s endorsed candidates have been winning their races on both the city and county levels.

In November, after a long push, the Dallas City Council passed a living-wage ordinance that requires all contractors and subcontractors hired by the city—largely in sanitation, janitorial, and groundskeeping—to pay its employees a minimum of $10.37 an hour, with future increases tethered to MIT ’s living-wage calculation for a single adult in Dallas County.

The Workers Defense Project, a worker center focusing on Texas’s largely immigrant construction industry, also pushed the city council to require the industry to give outdoor laborers a ten-minute rest break every four hours.

Advocates say such a break is crucial in protecting workers from potentially deadly work conditions in the Texas sun.

With the changing demographics of Southern cities, many policies that have long been routine in Northern cities that have substantial union presences—prevailing wages for construction work, living wages for city contract workers—are now coming to Dixie. In Miami, labor leaders have worked to ensure that the city’s construction boom of recent years is ben-

86 WWW.Prospect.org Winter 2016

efiting not just wealthy developers but also construction workers, many of whom are black and Latino. In March 2015, they successfully lobbied the city commission to unanimously pass a Responsible Wages ordinance, including a prevailing wage for all city construction projects. “Look, construction is lucrative,” says Andy Madtes, president of the South Florida AFL-CIO. “Paying someone $10 an hour on a construction site is not right. A prevailing wage levels the playing field.” Labor activists are also trying to figure out the legal pathway forward to expand the Miami-Dade County prevailing wage beyond just contractors, particularly to include airport workers.

Birmingham, Louisville, and Lexington have passed minimumwage increases; Dallas and New Orleans enacted living-wage ordinances.

Next on their radar is a campaign to address rampant worker misclassification in the Miami construction industry—a practice where contractors will call their workers independent contractors, and thus avoid paying into Social Security, workers’ compensation insurance, or payroll taxes, while forcing many workers to seek government assistance. “Contractors are getting away with murder,” Madtes says, “and taxpayers are on the hook for health care.”

There are indications of increased pressure on cities elsewhere in the South, too. In Greensboro, North Carolina, a community effort in which Working America played the key role persuaded the city council to raise the minimum wage for city employees with the goal of reaching $15 an hour in 2020. Up till now, says City Councilmember Jamal Fox, many city employees have been working two or three jobs to make ends meet. “If they can’t

take care of their families and take them out of poverty, what kind of government entity are we?” Fox says. “We have to be a leader on this.”

Both Lexington and Louisville, Kentucky, have increased their minimum wages in recent months. Down in the Deep South, Birmingham, Alabama, raised its minimum wage to $10.10 an hour. There’s been talk of additional hikes in Tuscaloosa and Montgomery.

However, the ability of cities to unilaterally improve workers’ rights is severely confined by hostile Republican power in the statehouses. Two weeks after Birmingham passed its minimum-wage increase, Alabama State Representative David Faulkner, a Republican, introduced legislation that would prohibit cities from dictating minimum wages for the private sector. Democrats were able to filibuster the bill at the end of the legislative session, but Republicans are expected to push its passage when the next session starts back up.

“The pattern is that opponents of economic populist measures will always go to the state to strip cities of the power to act,” says Paul Sonn, general counsel for the National Employment Law Project. “You see this most frequently in the South. Typically there’s the veneer of keeping the state regulatory framework uniform.

That’s pretty clearly not what’s driving this.

It’s naked power politics.”

Still, there are limited measures that can be passed within the confines of various pwreemption laws. Even if they’re constrained from across-the-board minimum-wage hikes, some Southern cities, like New Orleans and Dallas, have passed living-wage ordinances that require city contractors to pay employees a heightened minimum wage. Wage theft enforcement ordinances have been enacted in Houston and El Paso, as well as in a number of Florida counties, including Miami-Dade. Ban-the-box measures, which increase job access for former felons, are also gaining traction in Southern cities.

“There’s a lot of momentum nationally, but especially in the South where there hasn’t been a lot of populist activism in years,” Sonn says.

“There’s a more recent wave and a real pattern.”

This is far from the labor movement’s first

rodeo in the South. From the late 19th century through the entire 20th century, there have been several iterations of a “Southern Strat-

mark humphrey / ap images

egy.” Some have met limited success. Most, however, have not—often to the detriment of the broader labor movement.

Take, for instance, Operation Dixie, the Congress of Industrial Organizations’ lastditch effort to gain a meaningful presence in the South after World War II. The campaign was a massive undertaking, stretching across 12 states and lasting seven years, draining the labor federation’s resources, and, when it ultimately failed, forcing the CIO to merge with the American Federation of Labor.

The CIO’s pivot to the South was a necessity. Key CIO industries, particularly textile and clothing manufacturing, were steadily moving from the North, where labor was well established, to the South, a region that posed many challenges for a Yankee-led movement. Absent a vibrant labor movement promoting a more liberal politics, Southern elected representatives, in coalition with Northern Republicans, would block any progressive reforms and enact antilabor legislation—as they did in 1947 by passing the Taft-Hartley Act, which enabled states to fight unionization through right-to-work laws.

Had the CIO’s campaign succeeded, the implications for the South—and the labor movement broadly—could have been tremendous. “[A] CIO victory in the South might have hastened the civil-rights movement by at least a decade,” Barbara S. Griffith writes in her seminal account of the campaign, The Crisis of American Labor: Operation Dixie and the Defeat of the CIO. “A successful Operation Dixie could have dramatically altered the predominance of conservative Southern politicians in state and national legislatures. And certainly, union membership for Southern workers would have created the potential for shifts of economic power to those in the South who had never known any.” The CIO’s failure and the Southern states’ enactment of right-towork laws, however, eviscerated the region’s unions: 18 percent of Louisiana’s workers were union members as recently as 1964; today, just 5 percent are.

In its current Southern campaign, the AFLCIO seems to have learned from past failures and recognized current shortcomings. “This is not Operation Dixie,” Gebre says. “This is really more about capacity-building, looking at a longterm turnaround. You have a huge imbalance of

capacity. Whereas the other side has its biggest capacity in the South, we have negative capacity in the South—we just have a wish list.”

“Operation Dixie required a huge amount of the CIO’s resources. But people were sent [from the North to organize]; Southerners weren’t organizing Southerners. It just didn’t work,” Gebre explains. “What we’re trying to do now is scaled back. It’s very incremental, but that’s what we want it to be, because previous organizing campaigns weren’t. Previous campaigns have been ‘let’s put millions of dollars into a two-month campaign,’” he says, and then see what happens.

Despite the well-recognized failures of

Operation Dixie, there are still some strategic

Gary Casteel of the United Auto Workers (left) and Wolfgang Lamb of the German union IG Metall announce the opening of a joint office in Tennessee.

vestiges that remain, echoing the CIO’s emphasis on organizing the biggest textile factories in the hope that such symbolic victories would trickle down through the industry and the region.

As European and Japanese corporations have flocked to the South to take advantage of the low-wage buffet promised by Chamber of Commerce Republicans, industrial unions have devoted a tremendous amount of resources and political capital to gaining footholds at some of the most prominent new plants.

Since 2011, the United Auto Workers have been trying to form a union at Volkswagen’s two-million-square-foot plant in Chattanooga, with varying degrees of support from Volkswagen itself, only to face continual attacks from the Republicans who used tax-incentive carrots to get the factory.

The announcement of an impending NLRB election angered prominent Tennes-

see Republicans. Leading up to the election, Grover Norquist’s Center for Worker Freedom rented out 13 billboards displaying anti-UAW messages. Governor Bill Haslam and former Chattanooga mayor and current U.S. Senator Bob Corker also sounded the alarms against unionization. Even with tacit support from VW management, the UAW effort came up short, with 712 workers voting in opposition and 626 in support. The loss was a gut punch to the UAW, and stunned the labor movement.

If a union can’t win an election with company support, can it win any election?

But organizing in the South is as much a necessity for the UAW today as it was for the clothing and textile unions in the 1940s. The Southern foreign-owned factories pay lower wages than those made by the UAW workers at General Motors, Ford, and Chrysler; they pull down wage and benefit levels throughout the industry, including at plants with UAW contracts. Accordingly, the UAW has been pursuing novel organizing and representational strategies since its defeat at Chattanooga.

A week before Thanksgiving, in Spring Hill, Tennessee, UAW and IG Metall, the German labor union that represents Volkswagen workers in Germany, announced the opening of a joint venture to explore new models of worker representation, such as work councils, which are ubiquitous in Germany and allow workers and managers to regularly meet to resolve workplace problems. The unions are also hoping to use IG Metall’s established presence in Germany to pressure German auto manufacturers and parts suppliers to welcome UAW representation.

The union hopes that a public pressure campaign on German companies like Daimler, BMW, and Volkswagen, in addition to the roughly one hundred German-owned parts suppliers operating in the South, will force companies to improve working conditions. “It’s not about an organizing strategy to build mass numbers,” UAW Secretary-Treasurer Gary Casteel says. “These companies that come in here have social doctrines that say they respect worker rights. Then they land here and invariably wind up with American management and are acting like any other company going to extremes with union avoidance.”

In recent months, the union has shifted its strategy by organizing the roughly 150 skilled-

Winter 2016 The American Prospect 87

trades maintenance workers in VW’s Chattanooga factory, a group that had been vocally supportive of a union during its plant-wide organizing campaign. VW management, surprisingly, has appealed the result to the NLRB on the grounds that the unit is too small, but the UAW is likely to win the appeal. Plainly, the organization hopes that gaining even a small union presence in the factory could help ease the path toward broader unionization.

In Charleston, South Carolina, the International Association of Machinists and Aerospace Workers (IAM) has been trying to unionize Boeing’s manufacturing plant, while Governor Nikki Haley has made it her personal mission to thwart any sign of union life in her state. The union believes Boeing could serve as an important bellwether for organizing efforts at other aerospace companies, like Airbus’s Alabama facility, that have found refuge from unions in the South. IAM Organizing Director Don Barker likens the South to “a bargain bin for employers to get tax incentives from the states.”

The United Food and Commercial Workers (UFCW) union is reportedly taking a new approach to organizing in the Southern poultry processing plants, which have long exploited the deportation fears of their Latino immigrant workforce so as to keep wages low and thwart union drives. The union hopes to build off its underdog win at the Smithfield plant in Tar Heel, North Carolina. Smithfield had repeatedly called Immigration and Customs Enforcement on its own employees when organizing efforts surfaced, and allegedly employed company strongarms to intimidate workers inside the factory.

After multiple attempts, the UFCW finally succeeded in winning a union election at the plant.

Now the union is making it a point to team up with local immigration groups to educate workers about their rights during organizing drives and combat the culture of fear created by employers. It is also seeking to leverage its presence in Northern plants and pressure the giant poultry companies (five corporations control 80 percent of the market) on a national level, rather than trying to gain footholds at individual factories. “With any company that has multiple locations, they leverage their size with their clients,” says UFCW organizer Eduardo Pena. “We’re going to be doing the same thing. We’re going to stop looking at the pro-

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cess as a single location in the rural South.”

A similar company-wide strategy informs the campaigns of UNITE HERE to organize hotel workers across the South. Focusing on hotel workers in Texas, casino workers in Louisiana and Mississippi, airport workers, and Disney World employees, the union has been able to leverage its density and corporate relationships in other markets when organizing in the South. For years, the union had a troubled relationship with Hyatt, which had fought unionization efforts at some of its Southern hotels. In 2011, the union called for a boycott of the 17 Hyatt locations (all in Northern cities) where its contracts had expired, eventually expanding that to a worldwide boycott.

Two years later, the union and Hyatt came to

“I have no interest in recreating Southern Democrats,” says the AFL-CIO’s Tefere Gebre. an agreement that set a framework for future bargaining agreements and pledged company neutrality in future drives at non-union hotels.

The union used that neutrality agreement to organize the employees at two San Antonio hotels in 2014. The contract—which includes annual raises, reinstatement of outsourced jobs, and protections for immigrant employees—is the union’s first at a Southern hotel.

“It’s a combination of the work we’ve done locally and the history that we have in these industries nationally that contributes to some of the successes we have had,” says UNITE HERE Communications Director Annemarie Strassel.

“It’s easy to point to limitations, but it’s important to look at successes, too. The successes are incremental but show lots of possibility.”

Despite increased traction in blue

cities, there’s still the elephant in the room: Republicans run the Southern states, and through years of gerrymandering, their state-

house and congressional seats are entrenched.

“We’re playing a game designed by the other side,” AFL-CIO’s Gebre says. “That always puts you on the defense.”

Gebre says it’s futile to pour labor’s limited political resources into winning costly governors’ races in states where Republicans control state legislatures, and would politically handcuff a Democratic governor. Labor is now looking at putting measures on the ballot wherever possible that would create independent redistricting commissions, which could theoretically open the door for a resurgence of Democratic power. At the same time, Gebre reiterates the importance of ensuring that the candidates backed by labor’s progressive Southern coalitions will carry out their objectives. “I have no interest in re-creating Southern Democrats,” he stresses. “Our solutions will come by people getting elected on our values.”

In Texas, there’s increasing optimism about the potential for the state to turn purple over the next few election cycles. The rise of progressive coalitions in Houston, Dallas, and San Antonio means change for a large slice of the state’s population. Additionally, both Georgia and North Carolina appear primed for political shifts in coming years. But while 2016 is demanding attention now, labor is also looking ahead to 2018 and 2020, and identifying ways to win back both statehouses and congressional seats.

That’s when the politicians who will control the next redistricting will be elected, thereby shaping the political landscape of the next ten years.

It’s a long road ahead. There won’t be a slew of minimum-wage laws passed next year. There likely won’t be a domino effect of union election wins. But there’s an emerging sense of excitement from Southerners in the labor movement who are eager to build what they can on recent victories. The challenge will be to keep the national labor movement invested in the Southern project, and to build and strengthen urban progressive coalitions over the course of the next several years. It’s a political project of the largest scope, to which Gebre is deeply committed.

“I’m gonna stick to this. … If anybody is saying they’re going to organize in the South and they don’t have a plan to stay till 2022, it’s just a photo op,” Gebre says. “We have to have the staying power … to get the high-hanging fruit; there’s no low-hanging fruit in the South.”

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Perpetually Outraged, Perpetually Outrageous Donald Trump, a candidate with all the subtlety of talk radio, is the perfect expression of both the politics and media of our time. By Paul Waldman b

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f there’s a defining anecdote about Donald Trump in Michael D’Antonio’s Never Enough: Donald Trump and the Pursuit of Success, it comes when young Donald, then a high school student at the military academy where his demanding father sent him for being such an insufferable lout, sees his name in the newspaper for the first time. The

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occasion was a baseball game, and the headline read, “Trump Wins Game for NYMA .” The experience had a profound impact.

“It felt good seeing my name in print,” Trump tells D’Antonio.

“How many people are in print?

Nobody’s in print. It was the first time I was ever in the newspaper.

I thought it was amazing.” Not only did people know his name,

they knew he was a winner.

Half a century later, Trump’s particular brand of fame and his unique persona positioned him extraordinarily well to run a presidential campaign in 2016. Political analysts who had grown tired of his previous flirtations with a presidential bid were shocked that he decided to run, and even more shocked when he went straight into

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the lead. But the political moment and the media moment had combined to give Trump the best opportunity he could ever have.

To understand Trump’s rise, you have to understand both those political and media moments. In many ways, Trump’s candidacy is the natural outgrowth of the Tea Party era. The Republican revolt that began once Barack Obama was elected president was full of rage and resentment (and notably, Trump made himself America’s most prominent birther, promising he’d get to the bottom of Obama’s foreign provenance). But the movement soon shifted the target of its rage from Obama to

Winter 2016 The American Prospect 89

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the Republican establishment, those ineffectual cowards on Capitol Hill who always failed to deliver to the base what they promised. Throughout, the conservative media outlets described by Jeffrey Berry and Sarah Sobieraj in The Outrage Industry: Political Opinion Media and the New Incivility egged on the insurgents, convincing them that the problem, even more so than usual, was Washington insiders. Then along came Trump, the ultimate outsider.

Trump is not just unsullied by ever having run for office, much less ever having held one; he’s also unlike ordinary politicians. For all we worry about negative campaigning, politicians usually talk about each other with a veneer of politeness and civility even when they are being harshly critical. They seldom come out and say, “That Jack Smith is a low-down dirty dog,” preferring to note that “my opponent’s behavior raises serious questions about whether he could represent this state in an ethical fashion.” Trump has no inhibitions.

He’s more than happy to toss personal insults at anybody he doesn’t like. Lindsey Graham? “What a stiff.”

Charles Krauthammer? “A totally overrated clown.” Mexican immigrants? “They’re bringing drugs.

They’re bringing crime. They’re rapists.” Carly Fiorina? “Look at that face! Would anyone vote for that?”

But you know who Donald Trump does sound like? A talk radio host, a member of that Outrage Industry.

As Berry and Sobieraj describe it, Outrage has become its own media genre, one that “involves efforts to provoke emotional responses (e.g., anger, fear, moral indignation) from the audience through the use of overgeneralizations, sensationalism, misleading or patently inaccurate information, ad hominem attacks, and belittling ridicule of opponents.”

Though hardly new in American politics, only in recent years has Outrage matured into such a core part of the media world.

While it may be aided by political polarization, the Outrage Industry is a media phenomenon, one that feeds and is fed by politicians, advocacy organizations, and political

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movements, none more so than the Tea Party. To satisfy the industry, its practitioners must be both perpetually outrageous and perpetually outraged.

How does all this affect us? As Diana Mutz notes in In-Your-Face Politics: The Consequences of Uncivil Media, the political interactions we see played out today are profoundly different from the way we confront the subject in our own lives. “Political discourse on television regularly violates norms for polite conversation,” she notes, because we tend to be polite to one another—and we usually avoid arguing about politics with people we know (except perhaps at Thanksgiving). “With political television, in contrast, there is considerable (if not incessant) political disagreement, and the opinion holders that we see and hear are often chosen specifically as exemplars of extremely divergent, highly polarized positions.”

You might say the same about all kinds of entertainment—most of us don’t engage in gunfights, fall in love with alarmingly beautiful people, or go on trial for murders we didn’t commit, but we watch these things in entertainment media all the time.

Mutz conducts a series of carefully crafted experiments to tease out what happens to us when we watch hostile political argument, and finds a mixed bag of effects on arousal, memory, and perceptions of who’s being civil and who isn’t. Not all those effects are negative; for instance, in some cases the angrier exchanges are remembered better than the civil ones.

And the producers of cable news can take heart from Mutz’s work that they’re on the right track, because the subjects in her experiments rated uncivil debates as more entertaining than civil ones. For all our idealistic ideas about noble Athenian debate, “it is difficult to imagine a calm exchange of political ideas going viral. When it comes to uncivil outbursts, however, they are emailed, posted, and rebroadcast with commentary elsewhere.”

A few decades ago, American politics and the news media didn’t give vent to nearly as much harsh and hostile talk as they do today. There’s not much reason to believe that we as a

Never Enough: Donald Trump and the Pursuit of Success

By Michael D’Antonio

Thomas Dunne Books

The Outrage Industry: Political Opinion Media and the New Incivility

By Jeffrey M. Berry and Sarah Sobieraj

Oxford University Press

In-Your-Face Politics: The Consequences of Uncivil Media

By Diana C. Mutz

Princeton University Press

people have become angrier than we were then. But never has anger had so many places to be amplified and spread. The first significant date in that evolution is 1987, when the Federal Communications Commission revoked the Fairness Doctrine, which had required holders of broadcast licenses to give equal time to opposing political viewpoints (generally presented, however, in a polite, even bland way). The end of the Fairness Doctrine led to an explosion of political talk radio, as station owners no longer had to worry about whether their offerings were balanced. Then in 1996, the Telecommunications Act loosened ownership limits, leading to a rapid consolidation in the radio industry. “There are now around 3,800 all-talk or all-news stations in the United States,” Berry and Sobieraj note, “roughly triple the number in existence before the dramatic wave of regulatory and technological shifts.”

As talk radio was expanding, it had (and still has) no bigger star than Rush Limbaugh, who did more than anyone else to ensure that this newly powerful medium would be dominated by the right. Success breeds imitation, and Limbaugh’s success convinced the industry that conservative talk was a surefire moneymaker.

Liberal attempts to provide a radio counterweight haven’t been nearly as successful, in part because opinion radio isn’t filling the same need for liberals. Conservatives gravitate to talk radio in part because they’re convinced the mainstream media are biased against them—a core part of conservative ideology for years. Liberals also have popular alternatives they find appealing, including National Public Radio and stations catering to African Americans and Hispanics.

Finally, there is plenty of research suggesting that conservatives are more drawn to the kind of black-and-white rhetoric that flourishes on talk radio than liberals are.

As talk radio grew, cable news came into its own, and the Internet began its rapid spread, Americans faced a newly fragmented media that allowed the Outrage Industry to develop. In this new landscape, it was no longer necessary to appeal to everyone—you

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could be a success with a much more limited audience, and that meant not worrying about the huge swaths of the population likely to be offended. The O’Reilly Factor, a prototypical Outrage program, is the top show on cable news, but only has around two million to three million viewers per night.

People may have looked to Walter Cronkite for the truth, but they look to Limbaugh or O’Reilly for what Stephen Colbert so memorably called “truthiness.” It’s not a literal, factual truth so much as it is an emotional truth that resonates with you. And Outrage resonates, Berry and Sobieraj argue. “It works because its coarseness and emotional pull offer the ‘pop’ that breaks through the competitive information environment, and it works because it draws on so many of our existing cultural touchstones: celebrity culture, reality television, a two-party system, as well as the conventional news and opinion to which those in the United States have become accustomed.”

These programs offer a kind of wish fulfillment, as you see yourself reflected in your favorite host. Performers like O’Reilly and Limbaugh channel their audiences’ rage and express it with more coherence and brio than that audience ever could on its own. When you curl your lip in disgust at President Obama or Lena Dunham or just some radical professor somewhere who is the target of Bill’s venom that night, you can be sure that O’Reilly will give them the smackdown they deserve. All that remains is for you to shout, “You tell ’em, Bill!” at the screen.

Talk radio and television hosts are in many ways the people their audiences wish they themselves could be: just like them, but better. They share the audience’s values and beliefs, but they’re a little smarter, a little better informed, and a lot more articulate (talking into a microphone for hours every day will do that). They say all the things you’d say if you could, and they say them better than you ever would.

Trump too presents an aspirational picture for his supporters, one that his critics may not quite appreciate. Educated, sophisticated liberals scorn him for his nouveau-riche

Heavyweight Match: Bill O’Reilly interviews Republican presidential candidate Donald Trump on Fox’s The O’Reilly Factor, November 6, 2015.

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boorishness, his eagerness to slap his name in 20-foot-high letters on everything he owns, his insistence on the most garish displays of wealth he can conjure up (why wouldn’t you decorate your penthouse with Roman columns?). There are plenty of superrich who flaunt their wealth with grand boats and cars and homes, but no one who does it with quite the vulgarity Trump does, as though he were enacting a poor person’s idea of what a rich person is like.

parodic extreme; he’s also unfailingly literal where any other politician— even any other human being— wouldn’t dare, for fear of sounding like something between a narcissist and a fool. Other politicians supply evidence—their experience, their ideas, their accomplishments—to lead you to an unspoken conclusion.

Trump dispenses with the evidence and skips straight to the conclusion: Elect me, because I’m the best. “We will have so much winning when I get

This performance is an essential part of his appeal. Surveys consistently show Trump doing far better among blue-collar Republicans than among white-collar Republicans. If I had a billion dollars, many of his fans say, that’s just how I’d be: I’d put my name on my plane, get myself a hundred solid-gold toilets, trade in one fashion-model wife for a younger, prettier model as soon as she hits her forties, and tell everyone how successful and rich and better than them I am. I’d be a winner.

And it isn’t just in his personal style; it’s also in his political persona.

Trump is not just competitive conspicuous consumption taken to its

elected,” he says, “you will get bored with winning.”

And when he says that we’re being led by idiots, or that he’ll go to China and practically punch them in the nose until they give us our jobs back, or that we just need to build a wall along the border with Mexico, he offers the same kind of validation that talk radio hosts do. He says, you’re right about everything, those other people are idiots and jerks, and all those things you feel but think you shouldn’t say in polite company? I’ll say them for you!

This provides a way to understand Trump’s comments on immigrants— both the horror with which they were

Winter 2016 The American Prospect 91

“Provocative in its understanding of democracy, compelling in its case studies of Richard Nixon and Sarah Palin, and challenging in its call for reinvigorated rhetorical criticism, this is a book that makes us think.”

—David Zarefsky, former president of the National Communication Association and of the Rhetoric Society of America $29.95 paper

penn state press 820 N. University Drive, USB 1, Suite C | University Park, PA 16802 www.psupress.org | 1-800-326-9180

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received in polite company and the burst of support in the polls that followed. As Berry and Sobieraj make clear, it’s nearly impossible to overstate the degree to which conservatives have become convinced that speaking out in public will get them unfairly branded as racist by liberals.

And it’s certainly true that that does happen on occasion. But it’s also true that in the age of Obama, conservative media have been absolutely saturated with thinly (and not-so-thinly) veiled race-baiting from the likes of Limbaugh and Glenn Beck, who have spent years telling their almost entirely white audiences that Obama is a presidential version of Stokely Carmichael, a radical black nationalist out to wreak vengeance upon them for the racial sins of their ancestors.

On race, Trump can be a conservative champion, unafraid to make racially charged remarks and unapologetic when he does. One day he says Mexican immigrants are criminals and rapists, and the next he says, “I think I’ll win the Hispanic vote.” He’s not just wrong, but spectacularly wrong—in August, Gallup measured his approval among Hispanics at 14 percent—but he doesn’t seem to care. He’s speaking for conservatives on both ends, giving voice to their ugliest feelings and dismissing as absurd the idea that his statements might suggest any racism.

Once again, just like the leading lights of the Outrage Industry, Trump is the person his fans wish they could be. Those surprised by his rapid success in the polls might have missed the fact that as buffoonish as he might appear to some, Trump is a skilled entertainer who has been honing his portrayal of the character known as “Donald Trump” for decades, but particularly since The Apprentice debuted in 2004. Just like other conservative media figures, the character is a version of the real person, exaggerated for the benefit of the cameras. In the same way, O’Reilly goes on Fox News every weeknight and performs as a character named Bill O’Reilly. Is that character “real”? Yes and no. He surely believes what he says, and plenty of testimony from those who have known him show him to actually be an overbearing bully. But the televised

version creates a persona out of the person by amping it up to an extreme.

In his private moments, is Trump the same person? Perhaps he brushes his teeth in the morning, then looks in the mirror and proclaims: “That was the classiest, most luxurious brushing any set of teeth have ever experienced.

I mean, it’s incredible.” One imagines that moving through life in an endless parade of superlatives would be extraordinarily tiring. But the Trump we see in the media is, to the public, the only reality that matters.

Trump’s combination of wealth and fame may not quite make him “quite literally, the face of modern success,” as D’Antonio says. But even the things for which he is ridiculed only reinforce what a perfect creature of the moment Trump is. His Twitter feed is like a piece of cultural and political performance art, a running flame war not just with his fellow candidates but with the likes of Cher and Bette Midler. He’s at once spectacularly arrogant, extraordinarily thin-skinned, and desperate for attention—an embodiment, or perhaps an exaggeration, of the way a nation of over-sharers represents itself in contemporary social media.

American politics didn’t use to feature running flame wars. Like Berry and Sobieraj, Mutz doesn’t believe the politicians themselves are any less civil now than they used to be. But as she notes, nobody watched Aaron Burr and Alexander Hamilton duel on YouTube.

If something similar happened today, you bet we’d watch it, over and over again. And even if his ability to get people to actually vote for him has its limits, we can’t stop watching Trump—rich guy, tabloid celebrity, reality TV host, and purveyor of insults and outrage. He might not be popular enough to become president, but at this moment in history, he’s pure media gold.

Paul Waldman is the Prospect’s senior writer and weekly columnist.

He also writes for The Week and the Plum Line blog at The Washington Post. He is the author of Being Right Is Not Enough: What Progressives Must Learn from Conservative Success.

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Leading from the Left

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hen the Republicans under Newt Gingrich swept to victory in the 1994 elections, one exception to the tide was Edward M. Kennedy. On what was a terrible day for Democrats almost everywhere else, Kennedy weathered the toughest challenge of his career from a Republican businessman named Mitt Romney.

Kennedy was always attentive to his Massachusetts political base, but he had never had to work harder in a reelection campaign. He took out a million-dollar personal loan on his house in Virginia and rallied back not by trimming or pretending to be who he wasn’t, but by running as, well, Ted Kennedy.

At a packed rally in Boston’s Faneuil Hall on October 16, he laid it out: “I believe in a government and a senator that fight for your jobs,” Kennedy declared. “I believe in a government and a senator that fight to secure the fundamental right of health care for all Americans. … I will be a senator on your side. I will stand up for the people and not the powerful.” If there is a ring of familiarity in those words, that is no accident. Eighteen years later, Elizabeth Warren would be elected to the seat Kennedy held for 47 years making the same appeal, and with the same result.

The fact that Kennedy succeeded against the tide of what was called the Republican Revolution gave him a certain credibility when Democrats returned to Washington. Many of them were in a defensive crouch, and President Bill Clinton was shaken by an outcome that had to be read, in part at least, as a dispiriting referendum on his first two years in office.

Kennedy didn’t know from defensive. His first instinct—really his only instinct as a resolute liberal—was resistance. Kennedy was convinced that what the Republicans actually stood for was antithetical to the views of most Americans. And so he went to work. He consulted widely, organized tirelessly, and buttonholed potential

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allies for what he knew would be a long fight. It turned out that resistance was not only principled; it proved to be the shrewdest form of realpolitik on offer.

And being Ted Kennedy, he could call on anyone for advice and they would be glad to give him their time.

He also planned meticulously. One learns from Nick Littlefield and David Nexon’s remarkable Lion of the Senate that among the many kinds of politics at which Kennedy was adept was the politics of dinners. He regularly invited smart people to his home and was determined to bring out as much from them as he could.

“He was a serious and enthusiastic host who took a personal interest in the smallest details,” they write. “He took particular care to ensure that the seating arrangement at the dining room table would be conducive to productive conservation.” He even decided on what kind of china to use, and here, at least, Kennedy may have displayed a certain elitism that was antithetical to his politics. If “guests were important enough” he’d “bring out his mother’s silver epergne, which she had passed on to him.”

In organizing to oppose Gingrich, he drew on advice from historians, political consultants, close friends, and intellectuals, including some with a long Kennedy family pedigree.

And if Kennedy worried about the china, he did not stand on ceremony.

If people couldn’t come to him, he’d go to them. Thus did Kennedy visit the celebrated economist John Kenneth Galbraith at his home in Cambridge a month after the Democratic disaster.

Galbraith was 86 years old at the time, but his mind was still sharp and his fighting instincts still intact.

His analysis of a midterm election held more than two decades ago is, like Kennedy’s own campaign rhetoric, strikingly familiar. In the case of Galbraith’s shrewd take on why the Republicans had won, that familiarity

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also has a depressing quality. The challenges described by one of the greatest liberal economists of the last century still plague progressives—and in some ways might even be more acute.

“The problem is that only 38 percent of the eligible voters voted,” Galbraith said, “so the Republicans won with less than 20 percent of the vote.

The essence of Democratic success is to get people to vote, as in the Roosevelt era. There is no doubt why we had a period of success. We had a big turnout among low-income people.

Those who aren’t voting today are those who most need public services.

It is the Republican genius to get people to stay away from voting, to keep people who would vote against them from voting. With the southerners now taking over Congress, this is the revenge of the old Confederacy.”

On the other hand, Galbraith did not believe the Republicans would deliver what the voters wanted. “The Republicans’ appeal to the middle class is a fraudulent way to release resources to the rich,” he said. “The middle class will never see any gains from the Republicans.”

One rather doubts Galbraith would say anything different in 2016.

For Ted Kennedy, political leadership meant moving public opinion—not chasing after an elusive center. By E.J. Dionne Jr. b

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Lion of the Senate: When Ted Kennedy Rallied the Democrats in a GOP Congress

by Nick Littlefield and David Nexon

Simon & Schuster

Nick Littlefield is the reason why we can know so much about who said what to Kennedy, and how Kennedy girded for battle after his re-election.

One of Kennedy’s closest aides, Littlefield was a meticulous note-taker with his own shorthand method, and he was at almost all the key meetings. As the historian Doris Kearns Goodwin notes in her moving introduction, Littlefield “had spent summer vacations transcribing the copious notes he had taken during his years in the Senate,” and when Kennedy died in the summer of 2009, he “renewed his resolve to complete the manuscript.”

Lion of the Senate is a hugely valuable contribution to history and a fascinating tour of how politics and the Senate really work. It is also a very brave book. As Goodwin notes, in early 2011, Littlefield was diagnosed with a very rare progressive neurological disease called multiple system atrophy (MSA). As Littlefield got weaker, he asked his colleague and

Winter 2016 The American Prospect 93

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friend David Nexon to help him finish the book, which is told in Littlefield’s voice from beginning to end. It is thus a double labor of love—of Littlefield and Nexon for Kennedy, and of Nexon for Littlefield. We can be grateful that they persevered.

In these days of full disclosure (a habit I approve of), I should note that the editor of this book at Simon and Schuster, Alice Mayhew, is also the editor of my own forthcoming book, although she never contacted me about this one. I disclosed this fact to the Prospect’s editors and they asked me to move ahead with this review.

I should also say that I knew and respected both Littlefield and Nexon when they worked for Kennedy. But in truth, anyone who wrote regularly about what Kennedy was up to in his years in the Senate eventually ran into both of them. That is precisely why they are the right team to offer this memoir.

This book is important for two overlapping reasons. The first is that like all legendary politicians, Kennedy had a career that can be read like scripture.

A giant figure, his way of being a politician and a senator can be used to make utterly contradictory points about what ails politics now. Those who long for a more consensual and civil time invoke Kennedy the deal-maker, the man who assiduously cultivated friendships among Republicans and who passed a mountain of progressive legislation because he seemed always to find a Republican who shared some particular interest of his.

Above all, his close friendship with Senator Orrin Hatch of Utah yielded real breakthroughs, including the Children’s Health Insurance Program (CHIP, to which Littlefield and Nexon devote an enlightening chapter), the Ryan White AIDS Care bill, and a major expansion of national service (a gain regularly jeopardized by the hostility of many conservative Republicans to “paid volunteerism” and by the fact that service is not always a high priority for liberals who find themselves embattled on multiple fronts).

Littlefield and Nexon explain this side of Kennedy very well; they show why it is truly helpful in politics for a public official to like people genuinely

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and to be interested in what makes them tick. In some ways, Kennedy was like a Saul Alinsky organizer, always looking for the one or two areas of common interest that could bring him together with individual Republicans, even very conservative ones, around a particular cause.

But to focus on Kennedy only as a deal-maker misses how important it was for him to have a clear philosophical compass. The paradox of compromise is that politicians who know exactly where they want to go can find the give-and-take of legislating much easier than do those who either test ideas against the polls (public opinion is not static) or those who don’t have any large objectives. You can’t know how to move two steps forward and one step back if you aren’t sure of the direction in which you are walking. You cannot know the difference between a minor concession and a major betrayal of principle unless you know what your principles are.

As Paul Starr and Robert Kuttner, the founders of this magazine, wrote recently in these pages, “The idea of transcending partisan differences works only when there is some basic agreement on the ends.” Kennedy searched for agreements on ends wherever he could. He made it his business to get work done with anyone who would toil along with him. But when it was time to battle over basic purposes, Kennedy knew how to fight, unequivocally and unapologetically, for principle.

And this is where Littlefield and Nexon make their second great contribution: to an understanding of how and why Newt Gingrich’s Republican Revolution was largely foiled—and in particular how the large budget and tax cuts the GOP championed were stopped. The major part of Lion of the Senate is devoted to this fight—and the prime strategist was Ted Kennedy.

Kennedy knew from the beginning that he would have to become a lead organizer of the fight and that many dispirited Democrats were inclined to put up only limited resistance to the Republicans’ radical budgets. “Their thinking was that we couldn’t stop them [Republicans] no matter what we did, that the public had spoken,

You cannot know the difference between a minor concession and a major betrayal unless you know what your principles are.

and we’d only make matters worse if we resisted,” the authors write.

Kennedy completely understood the pressures to capitulate. “Democrats are shattered by the results of the election,” he explained to Littlefield in December 1994. “Those who survived are looking over their shoulders at Republican challenges next time. Those who were lucky enough not to have an election this year will be doing the same.”

The task, Kennedy went on, was to persuade colleagues in his party that “the election was not a mandate for a drastic scaling back of government”— which was true—and to “hold every Republican action and every Democratic initiative to the standard of how it affects middle- and low-income Americans.” This turned out to be good strategy.

The most important Democrat, of course, was Bill Clinton. Here, the authors do not pretend to make definitive judgments. They do not try to claim that Clinton would have capitulated if Kennedy had not been there to argue and cajole and make both the political and substantive case for blocking the big Republican cuts to Medicare, Medicaid, education, and the environment—these would become M2E2, the Star Wars answer to Gingrich’s Darth Vader. They write of “the president’s own divided mind and the ongoing argument within the White House.”

At times, they report, Clinton seemed to welcome Kennedy’s interventions and to see why fighting Gingrich would be in his long-term interest. In his own memoir, My Life, Clinton made clear that he knew from the start that “the new Congress, especially the House, was well to the right of the American people.” The memoir, of course, had the advantage of being written after Clinton’s budget triumphs. Still, Clinton was often in sync with Kennedy, and the authors argue that in certain respects, the two men “were soul mates—both were larger-than-life characters; both loved politics, political combat, humor and argument.”

Nonetheless, Littlefield and Nexon also stress divisions within the Clinton camp over how to respond to

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Gingrich and times when Clinton himself seemed inclined to make more concessions than Kennedy thought wise. Some of the president’s aides (including Dick Morris, the conservative consultant Clinton brought back after the November drubbing) thought deal-making would be better for Clinton. The whole theory of “triangulation” saw Clinton as casting himself as roughly equidistant from congressional Republicans and Democrats. This contrasted sharply with the Kennedy strategy that required Democratic unity in support of programs he was convinced the public did not want to see cut—and in opposition to tax cuts that tilted toward the bestoff in which the public had no interest.

And Clinton was, at times, the least of Kennedy’s worries. Some of his own more conservative Democratic colleagues seemed eager to go along with the conservative tide. Worse still was a great deal of strategic uncertainty among Democrats. The Kennedy of this book is constantly shuttling among his party’s various factions, strengthening the will of his allies, shoring up waverers, and pointing to

the strategic benefits of standing for something—and against what proved, in the long run, to be very unpopular conservative policies.

Littlefield and Nexon rightly point out one of the very worst decisions the Republicans made: to have their tax cuts add up to almost exactly the same amount as their Medicare cuts.

The public might respond to anti-government appeals in theory; it surely didn’t want to slash Medicare (or “the future growth of Medicare spending,” as Gingrich preferred) in order to finance tax reductions designed to go mostly to the wealthy.

As time went on, Clinton hardened his position. The attack on the Alfred P. Murrah Federal Building in Oklahoma City on April 19, 1995 by two far-right domestic terrorists inspired by racist and anti-government writings shook both the country and the political argument. The attack killed 168 people and injured nearly 700.

“People should examine the consequences of what they say,” Clinton said, “and the kinds of emotions they are trying to inflame.” Gingrich was furious that anyone would link his

Ted Kennedy: conviction as strategy

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anti-government crusade with the attacks. (“It is grotesque,” he insisted, using one of his go-to words.) Clinton had never explicitly linked Gingrich to the attacks, of course, but he knew that Oklahoma City put extreme forms of anti-government rhetoric in a very different light.

We know the ending: The Gingrich Republicans lost their fight, Clinton was re-elected handily, and the core New Deal/Great Society programs were saved. What makes Littlefield’s witness so valuable is the wealth of detail he provides. In doing so, he shows that what looks like an easy and obvious win in retrospect was far from easy; that there were many strategic stops and starts; that individuals had to make both tactical and strategic decisions—under pressure and without any guarantee of success; and that trying to move the center of the political conversation is better than chasing an elusive centrism at the very moment when it is being dragged rightward.

Kennedy showed that principle linked to a realistic understanding of what Americans want from government is always the right starting point for an intelligent progressivism. “Passivity usually doesn’t work in politics,” Littlefield and Nexon write. “The party setting the agenda, bringing energy and vitality to the contest, clear in its convictions, beats the party that is confused, sullen, reactive, defensive, incoherent and accommodating.”

Nick Littlefield admired Kennedy as a politician full of energy and allergic to being sullen, reactive, or defensive. He is leaving behind a tribute that speaks to his own passion for justice, reflected in a life devoted to a simple yet transformative idea his old boss loved to talk about: “that public service can make a difference in the lives of people.” Kennedy did that. So has Littlefield.

E. J. Dionne’s new book is Why the Right Went Wrong: Conservatism— from Goldwater to the Tea Party and Beyond. He is a Washington Post columnist, a senior fellow at the Brookings Institution and University Professor at the McCourt School of Public Policy at Georgetown.

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The Big Financial Divide Why we have one banking system for the well-off and a “Wild West” fringe for everyone else By Lisa J. Servon b

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he hit Broadway musical Hamilton features a riveting rap throwdown between Thomas Jefferson and Alexander Hamilton called Cabinet Battle #1. The issue on the table?

Secretary of the Treasury Hamilton’s proposal to assume the states’ Revolutionary War debt and establish a national bank. jefferson: But Hamilton forgets His plan would have the government assume state’s debts Now, place your bets as to who that benefits: The very seat of government where Hamilton sits hamilton: Thomas. That was a real nice declaration Welcome to the present, we’re running a real nation Would you like to join us, or stay mellow Doin’ whatever the hell it is you do in Monticello?

If we assume the debts, the union gets A new line of credit, a financial diuretic How do you not get it? If we’re aggressive and competitive The union gets a boost. You’d rather give it a sedative?

Jefferson wanted a system of small, local banks to support the farmers who constituted the backbone of the economy, while Hamilton supported a centralized, government-coordinated banking system. The very same debate features prominently in the second chapter of Mehrsa Baradaran’s important and comprehensive new book, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy. Hamilton did get the federal government to assume state debt and create a short-lived national bank. But Jefferson’s position prevailed through the 19th century and remained a powerful influence even into the 20th. Not only were banks

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small and local, they were also prohibited from engaging in the more complex financial activities in which Wall Street firms specialized. Local versus national; small and accessible versus large and efficient—these debates have been rehashed in different ways at different times over the 220 years since Hamilton left that office, and Baradaran chronicles them all.

How the Other Half Banks is a fascinating read, and Baradaran has done a masterful job of turning what could be incredibly dry material into a wellpaced, accessible chronicle of how the consumer financial services industry has changed since the beginning of the republic. She traces the history of the relationship between the banking industry and the nation, and shows how banks have gained more power, leaving the less well-off excluded and exploited. As a result, she writes, we are now left with “two banking systems in America: government-supported banks that serve the well off, and a Wild West of fringe lenders and checkcashing joints that answer the needs of everyone else—at a hefty price.”

Baradaran, an associate professor at the University of Georgia School of Law, explains the social contract that exists between banks and the government, a contract that rests on their interdependence. “For hundreds of years,” she writes, “this country’s leaders were afraid of excessive bank power and the inequalities of access it would inevitably produce.” Thomas Jefferson, John Adams, and others disdained banks and worried that they had too much power. Supreme Court Justice Louis Brandeis wanted to turn them into public utilities like the railroads. But over time, that contract has become “lopsided,” increasingly tilted in favor of the banks.

Baradaran details the efforts that have been made to provide safe, affordable financial services to everyone.

She chronicles early postal banking (which she calls “the largest and most

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

by Mehrsa Baradaran

Harvard University Press

successful experiment in financial inclusion in U.S. history”), credit unions, community banks, the Freedman’s Savings Bank, Morris banks, and industrial loan companies. She shows that models that succeeded for a time were heavily subsidized. Although all were well-intentioned, each and every one of these attempts eventually strayed from the public purpose to which they had originally been committed.

Perhaps the most important change to the social contract came during the past few decades, when banks began to lose customers—and profitability—as consumers turned increasingly to other kinds of financial services providers. Government responded by deregulating banks, enabling their unchecked growth. Deregulation and the growth it facilitated also allowed banks to make money in new ways— through complex investment strategies and international deals, for example.

As a result, they turned away from ordinary consumers because more money was to be made elsewhere.

Banks also began to fail more often during this period and, rather than let them fail, government stepped in to bail them out. Congressman Stewart McKinney coined the term “too big to fail” in 1984—24 years before the financial crisis that made it a commonplace catchphrase. McKinney used the term in a congressional hearing discussing the decision of the Federal Deposit Insurance Corporation (FDIC) to bail out Continental Illinois, the largest bank failure in U.S. history up until that time. The situation has only worsened since then. When Washington Mutual went under during the financial crisis in 2008, the bank was seven times larger than Continental Illinois had been. As they deregulated, banks adopted the attitude that they didn’t owe the public anything; the definition of “public interest” changed from equality of access to profitability and efficiency.

In the tradition of the Founders, Baradaran argues that banks should reciprocate the advantages granted them by the state—for example, insurance, liquidity protection, bailouts, advances from the Federal Reserve—by providing safe, affordable financial services to all Americans. And yet banks

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have moved further away from keeping up their end of the bargain, and the nation’s leaders have not held them to it. We saw that pattern most strikingly in the wake of the most recent financial crisis when, “instead of using the crisis to effect real reform in banking … policymakers focused myopically on maintaining bank profitability without requiring anything in return.”

Banks have been particularly unfriendly to people of color and women, who have endured credit discrimination throughout history.

Despite a spate of legislation passed in the wake of the civil-rights era, African Americans still get less-favorable credit than whites who have the same credit profiles. They lost more than any other group as a result of the financial crisis, and they are more likely to be targeted by debt collectors than are whites.

We’re at a place in our political history that makes it seem unlikely that government will rethink the “quid pro quo bargain” that has always existed between banks and the government but, in the modern era, does not hold banks accountable for the risks they take and the people they exclude.

Baradaran implies that it’s too late to “make banking boring again,” as Paul Krugman mused in 2009. She believes we should turn elsewhere for solutions, namely to the postal service.

In the final chapter of How the Other Half Banks, Baradaran argues that the problem of financial exclusion should be solved by a reinvention of the postal banking system that we had in the 50 years before 1967. Although the idea

Baradaran argues that in return for advantages granted them, banks should provide safe, affordable services to all. Yet they are keeping up their end of the bargain less than ever.

has its merits, Baradaran’s argument is less than convincing. The 2014 white paper produced by the U.S. Postal Service Office of Inspector General, on which Baradaran bases her recommendation, leaves too many critical questions unanswered, and she fails to address them sufficiently. She claims that the Postal Service can use natural economies of scale and scope. But in the last several years, post offices have been shutting down and decreasing their hours, while check cashers and payday lenders are increasingly open 24/7. Baradaran also maintains that post offices “would be able to offer products at cost.” But the one financial product they now offer—money orders—costs less at most check cashers than at the post office. The prepaid card and the Postal Loan—a substitute for a payday loan—that the white paper proposes seem attractive on the surface. But the proposal fails to specify how the Postal Service would develop effective risk scorecards for underserved segments of the population, who often require nonstandard approaches.

It also does not describe collections routines for delinquent loans, or how its loan model would generate a profit, or even just cover costs. Even nonprofit operations and for-profit businesses with a social-justice bent have had a hard time offering these services at attractively lower prices.

The Postal Service could offer low-cost financial services or it could generate profit, but it would be difficult to serve the poor and “save the [Postal Service] from imminent demise.” The white paper on which Baradaran bases much of her argument maintains that providing credit could enable the Postal Service to turn a profit. That seems unlikely.

In order to evaluate the postal banking proposal, it’s necessary to compare it to check cashers and payday lenders, since those are the places the “unbanked” are currently getting most of their financial needs met. It wouldn’t be too difficult to provide the kinds of services one finds at a check casher—money orders, bill paying, and remittances are not rocket science, and the people who work in these businesses don’t require an advanced education. But with the

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decline in the number of checks written, the increase in direct deposit, and the growing use of mobile banking technologies, the check-cashing business model is under pressure.

The provision of credit is another matter. The kind of underwriting that’s necessary to make loans to people who have little or no access to the financial mainstream is difficult and complex. It’s not so hard to make payday loans with annual percentage rates of 400 percent and more. Those aren’t the kinds of loans Baradaran is suggesting the Postal Service should make. It’s extremely tricky to do what she is suggesting—to make small loans at reasonable prices to people who likely have problematic credit histories. Making loans that carry even a 36 percent interest rate—a rate that’s considered usurious in some states—is tough to do. Oportun, a small-dollar lender based in California, has spent nearly a decade working to develop underwriting criteria, and turns a modest profit by offering loans at an average annual percentage rate (including fees) of about 38 percent, and by approving approximately half of all loans from new applicants.

How the Other Half Banks tells an important story, one in which we have allowed the profit motives of banks to trump the public interest. Baradaran is right to take a pragmatic approach to these issues, as it seems unlikely that there is sufficient political will to renegotiate the social contract between banks and government so that it once again favors the public.

The retreat of banks from their public responsibilities is a key piece of this story. But there’s a larger, equally important story behind this one. During the same time that deregulation happened, real wages declined, income volatility increased, and the socialwelfare safety net got torn to shreds. As a result, a growing number of people simply cannot make ends meet. Even the best public banking system on the planet can’t fix that problem.

Lisa J. Servon is professor of urban policy and management at the New School. Her forthcoming book, The Unbanking of America, will be published in 2017.

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Shall We Be Released?

The mass folly of mass incarceration and the road back to sane prison policy By Dana Goldstein b

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oliticos first took notice of Jeff Smith in 2004, when the then29-year-old political science graduate student came within two points of beating Russ Carnahan, scion of an entrenched Democratic family, in a 2004 Missouri congressional primary.

A 2006 documentary, Can Mr. Smith Get to Washington Anymore?, offered an admiring portrait of Smith and the grassroots activism of that race. But during the campaign, Smith had partnered with a shady media consultant who sent illegal postcards to voters. The cards attacked Carnahan and failed to include the required text explaining who had paid for them. Two years later, Smith became a state senator representing parts of St. Louis. His career was off to an energetic start. Yet when the FBI questioned Smith in 2009 about the old campaign postcards, he lied, claiming to have no knowledge about who had orchestrated them. Smith’s deception was revealed to the feds after one of his associates wore a wire. He pled guilty to obstruction of justice, resigned from office, and was fined $50,000 and sentenced to a year and a day in prison.

Smith served eight months. He is now a professor of politics and advocacy at the New School in New York and the author of a memoir, Mr. Smith Goes to Prison: What My Year Behind Bars Taught Me about America’s Prison Crisis. I began the book with skepticism. Like Piper Kerman, author of the mega-bestseller turned television hit Orange Is the New Black, Jeff Smith is a profoundly unusual excon. Did we need another book about what it’s like to be an affluent, college-educated white person behind bars? Black men are six times more likely than white men, and 2.5 times more likely than Hispanic men, to be imprisoned. What’s more, the first 50 pages of Mr. Smith Goes to Prison are a slog in which Smith recounts

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his political glory days, sometimes at pains to point out that other campaigns, not just his own, employed dirty tricks.

So I was surprised when the book became utterly absorbing, and poignantly self-aware, as Smith began narrating his time at Manchester Federal Correctional Institution in Kentucky. True to the politician he was, Smith arrived at Manchester with visions of helping his fellow inmates strive toward a better life. “[G]iven my grounding in black history, political experience, and love of teaching, I might be able to do some good if allowed to teach,” he thought.

But early in his sentence, he angered prison staff by emailing his literary agent, a potential violation of the ban against inmates conducting business behind bars. Instead of teaching, Smith was assigned to unload supplies in the prison’s warehouse. At 5 feet, 6 inches, and just 120 pounds, he joined six other prisoners unloading 35,000 to 40,000 pounds of food each weekday, earning $5.25 per month. Though he had promised his family and girlfriend that he wouldn’t break prison rules, he found he didn’t really have a choice within the prison’s social code. He and his co-workers pilfered everything they could, stuffing peppers and chicken patties into their oversized uniforms in order to bulk up for Manchester’s chief recreational activity: competitive bodybuilding.

Smith quickly lost his idealism about the rehabilitative potential of prison. A computer skills course consisted of sitting silently in a room with computers for 30 minutes. A nutrition class lasted five minutes. There was, however, a two-week course in hydroponics—growing tomatoes in water.

There were no classes in résumé writing or parenting.

In between recounting these stories, Smith does some hard thinking about the contours of American mass

Mr. Smith Goes to Prison: What My Year Behind Bars Taught Me about America’s Prison Crisis

by Jeff Smith

St. Martin’s Press

Arresting Citizenship: The Democratic Consequences of American Crime Control

by Amy E. Lerman and Vesla M. Weaver

University of Chicago Press

incarceration, sometimes troubling the narrative of the bipartisan prison reform movement. While there is growing consensus around shortening the prison terms of “nonviolent” offenders, Smith acknowledges it isn’t easy to determine which inmates fit into that category. “Many prisoners with drug and gun charges described incidents in which they put those guns to good use: they just hadn’t been caught doing so,” he writes.

Solitary confinement is a form of torture that leaves an inmate mentally unstable, medically sedated, and doing “the Thorazine shuffle … walking slowly with his head tilted at an angle.” But Smith admits it is so feared among inmates that it is also an “effective behavior modification tool.” Indeed, research suggests it is impossible to reduce or eliminate solitary without meaningful buy-in from correctional officers, who rightfully fear losing control. Cutting the use of solitary also requires funding for the sorts of psychological, educational, and vocational services that can be effective in changing a prison’s culture and reducing recidivism.

Smith argues for those types of programs, and for using electronic monitoring and home confinement as alternatives to incarceration. He goes further than most current elected officials in calling for the elimination of all mandatory minimums, not just a reduction in their lengths. Perhaps unwittingly, he has also produced a cautionary tale about the dangers of hyper-masculinity. Throughout the book, he compares politics to prison life, finding that in both realms, gendered forms of aggression and self-aggrandizement are prized over ethical behavior.

Two nights before he is set to be released from Manchester, Smith chooses to play in the semifinals of the prison basketball league, even though the court is a notorious breeding ground for fights, and fighting can result in solitary confinement or a delayed release. Sure enough, he is knocked unconscious by a player on the opposing team who is irritated

by Smith’s “showboating.” Lying in his bunk later on, Smith reflects.

“The way I had antagonized people

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on the court shocked me. …

All I’d thought about was flaunting my slick moves.

I’d never even considered how it would feel for somebody with eight more years to see a guy leave after eight piddlyass months, and then have that guy—a little white politician, for chrissake!—embarrass him in front of the whole prison as the runt waltzes out the door.”

istock

In Arresting Citizenship: The

Democratic Consequences of American Crime Control, political scientists Amy Lerman of Berkeley and Vesla Weaver of Yale observe the mind-sets of more typical former prisoners and their neighbors, those who are struggling to find service-sector jobs, not teaching college classes.

The American incarceration rate quadrupled between 1970 and 2010.

Over that period, the bipartisan popularity of “tough on crime” policies meant the criminal justice apparatus expanded as the social welfare state shrank. Problems like drug addiction and the urban segregation of the poor and nonwhite were dealt with through police and courts more often than through increasing access to health care or quality housing. The United States became the lone democracy to permanently bar some former felons from voting.

Ex-offenders were also banned from accessing welfare, food stamps, veterans’ payments, and federal financial aid for college.

Naomi Murakawa, Marie Gottschalk, Bruce Western, and Michelle Alexander are among the many scholars who have sketched that narrative.

Now Lerman and Weaver make a significant contribution. They use survey results and interviews to reveal the civic attitudes of the group they call “custodial citizens”: not just those behind bars, but also those on probation, on parole, or who simply reside in heavily policed neighborhoods. “A large and growing swath of citizens has been made members of a pariah class by the policies and practices

of the carceral state,” Lerman and Weaver write.

The authors’ interview subjects in Charlottesville, Trenton, and New Orleans, most of them poor people of color, describe avoiding a huge range of normal behaviors lest they trigger police interest, from standing on the sidewalk texting to carrying a backpack to wearing a white T-shirt to hosting a large gathering at one’s home. (All of these actions can be construed as evidence of drug dealing.) In Ghettoside, the journalist Jill Leovy showed that while police work hard to prevent and punish drug sales in poor, nonwhite neighborhoods, violent crimes that take place in those same areas often remain unsolved.

Lerman and Weaver’s subjects echo that complaint. Carlos, who grew up in northern New Jersey public housing, reports rampant “stealing and robbing and killing.” Yet, he tells them: “You call the police, an hour later they come. … Here, they don’t care about you.”

Unsurprisingly, these experiences breed cynicism toward government and even toward democracy itself.

Black “custodial citizens” are less likely than black individuals without a history of criminal justice contact to vote, register to vote, or join a civic organization. They report less hope that society will overcome racism and

The U.S. incarceration rate quadrupled between 1970 and 2010. As the criminal justice apparatus expanded, the welfare state shrank.

Ex-offenders were denied welfare, food stamps, veterans’ payments, and federal college aid.

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more personal experience of being racially discriminated against. Lerman and Weaver cite the Black Youth Project’s 2005 survey of black and Hispanic 15-to-25-year-olds, which found that more than 70 percent of respondents without significant criminal justice contact felt like “full and equal citizen[s],” compared with less than 60 percent of those ever convicted of a crime or arrested.

The book’s major weakness is an accident of timing. Although the lives of the book’s subjects are shaped by inequality and discrimination, Lerman and Weaver also observe a strong ethic of “personal responsibility”: an essentially conservative belief in the ability of the individual to persevere regardless of structural barriers. The authors conclude that the combination of individualistic thinking and cynicism toward government makes it unlikely that this group of citizens will effectively organize and agitate for change.

The research for Arresting Citizenship seems to have been completed before the explosion of the Black Lives Matter movement in 2014. Cellphone videos of police brutality on the streets, at parks, and in schools have helped ignite a protest movement that has altered the criminal justice agenda of presidential candidates, college administrators, the media, and Washington policy-makers. It remains to be seen whether Black Lives Matter will lead to sustainable policy change.

Still, in 2015, any discussion of cynicism around criminal justice reform should be tempered by hope.

Dana Goldstein, a former Prospect writing fellow, is a contributor to The Marshall Project and author of The Teacher Wars: A History of America’s Most Embattled Profession.

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The War on the Poor The welfare reform of the 1990s left millions of Americans near destitution. By Peter Edelman b

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e should know by now that Temporary Assistance for Needy Families, or TANF— the so-called “welfare reform” enacted in 1996—is a failure. For every 100 families in poverty in 1996, 68 received cash assistance. Now it’s only 23 in 100. Less than 1 percent of our population—just 3.1 million people— receives TANF now. Cash assistance has all but disappeared nearly everywhere. Because states have complete discretion over who will get help, two relatively generous states—California and New York—account for close to half of the nation’s welfare rolls. The other 1.7 million recipients are divided among the remaining 48 states and the District of Columbia. No wonder 7.5 million people have no income other than food stamps (now known by the acronym SNAP) at any given time. TANF is a success only by one indicator: It drastically cut government aid to the very poor.

Aid to Families with Dependent Children, the old welfare program that Congress “reformed” in 1996, was a direct federal entitlement program.

The money flowed through to needy, eligible recipients. Conservative state governments could not obstruct it (although, as now, they could set benefit levels). TANF, by contrast, is a block grant with fairly broad authority, so states are free to divert incomesupport money to other uses loosely connected to children and families, like financing child-welfare protection agencies. In other words, they can use the TANF block grant for what amounts to general budget relief.

To make matters worse, federal funding for TANF has been stagnant since the law was enacted, and is now worth 30 percent less than it was in 1996. By design, TANF made it easy for states to intentionally push people away from the program. One permitted technique is the increased use of sanctions, which kick recipients off the rolls for minor infractions. Another is

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the use of time limits, which the states can set at levels even stricter than the federal five-year limit. States may simply narrow eligibility for assistance and therefore keep people from ever getting into the program. TANF gives the state every right to do this unless it is caught violating the equal protection provision of the 14th Amendment of the Constitution. If the workers at the TANF office didn’t just declare the would-be applicants ineligible for one reason or another, they could ask privacy-violating and obnoxious personal questions that discourage people from even trying to get help.

Other than low-income people themselves, few people in Washington or anyplace else know and understand the meaning of these facts. Too many continue to proclaim that TANF is a roaring success because it has cut cost and presumably forced people into the low-wage labor market (where there are not enough jobs). In reality, we have ripped a huge hole in our national safety net.

H. Luke Shaefer have written a powerful book that breaks the silence. It is as worthy a successor to Michael Harrington’s The Other America as any I know. Edin and Shaefer do two things seldom joined together in a single book: Edin brings to the project her skills as one of our great ethnographic scholars, and Shaefer brings his exceptional understanding of the numbers about poverty and deep poverty in a number of data sets.

The statistics, as striking as are the ones I mention above, don’t do the job by themselves. Edin and Shaefer use human stories to produce a whole that is far more powerful than its parts taken separately. Shaefer adduces the shocking fact that 1.5 million households with 3 million children have cash incomes of less than two dollars a day— the number we usually use to measure third- and fourth-world poverty. Edin

(with Shaefer) presents a deeply moving human face that brings the stunning numbers to life. It is an explosive book.

Their choice of focusing on cash income is an eye-opener. Most of the people in the book receive food stamps, which typically provide an income equivalent at about a third of the poverty line (a little over $6,000 annually for a family of three). But food stamps aren’t cash. As Edin and Shaefer point out, cash is crucial. It is needed to pay rent, or if people are couch-surfing or crammed into an overcrowded and usually dilapidated lodging, they still need to have money to get diapers, tampons, and a host of other things the rest of us take for granted. As the authors point out, their only recourse is to sell their precious food stamps at a deep discount.

Indeed, the fact that desperately poor people are willing to lose about 40 percent of the value of their food stamps (the going rate) in order to trade some

Kathryn Edin and

of them for cash suggests just how desperate the need for cash is.

The authors get to know people

struggling in Chicago; Cleveland; Johnson City, Tennessee; and the Mississippi Delta, and we do, too. We see that these are people with long histories of work who still (except for a disability caused by a work accident in one of the stories) want first and foremost to find work and to support their families. We see firsthand the dysfunctional operation of today’s labor market in which low-wage work

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is epidemic and a total lack of jobs is often the prevailing fact. We see the inner city and the rural world. Nothing is working as it should. And we see that cash assistance to ameliorate the pain is simply unavailable.

The stories will make you angry and break your heart. Modonna Harris in Chicago (all names are fictional) went to a good high school and had some college, but made a bad choice in marriage and ended up working, for eight years, as a cashier at Stars Music, where she was able to support herself and her daughter, Brianna.

Everything began to unravel when she was fired one day because her cash drawer was short $10. Her housing fell apart and she and her daughter bounced from one family member to another, sometimes confronting situations of considerable peril to her daughter. She applied unsuccessfully for job after job and finally tried to apply for TANF, encountering the runaround clearly meant to drive people away. It succeeded.

Jennifer Hernandez and her two children, also in Chicago, were homeless and in a shelter, her second stint in two-dollars-a-day poverty. After applying for numerous jobs, she obtained one cleaning offices. It went well at first, but deteriorated into longer and longer hours, cleaning abandoned houses amid mold and mildew.

She soldiered on, but her asthma finally won out and she was back in two-dollars-a-day poverty. Rae McCormick, in Cleveland, had grown up living in more places than her 24 years. She finally found apparent stability for herself and her daughter, living with family friends, and got a job as a cashier at Walmart. She was honored as the fastest cashier in the store, but one night, her host left the truck she used to get to work without gas. When she called in to report her problem, they told her not to come back the next day. Other work turned out to be unavailable. Jessica Compton in Johnson City, Tennessee, sells her blood plasma as often as she can because neither she nor her husband can find work. Paul Heckewelder in Cleveland had a successful string of pizza shops that fell apart in the recession. Twenty family members live in his house. All who can seek work do so,

and in the meantime forage in Dumpsters and sell their plasma.

Even so, too many politicians continue to say that the problem is laziness, and demonize the poor for wanting “free stuff.” Not satisfied with destroying cash assistance, they call for turning food stamps into a block grant as well, and invite the states to finish shredding the safety net altogether. And don’t think that can’t happen. See TANF. Here is where we are now. Counting public benefits not included in the traditional poverty measure, about 15 million people are in deep poverty, with annual incomes below half the poverty line—about $10,000 for a family of three. What is even more shocking is the at least 4.5 million people with incomes far below that— an appalling two dollars a day.

Aid to Families with Dependent

Children, or AFDC—welfare as we used to know it—was in fact deeply flawed, and needed to be overhauled. It did not help people get jobs and therefore allowed people to stay on the rolls for unacceptably lengthy periods. AFDC also allowed the states to pay benefits at any level they chose (as TANF still does). But it had one positive characteristic that was very important. There was a legal right to receive it. Indeed, the nub of the critique from the right and some others was just that. Many states were always very stingy, but people who qualified under the law could go to the welfare office and ask for help, and it was illegal to turn them away. That’s why for every 100 families in poverty, 68 were getting help. Even in Mississippi, which offered AFDC at the level of 11 percent of the poverty line, a qualifying family also receiving food stamps would get total benefits at 40 percent of the poverty line. Now, only 10 percent of poor families in Mississippi receive TANF. No wonder so many live in deep poverty, even with incomes as low as two dollars a day.

The importance of having a legal right to public assistance became visible in a dramatic way during the recent recession. SNAP, to which people still have a right, soared from 26.3 million food-stamp recipients before the recession to 46 million at the

About 15 million people are in deep poverty, with annual incomes below half the poverty line— about $10,000 for a family of three.

$2.00 a Day: Living on Almost Nothing in America

By Kathryn J. Edin and H. Luke Shaefer

Houghton Mifflin Harcourt

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depth of the recession (and is still near that figure). TANF went from 3.9 million to 4.4 million recipients. The difference, of course, was that there is no right to receive TANF. The states were free to turn away anyone they wanted to. And most of them did. SNAP served as a strong counter-recession force; TANF did not.

Things looked better for the first few years after the 1996 law was enacted (if you didn’t look too closely), so there was a story line of success for TANF adherents until about 2000. The number of single mothers without a high school diploma who found jobs did go up significantly. The secret ingredient was near-full employment. However, the last half of the 1990s was the first and only period of significant growth in jobs and wages between the early 1970s and now. The welfare-reform proponents took the credit. (Never mind that 40 percent of the people who left welfare in that period did not find jobs.) In a time of prosperity, TANF ’s shortcomings were less visible. Indeed, TANF could only seem successful during a period of full employment, which serendipitously occurred just after the law was enacted and consequently averted the immediate disaster, which has now played out since 2000 and especially during the Great Recession.

In the vast majority of states, the only “success” of TANF has been saving money that very low-income people desperately needed.

But the success story, such as it was, ended after 2000. The number of single mothers without a high school diploma who had jobs went steadily down and is now almost to the level it was before the 1996 law was passed.

The rolls have gone down and down— down another 600,000 people in just the last two years—a fiscal triumph at horrific human cost.

Except in a very few states, welfare is indeed dead. And Kathryn Edin and H. Luke Shaefer have done more than anyone I know to show us the damage that has been done.

Peter Edelman is a professor of law and public policy at Georgetown Law. His most recent book is So Rich, So Poor: Why It’s So Hard to End Poverty in America.

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It Didn’t Start with Stonewall A new history deepens our understanding of the origins of the gay rights movement and the transformation it has brought about. By Peter Montgomery b

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illian Faderman’s The Gay Revolution: The Story of the Struggle begins with the late-1940s story of E.K. Johnston, a beloved professor at the University of Missouri who was considered a likely candidate to take over as college president. But everything changed when his name came up in the kind of police interrogation common in the day: one homosexual bullied into giving names, and those people intimidated into giving more names.

On no other evidence, Johnston was arrested, smeared in the media, fired from the university, and threatened with jail. Hoping for mercy, he pleaded guilty, and received a fine and a sentence of four years’ probation. A condition of his probation: “cessation of all homosexual practices.”

In an epilogue some 650 pages later, Faderman squeezes in a going-to-print mention of the Supreme Court’s June 26, 2015, ruling that made marriage equality the law of the land nationwide.

In the riveting intervening pages, The Gay Revolution tells story after story of lives destroyed by anti-gay prejudice brutally enforced by societal and governmental institutions—and of individuals-turned-activists who fought to win recognition for the sanity, dignity, and citizenship rights of LGBT people by taking on what early Mattachine Society activist Dorr Legg called the “Four Horsemen of the Gay Apocalypse”: the social, the scientific, the religious, and the legal.

At the end of the prologue, Faderman recounts the 2012 ceremony in which Army Colonel Tammy Smith was promoted to brigadier general.

Following tradition, the stars were pinned to each epaulet by two individuals most important to her. One was her father; the other, not so traditionally, was her spouse, who was also a woman. Writes Faderman: What long-fought battles, tragic losses, and hard-won triumphs

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have brought us as a country from the days when a much loved and gifted professor could be disgraced, thrown in jail, and hounded out of his profession as soon as his private life was revealed, to the days when a military officer could marry the woman she loves in broad daylight and be promoted, in a very public ceremony, to the rank of general with her wife by her side?

It is these battles—with enemies and sometimes between allies—tragic losses, and hard-won triumphs that make Faderman’s book compelling reading.

Drawing on years of archival research and more than 150 interviews, Faderman tells this history of social and political change through the experiences of individual people, those who found themselves in trouble and those who dedicated themselves to making constructive trouble on behalf of the rights and dignity of LGBT people.

For LGBT people not familiar with their own history, the book is an essential reminder that progress was not inevitable or easily won. The struggle for social respect and legal equality began in earnest more than 50 years ago, and was built on even earlier acts of courageous resistance.

One crucial early battle was waged through much of the 1950s by the publisher of One magazine, whose attorneys challenged a series of rulings from the Post Office that articles about homosexuals were by definition “obscene, lewd, lascivious, and filthy.”

The 1958 Supreme Court ruling that the topic of homosexuality was itself not obscene, and that the Post Office had no right to confiscate copies of the magazine, “made a remarkable social statement, tacit as it was,” Faderman writes.

“Homosexuality was not unspeakable.”

But it was cause enough for all kinds of persecution.

Faderman describes the earlier

The Gay Revolution: The Story of the Struggle

By Lillian Faderman

Simon & Schuster

case of Franklin Delano Roosevelt’s trusted aide Sumner Welles, whose drunken proposition of railroad train porters in 1940 was used by his political enemies to engineer his downfall. Welles’s destruction, she writes, “became the ripple that began the tidal wave of Washington’s homosexual witch hunts.”

Those witch hunts, led by the local police, the FBI, and investigators for the Civil Service Commission, were the enforcement arm of a morality hysteria that cost tens of thousands of people their jobs and forced countless others to live with daily fear that a slight slip in a carefully maintained facade could bring the world crashing down on them.

Faderman also reminds us that, contrary to much of the public imagination, the gay rights movement did not begin with Stonewall. Almost two decades before, Harry Hay founded the Mattachine Society in Los Angeles. Five years later, Phyllis Lyon and Del Martin created the Daughters of Bilitis in San Francisco. Psychologist Evelyn Hooker’s groundbreaking study disproving widely held theories about gay men’s mental health was presented in 1956. In 1965, Frank Kameny and Barbara Gittings led pickets at the White House and other government buildings challenging the federal government’s exclusion of gay people from government jobs. Gay people had protested police harassment at Cooper’s Donuts in Los Angeles in 1959, at Dewey’s coffee shop in Philadelphia in 1965, at Compton’s Cafeteria in San Francisco in 1966, and in response to bar raids in Los Angeles in 1967 and 1968.

But, Faderman notes, the ferocity and duration of the Stonewall riots signaled a crucial shift from the polite and respectable “homophile” organizations to an era of more aggressive activism from groups like the Gay Liberation Front and the Gay Activists Alliance, which flourished in the 1970s.

Stonewall was led by street kids and transgender people of color, but it also inspired middle-aged professional gay guys who took to the streets in creative new ways. And the widely publicized spirit of defiance changed the way many gay people looked at themselves.

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Faderman quotes poet Allen Ginsberg, who, having visited the Stonewall scene after two nights of rioting, said, “You know the guys there were so beautiful. They lost that wounded look that fags all had ten years ago.”

Many gay men took on a different wounded look during the scourge of AIDS in the 1980s and 1990s. Faderman chronicles some of the villains and heroes of the era, which devastated the community and a generation of leaders, but also pushed or pulled many people out of the closet, creating expanding circles of allies and advocates among their families and friends—and setting the stage for a new generation of effective activism.

Reading Faderman’s book can give one a sense that there’s nothing new under the sun when it comes to divisions within the LGBT movement.

Many of the current fissures have been evident through the decades: liberationists versus assimilationists; lesbians dealing with and refusing to put up with gay men’s sexism; “born gay” versus “gay by political choice”; tensions between trans people and lesbian feminists; single-issue organizations versus a broad, social justice– oriented movement; “respectable” behavior versus in-your-face activism.

Also remarkably familiar is the rhetoric of the enemies of LGBT people. What we hear today from some anti-gay activists sounds very little different from language used to

A demonstration in front of Philadelphia’s Independence Hall in support of homosexual rights, July 4, 1967

What we hear today from some anti-gay activists sounds very little different from language used to justify the witch hunts of 60 years ago.

justify the witch hunts of 60 years ago. For example, as the head of the Civil Service Commission, John Macy was a stubborn enforcer of homophobic rules that forced people out of government jobs in the 1960s. In defense of those policies, he said that it made no sense to think of homosexuals as a minority, because, he asserted, homosexual isn’t even a noun and it can’t refer to a person; it is rather an adjective that refers to deviant behavior. This is strikingly similar to rhetoric from some of today’s conservative evangelicals and some of their allies in the Mormon and Catholic hierarchies, who insist there is no such thing as a gay person, just a person with “homosexual tendencies” or one who experiences “same-sex attraction.”

For all the phenomenal shifts in public opinion, we still saw many 21stcentury ballot initiatives against marriage equality won by portraying gays as threats to children, the same way Anita Bryant attacked anti-discrimination laws in the 1970s. Just this past November, opponents of Houston’s transgender-inclusive nondiscrimination law convinced voters to repeal it by running ugly ads suggesting the legislation would provide an open door for child molesters.

Of course, no single book, even a large and ambitious one, can provide a comprehensive history of a movement that spans generations. There are inevitably gaps. In chapters on the marriage-equality movement, for example, Faderman has to condense into a relatively few pages something that has recently been the subject of multiple book-length treatments. It is not hard to think of individual strategists and activists who have played crucial roles in the movement but do not appear in this book.

Scholar John D’Emilio has said, in a mostly positive review, that Faderman’s focus on telling individual stories gives short shrift to the role played by organizations. It also means that there is less space devoted to analyzing the movement’s strategies

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and explaining how some of the crucial beneficial changes—notably huge shifts in public opinion—were accomplished. And the thematic chapters, covering overlapping periods of time, occasionally left me flipping back a few pages to remind myself what year I was reading about.

It is also worth noting that, while the book presents the history of the movement in the United States, the LGBT equality movement is increasingly a global phenomenon, as is the often deadly resistance and backlash.

Nobody understands the challenges of this kind of undertaking better than Faderman, author of numerous books on gay and lesbian history and literature, including Surpassing the Love of Men, Odd Girls and Twilight Lovers, and Gay L.A., co-authored with Stuart Timmons. She says that among the pieces left on the cuttingroom floor during the editing process were in-depth looks at the role played by progressive religious activists, activism aimed at influencing portrayals of LGBT people in the media, and the influence of LGBT sports figures. Faderman says she may be publishing that research in future articles.

Faderman says that she hopes her book will give LGBT people a clearer sense of their history and that it astonishes her when LGBT people say of progress toward equality, “Wow, that was quick.” In fact, it has been a long, hard slog, and, in the words of activist and author Michelangelo Signorile, “it’s not over.” The Religious Right is not going away, and is not going to abandon its opposition to LGBT equality, Faderman says. “It’s important to know how hard the struggle has been and how many defeats there have been along the way,” she writes. “It’s important to remain vigilant.”

The Gay Revolution will equip readers with a greater knowledge of the movement’s history, and an appreciation for the crucial role of individual acts of courage in winning and safeguarding equality. And it’s a great read.

Peter Montgomery is a senior fellow at People For the American Way, where he contributes to PFAW ’s Right Wing Watch blog, and is an associate editor at Religion Dispatches.

Winter 2016 The American Prospect 103

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What We Can Do about Gun Violence

by Harold Pollack

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lthough recent rampage shootings have put gun violence back in the national spotlight, many people are convinced no practical measures can be taken.

The poisonous politics of guns pose one set of obstacles. The sheer number of guns in private hands— 310 million—creates another.

Throw in current Supreme Court interpretation of the Second Amendment, and it’s easy to be pessimistic about the possibilities for making America safer. As great as immediate obstacles are, however, we do have the basis for a practical, medium-term agenda for limiting gun violence.

I want to suggest three elements of such an agenda: controls of military-style weapons, regulations of gun purchases by people under age 25, and stronger penalties for illegal gun carrying.

A fundamental question for gun policy is whether to focus on the most dangerous weapons or on the people who present the greatest risk.

In different ways, we should do both.

Rampage shootings and ordinary gun violence are distinct challenges, in part because they typically involve different weapons. Semiautomatic rifles such as the AR-15 are often used in the mass shootings that cause headlines and horror, though they account for a small proportion of gun deaths.

Jihadists, other fanatics, and the dangerously mentally ill are drawn to these weapons and to tactical gear such as suppressors and body armor available from websites with names like outlawtacticalarms.com.

In contrast, most routine gun violence and the vast majority of gun homicides involve handguns.

Common sense has long argued for stringent controls over the purchase of military-style weapons and gear. Politically, this is an issue that places the National Rifle Association and its allies on the defensive. Moreover, the Supreme Court appears receptive to well-grounded regulation of assault weapons.

Current laws bar some predictably dangerous people—such as convicted felons and those involuntarily committed to psychiatric institutions—from acquiring guns.

These laws are helpful and can be strengthened. Yet many dangerous people cannot be identified before they injure or kill others. I know of nothing in the background of Robert Dear, the Planned Parenthood shooter, or of Syed Farook and Tashfeen Malik, the San Bernardino killers, that would have legally barred them from buying guns.

Severe mental illness accounts for only about 4 percent of community violence. In contrast, an estimated 8.9 percent of American adults experience impulsive anger symptoms and have guns in their homes.

Few of these people are legally prohibited from possessing a gun, have ever been involuntarily committed, or would be diagnosed with severe mental illness. Because dangerous people are hard to identify, we should restrict general civilian access to the most dangerous weapons that cause the greatest harm.

We could also tighten regulations for groups at elevated risk who are not wholly barred from gun

possession. It is especially hard to identify young adults who are experiencing dangerous mental health challenges but have yet to accumulate the explicit paper trail that would bar them from possessing a gun. Following the example of rentalcar companies, we might consider more stringent restrictions and more careful checks on gun purchases by adults younger than age 25.

Gun violence restraining orders (GVROs) may also be helpful in monitoring and helping obviously troubled young men such as Elliot Rodger, who committed a rampage killing in Santa Barbara in 2014. The proposed GVRO process would restrict access to weapons by people who show signs that they pose at least temporary danger to themselves or to others.

Gun regulations could be especially effective in limiting gun crime by teenagers and young adults. Phil Cook, Susan Parker, and I analyzed interviews with 99 gun offenders in Chicago, a city with relatively stringent gun laws.

Our research, and the work of others, yields one ironically hopeful finding. Most gun offenders don’t know much about guns or underground gun markets. A young adult who can’t legally buy a gun typically obtains one through a relative, friend, or gang associate. If he has no relationship of trust with someone willing to help, he’ll often fail in this effort. This is good news.

It suggests that basic measures to deter straw purchases, illegal gun transfers, or interstate trafficking could make a real difference.

By itself, no city or state can

properly prevent or deter the acquisition of guns by people legally barred from possessing them.

Low-regulation states export guns, and therefore gun crime, to other localities. Even without national laws, however, swifter and more certain local penalties to deter illegal gun carrying would help. Many offenders carry guns because they are scared of their frightened peers who are doing the same thing. Stronger gun-specific deterrence could alter this riskbenefit calculation and cool the arms race in many localities.

Other incremental changes could also prevent many deaths.

Improved background checks, which came close to being enacted after Newtown in the ToomeyManchin bill, provide one obvious opportunity. Senators Kirsten Gillibrand and Mark Kirk are now sponsoring a bill to strengthen federal penalties for gun trafficking.

Unfortunately, some of the best evidence for the impact of incremental change comes from states that weakened good gun policies.

In 2007, Missouri repealed its permit-to-purchase handgun law.

That legal change was associated with a 25 percent increase in Missouri gun homicides. We must take seriously the measures that can move us incrementally in the opposite direction. We don’t have to live in fear of gun violence.

Harold Pollack is a professor at the University of Chicago School of Social Service Administration and co-director of the University of Chicago Crime Lab.

volume 27, number 1. The American Prospect (ISSN 1049-7285) is published quarterly by The American Prospect, Inc., 1333 H Street NW, Suite 300 East Tower, Washington, DC 20005. Periodicals-class postage paid at Washington, DC, and additional mailing offices. Copyright © 2016 by The American Prospect, Inc. All rights reserved. No part of this periodical may be reproduced without the consent of The American Prospect, Inc. The American Prospect ® is a registered trademark of The American Prospect, Inc. Postmaster: Please send address changes to The American Prospect, P.O. Box 421087, Palm Coast, FL 32142. printed in the u.s.a.

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Charter Schools as Incubators or Charter Schools Inc.?

Photo by Michael Campbell

By Randi Weingarten, President AMERICAN FEDERATION OF TEACHERS hen you hear the words “charter school,” what comes to mind? High expectations? High student attrition? High achievement? Lack of transparency?

There’s no right or wrong answer, because charter schools, like other public and private schools, vary widely. The top-ranked high school in Louisiana is a unionized charter school. On the flip side, a recent study of students enrolled in online charter schools found that they lost 180 days of learning in math over the 180-day school year.

(You read that right.)

Charter schools are publicly funded schools with flexibility in program design and operations. The late AFT President Albert Shanker was one of the first proponents, believing public school teachers could incubate innovative ideas, sharing successes and learning from setbacks.

That was our goal in creating University Prep, a charter school in the South Bronx that the United Federation of Teachers co-founded with Green Dot Public Schools when I was UFT president. Now in our eighth year, 98 percent of students graduate, and almost all go on to college. The goal was never to undermine the many extraordinary district public schools—or to close or make it harder for traditional public schools.

Unfortunately, some charter proponents have shifted the intent of charters from incubating ideas and sharing successes to competing for market share and taxpayer dollars. A pro-charter group in New York recently ran deplorable ads suggesting they care more about equity than Mayor de Blasio does. The reality is that some charter school operators want to take public funds yet behave like private entities that can play by different rules.

Charter schools tend to enroll fewer students with disabilities, fewer English language learners, and a less-poor population of students than do nearby public schools.

Reuters has reported on practices some charter operators use to “get the students they want.” Some require character references from a religious or community leader, entry exams, or completion of lengthy forms (often only in English). A Philadelphia charter school accepted applications only one day each year—at a suburban country club.

Some charter schools reportedly “counsel out” or expel students just before state testing day. Recent exposés revealed that the Success Academy Charter Schools chain has suspended or expelled children as young as kindergartners—often for minor infractions—at a rate seven times higher than elementary students in New York City’s public schools.

A new report revealed more than $200 million in fraud, waste and mismanagement in the 15 states examined of the 43 states that allow charters. The U.S. Department of Education this fall awarded $71 million for charter schools

to Ohio—whose charter schools are notorious for financial and ethical scandals and academic results that lag far behind traditional public schools—prompting an outcry from the state auditor. Federal officials have since placed restrictions on the funds.

Since 1995, the Education Department has awarded more than $3 billion to create and expand charter schools throughout the country, despite warnings by its inspector general that the department has provided inadequate oversight of federal funds sent to charter schools.

These failings hurt the charter school operators who are trying to operate aboveboard with students’ best interests in mind. And rampant charter expansion undermines traditional public schools. A proposal to “charterize” half of the public schools in Los Angeles would not just disrupt the public school system, it would destroy it. Neighborhood public schools would be stripped of essential resources, programs and personnel, and the district would be bankrupted. These schemes, also playing out in Boston, Chicago, Philadelphia and elsewhere, aim not to supplement public schools but to supplant them. There must be robust debates about proposals that so radically privatize public education.

“Charter” does not mean “better.” A well-regarded Stanford University study found that 25 percent of charter schools perform significantly better than traditional public schools, while 31 percent produce academic results that are significantly worse.

Hillary Clinton, a longtime supporter of charter schools, was recently lambasted when she called for accountability for all public schools. She noted that some charter schools “don’t take the hardest-to-teach kids, or, if they do, they don’t keep them. And so the public schools are often in a no-win situation, because they do, thankfully, take everybody, and then they don’t get the resources or the help and support that they need to be able to take care of every child’s education.” She’s right.

The public education landscape is enriched by having many options—neighborhood public schools, magnet schools, community schools, schools that focus on career and technical education, and charter schools. They all must be held to educational, financial and ethical standards, particularly now, given that half the children in public schools are poor. This is a solemn responsibility to both students and the public.

Some have shifted the intent of charters from innovating and sharing successes to competing for market share and taxpayer dollars.

Photo by Simone Bonde

Weingarten with a student at Instituto Health Sciences Career Academy, a charter school in Chicago.

Follow AFT President Randi Weingarten: www.twitter.com/RWeingarten

Give her the card before you give her the keys.

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