Donald Cohen

Hurricane Harvey Exposes Danger of Tax Cuts, Deregulation, Aging Infrastructure, Ignoring the Environment and ‘Limited Government’

In the aftermath of Hurricane Harvey, we need to tell the truth: While the storm’s devastation was unavoidable, it was made worse by too little government.

We need to say it loud and clear, because here come the snake oil salesmen.

Twelve years ago this month they invaded New Orleans after Hurricane Katrina. Republican leaders used historic flooding as an opening to help corporations and private investors profit from tragedy. Following a blueprint called “Pro-Free-Market Ideas for Responding to Hurricane Katrina and High Gas Prices,” they hired private mercenary corporations, cut taxes, weakened labor laws and eventually privatized the city’s public housing and most of its public schools.

There’s no doubt they’re salivating right this second over yet another crisis.

But the very “solutions” they’re sure to propose—charter schools, suspending prevailing wage standards, lower corporate taxes, etc.—are derived from the very ideology that made Harvey more destructive that it should have been.

Years of unchecked development and sprawl made Houston more prone to flooding. Private developers have made fortunes off the city’s lack of zoning laws, paving over acres of pastureland that once helped soak up floodwaters.

Decades of underinvestment in public infrastructure put more lives at risk. Both of Houston’s two major levees were built in the 1940s and need serious repairs—one breached under the pressure of Harvey’s heavy rains and the other is at full capacity.

Across Southern Texas, many people couldn’t evacuate simply because they couldn’t afford to. “I had some problems getting out of town, a little broke and stuff, so I had to come home and, you know, tough it out,” said one resident of Rockport, Texas.

Chronic inaction on carbon emissions—lobbied for by the oil and gas industry—is rapidly changing our climate. While climate change triggered by carbon emissions didn’t cause Harvey, it likely made the storm stronger, more unpredictable, and quicker to intensify.

For years, the Texas legislature has refused to pass any legislation to prepare for the impacts of climate change as long as it contained any reference to climate change. Just two weeks ago, President Donald Trump repealed an Obama-era executive order that had required infrastructure projects using federal dollars to be resilient to the impacts of climate change, like flooding.

We are decades into an all-out assault on democratic control of government. From rural towns to big cities, crucial public resources like water, public schools, and transit have slowly been handed over to the private sector. Roads, bridges, levees, and water systems have deteriorated without funding. Public budgets have gotten tighter as corporate taxes have been cut. The government, they say, is “too big,” and the “free market,” no matter the costs to poor and working people, reigns supreme.

The solutions in the coming weeks and months cannot be more of the same. No, American Enterprise Institute, removing price-gouging laws in the wake of Harvey to “let the market work” is evil and absurd. Enough is enough. The “free market” isn’t working.

America’s infrastructure needs direct federal funding with no strings attached that grease the wheels for privatization. Decisions about our communities need to be made by people, not private investors and developers. Those that make unimaginable wealth from a thriving economy need to pay more to keep it thriving, while those that profit from speeding up climate change need to pay more to clean up the mess.

The truth is, we need more democracy—government controlled by and for the people. Or Hurricane Harvey—and Hurricane Katrina, and Detroit, and Flint—will become the new normal.

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Billionaire Charter School Leader Says Black Politician Worse Than the KKK

The white supremacist violence in Charlottesville was the tragic result of the Republican Party’s racist politics, which have only intensified under President Donald Trump.

We must fight those politics, but we should also acknowledge that racism isn’t only angry people clutching guns and confederate flags.

A week ago, Daniel Loeb, the chairman of the board for New York City’s Success Academy Charter Schools network, accused New York State Senator Andrea Stewart-Cousins of being worse than the Ku Klux Klan:

Hypocrites like Stewart-Cousins who pay fealty to powerful union thugs and bosses do more damage to people of color than anyone who has ever donned a hood.

What had the African-American senator done wrong? Stewart-Cousins supports more transparency and accountability for charter schools, which are publicly funded but privately operated.

The billionaire hedge fund manager went on to praise charter school advocates “who stand for educational choice and support Charter funding that leads to economic mobility and opportunity for poor [black] kids.

Loeb’s remarks are unacceptable and should be condemned—but we shouldn’t miss the deeper lesson.

While Loeb has apologized, he’s refused to resign—and there’s very little New Yorkers can do about it. Even though Success Academy is funded with taxpayer dollars, taxpayers have no say over how the network operates. The investors, lawyers, PR professionals, and philanthropists that sit on its board get to spend public money to educate children with little accountability to the public.

That’s the problem with private control of public education. Charter schools are publicly funded schools run by private groups—some for-profit, some nonprofit, and some that use nonprofit status to hide behind for-profit schemes unaccountable to parents and the public who pay the bills.

For example, across the country from Success Academy, two charter schools in Livermore, California, managed by the nonprofit Tri-Valley Learning Corporation were recently found to have potentially funneled millions of dollars in public money to various private entities. The schools closed, leaving students scrambling for other options and parents with no way to hold Tri-Valley’s leaders accountable.

Many charter schools also raise additional money from private investors with little transparency about how that money is spent. Success Academy has received millions of dollars from billionaires like Rupert Murdoch and Trump economic advisor John Paulson.

What Daniel Loeb said is not only racist, it’s also wrong. As the nation’s schools become increasingly segregated by race and class, many charter schools are making things worse.

Public schools should be in our hands, not billionaires who get to decide what’s best for “poor black kids.”

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Atlantic City Votes to Protect Its Water From Chris Christie

When New Jersey Gov. Chris Christie lounged on a closed public beach it was symbolic of his governing style. If you have money and power, you can do whatever you want—or as Christie said about his beach vacation, “That’s just the way it goes.”

And with Donald Trump in the White House, it seems like the winner-takes-all attitude has corrupted every level of American government.

But what just happened on another stretch of New Jersey shoreline goes to show: if there’s any truth in the Trump era, it’s that local politics is where ordinary people can fight back and win.

On Tuesday, the Atlantic City Council unanimously passed an ordinance to ensure its residents get to vote on any action by the state to sell or lease the city’s water system.

Why might New Jersey sell or lease Atlantic City’s water? Well, because Christie has been laying the groundwork for such a deal for years. In 2014, he passed a statewide law making it easier for struggling municipalities to sell off water infrastructure. Turns out, Atlantic City has been struggling—mainly due to a rash of casino closures, including Trump’s failed Taj Mahal. Last summer, after the state bailed the city out, Christie made it loud and clear there were strings attached: “I want [the loan] secured by every asset they have, so that if they don’t pay it, I get to take the assets, sell them and pay you [the taxpayer] back.” Late last year, he delivered on that promise and took control of the city’s assets and most of its decision-making power.

Within months, it became clear that Christie’s state takeover was really a corporate takeover. The law firm Christie hired to run the show—at $400 an hour—privatized trash collection and recommended the state layoff 100 of the city’s unionized firefighters. A partner at the firm defended the layoffs: “If we don’t have everyone sacrificing, we’re going to be Detroit.” Meanwhile, the city’s casino operators continue to receive massive tax breaks.

No wonder residents are worried their water system might be sold off or leased to a private corporation. Under public control, Atlantic City has some of the cleanest and most affordable water statewide. Privatization poses many dangers, including higher rates. New Jersey residents who get their water through private utilities pay an average of $230 more per year than those with public utilities. There’s also the issue of quality. The city of Missoula, Montana, recently took back ownership of its water system, arguing that under private ownership it was leaking half its water while investors received millions of dollars in dividends. And remember, it was state takeover that led to Flint, Michigan’s water crisis.

Residents might be worried but they aren’t running scared. Joined by statewide and national organizations, they packed council meetings for months and gathered signatures in the community to get the water ordinance up for vote. “This is the people’s ordinance,” said a member of the local NAACP, which helped get the word out.

This is what real democracy looks like. It’s hard work but it must be done, especially now that winner-takes-all is the new normal.

Water is a fundamental human right. The only way to make sure it’s accessible to everyone, no matter how much money they have or the color of their skin, is to keep it under public control and out of the hands of corporations.

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Corporations Could Soon Advertise in Our National Parks

The Grand Canyon, brought to you by Budweiser. Verizon signs throughout Yellowstone. The thought of advertising in our national parks is nauseating. But it could happen.

Earlier this month, the National Park Service released a proposed plan to begin aggressively seeking private sponsorship for park projects to make up for dwindling public funding. Park leaders would be encouraged to spend official time soliciting donations from individuals and corporations. Anything from sponsoring a bench to designing, building, and even operating a park building would be allowed.

The plan stirs up a fundamental debate about our public goods—what they are, who owns them, and how they should be managed.

On one side, private interests are vying to influence and control America’s untapped public space and resources. Like Coca-Cola, which in 2011 tried to halt a planned ban on the sale of plastic water bottles in Grand Canyon National Park. The company owns Dasani, the most popular U.S. brand of bottled water, and considered the ban a hit to their bottom line. The National Park Service’s new proposed plan would allow even more private influence on policies and decisions to protect our public resources.

On the other side, communities across the country are standing up to corporations that want to control and profit off of the things we own in common. Just last week, after an eight-year fight, a coalition of advocates in Oregon blocked the multi-national corporation Nestlé from bottling water from the Columbia River Gorge. Their unprecedented county ballot measure that bans all commercial water bottling passed by 69 percent and paves the way for other communities looking to protect public resources.

Our public parks and resources allow everyone—from working families to the wealthiest—to enjoy and experience nature and live healthy lives.

Things we hold in common—parks, public buildings, public resources—are a big part of what makes a society. They need protection and more public investment, not private influence.

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The Online Learning Charade: No Buildings, No School Yards, No Education

Did you know that one of the fastest growing sectors of the charter school industry is the “virtual” charter school, where K-12 students learn from home in front of their computers? No school buildings, no recess with friends, no shared learning. It’s true. The largest virtual charter company, a publicly traded corporation called K12, Inc., provides education to over 120,000 public school students across the country. In 2014, it made more than $900 million in revenue, most of it taxpayer money earmarked for public education.

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The Education of Alan Greenspan

Greenspan 1963: Writing in Ayn Rand's Objectivist Newsletter, Greenspan declared as myth the idea that businessmen "would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings. It is in the self-interest of every businessman to have a reputation for honest dealings and a quality product."

Greenspan 2008: Testifying before the House Committee on Oversight and Government Reform, Greenspan recanted: "Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief.... This modern [free market] paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year."

Greenspan's life spanning quotes are the bookends of the dramatic ascendance, dominance and ultimately demise of the radical right's unquestioning faith in unfettered free markets.

Greenspan's pronouncement in 1963 marked an inauspicious beginning of the new Free Market Fundamentalism in the midst of the coming LBJ landslide and Goldwater defeat. But Rick Perlstein's Before the Storm, an account of the roots of the coming conservative movement, detailed how the Goldwater debacle launched a 40-year project to construct a sophisticated conservative movement and create a new American conservative consensus.

For the Free Market Faithful, those early years were dark days of "big government" marked by the Great Society, landmark civil rights legislation, Medicare and Medicaid. Dominant public opinion even drove progressive policy-making well into the Nixon and Carter years with major environmental and workplace legislation and new regulatory agencies.

But the Fundamentalists, with revolutionary zeal, kept their eye on the prize and systematically built the infrastructure for a conservative triumph. Their greatest accomplishment was the shifting of mass public opinion towards a set of agenda-enabling free market beliefs -- that the government could do no right, and the market could do no wrong. They posited, successfully, that the laws of markets were as immutable as the laws of nature.

Throughout the period of conservative dominance there were always those who understood the fallibility of unregulated markets. In 1992, the GAO, asked by Democratic Congressman Ed Markey to study the impact of new and complex financial derivatives, concluded presciently that "The sudden failure or abrupt withdrawal from trading of any of these large U.S. dealers could cause liquidity problems in the markets and could also pose risks to others, including federally insured banks and the financial system as a whole. In some cases intervention has and could result in a financial bailout paid for or guaranteed by taxpayers."

In 1994, a bi-partisan bill was introduced in Congress to tighten the supervision of the complex and growing derivatives in the banking industry. The bill would have had the regulatory agencies establish standards for capital requirements, disclosure, accounting and examinations and audits. As expected, the banks argued that no new laws were needed. Greenspan sealed the legislation's defeat (as he was able to do with all attempts to establish updated regulation for the financial industry) by testifying that the Fed had the powers it needed and that a taxpayer bailout caused by derivatives was remote.

Greenspan claimed with the resolute faith of a true believer that "risk in financial markets, including derivatives markets, are being regulated by private parties... There is nothing involved in federal regulation per se which makes it superior to market regulation." There were doubters, but Greenspan, in the heady days of free-market mania, was the ultimate silencer of doubt.

In 2003 Greenspan continued to praise derivatives as "extraordinarily useful." As recently as September 2005, in a speech to the National Association for Business Economics, Greenspan proclaimed his continued confidence in derivatives in free, un-regulated capitalism, the inherent ability of unfettered markets to self-correct in times of economic distress and the overwhelming dangers of government intervention.

Greenspan spoke glowingly about the "development of financial products, such as asset-backed securities, collateral loan obligations, and credit default swaps, that facilitate the dispersion of risk." He claimed, with remarkable lack of foresight, that "these increasingly complex financial instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago."

The argument was an old one. The inviolability of the laws of the market would generate the information needed to establish appropriate asset value and risk and self-regulate to prevent excessive speculation. Government regulation would, by definition, get in the way of natural market forces.

He did admit that the Fed, concerned about the irrational exuberance of the Tech Bubble, considered and rejected aggressive action to reign in the speculative excess of the late 1990's. They chose not to "risk recession" and decided to "wait for the eventual exhaustion of the forces of boom." Unfortunately, exhaustion turned into global collapse.

Now, just three years later, the economic crises and its obvious roots in a fanatical aversion to regulation led to Greenspan's striking admission that he and his fellow believers had been wrong.

The dramatic collapse of the banking industry finally exposed several key flaws in the Book of Greenspan. First, the entirely self-evident fact that economics is a behavioral science - that economic conditions are the sum total of human actions, emotions, vice and virtues. Ultimately it was a very human vice - greed - that became the paramount driver of economic growth. Greed, inherently incapable of recognizing excess or limits, inevitably leads to economic distress.

Second, predictions that market signals would cause the necessary corrections turned out to be stunningly false in the face of financial instruments so complex that no one could accurately determine the value of assets or level of risk.

Greenspan's awakening signals a turning point for American capitalism. It's the beginning of the end of the fundamentalist free market epoch, underlined by calls from Democrats and Republicans alike for greater regulation, far more government oversight and even public ownership of private capital.

The rise of the free market zealots is a study of how a movement, driven by the clarity of purpose and a commitment to the long haul, created a narrative of the American economy that clouded the steady erosion of American living standards and the death march to the environmental precipice wrought by global warming. Their fall is a lesson for progressives who, shellshocked and silenced by right wing ideological dominance, couldn't see the way back to a more progressive future.

Progressives have plenty to do to undue the damage and fully untangle America from the sway of the free-market faithful. Still, distrust of government is high, the institutions of government have been hobbled and the right wing message machine is still intact even if on the run. Fortunately, the progressive intellectual infrastructure, more developed and more capable than even just a few years ago, is ready to drive a new New deal, focused on 21st century economic and environmental challenges and reinvigorated with 21 century ideas.

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