Category Archives: financiers

No Nostalgia for Thatcher, but a Tribute to the Welfare State by Ken Loach


The muted protests at Thatcher’s funeral on Wednesday gave the world a glimpse of the deeply-felt divisions in British society. She did not create this social cleavage, which at root is part of an international process: a shift of manufacturing out of Europe and the U.S., and a rapid expansion of speculation in financial centres like London and New York. What she is responsible for is ending the ruling elite’s Keynesian commitment to the mitigation of regional and social inequities.

Although her death evoked few tears in Britain’s industrial heartland, there was more than a little interest in showings of Ken Loach’s new documentary about the Attlee Labour government, “The Spirit of ‘45”. I was fortunate enough to see it while in the UK recently, and my own feelings were mixed: my childhood was spent under the wing of the welfare state, so I took state-provided health and education for granted, and share Loach’s affection for the cradle-to-grave policies that characterized the period.

The interviews with people who were children in the 1930s and 1940s were very moving. They remembered the harsh and degrading conditions of that time and the optimism for a better future after the 1945 election, articulating the general disaffection with prewar society and the determination that things were going to be different.

The interviewees vividly recounted the social impact of the Labour government’s nationalization and house-building program. The experience of state-directed industry during the war had established the feasibility of state intervention to achieve social goals. There was a huge sense of pride and ownership of the newly-nationalized industries, especially the National Health Service, which brought free health care to working-class families who had never been able to afford it. The government channeled state resources into solving the immediate problems of poverty, unemployment, and bad health. Housing for millions of families living in slums or private boarding houses was made a priority.

The weaker part of the film was the final segment, which showed participants urging a return to the collectivist spirit of the postwar era. While Thatcher was the clear villain of the piece, the discussion gave the impression that she imposed privatization and unemployment from above, an arbitrary political decision that could be reversed by a revived social-democratic party in Britain.

But the world has changed since Labour’s manifesto was written in 1945.  Globalization has made national forms of struggle increasingly ineffective in resisting corporate power. What troubled me was the message that the younger generation should look to the history of the Attlee government for an alternative to austerity, which amounts to advocating old solutions to qualitatively new problems.

The achievement of a welfare state after World War II was essentially a political compromise between an organized and homogeneous working class and a capitalist class that had survived the war and needed to restart capital accumulation. This cemented the priorities of the Labour leaders to the recovery of British-based capital within the economic boundaries of the old empire.

The Labour electoral landslide was not the result of some mass revolutionary wave, as some on the left like to think, but rather came from a popular determination to continue the state planning established during the war. State technocrats were more enthusiastic about nationalization than the government, which never intended to change the balance of power in industry, and obsolete production relations were kept intact along with antiquated machinery.

While making a huge difference in people’s lives by alleviating the prewar degradation of the working class, nationalization also released capital bound up in older industries with more than generous compensation to the former owners. Later Conservative governments continued the social compromise, while full employment and expanding markets gave shopfloor militancy leverage to gain a larger share of the surplus being produced. As production rapidly accelerated, the focus of capital accumulation shifted from the national arena to the global. The revival of the German and Japanese economies intensified competition in the world market, and the boom began to falter.

Signs of the erosion of the postwar political compromise were evident by the time of the Heath government, with a wave of inflation and industrial slowdown in 1973; national control of the economy dissolved with the IMF loan to the Callaghan government in 1976. As Michael Hudson explains it: “Labour Prime Minister James Callaghan made a token attempt to address [problems of the economy] by requesting an IMF loan in 1976 to finance tangible industrial re-investment as bridge financing until the UK’s North Sea oil could begin generating foreign exchange. But US Treasury Secretary Bill Simon read him the riot act. IMF and U.S. policy was to provide credit only to pay bondholders, not to build up the real economy. Britain would be advanced loans only if it reoriented its economy to let high finance do the planning.”

At the same time, industries based on new technology were expanding in the south of England, dividing the country socially and politically, and intensifying existing class divisions which had been left unchanged even after thirty years of the welfare state. This created the upwardly-mobile forces Thatcher was able to mobilize to champion populist capitalism against the Keynesian compromise. Her neoliberal agenda corresponded to the changes in international production and exchange that had weakened the unions and enabled her to change the ideological climate within the British ruling elite to toleration of the harsh monetarist doctrines shared by U.S. capital.

She did not set out to empower bankers, but that was the inevitable result of lifting restraints on capital as soon as she took office. As Hudson puts it: “Attacking central planning by government, she shifted it into much more centralized financial hands – the City of London, unopposed by any economic back bench of financial regulation and ‘free’ of meaningful anti-monopoly price regulation. … The Iron Lady was convinced she was rebuilding England’s economy, while in reality it was only getting richer from London’s outlaw banks.”  Her administration was the last to stridently claim an independent nationalism before later governments succumbed to the dictates of international finance – there is no pretense today that British foreign or economic policy is anything but dependent on the US and the City bankers.

Like the rest of Europe and the US, Britain has moved to a low-waged, service economy dominated by global corporations. The labour movement is faced with finding new ways of organizing and fighting in line with the realities of this globalized economy. That is why signs of international resistance to global capital are significant. US workers are flying to Europe to take on their Dutch supermarket owners. Striking immigrant McDonalds workers are returning to their homelands from the US determined to spread the campaign for a living wage. Bangladeshi survivors of the Tazreen factory fire and Nicaraguan victims of antiunion assaults are in New York to confront Walmart board members. And US unions are creating non-traditional ways to organize workers who have no recognized union at their workplace; the AFL-CIO affiliate, Working America, now claims 3.2 million members and is planning to establish chapters in every state in the USA.

I made this brief sketch of events in the years not covered by Ken Loach’s film to give some historical context to Thatcher’s administration, and to argue that the revival of a social-democratic perspective, necessarily limited to winning concessions from a nationally-based state, would not be productive. I believe that activists should focus on connecting with workers in the international supply chain feeding commodities into Western markets, which is corporate capital’s weakest point.

Nostalgia for the welfare state is understandable, but we need to learn from the creative solutions of the international labour movement in order to defend those reforms that remain from the past.

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Filed under BBC, credit creation, financiers, political analysis, poverty, riots in Britain, strikes, Thatcher, Walmart

Yes, Virginia, Arbitrage Capitalism Is Still Capital versus Labor


I’ve been mulling over a December op-ed by Paul Krugman, “Robots and Robber Barons,” in which he wonders why corporate profits are at a record high in today’s depressed economy while wages are down. My attention was drawn by his question: “The pie isn’t growing the way it should ­– but capital is doing fine by grabbing an ever-larger slice, at labor’s expense. Wait – are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?”

“As best as I can tell,” he goes on to say, “there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power.“

In a response to Krugman’s column, Alternet writer William Lazonick holds that automation is not the problem. “As part of a process that could reconnect profits and prosperity, the US economy needs more, not less, corporate investment in automation. … Companies that invest in automation have to build organizations to ensure steady supplies of high-quality materials, improve and maintain machinery, and capture sufficiently large market shares to achieve economies of scale. These investments in the development and utilization of automated facilities create lots of high-value-added jobs,” he argues. Then he asks “why US corporations are failing to reinvest these profits in new products and processes that can create large numbers of new high value-added employment opportunities in the United States.”

The problem with both points of view is that they retain the conception that corporations are still large, vertically-integrated units that manufacture products and sell them to the retail channel via wholesalers. However, since the early 1990s, major structural changes have taken place that have drastically hollowed out the domestic economy.

Barry Lynn, in his 2005 book End of the Line: The Rise and Coming Fall of the Global Corporation, writes that the kind of self-contained organizations most of us think of when we hear the names Dell, GE, Cisco, IBM, Cargill and Boeing, for example, have been systematically taken apart and actual production outsourced to smaller entities, many of them offshore, leaving only the company name and marketing functions intact.

The recent issues with the Boeing Dreamliner’s batteries catching fire attest to some of the risks inherent in this outsourcing model. But these are being ignored in favor of high and immediate corporate profits. Lynn writes: “By placing erstwhile internal operations on the other end of a contract or series of contracts, these lead firms gain much greater overall leverage vis-à-vis the individual supplier, worker, and government. … Today’s arbitrage-oriented firms … are designed to focus much more on using their power over their production systems to wring out wealth immediately, rather than to devote resources to technologies that might create wealth years from now.”

The poster child of this arbitrage business model is Walmart, whose role in Bangladesh, as in other countries, was to strip value from producers to the point where basic safety was compromised and a disastrous fire took place. A more telling example, however, is Apple Computer.  In the early 1990s Apple had two major plants in the U.S. turning out desktops and Powerbooks. Demand was high, but mismanagement at Apple meant that profits were sagging. Even though their production plants were working efficiently, Apple sold them in 1996 to an outsourcing specialist called SCI Inc. who kept on producing Macintoshes for Apple.

In 1998, Steve Jobs, who had experience with outsourced production for his NeXt computer, moved manufacturing completely offshore. According to the Philadelphia Inquirer,  “The move to China came about quietly and was little noticed at the time because of the way Apple went about creating its offshore presence. Rather than build plants that proudly displayed the Apple name, as it did in California and Colorado, the company turned to outsourcing firms that partnered with the Chinese to establish plants where the products are made. Apple’s plants in mainland China bear the name of their Chinese contractor, but inside they are making Apple products.”

In a 1997 paper which specifically examined the sale of Apple’s plants to SCI, MIT scholar Timothy Sturgeon wrote: “The evidence provided here suggests that American electronics firms are developing new ways of exerting substantial market power without the fixed costs of building and supporting a gigantic corporate organization. The strategy for brand-name systems firms is to outsource all of those functions that do not have direct relation to the establishment and maintenance of market power. Brand names, product definition and design, and marketing are being kept in-house, while manufacturing, logistics, distribution, and most support functions are being outsourced.”

Market power is the key to the lead system firm’s dominance over producer firms. By its control over design specifications, distribution and retail, the lead company can exert considerable pressure on its suppliers, who have no direct access to the consumer, to meet harsh production targets and price points. Cutbacks in orders can destroy the profitability of suppliers, who have already invested heavily in automated technology to manufacture components and need to keep production levels over a breakeven point. As a result of this unequal power relation, the lion’s share of surplus value in the commodity chain goes to the lead company. In the case of an iPhone or iPad, only about 2% of the value added (about $10) is retained by assembly companies in China, and 5-7% by Korean companies who supply display and memory chips, compared to between 30-60% going to Apple and its shareholders.

The push by the one percent for continued high share prices and profits means that corporate capital has been directed to the control of market share at all costs, and diverted away from investment in the development of automated facilities. Even if manufacturing were to return to the U.S., it would not create the kind of jobs that sustained a growing middle class after World War II. The answer to Krugman’s and Lazonick’s questions is that it is the way monopoly power has been able to reorganize the economy around globalized production that enables corporations to keep wages low, not as a separate factor from automation, but interacting dynamically with it. It’s still capital versus labor, but in a different configuration.

No amount of money thrown at the banks, or even bringing supplier companies back into the U.S., will undo this reality. While resistance has been quiet around the period of Obama’s reelection, discontent lies just below the surface and determined efforts by low-waged workers to organize are harbingers of major battles ahead. Rather than making workers in America or other countries unemployed, control of corporations must be taken out of the hands of the plutocracy and put in the hands of the people

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Filed under financiers, Neoliberalism, occupy wall street, OUR Walmart, Paul Krugman, strikes, Walmart

Occupy Sandy: Lessons in American Solidarity


Three weeks after Hurricane Sandy struck the eastern seaboard of the United States, government has been unable to restore normal living conditions to the worst-hit areas, all located a few miles from the financial center of Manhattan. It is incredible that a country which is spending untold billions to fight wars in Iraq and Afghanistan does not have the resources to get relief to people living in the nation’s symbolic center. Those who are suffering most are, as always, the poor and underprivileged.

Hurricane Sandy was just one of a series of extreme weather events this year, the kind of events which are likely to become much more frequent as a result of global warming. It hit the headlines primarily because it affected a highly populated area of the U.S., but its aftermath highlighted the fact that the municipal infrastructure in parts of New York City has for years been allowed to disintegrate. As a result, three weeks after the storm thousands living in the housing projects of Red Hook in Brooklyn, as well as the Rockaways in Queens and Staten Island (where many first responders also live) are still without electricity, heat, hot water, and medical support.

Photographer Matt Richter has been documenting relief efforts in the area’s public housing. He told Gothamist last week: “The sick and elderly are trapped on the top floors of high-rise buildings in cold, pitch-black apartments without anyone to check on them or anyone to talk to. Mothers cannot feed their children because all of the local storefronts have been destroyed by flooding and looted. Diabetics and asthmatics have run out of medicine. Residents are heating their homes using gas stovetops and poisoning themselves.”

Many have observed that FEMA and the Red Cross were slow and ineffective in getting relief to these communities, while members of the Occupy movement were able to mobilize and coordinate volunteers almost immediately. Individuals who had been active in the Zuccotti Park occupation acted the day after the storm to find out what people needed, then set up distribution centers at church premises in Brooklyn, from where volunteers have been taking supplies to Red Hook and the Rockaways. Occupy’s horizontal structure appears to have facilitated an inclusive and flexible response to the disaster.

In the Rockaways, according to Gothamist, “volunteer manpower—a precious resource in the Hurricane Sandy recovery—continues to be misdirected or squandered by those in charge of official relief efforts. ‘The city hasn’t reached out to us at all,’ said Matt Calender, a Rockaway resident who helps direct a bustling relief effort from a house on Beach 96th Street. ‘The Red Cross gave us 500 blankets the other day. FEMA talked to us. But that’s it. We station volunteers here, but we also send people downtown, where there is immense need’.”

Slate reported: “Unlike other shelters that had stopped collecting donations or were looking for volunteers with special skills such as medical training, Occupy Sandy was ready to take anyone willing to help. … Ethan Murphy, who was helping organize the food at St. Jacobi’s and had been cooking for the occupy movement over the past year, explained there wasn’t any kind of official decision or declaration that occupiers would now try to help with the hurricane aftermath.  ‘This is what we do already,’ he explained: Build community, help neighbors, and create a world without the help of finance.”

John Knefel writes in Truthout: “One of Occupy’s defining features is horizontalism, or non-hierarchical organization, which replaces traditional methods of control with, in theory, mutual affinity and respect. The media often refers to this as “leaderlessness” and calls it a weakness, and when trying to interpret Occupy through the narrow lens of corporate-captured electoral politics that may be a fair criticism. But the premise is completely incorrect. … The fact that volunteers can be trained and assigned to tasks quickly – tasks they aren’t compelled by any strict authority to do and so therefore take ownership of almost immediately – is a virtue rather than a fatal flaw.”

The Red Cross and FEMA are hamstrung by bureaucracy and turf issues. FEMA field official Katherine Ordway told Time magazine: “It’s dark in those apartments and people are cold …They’re coming here wanting us to fix the problem in their homes, but we can’t. Restoring power and heat is not a FEMA issue. And that’s very frustrating.”

Occupy Wall Street framed their actions as the community self-adjusting to the crisis. What it also shows is that when communities are faced with rebuilding after a disaster, the philosophy of Occupy coincides with their modes of recreating social order. People who are protesting the control of banks and corrupt politicians over their lives can relate to those who have lost it all. One of the organizers of the relief effort, PhD student Pamela Brown, told Democracy Now: “organically, Occupy was able to organize very quickly on the ground and provide real relief to people, provide food and clothing. People were donating all of these things. And the Red Cross wasn’t really able to reach out to people in the way that was necessary to distribute those goods. … One of the things that Occupy has been amazing at with Sandy has been actually going to people, talking to them and saying, ‘What is it that you actually need?’ and providing that.”

While Occupy could not move large quantities of equipment and materiel to large areas, it can mobilize volunteers and concerned citizens in a way that the government cannot. A Time article considered: “Being among the first to move made Occupy a vital part of the city’s hurricane relief infrastructure. As a result, this radical nonstate movement finds itself in the unlikely position of coordinating with government institutions it might otherwise be in conflict with. … Ultimately, Occupy Sandy is an ethos, a grassroots, on-the-fly approach to disaster relief that, in certain areas of the city, has filled a void left by overwhelmed bureaucracies. It’s an approach adopted by numerous local groups and individuals throughout the city, and Occupy is in large part an attempt to link volunteers and donations to those efforts.”

The New York Times ran a story that contrasted the middle-class values of the volunteers with those of the working poor who are the recipients of aid. Naturally, any social interactions will not be free of class antagonisms. However, the fact that these interactions are taking place at all is a step to finding solutions to the daily struggles that project-dwellers face. What is needed is the inclusive and pluralistic ideology of the Occupy movement to facilitate equality and mutual respect.

As in New Orleans after Katrina, relations of power get rebuilt after disasters. But with Occupy Sandy, there is an opening for them to be challenged. The Occupiers are right to prepare for resistance against the opportunist interventions of financiers who seek to capitalize on crises by encouraging debt dependency, like the 2-year disaster loans small businesses are being advised to take or people’s borrowing against their retirement savings. Against the faceless world of finance capital and a government that serves it, Occupy Sandy is mobilizing the power of human and American solidarity—the recognition that, as Lincoln put it, united we stand.

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Filed under bank foreclosures, credit creation, financiers, Occupy Sandy, occupy wall street, poverty, We are the 99 percent

Waking Up and Smelling the Coffee: Americans Organize Collectively to Defend Themselves against the Plutocratic 1%


While pundits may debate Obama’s lackluster performance and Romney’s zingers, when it comes down to it, the presidential debate will not change people’s minds. What will decide the election will be demographics:  Latino voters have increased their support for Obama to 70%. Women perceive Romney as dismissive of their issues. And a Reuters poll finds Obama to be better representative of America by 48 to 39 percent – despite the billions spent by Republicans trying to portray him as alien.

Focus groups found that blue-collar voters lowered their opinion of Romney in response to quotes from his campaign, but were more forgiving of quotes from Obama; many suggested that Obama needed more time to fix the economy given the extent of the 2008 collapse.  “And while Obama didn’t seem to get too much credit from any group for his individual jobs policies or for his health care law, voters were bullish on the auto bailout — not only in auto-heavy Ohio, but northern Virginia as well. … In another disturbing trend for Romney, women’s health issues cut against him hard among the Virginia groups, especially college educated women, for whom they generated as much attention as the economy.”

Romney’s clandestinely videoed remarks describing half the population as parasitic have had a discernible effect on the electorate, strengthening the perception of him as the candidate for the plutocracy. This attests to the persistence of the Occupy theme of the 99 percent, a form of populist class awareness. A further social change is the turn to unionization among the low-waged. The threat of unemployment has become a two-edged sword: while employers have used the fear of joblessness to drive down wages and conditions, a point has been reached where workers’ backs are against the wall and they have nothing to lose by fighting back.

In the Midwest, two important strikes are currently taking place that bear this out. Warehouse workers at a giant Walmart warehouse outside of Chicago are on strike over illegal retaliation against workers who filed a lawsuit over wage theft, supported by Warehouse Workers For Justice, an organization launched by the United Electrical Workers union to raise standards for the industry. Although Walmart owns the warehouse, which handles 70% of all the goods it imports into the U.S., it has a pyramid organization of companies that contracts and subcontracts out its labor supply, in order to avoid responsibility for workers’ welfare.

In These Times reports that the dispute began after a small group of workers walked out of the facility when management first fired, then backtracked and suspended, some key workers’ leaders, including one of the four named plaintiffs in the lawsuit. Following this, another group of workers took a petition to management complaining about unsafe equipment, extreme heat, and a reduction in breaks during long shifts. Managers again fired the petitioners, then changed their minds and suspended them. The number of workers now on strike over unfair labor practices has reached 38.

Despite the high turnover rate in the warehouse, which makes it difficult to organize, a group of workers who had managed to endure the conditions for a number of months began the protest action. “What we have in common is we’re pretty marginalized and desperate,” plaintiff Philip Bailey told David Moberg of In These Times. “The prospect of working these low-paying jobs for long hours became scarier than risking losing the job to improve it. People realized we won’t get anything until we stand together.”

On Monday, several hundred supporters converged on the warehouse, effectively shutting it down. Riot police equipped with a Humvee-mounted sonic weapon were on hand to arrest 15 protesters who had nonviolently sat down outside the main gate. Support came from groups like Chicago Jobs With Justice and Chicago teachers, who have a common enemy in the privatization-crazed Walton family. Also joining the picket were workers from Sensata Technologies Inc., a company owned by Bain Capital and now in the final stages of moving its production to China.

The strike movement has now spread to Walmart stores in Los Angeles, whose “associates” staged a one-day protest on Thursday. Like the warehouse workers, the retail store employees are responding to escalating cases of retaliation by managers against workers who speak out against low pay, inadequate health insurance, short or unpredictable work weeks, understaffing, and lack of appreciation and respect.

In Detroit, as in the Chicago teachers strike, union members are striking against privatization, which they know will result in the loss of jobs and the rapid erosion of their control over conditions of work. Detroit’s wastewater treatment plant workers came out against a plan to cut 81% of their jobs under a $46 million no-bid contract signed with the EMA Group.  The suburban-dominated Detroit Water Board approved the contract in early September with the aim of replacing most of the unionized workforce. According to the union, the EMA Group was responsible for massive flooding in Toronto after revamping the city’s sewage system and laying off the majority of the workers.

Declaring they were fighting for the future of Detroit, 34 workers walked out in a wildcat action early Sunday, in order to preempt an order barring a strike. They were joined by the rest of the 450-strong workforce the following day, when, as anticipated, U.S. District Judge Sean Cox issued a no-strike order on the union. Defying the order, the strike continued, and on Tuesday water department officials suspended the original 34 strikers. At the picket line, Tanya Glover told the Detroit Free Press she was concerned about wage cuts and outsourcing: “I’m out here because I need to feed my family,” she said. “They’re telling me I don’t have a job in five years anyway. It’s either fight, or let them give my job away.”

Workers from other unions came out to support the water workers as word of the walk-out spread. “This strike is happening in the wake of the victory of the Chicago Teachers Union,” said Martha Grevatt, of UAW Local 869. “It’s another example of workers standing up, not only for their jobs, but against the banks and corporations. Whether you work for a private company or in the public sector, your bosses are part of the 1 percent.”

The union district-level Michigan AFSCME Council told union members on Tuesday to return to work and comply with the judicial order. The confusion this created meant that many of Wednesday’s afternoon shift followed this directive, after being informed that the department had promised not to discipline them. However, the leaders of the water workers’ Local 207 rejected the order, voting late on Wednesday to continue the strike until all suspended workers were given amnesty. It issued a statement that said: “The power of our strike is based on the support of Detroit’s Black community and the surrounding communities of Michigan, including unions and churches, and is being expressed more and more each day. … Unless our members are all returned to work, there is no deal, and the strike is still on.”

The strike ended Thursday in victory. Management agreed to reinstate all the fired workers and to continue discussions on union rights and job security. Michael Mulholland, Local 207 Secretary Treasurer, said, “This victory is a measure of the strength of Detroit as a whole. If Judge Cox had not feared what the public response would have been if he had taken action against our union, this victory would never have been possible.” Union attorney Shanta Driver added: “If the people of Detroit draw the correct conclusion that we have the power to control the destiny of our City and its resources even when just a few of us stand up and fight to win, this struggle will have achieved a great deal. … we are building a new movement that can change the balance of power in this city forever.”

The power of the community was also realized in the Chicago teachers’ strike, and the Occupy movement. As different groups of workers’ struggles begin to converge, this movement poses a challenge to bureaucracy within the unions. A new form of leadership is being created, close to the grassroots, which is turning outwards to unorganized low-waged workers and is building alliances within the community across ethnic and class divides – to paraphrase the leaders of Local 207, launching a new civil rights movement and era of mass struggle.

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Filed under political analysis, financiers, strikes, occupy wall street, police presence, poverty, African Americans, 2012 Election, chicago teachers

Even if Obama Wins, There’s Homework: The Teachers Remind Us That Only the Public Education of the People Can Preserve Liberty


Washington Post columnist E.J. Dionne asks if November’s election will decide anything? He frames his question in terms of a continued Congressional stalemate if Obama regains the presidency. However, Republican legislative obstructionism and Romney’s disastrous candidacy is losing the party support among independent voters and some sections of the corporate and financial elites. It seems that now even Wall Street bankers are abandoning Romney.

What the billionaires who support Obama share with him is a sense that change must be initiated and controlled from above, rhetorically to alleviate the plight of the working poor but without disturbing the relations of power that made them poor in the first place. As Paul Street points out: “The problem has not been that ‘the economy’ has been broken by the supposed ‘invisible hand of the market’ or other forces allegedly beyond human control. The real difficulty is that the ‘human-made’ U.S. economic system has been working precisely as designed to distribute wealth and power upward.”

If the relations of power are unchanged, does this mean that the election results are unimportant? No. An Obama electoral victory, even with no change in the House or Senate, will confirm the social fact of a multiracial America, where women have a major voice. It will also call into question the effectiveness of the Republican strategy of splitting the working class on racist grounds.  And most crucially, it will give more time for ordinary Americans to organize resistance against the transfer of wealth from the middle class to the rich independently of the two-party political straitjacket.

Education is one of the battlegrounds where the power of community in solidarity has reasserted the principles of popular sovereignty—government of the people by the people—and significantly checked the power and seemingly unstoppable influence of the American plutocracy.  Corporate billionaires like Bill Gates, the Walton family, and Wall Street hedge fund managers have decided that schools should be remodeled on corporate lines and that teachers’ unions are obstructing their plans. Steve Jobs reportedly told Obama that the American education system was “crippled” by teachers’ unions that had to be broken.The objectives of this oligarchy are facilitated by Obama’s Race to the Top program which, like Bush’s No Child Left Behind, is a top-down, technocratic solution to the problems of education, to be imposed on state education systems over the voices of the teachers and parents who deal with the problems daily.

The key elements of the program, summarized by NYU professor Diane Ravitch, were drawn from the strategy of the Chicago school board:  “Teachers will be evaluated in relation to their students’ test scores. Schools that continue to get low test scores will be closed or turned into charter schools or handed over to private management. In low-performing schools, principals will be fired, and all or half of the staff will be fired. States are encouraged to create many more privately managed charter schools.”

The consequences of school closings in practice were pointed out by Chicago teachers’ leader Karen Lewis. “[When they closed a school] children were not going to other schools, especially in high school.  They were choosing not to go to school…. [The school board] had never thought about the ramifications of what a school closing means. So if I close a school here, now this means that my children have to walk through gang territory…. There was just no understanding of community.”

The seven appointed members of Chicago’s Board of Education have little knowledge of the school system.  The Occupied Chicago Tribune reported: “As anyone who has ever witnessed a board hearing knows, members like Hyatt heiress Penny Pritzker and former Northwestern President Henry Bienen, when they bother to show up at all, nod indifferently to public testimony, toy with their smart phones, and reliably vote in the interests of their boss. This past winter, after the board voted unanimously to close or turnaround 17 schools, frustrated parents burst into tears, and community members chanted ‘Rubber Stamp’ until CPS security escorted them out of the room.”

The board is responsible only to mayor Rahm Emanuel, not to the public. But the solidarity of Chicago teachers and their supporters in the communities succeeded in establishing limits on its plans for privatization. The strike also challenged ideological supporters of the system, who created a narrative that the conflict between teachers and the board was disrupting the welfare of the students. In the guise of impartiality, they implicitly blame teachers for putting their own interests above that of the children.

Writing in The Nation, Obama apologist Melissa Harris-Perry relates the story of Rolisa, whose younger children attend a small public school on the South Side. “Her kids are pretty happy there. Or at least they were, until the standoff between the Chicago Teachers Union and Mayor Rahm Emanuel transformed them into students of Rolisa’s makeshift kitchen table school. …This generation of children may become hard-working, courageous adults who nonetheless are relegated to life sentences of poverty and underachievement. They are stuck because they were born in a time of war—not just the wars in Afghanistan and Iraq, not just the heavily armed wars in their own streets, but the wars between the leaders and teachers who are supposed to have their best interests at heart but who seem willing to allow this generation to be lost.”

Evoking the images of war, in which innocents suffer more than armies, she misreads the strike as a selfish act by teachers willing to make victims of children, when in reality it was a struggle of the whole community against high-handed school closings in working-class areas and for better conditions for pupils to learn in the classroom.

Michelle Rhee, the former head of D.C.’s schools and now advocate for charter schools through her misnamed StudentsFirst organization, adopts the same argument in order to attack teachers’ unions. The Washington Post published an opinion piece in which she writes: “Chicago’s children lost roughly  18 million collective hours of learning time; moms and dads across the city lost wages, and possibly risked jobs, so they could care for their kids; and some children went without the hot meals they reliably get at school. It was frustrating to hear Chicago Teachers Union President Karen Lewis say toward the end of the dispute that the strike would continue to see whether there is ‘anything else they can get.’ But at least that was clear evidence that, for union leaders, this strike was never about what was best for kids….”

Rhee claims the support of corporate Democrats when she characterizes the teachers’ union as a self-serving group not interested in improving children’s education. But what was it that teachers wanted more of? A broader, well-rounded curriculum – and, above all, to be given the support they needed as professionals in the field and not be dictated to by someone in an air-conditioned office working off a spreadsheet, while their students wilted in the Chicago heat. The union mobilized teachers, custodians, parents, and pupils themselves in defense of their right to a proper education, which in fact continued an ongoing struggle by communities against school closings and so-called “turnarounds,” in which teachers and principals are completely replaced.

The Occupied Chicago Tribune reports on some of these earlier battles: two years ago parents occupied an elementary school building that officials decided would be demolished in order to build a soccer field for a neighboring private school. The sit-in lasted for more than a month before it was agreed to keep the building open as a community space. And when, this year, the school board designated Piccolo Elementary for turnaround, “parents and students decided to draw from the lessons of the Occupy movement. Surrounded by police, Occupy Chicago demonstrators complete with tents, and other allies, about a dozen parents and supporters stayed in the building overnight and won a meeting with Chicago Public Schools CEO Jean-Claude Brizard. But in the end, the board voted to close the school anyway.”

The relations of power are not fixed and immutable, but are fought out daily on the organizational level and the ideological. The Chicago teachers have achieved a victory that has encouraged low-waged workers throughout the city – from car wash workers who are organizing against wage abuses, to the musicians of the Chicago Symphony. The teachers’ strike gave the best lesson of all: solidarity in struggle will push back the billionaires and trillionaires who want to overturn democracy in America.

If Obama wins the election, let’s use the time gained to spread this lesson around. And there are many willing to learn.

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Filed under 2012 Election, chicago teachers, financiers, Hedge Fund managers, Michelle Rhee, Neoliberalism, Obama, occupy wall street, poverty, public schools, strikes

Chicago Teachers Bring Hope and Empowerment to the Fight Against Plutocratic Power


Now that Chicago’s teachers have returned to work, their strike is being fought out again on an ideological level, with both sides claiming victory. But the rhetoric obscures the true nature of the outcome: the teachers and their community support have been strengthened, while limits have been set on the education administration’s privatization goals.

On the national stage, Michelle Rhee, the former head of the school system in Washington and now a school reform advocate, hailed the stand of Chicago mayor Rahm Emanuel. She said that “it ‘signaled a new day’ that Mr. Emanuel, a Democrat, had taken on issues — like tougher teacher evaluations and longer school days — so thorny with labor groups, and had pushed them forward even in the crucial few months before President Obama, his former boss and ally, seeks re-election.”

To give an idea of the forces behind the drive for privatization, Rhee’s lobbying organization is funded by predatory billionaire Rupert Murdoch, who views the education system as a “500 billion sector in the U.S. alone that is waiting desperately to be transformed.” He has pledged to spend more than $1 billion to push for-profit schools. According to PRWatch, “She [Michelle Rhee] was credited with greatly improving test scores in Washington, D.C. schools, but this accomplishment was cast into doubt by a USA Today investigation that suggested that test score gains during her term may have been the result of cheating on the part of school officials.”

In Chicago itself, a Democratic party PAC funded by Wall Street hedge fund managers to promote non-union charter schools launched a political-style TV and radio ad blitz featuring Emanuel claiming he achieved “the right deal for our kids” by negotiating a longer school day and the right to evaluate teachers using pupils’ test scores. All 350,000 students were given a two-page letter with the same message.

However, as In These Times points out, “In the public-relations battle over who was helping ‘the kids,’ the Chicago Teachers Union (CTU) held its own by emphasizing how it successfully bargained for a commitment to hire 600 new teachers in art, music and other ‘enrichment’ courses. CTU also extracted promises from CPS to hire more counselors, supply textbooks by the first day of school and include a parent representative on a class-size review committee.”

The union also has its critics from the left.  Pedro Noguera, a professor of sociology at NYU, writes in The Nation that “shutting down a school system where the overwhelming majority of students are poor, black and Latino without offering a vision for comprehensive change is not sufficient.” Since the teachers do not control the resources available to the school system, it is absurd to accuse them of lacking a vision for comprehensive change. They certainly have a vision for improvements in the classrooms, as the promises they extracted from the school board prove.

Another critic, New York attorney Elliot Sperber, accuses the union of not being militant enough.  “Rather than striking to secure better working conditions and better pay, per se, the Chicago teachers’ strike is a defensive, conservative strike [to defend jobs]… [they] found themselves facing Rahm Emanuel’s threat of a court-ordered injunction. Cowed by this, the teachers’ union agreed to a compromise.” But in fact Emanuel’s injunction threat came after the union had finished its negotiations, while teachers’ delegates were carefully examining the agreement. Their decision was unaffected by the mayor’s bullying threats, which smacked of desperation in face of the solidarity of the teachers.

The Chicago education board had begun to concede on issues like class size after 90 percent of the teachers had voted to authorize a strike. They had abandoned the idea of merit pay before the strike began, according to the Chicago Tribune, but the key victories on evaluation and recall policies were gained because of the walkout. Teachers’ union attorney Robert Bloch said: “To the union, that completely changed the whole tenor of how evaluations really worked. To take out student scores, a volatile indicator, as a way to lead to firing teachers was a really big accomplishment.” Most of the final contract was negotiated during the strike, he said, including the concession most popular among the teachers – the ability to write their own lesson plans.

Sperber casts Emanuel as Machiavelli using the legal argument of public health and safety to mobilize state sanctions against the teachers’ union. But this only credits Emanuel with greater power than he actually possesses. He has lost public support, while the union has retained and increased its approval in the community. Harold Meyerson draws attention to the class nature of their support: “the Illinois political newsletter Capitol Fax commissioned a poll of Chicago voters that showed that fully 66 percent of parents with children in the city’s public schools supported the strike, as did 56 percent of voters citywide. The only groups that disapproved of the strike (narrowly) were parents of children in private schools and whites. (Blacks and Latinos supported it.)”

CTS leader Karen Lewis and her union officials are not bureaucratic functionaries, but working teachers who are focused on improving the schools. After winning the leadership of the union, they changed its structure to include all sectors of the profession and make its workings transparent. In a long and informative interview with Amy Goodman on Democracy Now, Karen Lewis described how on the negotiating committee “we had members from all over the city in different areas—high school, grammar school, our paraprofessionals, our clinicians—all on our big bargaining team, so that they could actually see the process of negotiations.”

She explained: “we purposely tried to change the culture of union so that the union is about education, is about empowering teachers and paraprofessionals and clinicians. And as a result, the union officers took pay cuts, significant pay cuts, so that we can have an organizing department, so that we can have a research department, so that we didn’t do the union the way the old union was done, because those days are over.”

Lewis is a founding member of the Caucus of Rank-and-File Educators (CORE), the group that reformed the union, which began when a small group of teachers formed a book group to read Naomi Kline’s Shock Doctrine in order to understand what was behind the school closings in the city. According to Lewis: “we started just trying to take off small bites of the apple by going to the school closing hearings, demanding that the Board of Education come to these hearings. … in the first year we started this, we got six schools taken off the hit list. That had never happened before. We changed the way the Board of Ed did things. The board members actually came to the schools. And we said, ‘You should at least come to the schools you’re going to close and look these people in the eye and explain to them why.’ And that had never happened.”

Their intervention restored the empowerment of parents and community members, who had felt that there was nothing that could be done to resist school closings. The teachers fought for parental involvement and school councils, and succeeded because they acted independently of the political parties and of the union bureaucracy, closely reflecting the grassroots membership. The union built bridges and support that strengthened during the course of the strike struggle.

As Lewis argues: “… the idea of the market approach for public education, as far as we’re concerned, tramples on democracy. You know, public schools are the place where you get to learn about democracy, and it’s been trampled out. And Chicago has the potential for that. We have local school councils of elected parents and community members and staff who are supposed to choose principals, evaluate principals, look at how the discretionary funds are spent. And the local school councils in schools that are very high-functioning, the local school councils are also high-functioning. But in the schools that aren’t so much, you find those aren’t functioning as well …”

In a measured, determined way, the Chicago teachers have successfully brought an organizing force and a pluralistic vision into the lives of working-class communities. This is the same spirit that motivated the Occupy movement, challenging the apparently overwhelming power of the plutocracy.

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The Prize for Building It is Slashing Down the Safety Net: Like Saturn, Republicans Will Devour Their Own Base


The Republican National Convention this week had the challenge of marketing a political party whose election would benefit only the super-rich and would devastate the living standards and health of all other Americans. Romney’s and Ryan’s acceptance speeches, scripted by Karl Rove and rapturously welcomed by the delegates, made grandiose promises they had no intention of keeping, while carefully omitting any substantive details of their policies.

Ryan’s speech in particular was so full of lies that even Fox News had to point them out. As Juan Cole put it: “He has to get people on his side who would be hurt by his policies. And that requires that he simply lie to them.” Both Ryan and Romney sought to persuade them to have faith in a superior Republican “leadership” which could reverse the recession, restore prosperity and protect the social safety net. Ryan promised to recreate “the America that was given to us, with opportunity for the young and security for the old. Romney promised to “restore that America.” This nostalgic vision of the “Mad Men” era was calculated to appeal to the old, the white, and the disgruntled: “If you’re feeling left out or passed by, you have not failed; your leaders have failed you,” said Ryan.

Romney tried to humanize his image with stories about the importance he gives to family and family values – at a moment when his election would kill Medicare and remove government support for education and retirement. Ryan portrayed himself as a small-town, middle-class individual, raised from poverty through his own hard work, creating a picture designed to identify with the very people targeted by Republicans. “Trust us, because we are just like you” was his message: “My Dad, a small-town lawyer… Mom, who rode the bus to Madison …” and had to rely on Medicare after the death of his father. But this, like the rest of his speech, was a lie.

The LA Times observed: “Ryan, 42, was born into one of the most prominent families in Janesville, Wis., the son of a successful attorney and the grandson of the top federal prosecutor for the western region of the state. … Ryan’s rise to political power and financial stability was boosted by family connections and wealth. The larger Ryan family has repeatedly helped the candidate along in his career, giving him a job when he needed one and piling up tens of thousands of dollars in campaign contributions. Court records indicate Ryan’s father left a probate estate of $428,000 …. The will leaves the bulk of the estate to Ryan’s mother, who now lives in an oceanfront condo in Florida.”

Ruth Conniff, a journalist with the Progressive magazine, noted the reaction of the delegates. “They loved him. They love his confidence, his poise and, most of all, his ability to make this incredibly Orwellian argument, to emote, to connect with working-class people like his constituents in his incredibly hard-hit industrial district, and then to take that and sell policies that are absolutely devastating to these same people. … he is the smiling face of this incredibly brutal Darwinian set of policies that the Republicans are presenting to us. And the fact that … he can flip through graphs saying that cutting taxes on the rich is going to bring back jobs and make America great again, and just his delivery, his relaxed demeanor and his humor, it’s what people love about him. And it’s really dangerous.”

The Republicans are lying through their teeth out of desperation. Their demographic base is shrinking; it’s 98% white, while other ethnic groups are rapidly becoming a majority. They want to gain power at all costs to transfer the remainder of society’s wealth to their plutocratic backers, and legislate to delay the inevitable reckoning with the expropriated. Harold Meyerson wrote a pungent article in the Washington Post charging the Romney campaign with attempting to rouse the demographically declining population of white voters – using attack ads falsely claiming Obama to be gutting welfare reform – with resentment of African Americans and Latinos. Ryan’s budget “would bring the nation down to the developmental level of the anti-tax, anti-public-investment Southern states of yore,” he said.

“To the extent that Republicans can depict government as the servant of this rising non-white America (precisely the purpose of Romney’s ads), the South’s antipathy toward government can find a receptive audience in other regions,” Meyerson continues. “This transformation of the GOP has also been spurred by the Southernization of the economy. The U.S. economy’s dominant sector is no longer the unionized manufacturing of the Northeast and Midwest, whose leaders included such Republican moderates as George Romney, and whose white working-class employees were persuaded by their unions to back Democratic candidates. Instead, the economy is dominated by a mix of the low-wage, nonunion retail and service sectors, and by high finance, which has shown itself fiercely opposed to regulation and taxation, happy to reap and shield its profits abroad at the expense of U.S. workers, and willing to invest plenty in a party that does its bidding.”

Resentment of government has other roots. Cap Times writer Paul Fanlund summarizes the work of political scientist Katherine Walsh, who found support in rural Wisconsin for cuts in government because residents believed it failed to represent their interests. “[T]hey would argue that it instead was operating to benefit other people: sometimes the wealthy, but also people who were undeserving largely because they did not work hard enough for the government benefits they enjoyed.” “Deservingness” was often defined by whether program recipients were perceived to be hard-working people like themselves, she writes, adding: “If one wishes to mobilize opposition to a government program, one powerful way of doing so is to suggest that the recipients of that program are predominantly people of color.”

She concludes: “Some of the conversations I observed strongly suggest that racial attitudes were playing a part in opposition to government programs.” Race came up just as often in urban and suburban conversations, she emphasizes. “It’s so easy for us urbanites to write off their attitudes as simply racism. That is only part of it. The rural consciousness I describe is about a broader ‘us versus them’ perspective that is effective for mobilizing opposition to government programs.”

Republican rhetoric about self-help and individual effort resonates with this ideology of the undeserving poor. However, many Republican voters are unaware of the extent of government support for their communities. Political scientist Dean Lacy found that the more a county receives in federal government payments, the more likely it is to vote Republican. Salon editor Joan Walsh comments: “As Lacy elaborated to a WNYC reporter: ‘The counties that are getting more in crop subsidies, housing assistance, and Medicaid payments are a lot more Republican. So it really is about that catch-all category that you might call welfare.’ Yet because their local congressmen and women tend to defend that type of ‘welfare,’ Lacy says, ‘they have the luxury of voting on social issues knowing that these federal spending programs will be kept in place’. Except those programs won’t be kept in place by the new GOP, which is committed to trashing even the economic supports it used to (however hypocritically) defend.”

Whoever wins the election, there will be a major struggle over government social programs which are immensely popular with all sections of society. Whatever the Republicans’ intentions, this is their last chance to win an election with an appeal to angry white men. The party will not survive in its present form – times they are a’changin’. Communities that are plunged into this fight will be able to make alliances across the ethnic and class lines that the Republicans historically have used to divide them, asserting the values of solidarity in a common cause.

Already, grassroots groups have formed to promote community action on basic needs, like housing and food. They will grow rapidly as social conditions worsen. There’s no need to run for the Canadian border: the future Americans can look forward to is one of struggle, but there is a world to win.

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Filed under 2012 Election, financiers, political analysis, poverty, Republicans, We are the 99 percent

President Teresa Sullivan’s Reinstatement: A Stay of Execution for the Humanities at UVA and the Nation


The reinstatement of President Sullivan is a clear victory for the University of Virginia campus community. The Washington Post reported: “When the Board of Visitors announced its unanimous vote — with Rector Helen E. Dragas concurring — a cheer went up from the crowd gathered outside the iconic Rotunda designed by Thomas Jefferson. It was a telling moment that underscored just how badly the board had arrived at and handled the misguided decision to demand Ms. Sullivan’s resignation on June 10.”

But make no mistake: the political pressures on UVA will continue, a fact  highlighted by a New York Times op-ed which blames universities’ expansion of higher education in the 2000s for their current fiscal problems as a rationale for promoting online education. However, not once does the author, Jeff Selingo, Editorial Director at the Chronicle of Higher Education, mention the way the bank-induced recession caused a drastic drop in state revenues, leading to major cuts in funding for higher education, nor the indebtedness of states and municipalities to banks which dishonestly sold swap deals to communities in order to milk Americans of the last drops of their wealth. The idea of asking states to invest in public higher education is not even on the table.

Only time will tell whether Sullivan will become the point person to carry out the changes that Dragas tried to hammer through and Selingo takes up in the Op-ed. (His timing in publishing the piece the day before the Board of Visitors met is an extraordinary coincidence that cannot go unremarked). The lack of transparency, however, in Sullivan’s reinstatement indicates that whatever compromise was reached, Dragas has not moved from the position that led her to the reckless decisions of the past month. It’s only a matter of time before we see Classics and German at UVA being wheeled out to the guillotine once more as Dragas or her replacement does her knitting.

The Cavalier Daily pointed out: “The process that led to Sullivan’s reinstatement, however, was just as shrouded in secrecy as the process that led to her resignation. The Board voted 12-1 to appoint an interim president on June 19, and all 12 of those members supported Sullivan today. Apart from the resignation of Vice Rector Mark Kington and the publication of emails between Dragas and Kington discussing changes in the field of higher education, the public has little insight into what forced the Board to rescind its earlier decision.”

In his preamble to the motion to reinstate Sullivan, former rector Heywood Fralin revealed: “It is clear that every member knew that the Rector and the Vice-Rector intended to meet with President Sullivan to ask for her resignation. I was not clever enough at the time to confer with other members to determine if three would be willing to call a special meeting of the Board of Visitors to discuss such action. I am confident there would have been three willing members and that if such a meeting had been called, a vigorous discussion would have ensued, and no one knows what the vote would have been.”

Dragas made no apology for the substance of her actions, only for “the way this was presented.” Speaking on the motion to reinstate Sullivan, she voiced agreement with Virginia governor McDonnell on “the importance of Board governance, and that the Board exists in large part to make difficult decisions for the good of the University. … the Board should all come together – to bring this University quickly toward a process of healing that respects the Board’s governance, while also committing to faster and more measurable progress against a number of real challenges we all face as an institution.”

Asserting respect for the board’s governance after the fiasco it created is a remarkable piece of chutzpah. By not leveraging her advantage and insisting on Dragas’ resignation, Sullivan allowed the board, made up entirely of political appointees from the business and financial world, to avoid taking a stand on Dragas’ unethical maneuverings or the profound philosophical differences over the kind of strategy the university should adopt. The vote served only to defuse the huge outcry against the board.

Gov. McDonnell is surely no innocent here, despite his Pontius Pilate act. The Koch-funded group ACTA specifically targets state governors in its propaganda which stresses an aggressive role for boards of trustees in imposing changes from above, and promotes them against faculty, administrators, and students. Dragas’ statements and actions appear to echo this viewpoint.

‘DrDemocracy’ commented on the same Post article cited above: “Bob McDonnell claimed to be uninvolved in all of this. But he most likely was, at least tangentially. As Chubb and Moe noted, McDonnell pushed very hard in the last legislative session for more charter schools and ‘virtual school opportunities.’ … Conservatives, especially Republicans (but also business-oriented ‘fiscal’ conservatives like Helen Dragas), view education simply as a commodity to be bought and sold, and not as a core civic responsibility of government in a democratic republic. In that sense, Dragas and her cronies undermined Jefferson’s belief in the importance of public education (and his vision for the University of Virginia).”

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Filed under austerity measures, financiers, Hedge Fund managers, Neoliberalism, political analysis, Uncategorized, University of Virginia

Helen Dragas Is Making UVA an Offer It Can’t Refuse: Move Over, Corleone


Today, Tuesday June 26, the University of Virginia Board of Visitors meets to decide whether or not to reinstate President Teresa Sullivan.

Despite the virtual unanimity of the campus community that the board should reverse its acceptance of her forced resignation, Sullivan’s principal opponent, rector Helen Dragas, has remained unmoved.

In all likelihood, Dragas will restate her position: that the board is responsible for projecting a sustainable income stream for the future and that because tuition fees are becoming unaffordable, and states will not reinstate funding, UVA will fail. She may accuse them with bending to popular opinion, as though the responses of faculty, alumni and students were simply an obstacle to be overcome in the execution of a business strategy.

What is sustaining Dragas’ intransigence? Her first reaction to the unprecedented outcry over Sullivan’s ouster was to hire expensive PR company Hill & Knowlton, and although it is known she has had regular discussions with hedge fund billionaire Paul Tudor Jones, this would seem inadequate to explain her stubbornness.

A comment in the student newspaper The Cavalier Daily may point to a deeper reason: ideological support from the Koch brothers, fresh from their triumphant manipulation of the recall election in Wisconsin. ‘Jeffersonian1’ noticed this intriguing fact: “The language in Dragas’ first Hill & Knowlton missive and P. T. Jones most unusual op-ed closely resembles and in some instances mimics the documents of the American Council of Trustees and Alumni (goacta.org), a group funded by Charles Koch.”

Anne Neal, the president of ACTA, has been one of the few people to publicly support Dragas in print. Beating the drum of accountability as a Trojan horse for her agenda, Neal argues in a press statement: “Of course, change is never easy. And faculty and administrators are up in arms.  But it bears noting that these are the same folks who have, for decades, resisted cutting costs and providing accountability to the public they serve. …  if the trustees stay the course, the university will be better off for their efforts. Let us hope that the UVA trustees have started a trend – a trend of engaged and courageous trustees who understand that today’s economic reality demands a new paradigm of effective and innovative leadership.”

The phrase “today’s economic reality” should give us all pause. To which reality is Neal referring? To the reality that Rolling Stone’s Matt Taibbi has chronicled in his exposé of the organized crime culture of today’s Wall Street, which commits fraud with an impunity that rivals the criminality of Mexico’s drug cartels? To the reality the Supreme Court, that venerable body, which has reaffirmed  U.S. elections can be sold to the highest bidder? That Neal, Dragas, and company have the galling nerve to claim to be acting in the public interest puts them beneath contempt if they did not represent the very real threat to the last public institution that stands for something entirely alien to the plutocrat mentality: the common good of America.

Just like ALEC, its sister organization for state legislators, ACTA offers conferences and political support for governors who advocate educational “reform.” It provides model charters for commissions to implement drastic eviscerations of public institutions through “the expanded use of online delivery, full-year academic schedules, academic consortia and partnerships.”

The organization’s literature emphasizes the active role of trustees as opposed to faculty and administrators. A report on the state of Virginia’s education system states: “The disturbing trends highlighted by this report can only be reversed when trustees, visitors, and council members stay active in controlling costs and keeping higher education affordable, and when they critically evaluate the quality of their institutions’ general education programs.”

A brochure aimed at state governors enthusiastically quotes John Engler, the former governor of Michigan, and president of the reactionary Business Roundtable: “The old philosophy is that [university] boards should be relatively passive. The new philosophy is that boards should be active and responsible representatives of the public interest.” And union-busting Indiana governor Mitch Daniels is quoted: “… if we are going to make the kinds of improvements we need … [trustees] are going to have to press for it, and measure it, and demand results.”

The council particularly stresses the need to ignore political resistance in its “Guide to What Boards Can Do”: “Governing boards may initiate change in some instances, but in all instances they will be required to act with the finality that only their authority permits.”

Is this what Dragas echoes when she says: “… we alone are appointed to make these decisions on behalf of the University, free of influence from outside political, personal or media pressure?”

The board will have to decide whether or not to give in to Dragas and her backers. Alternatively, they can fail to come to a decision and be dissolved, putting the onus on the governor and creating a bigger political crisis. If Bob McDonnell is for sale—and after Citizens United, is there a politician who isn’t?— he could create a board that reinstates Sullivan with conditions designed to undermine her leadership and carry out the plutocratic dream of online education for all, and profit for a very, very few, effectively killing the Jeffersonian ideal of the university as a beacon of a democratic society.

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Helen Dragas and the UVA Board of Visitors: A Lesson In Hubris?


A reinvigorated and strengthened community of faculty, students and alumni has rallied around President Teresa Sullivan in an unprecedented way. Its demands for her reinstatement challenge the actions of Rector Helen Dragas and the Board of Visitors, who acted against the institution through irresponsible decision making and secret back-room processes.

What’s so powerful about the UVA community’s defense of Sullivan is that it has also become a collective reaffirmation of founder Thomas Jefferson’s ideal of higher education as a force to improve society, one which is central to the American dream. It is nothing short of a defense of American public higher education.

Students’ use of social media has made it harder to keep the machinations of Dragas, Kington, their billionaire friends, and their PR company under wraps. They have galvanized support for Sullivan’s reinstatement and organized and funneled the tremendous response of the community. A group led by student Suzie McCarthy organized a “Rally for Honor” Sunday on the campus lawn which called for a vigil outside Tuesday’s Board of Visitors’ meeting. Almost 15,000 people have joined the group’s Facebook page, and an emotional Youtube video posted last week featuring alumni statements has received 7,000 views to date.

However, Dragas appears to be tone deaf. In her reply to Gov. McDonnell’s demand that the university board end the uncertainty about Sullivan’s position, she discounted the uproar she has unleashed by reiterating the formal authority of the board over the campus: “… we alone are appointed to make these decisions on behalf of the University, free of influence from outside political, personal or media pressure.”

In rebuttal, UVA professor of politics James W. Ceaser emphasized Jefferson’s belief that governments derive their authority from the consent of the governed. The Board of Visitors, he writes, ignored the spirit of this principle in the way they dismissed Sullivan: “Real authority, the kind that matters most, is measured in peoples’ willingness to accept the legitimacy of those in power. If the alumni stop giving moral and financial support to the university, if the faculty continues to resist, if students do not fall in line, then formal authority is almost helpless.”

In her statement last Thursday, Dragas says: “It is the Board’s responsibility… to ask how well any particular curriculum or program actually prepares UVA graduates for the increasingly complex, international world in which they will live and compete.” But Dragas’ hard-line assertion of authority implies that the only kind of acceptable answers are those framed in the language of the businesspeople who make up the board – indeed the model she discussed for UVA with her erstwhile ex-vice rector Mark Kington followed the organization of Darden business school.

The fact is that in a fast-changing world, confining education to specific high-growth fields – like business studies or science – is the worst kind of preparation for students. A growth field today may be a dead end tomorrow, and in order to adjust to a complex world graduates need a more generalized education. The more specific the skill set taught, the harder it is to orient to change. What is at a premium is learning to use judgment and to think for oneself, qualities learned in the very liberal arts curricula that Dragas dismisses.

An article in the Washington Post on how the struggle had focused attention on the purpose of public higher education attracted many comments, among which was one by ‘Laughternforgetting’: “When I went to UVa as an undergraduate, the people of Virginia and the other states thought having a well educated population was an essential part of being a free nation with a democracy and provided the support necessary for me and others to attend without becoming indentured servants upon taking our degrees. Today, people seem to think that being well educated benefits only the individual … and to the businesses where those future workers will work. It is time to return to the same tax structure of the 60s and early 70s that made this a great nation with a strong working infrastructure including outstanding universities.”

The WaPo article notes: “At the center of the conflict are governing board members, many of them successful business people, appointed by Republicans and Democrats alike, who want schools to behave more like corporations — measuring student outcomes, boosting faculty productivity and trimming programs that don’t add to the bottom line. ‘They’ve got to run more efficiently,’ said Virginia House Majority Leader M. Kirkland Cox … ‘We do want more return for the money — distance learning, using facilities year-round, putting more resources into science, math and technology because that’s where the jobs are’.”

But ‘Rick441’ retorts: “Business school grads like to talk accountability more than they talk about how their zeal for accountability can produce perverse results because of an incomplete understanding of what they are measuring.”

Certainly Dragas is one of those perverse results. But whether she persists in her hubris—and yes, you need to have read Aristotle to fully know what that means—remains to be seen. What is certain is that Americans are waking up to the fact that a comprehensive public higher education that includes the humanities as much as the sciences and business is vital to the republic. The humanities are about more than sweetness and light: they are about freedom.

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