Addendum to Union Meeting Agenda: Jim Miller will be making a brief presentation relating to his article below which was recently published in the City Beat.
INDY BY THE SEA?
by Jim Miller ³If we can show reform in San Diego, it becomes a model nationwide.²
‹Carl DeMaio, founder, Performance Institute
If you want to understand what¹s really going on in San Diego politics, skip the local media as they trip all over themselves to fawn over new ³strong mayor² Jerry Sanders and pick up a copy of the recently released Center on Policy Initiatives report, Target San Diego: The Right Wing Assault on Urban Democracy and Smart Government. It will be sobering reading for the swing Democrats whose votes were necessary to elect Sanders in a majority Democratic city, and even for moderate Republicans who don¹t think their party is aiming to roll back the great reforms of the 20th century.
As Lee Cokorinos¹ rigorously researched and thoroughly documented work notes, ³The San Diego right has waged a series of intense ideological and political campaigns to undercut the role of the City Council in favor of a Œstrong mayor¹ form of government, developed anti-union messaging in the media and raised the profile of San Diego as a problem city in the national media.² They are, Cokorinos informs us, training activists and ³developing and driving anti-government policy initiatives and research² through local, state and national think tanks with the support of organizations such as Grover Norquist¹s Americans for Tax Reform.
Norquist, who once famously said his goal was to cut government ³down to the size where we can drown it in the bathtub² and who has said that ³bipartisanship is another name for date rape,² counts San Diego County Republican Party Chair Ron Nehring as his San Diego ³senior consultant.² Norquist is also an associate of David Safavian, who, after being lionized by Performance Institute founder Carl DeMaio as ³an ideal candidate to lead the Office of Federal Procurement Policy,² was eventually arrested in 2005 by the FBI for obstructing a federal inquiry into Jack Abramoff¹s affairs. Interested yet?
Cokorinos¹ report carefully documents the intricate web of connections between the corporate-funded think tanks at the national, state and local level. Some of the key organizations include the aforementioned Americans for Tax Reform, Freedom Works and the American Legislative Exchange Council at the national level; the Project for California¹s Future, the Pacific Research Institute, the Claremont Institute and the Reason Foundation at the state level; and the Performance Institute here in San Diego. This powerful, well-organized network of right-wing think tanks is funded by the owners of the largest and richest companies in the United States such as Koch Industries, Amoco, Shell, Texaco, Coors Brewing, Nationwide Insurance, Pfizer, the National Energy Group, Phillip Morris, Verizon Communications Inc. and a host of others too long to list. As the report indicates, they are part of a ³movement to reverse decades of progressive reform² that began during the early ¹70s.
As historian Howard Zinn and others have noted, after the breakdown of the business-labor consensus that grew out of the New Deal, the movement toward accelerated globalization and capital flight, and the rise of the new right, the American power elite sought to curb what Samuel Huntington called the ³excess of democracy² that arose during the 1960s and began to actively support and generously fund think tanks designed to influence and/or criticize the media, shape the public debate on a wide range of political, cultural and economic issues and counter the influence of progressive academics in the universities. They have largely succeeded by consistently demonizing the government at all levels as inefficient and corrupt; valorizing the ³business model² and ³market based government;² dividing the cities from the suburbs via anti-tax populism; and peeling off working-class white voters first with Nixon¹s ³Southern strategy,² which capitalized on the Southern white backlash against civil rights, and then with what Thomas Frank calls ³backlash populism,² which seeks to replace economic anger with ³culture war² rage at godless liberal elitists.
In so doing, there has emerged a strange marriage between the religious and libertarian right, which, it appears, has won a seminal victory with the appointment of Judge Samuel Alito to the U.S. Supreme Court, shifting the balance to the right for years to come and endangering a whole host of reproductive, civil and economic rights.
Above all else, the agenda of the right-wing think tank movement is privatization. When government fails, the answer is always to hand over the commons to the corporate world, which, we¹re told, does it better and more efficiently than the public sector. We are told this ad nauseam even after Enron, Haliburton and Abramoff and the K Street gang do all they can to prove it wrong‹it¹s the big lie that keeps on lying.
What is privatization? As Si Kahn and Elizabeth Minnich define it in The Fox in the Henhouse: How Privatization Threatens Democracy:
³Privatization is a concerted, purposeful effort by national, multinational, and supranational corporations (and individuals, families, officeholders, nonprofit and religious organizations they have made or promise to make enormously wealthy) to undercut, limit, shrink, or outright take over any government or any part of the public sector that (1) stands in the way of corporate pursuit of even larger profits, and (2) could not be run for profit.²
Kahn and Minnich go on to point out that privatization, like the outsourcing of government jobs, ³leads not to decreasing but to increasing the number of lousy jobs,² and it does little to lower existing taxes. Their study notes that, ³What is perfectly clear is that, even if a major privatization takes place, and even if the quality of service goes down, taxes usually remain the same. The difference is that more of those public funds go into private corporate pockets.²
So why do it? Kahn and Minnich suggest that such snake oil is sold to the public in order ³to destroy independent, democratic government itself.² With no ³big government,² there are no pesky taxes on corporations, bothersome safety or environmental regulations, no limits on development and, ultimately, no real checks on the power of capital.
As Nicholas Confessore of Washington Monthly has reported, Jeb Bush¹s ³outsourcing of millions of dollars² of state work in Florida to private contractors has resulted in ³little evidence that doing so has improved state services² but has, more importantly from the right¹s perspective, ³vastly improved the financial state of the Florida Republican Party.² The same is true of President Bush¹s proposed efforts to privatize about half the total of federal jobs, which, Confessore notes, ³may or may not save taxpayers much money² but will surely ³divert taxpayer money out of the public sector into private-sector firms, where the GOP has a chance to steer contracts towards politically connected firms.²
In California, privatization advocates at think tanks like the Pacific Research Institute and the Claremont Institute argue that, according to Cokorinos, ³a key political objective for the right wing is to compel states and localities to compete with one another in a frenzy of deregulation and privatization that will supposedly attract investmentŠ. Taken to its extreme, this would involve a race to the bottom, where perfect efficiency equals no regulation, and the perfect state is a minimal government that simply secures the sanctity of contracts and provides for the common defense.²
In addition to the work being done at the Pacific Research and Claremont institutes, the Reason Foundation cranks out an endless flow of pro-privatization propaganda aimed at lambasting the incurably wasteful inefficiency of government in contrast to the flawless productivity of market forces. Through the use of ³performance reviews,² which inevitably show how government just doesn¹t work like the business world, the idea of ³performance-based government² is promoted as the final solution for the hapless public sector, which just needs to be put to sleep.
As Cokorinos observes, ³the performance review, while long a part of organizational culture public and private, is used [in Reason Foundation reports] as a non-threatening entry point to achieve an ideological purpose² to identify inefficiencies that require the expertise of right-wing think-tank experts to be solved. DeMaio, in his time at Reason, and others after him have promoted a radical privatization agenda by releasing annual ³privatization reports² that have advocated the privatization of military housing, education, transportation systems, public roads and highways, housing, major infrastructure projects and much more.
DeMaio founded the Performance Institute in 2001 and set about bringing to San Diego the skills he learned at Reason and while working to starve the beast in the Beltway with Newt Gingrich at the Congressional Institute. The conservative old guard in San Diego seemed to be in peril, with labor, environmental activists and other progressives gaining new political clout. Democrats controlled the City Council for the first time in the history of the city, and a significant political realignment seemed possible.
Still, DeMaio quickly made himself a presence, setting up a well-funded operation, issuing reports, working the local media and positioning himself to influence policy if the opportunity arose. Enter the pension crisis like manna from right-wing heaven. DeMaio could now present his agenda as the tax-free solution to San Diego¹s nightmare. If successful, San Diego would be a model for a national assault on the public sector at the municipal level.
As Cokorinos notes, ³The Beltway privatization and downsizing campaign model, combining think-tank backup and political networking, was introduced to California by the Reason Foundation in 2003 and then to San Diego by DeMaio in an effort to make the city a prototype for similar drives across the country.²
In documents such as ³The Citizen¹s Budget² and ³The Citizen¹s Budget Plan,² DeMaio argues for the breaking up of public-sector unions and the radical reorganization and downsizing of city services like libraries, environmental services, the traffic division and more, as well as the outsourcing of many other city services.
DeMaio¹s plan, according to Cokorinos, ³hews closely to Grover Norquist¹s agenda of de-funding unions as part of the right¹s long-term strategy to cement their long-term dominance.² Hence, with the editorial page of the Union-Tribune, the local Republican Party (Nehring also edits the virulently anti-union Labor Reform News) and many other willing allies in the local media and the business community, DeMaio helped frame a public discourse that successfully made unions the source of all that ailed San Diego when the roots of the pension crises are far more complex.
Indeed, the practice of defining above-average returns earned by the pension funds as ³surplus earnings² began in 1980, when the tax-phobic city government used this hypothetical money in order to cover a cost-of-living increase for the city¹s retirees. As The New York Times has noted, ³San Diego authorities continued to rely on the pension fund¹s Œsurplus earnings¹ until 1996.² That year, the city borrowed millions from its pension plan to help fund the Republican National Convention and numerous other projects. Hence, while union members may certainly regret their leaders stupidly agreeing to temporarily under-fund the pension system, rank-and-file city workers are clearly not responsible for the entire problem. A long history of starving the city of revenues is also a central, though nearly never reported, part of the problem.
San Diego was particularly vulnerable to such a dangerous scheme because of its long history as a center of anti-tax, anti-government ideology. When California¹s Proposition 13 in 1978 limited property tax revenues and imposed supermajority requirements for raising taxes, cities were forced to find new ways to fund urban needs, and pension funds became targets of opportunity. Unlike other California cities, San Diego lacked a utility tax, had fewer city fees and imposed much lower taxes on its citizens. This led to problems in funding city infrastructure projects, meeting neighborhood needs and paying competitive wages to city employees. Even today, Cokorinos observes, San Diego businesses and residents pay a far lower proportion of their incomes to taxes for providing city services than do the residents in the rest of the state¹s 10 largest cities. Still, when fires hit, homeowners blame the under-funded city for not saving their homes. When it rains, residents blame the under-funded city for sinkholes and the failure of pipes and other infrastructure they refuse to pay for.
Where do people get the idea that they are overtaxed in a country where people pay fewer taxes than citizens of most other industrialized countries and have a much smaller ³welfare state²? Thank 30 years of relentless anti-government attacks from think tanks funded by corporate America. Thank the knee-jerk anti-tax populism that is the ideological stock-in-trade of the American right, which has helped redistribute wealth from the working and middle classes to the wealthy dramatically during the last 30 years.
Hence we have electoral campaigns dominated by big money in which no one has the courage to state the obvious. The more you ³starve the beast,² the harder it is for any government service to perform adequately. You get what you pay for‹or don¹t pay for.
Because the right has been much better funded and vastly more organized than the opposition for quite some time, Cokorinos observes that ³the relationships, organizational connections, individual histories, party ties, funding linkages and policy networks that underlie this combined assault on the gains of the social-justice movements in San Diego and elsewhere are often not well-understood by activists who are on the front lines or the people whose lives are the most directly affected.² Perhaps this is why so many political observers have followed the ³Steve Francis was the hard right; Jerry Sanders is a moderate² line.
While DeMaio may have fallen off the radar screen briefly when Francis lost out to Sanders, Target San Diego notes that after Donna Frye was defeated, staving off a nightmare for San Diego¹s right, DeMaio ³has resurfaced² and ³Sanders is said to be preparing a package of Norquist-type ballot measures for the 2006 ballot that seem to have DeMaio¹s fingerprints all over them.²
Still, nobody on the San Diego ³left² outside of a handful of people in labor circles seems to get it. Even iconoclastic City Attorney Mike Aguirre was crowing about how ³powerful² Sanders¹ inaugural speech was. ³It was what the people of San Diego have desperately been looking for from their mayor,² the U-T quoted him as saying.
But is Sanders answering the beck and call of ³the people² or citing the jargon of right-wing think tanks chapter and verse? While Sanders may have angered some on the right by calling for a fee hike to upgrade water and sewer service, don¹t expect him to stray much further from his no-taxes pledge. All the talk of ³managed competition,² ³transparency,² ³performance reviews² and ³re-engineering² is straight from the Reason Foundation and Performance Institute playbooks.
In a recent CityBeat interview, Sanders downplayed what his ³reforms² will mean for union workers, an astoundingly disingenuous comment given the fact that his plan to play the cops and firefighters against the municipal employees is straight out of the Claremont Institute¹s dictum of ³playing off one part of the welfare state against another.² Apparently, Sanders hoped that most readers would be unaware of the fact that his outsourcing plans are borrowed from the strategies of the most anti-union groups in the United States.
Finally, those who know the right should have seen a red flag when Sanders told CityBeat that his ³ideas about privatization² and ³the contracting out of city services² came from ³Steve Goldsmith of Indianapolis.² Goldsmith literally wrote the book on the hard right¹s vision for America¹s cities. As Cokorinos writes:
³The Reason Foundation is not just about introducing privatized toll roads, eliminating environmental regulations or privatizing educationŠ. [C]onservatism is undergoing a transition from being an oppositional movement to a power structure with a governing philosophy. Reason¹s approach to this is the concept of ³governing by network²‹breaking open governing structures and inserting into them a dense complex of political and business relationships built up over the past two decades. It is spelled out most concisely in a book released in November 2004 written by former Indianapolis mayor Steven Goldsmith and former Reason privatization director William Eggers.²
If this sounds a little bit like bringing the K Street project, with its aim to privatize as much of the federal government as possible, to the municipal level, then you are on the right track. Confessore observed in 2003, ³Republicans [at the federal level] are engineering a tectonic political shift in two phases. First, move the party to K Street. Then move the government there, too.² The central truth of ³the emerging GOP machine² is that it is ³premised on a unity of interests between party and industry.² When this kind of thought moves to the state and municipal level, you get government dominated by business interests to the point that the barriers begin to break down. Welcome to Indy by the Sea.
Why should you be worried about living in a privatopia where the market takes care of all ills? As Yale political scientist Jacob S. Hacker has noted, employers who once ³championed private benefits as an alternative to overbearing public programs² have noticed that they don¹t need to worry about big government or unions anymore. Hence, companies like IBM, United Airlines and Verizon have begun ³a massive shift of risk from employers onto workers and their families.² As for the much-vaunted 401Ks, far fewer than half of all Americans have saved enough to ensure security in their retirements. And those that are saving in 401Ks are, despite the pro-market solution propaganda, getting worse returns than workers in the old-school pension plans run by employers.
And it is not just good pensions that are disappearing. In 1979, 70 percent of Americans received heath insurance from their employer; now it¹s 50 percent and dropping fast. For low-wage workers, the percentage of those covered has fallen to just 26 percent. This is what the free market utopians in the think tanks herald as the solution‹a social Darwinist social order in which we¹re all on our own in the race to the bottom.
It was the hard edges of an unregulated market that led to the great social reforms of the 20th century, and we are now living in a battleground city where the hard-right hopes to starve the public sector, privatize all they can and push us back into the golden era of the past before the New Deal or even the Progressive Era reforms. Indeed, Karl Rove and Grover Norquist¹s favorite president was William McKinley, who, as the darling of the robber barons, ushered in a period of government largely by and for industry.
Why can¹t it happen here? Oh, Brave New World with such creatures in it!
Jim Miller is co-author with Mike Davis and Kelly Mayhew of Under the Perfect Sun: The San Diego Tourists Never See. He teaches English and Labor Studies at San Diego City College and is on the executive board of the American Federation of Teachers, local 1931.
The full text of Target San Diego is available at www.onlinecpi.org.