The American Prospect #339

STARR & KANU: THE SUPREME COURT’S FAR-RIGHT RULE

I D E A S, P O L I T I C S & P O W E R

PEER INTO THE FUTURE

LILAH BURKE | GABRIELLE GURLEY ROBERT KUTTNER | MAUREEN TKACIK RYAN COOPER | LUKE GOLDSTEIN DAVID DAYEN AUGUST 2024 PROSPECT.ORG

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August 2024 VOL 35 #4

The Future of ____________ 12 School’s Out

18

Demographic crashes and rising costs threaten an entire segment of higher education. By Lilah Burke

18 Neighborhoods Play Hardball

For decades, wealthy owners and financiers have gotten cities to pay for their sports stadiums. It’s not so easy anymore. By Gabrielle Gurley

26 The Left’s Fragile Foundations

Could a weaponized Trump IRS wreck the progressive infrastructure by attacking the entire nonprofit ecosystem?

By Robert Kuttner

36 The Domination Tour

12

Four decades of intensifying corporate concentration turned the music industry into a wasteland of institutionalized control and abuse. Are antitrust enforcers ready to reckon with that? By Maureen Tkacik

42 The Case for Pragmatic Socialism

The times are right for a socialist agenda that America can accept. We even have examples of it in practice.

By Ryan Cooper

48 Wall Street Hits the Locker Room

Private equity firms are maneuvering to invest in college athletes, their schools, and the conferences they play in.

The deals could add risk to the whole system.

By Luke Goldstein

Prospects 04 A License for Vengeance By Paul Starr

Notebook 06 Power and the Court By Hassan Ali Kanu 09 Florida Invests in Catastrophe By James Baratta

Culture 55 David Dayen on The Future of Television 59 Harold Meyerson on Reds: The Tragedy of American Communism 62 David Kirp on How a City Learned to Improve Its Schools 64 Parting Shot: Dystopia Now, Socialism Soon?

By Francesca Fiorentini Cover art by Ryan Inzana JUNE 2022 THE AMERICAN PROSPECT 1

55

FROM THE EDITOR

Hello! It’s been a while,

2 PROSPECT.ORG AUGUST 2024

but we’ve decided to bring back the editor’s note for our print editions. It’s important that you hear from me directly on how we conceive of our journalism.

This issue is about the future, and we’re living through a reminder of how unpredictable the future often is. As I write this in mid-July, I’m not 100 percent sure who the Democratic nominee for president will be, and we came about half an inch from a successful assassination attempt on the other nominee. It’s been a wrenching few weeks.

On the Democratic side, it’s driven home for me an inescapable and important fact: There is no real mechanism within Democratic politics for the voices of its base, the rank-and-file supporters, to be heard. As BOB KUTTNER explains in this issue, a half-century ago we had organizations that were largely funded not by foundations or large donors but through dues from members, like civil rights groups and strong unions. Those have either diminished or disappeared today, so when the party is in crisis, as with the Biden re-election situation, there are few, if any, mass membership organizations representing millions of people at the table. As a result, you have this agglomerated mass of wealthy donors and celebrities and consultants trying to simulate the beliefs of the public. It’s a side effect of weak parties where the influence of big money fills the vacuum.

That kind of step back, to look at the forces underneath the surface, is an integral part of what makes a great Prospect story. And for this issue, we decided to take that one-level-deeper approach to a host of important parts of American life. For example, higher education is in turmoil, but it has nothing to do with campus protests, as contributor LILAH BURKE explains: It’s about a demographic cliff that could sink hundreds of private universities. Sports stadiums were almost always rubber-stamped by local politicians seeking to build a legacy; GABRIELLE GURLEY shows how that’s changed, with public activism making cities more skeptical. Kuttner’s piece is about the foundation-funded nonprofits that dominate Democratic politics today, and how a tiny tweak in tax enforcement, maybe from the next Republican president, can make them vulnerable.

We also have RYAN COOPER on the future of democratic socialism with a pragmatic twist; MAUREEN TKACIK on the future of music after the Live Nation antitrust lawsuit; LUKE GOLDSTEIN on the player compensation era coming to college athletics at last, and how private equity is lurking in the background. I have a story about the future of television, and what the end of cable in favor of streaming could mean for how we get our local and national news. The through line is that we’re in an unsettled moment of transition for many institutions that we take for granted, and we’re tracking where they might go from here.

I also wanted to announce some new members of the Prospect team. JANIE EKERE and EMMA JANSSEN are our two newest writing fellows, and they’ve already gotten off to great starts with stories at our website, prospect.org. You’ll be seeing their bylines in these pages over the next two years. And MITCHELL GRUMMON is the Prospect’s new publisher. You may not see his writing in the magazine, but he will lead our business operation and make everything you see in the Prospect possible. (And a fond farewell to ELLEN MEANY, whom Mitch is replacing; Ellen, you are already missed!)

Thanks for reading, and if you have questions or comments, reach out at info@prospect.org.

—DAVID DAYEN

EXECUTIVE EDITOR DAVID DAYEN FOUNDING CO-EDITORS ROBERT KUTTNER, PAUL STARR CO-FOUNDER ROBERT B. REICH EDITOR AT LARGE HAROLD MEYERSON EXECUTIVE EDITOR David Dayen

SENIOR EDITOR GABRIELLE GURLEY

FOUNDING CO-EDITORS Robert Kuttner,

MANAGING Paul Starr EDITOR RYAN COOPER

ART DIRECTORRobert JANDOS CO-FOUNDER B. ROTHSTEIN Reich

ASSOCIATE EDITOR SUSANNA BEISER EDITOR AT LARGE Harold Meyerson STAFF WRITER KANU SENIOR EDITORHASSAN Gabrielle Gurley

WRITING FELLOWS MANAGING EDITORJANIE Ryan EKERE, CooperLUKE GOLDSTEIN, EMMA JANSSEN ART DIRECTOR Jandos Rothstein

INTERNS RACHAEL DZIABA, YUNIOR RIVAS ASSOCIATE EDITOR Susanna Beiser GARCIA, K SLADE, MACY STACHER STAFF WRITER Hassan Kanu

CONTRIBUTING EDITORS AUSTIN AHLMAN, WRITING FELLOWGABRIEL Luke Goldstein MARCIA ANGELL, ARANA, DAVID INTERNS ThomasBOUIE, Balmat, Lia Chien,COHN, BACON, JAMELLE JONATHAN Gerard Edic, KatieGARRETT Farthing EPPS, JEFF ANN CRITTENDEN, FAUX, FRANCESCA FIORENTINI, CONTRIBUTING EDITORS AustinMICHELLE Ahlman, GOLDBERG, GERSHOM GORENBERG, E.J. Marcia Angell, Gabriel Arana, David GRAFF, GUYER, BOB HERBERT, Bacon,JONATHAN Jamelle Bouie, Jonathan Cohn, ARLIE CHRISTOPHER Ann HOCHSCHILD, Crittenden, Garrett Epps, JeffJENCKS, Faux, JOHN B. JUDIS, RANDALL KENNEDY, BOB Francesca Fiorentini, Michelle Goldberg, MOSER, KAREN PAGET, SARAH POSNER, Gershom Gorenberg, E.J. Graff, Jonathan JEDEDIAH PURDY, ROBERT PUTNAM, Guyer, Bob Herbert, ArlieD.Hochschild, RICHARD ROTHSTEIN, ADELE STAN, Christopher Jencks, John B.M. Judis, Randall DEBORAH STONE, MAUREEN TKACIK, Kennedy,A.Bob Moser, Karen Paget, Sarah MICHAEL TOMASKY, PAULRobert WALDMAN, SAM Posner, Jedediah Purdy, D. Putnam, WANG, WILLIAM JULIUS WILSON, MATTHEW Richard Rothstein, Adele M. Stan, Deborah YGLESIAS, ZELIZER A. Stone,JULIAN Maureen Tkacik, Michael

Tomasky, MITCHELL Paul Waldman, Sam Wang, PUBLISHER GRUMMON

William Julius Wilson, Matthew Yglesias, PUBLIC RELATIONS SPECIALIST Julian Zelizer TISYA MAVURAM

PUBLISHER Ellen J.COORDINATOR Meany ADMINISTRATIVE PUBLIC PFEIL RELATIONS SPECIALIST Tisya Mavuram LAUREN

ADMINISTRATIVE COORDINATOR Lauren Pfeil BOARD OF DIRECTORS DAVID DAYEN, REBECCA DIXON, SHANTI FRY,Dayen, STANLEY B. BOARD OF DIRECTORS David Rebecca GREENBERG, MITCHELL GRUMMON, JACOB S. Dixon, Shanti Fry, Stanley B. Greenberg, HACKER, HANAUER, JONATHAN HART, Jacob S.AMY Hacker, Amy Hanauer, Jonathan DERRICK JACKSON, RANDALL KENNEDY, Hart, Derrick Jackson, Randall Kennedy, ROBERT JAVIER MORILLO, MILES RobertKUTTNER, Kuttner, Ellen J. Meany, Javier RAPOPORT, JANET SHENK, ADELE SIMMONS, Morillo, Miles Rapoport, Janet Shenk, Adele GANESH SITARAMAN, PAUL STARR, Simmons, Ganesh Sitaraman, PaulMICHAEL Starr, STERN, VALERIE Michael Stern,WILSON Valerie Wilson

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S T C E P S PRO

PAUL STARR

A License for Vengeance The full implications and absolute revenge,” and his interest in of the Supreme Court’s decision on presidential immunity in Trump v. United States will take time to sink in. By failing to rule on the case expeditiously, the Court had already effectively shielded Donald Trump from prosecution before the next presidential election for trying to overturn the last one. The shock from the decision was less the protection it gives Trump for what he did in the past than the protection it gives him and others for what they may do as president in the future. The ruling, as Justice Sonia Sotomayor spelled out in her powerful dissent, “makes a mockery of the principle, foundational to our Constitution and system of Government, that no man is above the law.”

To shield the president from criminal prosecution is to put everyone else, and all of our institutions outside the government, at greater risk of abuses of power. The Court’s decision provides a license for presidential vengeance and intimidation, and it does so at a moment when a man standing on the threshold of the presidency shows every intention of using that license.

Many people may have shrugged off Trump’s repeated promises of “ultimate 4 PROSPECT.ORG AUGUST 2024

using the Justice Department to prosecute his enemies if he wins the election. Just recently, he was circulating social media posts calling for “televised military tribunals” and the jailing of Joe Biden, Kamala Harris, Mitch McConnell, Chuck Schumer, Mike Pence, Nancy Pelosi, and Liz Cheney, as well as other members of the House select committee that investigated the January 6th insurrection.

These threats may seem outlandish, but we now have one more reason to take them seriously. We already knew that in a second Trump term, the people in the White House and Cabinet who restrained him the first time would be gone. We already knew from his two impeachment trials that Senate Republicans would make impeachment an ineffectual check. And now, by ruling that he has no reason to fear prosecution for criminally abusing the power of the presidency, the Supreme Court has eliminated one additional check.

The ruling is specifically relevant to Trump’s potential ability to use the powers of the Justice Department to threaten and intimidate anyone who gets in his way. The federal government’s prosecuto-

rial powers, the decision states, fall under the president’s core functions, and a president cannot be held criminally liable for any use he makes of that power. Although the Court is vague about the exact limits of presidential immunity, it is unambiguous on this point: “Because the President cannot be prosecuted for conduct within his exclusive constitutional authority, Trump is absolutely immune from prosecution for the alleged conduct involving his discussions with Justice Department officials.”

No matter that in this case Trump told Justice Department officials to make groundless statements that the 2020 election was rigged. Information about those discussions cannot even be entered as evidence as part of a prosecution for unofficial acts he undertook to overturn the election.

If what Trump says to Justice Department officials can never be a basis for prosecuting him, he and all future presidents are free to demand that those officials undertake investigations of an administration’s enemies and instigate sham prosecutions.

And if presidents can make those demands of the Justice Department with impunity, they can make similar demands of the FBI, IRS, and other agencies to harass, intimidate, and punish people opposed to the incumbent. The Court is unambiguous about the president’s total authority over the executive branch.

“The main takeaway of today’s decision,” Sotomayor writes, “is that all of a President’s official acts, defined without regard to motive or intent, are entitled to immunity that is ‘at least … presumptive,’ and quite possibly ‘absolute.’”

There are two key distinctions here—the distinction between “official” and “unofficial” acts and between “absolute” and “presumptive” immunity—but neither offers much hope of reining in a president intent on criminally and corruptly abusing power.

The way the Court now draws the distinction between official and unofficial acts defines a much broader range of conduct as an “official act” than the Court did in a 2016 case, McDonnell v. United States, concerning the conviction of a former Republican governor of Virginia, Robert F. McDonnell, for corruption. In that case, the Court narrowly defined an official act as a decision or action on a “question, matter, cause, suit, proceeding or controversy,” involving a “formal exercise of governmental power.” To qualify as an “official act,” the action taken

GREG HOUSTON

by a public official had to involve acting on a matter before the government, not merely, as the case was with McDonnell, setting up a meeting or talking with other officials about it. By narrowly defining official acts in that context, the Court made it more difficult to convict public officials of corruption—one of a series of such decisions, all consistently shielding officials from accountability to the criminal law.

The Court’s ruling in Trump v. United States achieves the same result—that is, limiting official accountability to the criminal law—but it achieves that result in the opposite way. In this case, the Court holds that presidents have at least “presumptive” and possibly “absolute” immunity for all official acts, so the Court defines official acts broadly. While the Court says that absolute immunity applies to the core areas of presidential authority, it says that presumptive immunity applies to the “outer perimeter” of the president’s functions. And that outer perimeter, it makes clear, is very wide.

The Court’s decision notes that the indictment of Trump “contains various allegations regarding Trump’s conduct in

connection with the events of January 6 itself. The alleged conduct largely consists of Trump’s communications in the form of Tweets and a public address.” It then points out, citing an earlier case, that the president possesses “extraordinary power to speak to his fellow citizens and on their behalf”; therefore, “most of a President’s public communications are likely to fall comfortably within the outer perimeter of his official responsibilities.” While the Court notes that the president also speaks in unofficial capacities, it suggests that the lower court must undertake a close analysis of the facts in every instance to determine whether a communication is an official one. Gone are the strictures in McDonnell about how narrowly official acts should be defined.

Sotomayor points out that “the majority’s dividing line between ‘official’ and ‘unofficial’ conduct narrows the conduct considered ‘unofficial’ almost to a nullity. It says that whenever the President acts in a way that is ‘not manifestly or palpably beyond [his] authority,’ he is taking official action.” And she points out that the distinction between “presumptive” and “absolute”

immunity also offers little comfort because the Court’s decision makes it extraordinarily difficult to overcome the presumption.

One of the effects of the Court’s decision is to nullify what once seemed like a national consensus and clear public norms about the appropriate limits of presidential power in the wake of the Watergate scandal. Richard Nixon had clearly abused the powers of his office by enlisting the Justice Department and IRS in attacks on his enemies; the post-Watergate norms called for presidents to desist from directly controlling individual investigations and prosecutions. In contrast, the Court’s decision is an emphatic endorsement of the “unitary” theory of the executive, the idea that there is no independence from the president within any part of the executive branch. Now the Court adds that a president need not worry about any limits from the criminal law about corrupt demands on the very agencies that were instruments of Nixon’s abuse of power.

Trump and other Republicans have made no secret about the many people and institutions they consider to be their enemies.

Journalists, Trump has often said, are “the enemy of the people.” With much of the media in a precarious financial position, they make an easy target. Colleges and universities make another vulnerable target. Many are also in financial straits, and even if they are private, they are vulnerable to government pressure because they depend on government funds for research that can be cut off. The whole nonprofit sector, especially nonprofits that are active on political issues, is vulnerable because of potential jeopardy to their tax exemptions, as my colleague Robert Kuttner explains in this issue.

We have lived in a relatively free society because of legal and normative restraints on the power of the government. The commentators who have talked about the Court’s decision as a prescription for dictatorship are not overstating the case. That is what the Court has produced. If Trump has a second term, the institutions and the people who stand up against him should be prepared for a full-fledged attack with all the powers of the government arrayed against them. We have already seen the entire Republican Party cowed and brought under Trump’s thumb. The rest of the country could soon face the test of courage that the Republicans have failed. n AUGUST 2024 THE AMERICAN PROSPECT 5

NOTEBOOK

The Kingmakers This Supreme Court session demonstrated that the current conservative

By Hassan Ali Kanu By now, it should be clear to most Americans that the nine unelected, unaccountable, and lifetime-tenured justices on the Supreme Court have more practical power than Congress or even the president. They alone get to define the shape of each branch’s power themselves. They can not only restrict or circumscribe national policy but enact it themselves, because “constitutional interpre6 PROSPECT.ORG AUGUST 2024

tation” is often indistinguishable from lawmaking. And they get to do this without half the scrutiny or potential backlash attached to similar actions by the other branches.

The Court’s reactionary approach to lawmaking this past term also made clear just how uninhibited the present conservative majority has become in their exercise of that power, and their easy willingness to toe its bounds or overstep those lines to enact right-wing or Republican Party goals.

On the whole, the 2023 term was among the worst in the Court’s history. Once again, the Court’s rulings call to mind former Justice Thurgood Marshall’s protestation, delivered as he prepared to step down from the Court in 1991: “Power, not reason, is the new currency of this Court’s decisionmaking.”

It’s important to keep in mind the backdrop to the latest term.

Well before 2024, many Democrats, pro-

PHOTO ILLUSTR ATION

majority is unrestrained in its desire to expand its own power.

gressives, and civil rights groups already considered the Court to have an illegitimate makeup, due to Republicans’ unprecedented refusal to confirm Democratic nominee Merrick Garland in 2016, and the fact that five of the six conservatives were appointed by Republican presidents who did not initially win the popular vote. The Court also saw some of the strongest and most widespread rejection of its decisions in the previous two terms, including blockbuster rulings that revoked a woman’s constitutional right to abortion, curtailed the civil rights of LGBTQ Americans, and ended affirmative action for racial minorities in college admissions. That included exceedingly rare international condemnation from foreign heads of state and the United Nations human rights system.

Moreover, as the latest term progressed, the justices became further enmeshed in some of the most scandalous ethics controversies to ever confront the Court, weathering Pulitzer Prize–level revelations of corruption, apparent graft, and personal bias.

With the benefit of hindsight, we can see now that the justices remained entirely unchastened by the surrounding circumstances, choosing to rule on some of the country’s most important and controversial social and policy questions, and consistently delivering right-wing and Republican policy victories. That holds true even when the Court clearly lacks justification for its rulings—legal, logical, or otherwise—and in cases where the justices simply plowed through the most serious kind of apparent conflicts of interest.

The Court manipulated its calendar in order to issue two rulings that effectively exonerated former President Donald Trump for an unprecedented coup attempt, allowing him to run for president again while also escaping any meaningful criminal responsibility if he loses. To put that differently, six people (again, unelected, unaccountable, and lifetime-tenured) decided how to settle probably the most significant and divisive issue regarding democratic governance that the country has faced in a century and a half, and that’s that. Never mind that there is no good historical or constitutional justification for placing former presidents above the law, nor that a majority of Americans believed that he should be tried before this year’s elections.

And no matter that the majority opinions were voted on by at least one justice who has a conflict of interest in the cases.

The ruling granting near-absolute criminal immunity to presidents was so egregiously unsound that the liberal justices advised the public in their dissent to “Feel free to skip over [certain] pages of the majority’s opinion.” Justice Ketanji Brown Jackson wrote that the Court “has effectively snatched from the Legislature the authority” to compel a president to follow the law, thereby augmenting the power of the presidency and of the Court itself, because only judges can decide whether a president has immunity for a particular action. As things stand, the same unelected officials who decided that Trump cannot be prosecuted for a coup attempt are the people who will ultimately decide whether or not any future president can be prosecuted for criminal behavior.

And, as my colleague Paul Starr elaborates on in these pages, the conservative justices granted these sweeping immunities to an ex-president and current candidate who has already made clear that he intends to enact an administration of “ultimate and absolute revenge” against his political rivals as well as Americans who support Democrats. That adds up to roughly half of the voting population.

Another trio of rulings also transferred executive power from hundreds of indispensable federal regulatory agencies to the judiciary (and ultimately to the justices themselves).

Taken together, they amount to a major step forward in the conservative movement’s drive to dismantle the administrative state, as Justice Sonia Sotomayor put it.

The central case among these overturned a 40-year-old precedent known as the Chevron doctrine, which required courts to defer to agencies’ scientific and technical expertise as they interpreted legislative statutes.

The senseless judicial hubris underlying that ruling was on full display in another recent opinion on environmental law (that made it harder to address climate change), in which Justice Neil Gorsuch referred several times to “nitrous oxide,” or laughing gas, rather than the smog-causing compounds that were actually at issue: nitrogen oxides.

One imagines that the climate scientists and chemists at the EPA and the Food and Drug Administration would probably never make that kind of elementary mistake. That’s exactly why the details of regulation should be left to them, rather than lawyers with exceedingly high self-regard and little practical experience in scientific and technical matters.

The Court also obliterated the statute of limitations to challenge agency rules, ordering in Corner Post v. Board of Governors of the Federal Reserve System that regulated entities can literally reach back to rules established in 1789 and try to nullify them.

And in SEC v. Jarkesy, it limited the use of administrative law judges, which dozens of federal agencies have employed for decades.

Importantly, the Court also issued a ruling that ensured that South Carolina will use a racist and gerrymandered electoral map in this year’s election, and allows states to do so in the future as well. A series of earlier rulings by the Court enabling racially biased maps had essentially handed Republicans the House during the 2022 midterms; now, this latest decision in South Carolina’s case established that the Voting Rights Act no longer bars racist gerrymandering unless there’s undeniably clear evidence that many lawmakers intended to discriminate. For example, a group of plaintiffs who present hard evidence that two legislators made openly racist statements, along with other circumstantial evidence of bias, are nonetheless unlikely to prove discrimination under the Supreme Court’s new voting rights standards.

The Court this term also legalized certain forms of bribing public officials; using police to “clear out” homeless encampments; and bump stocks, a combat device that enabled the single deadliest mass shooting by one gunman in American history.

All of these rulings effect a sea change in U.S. politics and society, sometimes on the most pressing issues Americans are presently facing; all of them enact right-wing or Republican policy goals; and all were divided 6-3 along partisan lines.

Of course, the issues the Court decides not to take up, or leaves for another day, are sometimes as important as the ones it decides.

The Court this term punted on cases about whether women can have access to mifepristone, the drug now used in most abortions, and on whether hospitals and doctors can deny women health care if they require an emergency abortion. It also sent back to the lower courts a challenge to Republican-backed laws meant to limit social media companies in their ability to regulate right-wing disinformation.

Some of those outcomes were portrayed as victories for liberals, but for the moment, they simply maintain the status quo (which is already desperate, in terms of women’s AUGUST 2024 THE AMERICAN PROSPECT 7

right to access reproductive health care).

The cases are all likely to soon return to the Supreme Court. Moreover, the Court granted a political advantage to Republicans by punting on more difficult questions about abortion policy in an election year, considering the backlash the party received after broadly restricting the procedures in 2022.

On the other hand, by refusing to hear certain other petitions altogether, the Court effectively created a new category of legal liability for protest organizers that will seriously suppress the right to demonstrate in Texas, Louisiana, and Mississippi; and enabled the continuation of racial discrimination in jury selection. The justices also declined to hear cases challenging life sentences for juveniles, a likely human rights violation unique to the United States; and a challenge to prosecutorial immunity, anoth-

ally high proportion, The New York Times reported. And the most common lineup by far featured the six Republican appointees in the majority and the three Democratic ones in dissent.

Legal experts and commentators have described the decisions and term as among the worst in the Court’s history. The presidential immunity ruling in particular has been described as one of its lowest points, mentioned alongside Dred Scott, Korematsu, Plessy v. Ferguson, Citizens United, and Shelby County.

The decision that reinstated Trump to Colorado’s primary ballot after he was disqualified for participating in an insurrection was the most controversial electoral decision since Bush v. Gore, according to Maureen Edobor, an assistant professor of law at Washington and Lee University.

Clarence Thomas, Samuel Alito, and John Roberts aligned on all the most important cases decided by the Supreme Court this session. er Court-created rule that totally shields even cartoonishly corrupt prosecutors from accountability.

Altogether, the Court this term continued a decades-long trend of hearing fewer cases, and this time it took unusually long to decide the highly politically charged questions it took up. The fact that so many involved long-standing right-wing policy goals, and some of the biggest political questions of the present moment, shows that the right-leaning justices behave much more like politicians and lawmakers than they say.

More than two-thirds of the Court’s decisions were decided by 6-3 votes, an unusu8 PROSPECT.ORG AUGUST 2024

Anthony Michael Kreis, an assistant professor of law at Georgia State University, commented on the social media platform X that “this has been the worst Supreme Court term for American democracy since Reconstruction.”

The Times also pointed out that the term featured a record rate of concurring opinions, the highest since at least 1937. That points to the weaknesses of the reasoning in the cases, even when the conservative justices agreed on the ultimate outcome.

For example, the case on emergency abortion produced a ruling in which a majority of the justices wrote or joined separate opinions that clearly and fundamentally rejected

the premise that the main opinion relied on (which some of them had even joined).

In other words, a majority of the justices agreed to punt on the case, but a different majority also agreed that the “justification [for that outcome] is patently unsound,” as right-wing justice Samuel Alito put it in his dissent.

A dissent in the case about prosecuting January 6th rioters was also notable because of Justice Amy Coney Barrett’s unusual, and unusually strong, criticism of her conservative colleagues’ reasoning (and Justice Jackson, who joined the majority decision).

The Court ruled in that case, Fischer v.

United States, that federal prosecutors can’t use an obstruction statute to charge hundreds of defendants for violently disrupting the 2020 electoral vote count in Congress.

The majority failed to adhere to the text of the law, and in “abandoning that approach, does textual backflips to find some way— any way—to narrow the reach” of the statute, Barrett wrote. Again, that sounds like policymaking rather than legal interpretation, per Barrett’s characterization.

Time and again, the Court decided the most pressing political questions facing the country; and, time and again, the Court delivered conservative policy victories, while employing scant reasoning or hardly any at all.

Power, rather than reason, has indeed become the currency of this Court’s decision-making, and of its case selection too.

The past term made it clear that the nine justices have perhaps more power than any other officials or entity in the country. And it showed that most of them are comfortable exercising that power for its own sake, even without any prudent reasoning—legal, constitutional, or otherwise.

Rule by judicial fiat is far from the design laid out in the Constitution, despite Justice Alito’s public arguments to the contrary.

Article III vests the country’s judicial power “in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish” (emphasis mine).

Congress in fact changed the number of seats on the Court seven times over its first 80 years, for example.

In other words, Congress created the Court—and it can recreate it as well. This Court’s judicial hubris and political activism in recent terms gives the elected branches good cause to use their checks and balances to rein in a wayward third branch. n

PABLO MARTINEZ MONSIVAIS / AP PHOTO

NOTEBOOK

Florida Invests in Catastrophe

The Sunshine State is putting public pension money into risky bonds that transfer risk away from insurance companies.

By James Baratta Florida is at the forefront of climate disaster, rattled by four major hurricanes since 2017 (Irma, Michael, Ian, and Idalia), which caused the deaths of almost 300 Floridians and resulted in hundreds of billions of dollars in economic losses.

As flooding persists with regularity and warming waters facilitate increasingly severe hurricanes, the state has pursued a deregulatory approach to resuscitate its death-spiraling property insurance market.

Not only have carriers fled Florida in droves, but numerous others have become insolvent amid climate catastrophe.

In a bid to entice insurers to continue providing property insurance coverage, Republican Gov. Ron DeSantis and the Florida legislature have implemented a series of reforms aimed at protecting consumers and reducing insured losses by clamping down on social inflation, the name the industry gives to perceived cultural factors that drive increases in monetary awards in litigation.

The insurance industry and its captive regulators have been quick to lay the blame on fraudsters, unscrupulous contractors, overzealous lawyers, and even gullible juries for burdening consumers, the state, and insurers with superfluous costs.

But the market instability has been twisted to facilitate another form of greed, orchestrated by Gov. DeSantis and his political allies. In implementing what is best described as Florida’s property insurance playbook, the DeSantis administration has homeowners in the state paying more for less, insurers profiting off soaring premiums, and the state pension giant investing hundreds of millions of dollars in investment funds that provide insurance for insurance companies, effectively socializing the risk that property insurers have on their balance sheets, sometimes through high-risk, high-reward allocations to complex financial instruments known as catastrophe bonds.

Florida’s playbook resembles the Republican playbook for addressing the home

insurance crisis nationwide. As the Prospect reported earlier this year, Republicans have sought to deny climate change perils in their entirety, shift the blame to lawsuit abuse or socially responsible investing, and transform state-controlled insurance markets through market-friendly policies that allow insurers to rake in exceptional profits while gutting consumer protections.

On May 15, 2024, Gov. DeSantis signed a bill overhauling state energy policy and stripping any mention of “climate change” from state law. In a post to X following the signing, DeSantis ridiculed “radical green zealots” for seeking to address the climate crisis and reallocate taxpayer dollars toward clean-energy projects, environmental mitigation, and climate justice initiatives.

“This bill is going to have a devastating impact on our ability to address climate change,” Brooke Alexander-Goss, organizing manager at the Sierra Club’s Florida chapter, told the Prospect.

Alexander-Goss, a resident of Volusia County, fears the climate denial will exacerbate depopulation in Florida, where homeowners pay three times the national average for property insurance. Many prospective homebuyers consider climate risk when relocating to a new state or region, and may hesitate to pay excessive property insurance costs in dangerous regions.

When Hurricane Ian made landfall in Florida in September 2022, AlexanderGoss’s neighborhood flooded. Although her home was not damaged, she saw her insurance premiums skyrocket. By the end of the year, six insurers had declared insolvency.

Homeowners whose carriers collapsed were left scrambling, causing many Floridians to turn to the Citizens Property Insurance Corporation—the state’s insurer of last resort, which provides coverage to an estimated 1.4 million homeowners who are unable to access policies on the open market. Over the two years leading up to Hurricane Ian, the number of homeowners receiving property insurance from Citizens had more than doubled.

According to a July 2023 report from Milliman, a Seattle-based international actuarial and consulting firm, industry losses after Hurricane Irma in 2017 totaled $27 billion. But loss estimates from Ian averaged out to about $54 billion.

As a May 2023 report from the Hedge Clippers, the American Federation of Teachers (AFT), Florida Rising, and the Center for Popular Democracy explains, Gov. DeSantis’s policies have advanced the insurance industry’s goal of weakening Citizens, while simultaneously offering only unaffordable alternatives. Furthermore, a Florida Phoenix analysis of insurance handouts passed during the 2022 legislative session found that DeSantis’s policy changes “would drive customers of Citizens … into significantly pricier policies on the private market.”

Citizens is required to place policyholders with a private carrier if that insurer’s premium is within 20 percent of their Citizens premium. One Palm Beach County resident who asked for anonymity was pushed to Citizens after Hurricane Irma, and told the Prospect about their experience being driven back into the open market.

Initially, Citizens attempted to place them with a carrier whose premium fell below the 20 percent threshold. But the quote they received exceeded this threshold. Fortunately, they were able to demand a better rate with help from a broker, but not all Citizens policyholders—who are predominately middle- and working-class individuals—have the wherewithal to ensure placement with carriers whose policies do not exceed the threshold.

DeSantis’s handouts to the insurance industry include the creation of a $2 billion reinsurance fund, the elimination of the one-way attorney fee provision in Florida law (which gave policyholders who win cases automatic attorney’s fees), and more stringent requirements for contingency fee multipliers, which lawyers are granted upon winning particularly challenging cases.

The controversial reforms seek to prop up insurers’ ability to access reinsurance—the insurance that insurance companies purAUGUST 2024 THE AMERICAN PROSPECT 9

NOTEBOOK Florida has been battered by four major hurricanes since 2017: Irma, Michael, Ian, and Idalia.

chase—and limit payouts to litigants and their legal representatives.

“The rampant gerrymandering since Jeb Bush’s governorship means DeSantis can hurt millions of Floridians through predatory practices with nary a peep from the legislature,” AFT president Randi Weingarten told the Prospect. “Moreover, the attack on workers and consumer freedoms that the governor and the legislature have wrought is designed to thwart any fightback.”

The litigation-oriented reforms have drawn criticism from civil society groups for limiting homeowners’ ability to seek legal recourse in the event they are wrongfully denied claims, while the reinsurance fund, dubbed Reinsurance to Assist Policyholders 10 PROSPECT.ORG AUGUST 2024

(RAP), subsidizes industry-related risks with taxpayer dollars. In a statement, the office of Gov. DeSantis described RAP as a series of “pro-consumer measures” intended to alleviate insurance costs, increase claim transparency, and “crack down on frivolous lawsuits.”

Two years later, premiums have remained elevated—leaving consumers in limbo as they attempt to navigate a crumbling market.

RAP throws money at a problem that warrants a far more considered solution. The taxexempt Florida Hurricane Catastrophe Fund (FHCF), which provides partial reimbursements to property insurers for hurricane losses they incur, has already disclosed plans to borrow up to $3.8 billion, because experts have argued it is on the brink of collapse.

The $12.4 billion fund is administered by the Florida State Board of Administration (SBA). Earlier this year, SBA announced it would sell $1.5 billion in municipal bonds to further ameliorate FHCF’s financial condition. In June 2024, CIO Lamar Taylor announced that SBA closed on $1 billion in pre-event bonds to add funding to FHCF. According to the Hedge Clippers report, Gov. DeSantis and the Friends of Ron DeSantis political action committee received a combined $3.9 million in contributions from insurance company donors between 2018 and 2023. The total included $150,000 in contributions from State Farm agents or their firms in a single

day, as well as $125,000 donated by two property insurers, both of which have been RAP participants.

In October 2023, Gov. DeSantis appointed two donors to the Citizens Board of Governors who had maxed out contributions to his ultimately aborted presidential campaign: gambling executive Jamie Shelton and homebuilding magnate Carlos Beruff.

Cronies aside, Gov. DeSantis is personally one of three trustees on the SBA board, which banned environmental, social, and governance (ESG) considerations from Florida’s pension investment management practices in August 2022. Specifically, the resolution prohibits SBA staff from considering climate-related financial risk, as well as other factors, when making investment decisions.

SBA oversees the Florida Retirement System Pension Plan, which has roughly $200 billion in assets from public employees. In October 2023, the plan announced it would be ramping up its allocation to a range of complex financial instruments known as insurance-linked securities, or ILS. With the 1 percent target allocation to ILS approved by SBA last October, these investments could total as much as $2 billion. According to an SBA investment staff member familiar with the matter, the ILS allocation was valued at about $1.3 billion at the end of 2023. As of the same date, $200 million of the allocation was exposed to socalled catastrophe bonds.

Artemis.bm, a news media and data service providing intelligence on the ILS market, defines catastrophe bonds as an investment vehicle designed to “transfer a specific set of risks (typically catastrophe and natural disaster risks) from an issuer or sponsor” to investors. By investing in catastrophe bonds, investors incur the risks associated with a qualifying catastrophe loss or named peril event to secure an exceptionally high return on their investment.

But if an eligible event protected by the bond occurs, investors will lose either a portion or the entirety of the money they initially invested. The severity of potential losses is dependent on how a particular bond is structured.

Despite its status as a well-capitalized investor, it remains unclear whether SBA is accurately pricing in the risk associated with its catastrophe bond investments, because the plan is prohibited

from including ESG considerations in its investment decisions.

SBA did not respond to multiple requests from the Prospect for comment.

“It’s absolutely absurd that Florida is attacking the tools investors use to measure risk while essentially causing there to be increases in climate costs,” Sierra Club’s Florida chapter told the Prospect in a statement. “By investing pension money in catastrophe bonds, Florida workers’ retirement savings are going to be used to cover costs associated with increasing natural disasters.”

Catastrophe bonds are not the only financial instrument susceptible to climate-related financial risk within ILS, though they are the riskiest. Catastrophe reinsurance has also suffered from climate-driven losses.

Pillar Capital Management and Nephila Capital, two of SBA’s ILS fund managers, also provide investment management services to the Hawaii Employer-Union Health Benefits Trust Fund (EUTF), a pension plan with approximately $7 billion in assets.

Pillar and Nephila oversee EUTF’s reinsurance investments, which in November 2022 underperformed as a direct result of losses from Hurricane Ian. SBA, which has been invested in ILS since 2017, also experienced catastrophe reinsurance losses during the second half of 2022.

According to Artemis.bm, the investments cost SBA retirees $63 million between June and December 2022. Nonetheless, the pension plan remains incentivized to continue investing in these securities so long as property insurance premiums continue to soar.

If the 2024 Atlantic hurricane season is as disastrous as experts predict it will be, SBA and other investors with property insurance–related investments may find history repeating itself.

Regulation. Jimmy Patronis, Florida’s CFO, also serves on the three-member SBA board of trustees. In 2022, he joined Gov. DeSantis in assailing the premise of ESG. Patronis has also been criticized for his complicity in lightly regulating the state’s insurance industry.

The Patronis-led Florida Department of Financial Services is required to examine companies at least every five years. When the now-defunct property insurer Sawgrass Mutual Insurance Company declared insolvency in 2018, the department’s report blamed the collapse on “mismanagement and lack of funds.” Reporting from the Tampa Bay Times highlighted the department’s abysmal track record of producing lackluster reports that neglect the full extent of what companies have done to remedy their financial woes.

Captured regulators could force homeowners in vulnerable areas across the Sunshine State to pay the price while insurers profit from their misery. An alternative approach would involve reclaiming consumer control over the insurance industry through a series of targeted reforms: capping home insurance rates, preventing rate hikes rather than approving increases at a whim, creating an industry-funded homeowner insurance incentives program, reinstating the one-way attorney fee rule, and requiring insurers receiving incentives to increase their presence in the state.

In addition, the federal government could and may be forced to get involved in state insurance markets with funding in exchange for reforms.

At present, the Republican Party’s grip on Florida, a prohibitory legal environment, and lack of political will for federal intervention are likely to impede the creation of such homeowner protections. Making matters worse, the National Association of Insurance Commissioners (NAIC) has long opposed federal intervention in favor of market-friendly policies, such as those implemented by the DeSantis administration.

Federal funding for climate-exposed insurance markets could be a game changer, but as the Prospect has reported, Democrats have yet to actively communicate alternatives to Republicans’ destructive approach to insurance policy, to prevent the climateinsurance-housing crisis from spilling over into the broader economy. n

Florida is the only state where the chief financial officer oversees the Office of Insurance

James Baratta is a financial journalist based in New York City.

Captured regulators could force homeowners across the Sunshine State to pay the price while insurers profit from their misery.

AUGUST 2024 THE AMERICAN PROSPECT 11

E

The Future of ____________ COLLEG

School’s Out

Demographic crashes and rising costs threaten an entire segment of higher education.

By Lilah Burke When Olivia Montagno entered college as a freshman in 2018, she intended to major in biology. But by her second semester, she felt drawn instead to the music that had been part of her life since she started studying trumpet at age 8. So she decided to take up music education, with the plan of becoming a music teacher.

By her junior year, that was in jeopardy.

The College of Saint Rose, her Catholic liberal arts school in Albany, New York, was facing an $11.3 million budget deficit. And the music department was on the chopping block.

The college cut 22 degree programs that year, which served about 10 percent of undergraduates. More than one-fifth of full-time tenured and tenure-track positions were eliminated.

Now, four years later, the College of Saint 12 PROSPECT.ORG AUGUST 2024

Rose has closed its doors for good. It had lost 20 percent of its undergraduate enrollment in the 2010s, according to federal data.

“There was a lot of resentment. There was a lot of anger,” Montagno said. “There was a lot of sadness.”

Montagno was able to graduate, and started a master’s in music performance at the State University of New York at Potsdam. But soon after, she had déjà vu. Potsdam announced in 2023 that it would be ending her program, along with eight others, in the hopes of covering a $9 million budget shortfall.

“I felt really insecure about going out into the world and trying to be a teacher,” said Montagno, who now teaches music in New York. “I contemplated going back for a doctorate, but at this point it doesn’t seem like

a good idea because everything either shuts down or closes.”

It’s a story that has become more and more common across higher education in recent years: Programs, often in the arts, humanities, languages, and social sciences, are shuttered; faculty and staff lose their jobs; and students find themselves bargaining with their dreams. In some cases, colleges close entirely—95 private, nonprofit four-year colleges closed between the 2015-2016 and 2022-2023 academic years, according to the latest federal data. Since June 2023, more than 20 similar colleges have announced they are closed or merging, according to a tracker from Higher Ed Dive.

For institutions like the College of Saint Rose—small, often religiously affiliated liberal arts colleges—this is a “do or die”

moment. The major problem facing these and other small institutions is low enrollment, spurred by a combination of demographic changes, growing skepticism about higher education, and eye-popping costs.

While elite and highly selective colleges are thriving financially, smaller regional institutions are struggling to survive.

Although the dominant story about America’s colleges has been about campus protests and culture-war battles, for many institutions, the real challenge is just keeping the doors open. How they respond will reshape higher education for decades to come.

Historically, higher education in America has gotten bigger and bigger. Nationwide enrollment grew in all but two years between

1984 and 2010, adding nine million students, according to data from the National Center for Education Statistics. College degrees have what economists call “countercyclical demand,” meaning when the economy is bad, the rolls swell. The financial crisis gave America’s colleges their biggest class yet, peaking at more than 21 million students across all levels and sectors in 2010.

Since then, nationwide enrollment has declined nearly every year. Today, it stands at more than one million fewer students than it did at its peak.

The most-discussed and perhaps mostfeared reason behind the enrollment decline is the changing demographics of the United States. Perhaps spurred by the unfavorable economic conditions of the Great Recession, U.S. fertility rates have

generally declined since 2007. That year, the expected average number of children born to women over their lifetimes was 2.12; by 2020 it was 1.64, according to World Bank statistics. Fewer babies then mean fewer college students now.

Nathan Grawe, an economist at Carleton College, is the person perhaps most associated with what some in higher education call “the demographic cliff.” His 2018 book, Demographics and the Demand for Higher Education, was a sensation among the small world of college administrators when it came out.

There were already concerns in higher ed about the birth rate before Grawe’s book, but his analysis turbo-charged the conversation. His central thesis was that not only were birth rates falling, but they were tankAUGUST 2024 THE AMERICAN PROSPECT 13

The Future of ____________ COLLEGE

14 PROSPECT.ORG AUGUST 2024

There is of course the movement to cast higher education as the domain of “woke” ideology. But it is also impossible to talk about the growing animus toward higher education without talking about cost.

Although the true cost of college after grant aid has actually been declining in the last decade, it is still close to $16,000 per year at a private nonprofit college. Most students don’t pay the sticker price for college, but shocking inflation in those advertised numbers only contributes to the feeling that higher education is out of reach. Some public flagships have raised tuition in part to finance large capital projects and new administrative staff, hoping to draw in more students.

Student debt has become a national political issue, as graduates across the country have called for the government to cancel loans that they say are ruining their lives.

Some senior citizens are still haunted by debt they took on decades ago. Nearly 37 million people have some college experience but no degree, often facing debt without the benefits of a credential.

There has also been more scrutiny over what exactly students are buying when they pay tuition. More than 80 percent of firstyear students say they are attending college in part to get a better job and make more money, according to research from the Higher Education Research Institute at the University of California, Los Angeles. On average, college usually pays off, but a strong labor market has increased the opportunity costs of four years in a classroom. Both

Ninety-five private, nonprofit fouryear colleges closed between the 2015 and 2022 academic years. researchers and the federal government have begun paying far more attention to what kinds of jobs college graduates get, and how much they earn.

All of this has combined to make college seem less and less attractive. Between 2020 and 2022, the share of high school students saying they are considering a bachelor’s degree fell by 20 percentage points. In some circles, college now has a reputation, not entirely unearned, of an expensive gamble.

“If they don’t feel like they have a way to finance it and they are not interested in being crushed by loan debt, they’re just not attending,” said Rachel Burns, a senior policy analyst at the State Higher Education Executive Officers Association (SHEEO), who has studied the effects of school closures.

U.S. Fertility Rate

AVERAGE TOTAL BIRTHS PER FEMALE

2.057

1.665

2005

2010

2015

2020

SOURCE: WORLD BANK

ing in exactly the populations most likely to attend college: white students from the Northeast and Midwest.

“Nationally, we anticipate declining cohorts starting in the next couple of years,” Grawe told the Prospect. “In the Northeast, we’re already in that period of declining numbers of young people reaching college-going age.”

Selective colleges, Grawe predicts, will be just fine. In fact, they could grow if they wanted to, spurred by an increase in the number of Asian Americans and students with college-educated parents. The demand for degrees from Ivy League and similar institutions exceeds the supply of seats. And multibillion-dollar endowments provide a financial backstop.

But that’s not most colleges.

“Most institutions are not highly selective,” Grawe said. “They’re accepting a large fraction of their students. And when the pool contracts, they don’t have nearly as many choices.”

Grawe has written about a variety of different strategies colleges might use to survive the dip. However, the one his name became inextricably linked to is the process of retrenchment. Officials at Marquette University, a Catholic college in Milwaukee, Wisconsin, assigned its entire leadership team to read Demographics and the Demand for Higher Education. The university has since laid off dozens of staff and aims to cut $31 million over the next several years, partly in anticipation of Grawe’s predicted 15 percent enrollment drop in the Midwest.

Many of the colleges closing in this most recent wave are similar to the College of Saint Rose. They are liberal arts colleges, religiously affiliated, and located in the Northeast.

“Regional state and private institutions, where population bases are more limited, are struggling more than other institutions,” said Jill Orcutt, a college consultant with the American Association of Collegiate Registrars and Admissions Officers. “How far are students and their families willing to relocate for their educational attainment?”

Demographics are likely not the only factor at play in the enrollment drop.

Researchers say a growing distrust of higher education is likely also playing a role. Only 36 percent of respondents reported having a good deal of confidence in higher education, a 2024 Gallup poll found. That’s down 21 percentage points since 2015.

The College of Saint Rose closed its doors in June, and it is now selling off the campus.

Even students who might really benefit from higher education sometimes need help to understand a complex system of enrollment, federal aid, and major options. Students at the high school level often don’t have access to high-quality advising and career counseling, said Wil Del Pilar, senior vice president of higher education at the think tank the Education Trust. They may also lack programs like dual enrollment, which let them get a taste of college early.

“We haven’t intentionally designed policies that are going to lead to better outcomes for students,” Del Pilar said. “We thought students would figure that out on their own.”

In the near term, some of higher education’s challenges may only get worse. Over the past year, the Free Application for Federal Student Aid (FAFSA) has been at the center of a nationwide debacle. The Education Department was tasked with simplifying the form, which held up its release and processing, and technical difficulties created more delays. There were 300,000 fewer applications for student aid this year compared to last year, according to a May report from the Century Foundation.

Amid these challenges, small and regional colleges are trying to grow enrollment any way that they can. Often, that looks like building out online programs and recruiting adult students. In other cases, it may look like focusing on retention or advertising a new sticker price. Some colleges are taking on bold new ventures, like new facilities and programs.

Siena College, a 15-minute drive through Albany from the College of Saint Rose, grew its undergraduate enrollment by nearly 12 percent between 2013 and 2022. Enrollment today is at a record high. That’s in part from adding new programs, such as those in the health sciences, to align with workforce demands in the region. Thirty percent of students are now enrolled in programs that didn’t exist in 2016.

“We need to look at ways to innovate and diversify our revenue,” said Jason Rich, vice president for strategy and communications at Siena. “Career is top focus, not just for students but for families, who are involved in paying for costs.”

But building a college, in the hopes that the students will come, is risky. In order to fix budget shortfalls and in some cases free

up funding for other expansions, many colleges have responded with cuts.

At the College of Saint Rose, music and arts saw steep cuts in 2020, but the administration also eliminated degrees in mathematics, chemistry, information technology, and business. Five years earlier, the college eliminated degrees in economics, philosophy, and women’s and gender studies, among others.

At small and regional public colleges, retrenchment doesn’t typically lead to closure because the state can support an institution. But at private nonprofit institutions, many of which are almost entirely dependent on tuition, closing is always on the table.

“We said it back then when they cut the program, ‘This school is going to be closed in five years,’” said Brianna Moss, a graduate of the music education program at the College of Saint Rose and now a middle school band director. “When you take the foundation out of a house, it crumbles.”

(The College of Saint Rose, which closed for instruction in June and will continue administrative functions until the end of 2024, declined to give comments for this article.)

AUGUST 2024 THE AMERICAN PROSPECT 15

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When an institution declares bankruptcy, creditors are typically made whole first; students have to get in line.

to make plans. The process at Saint Rose, painful as it was, was relatively orderly. But closures are sometimes sudden, and their reasons opaque.

University of the Arts, a private arts college in Philadelphia, unexpectedly announced in May that it would be closing in one week. The president resigned and executive functions are now in the hands of a management consulting firm. Current students have the option to attend a “teach-out” program from another college, or to pursue a student loan discharge from the Department of Education. When an institution declares bankruptcy, creditors are typically made whole first; activists like those at the Debt Collective have noted that students have to get in line.

Bradley Philbert taught media courses at University of the Arts. He was picking up wedding rings with his fiancée the day the closure was announced. He heard the news via a push notification from The Philadelphia Inquirer. He is now a named plaintiff in a proposed class action lawsuit against the university.

“I don’t know how a $40 million problem happens in two weeks,” Philbert said, referring to numbers one trustee of the university told the Inquirer.

College off icials are often wary of announcing that they are having enrollment or financial problems because that may turn off even more students, said Gary Stocker, founder of College Viability, which offers college financial data for students, faculty, and others to determine whether their college might close. Enrollment, Stocker said, doesn’t tell the whole story.

Many colleges offer scholarships or discounts that are unfunded, meaning institutions simply forgo revenue. That gets students in the door, but can mask internal financial problems.

The fact that colleges have more seats than students willing to pay for them is just simple supply and demand, Stocker said. Some of those that have closed were never good educational opportunities to begin with.

“We’re seeing the same kind of market adjustment that we’ve seen in countless other

ALEJANDRO ALVAREZ / SIPA USA VIA AP

When colleges close, a community can lose its center. People lose jobs—not just professors and presidents, but janitors, cooks, landscapers, and administrators.

“We’re seeing closures of really wellestablished institutions with a long history and a lot of alumni,” said Burns. “It’s affecting the whole community.”

One of the reasons closures have been so numerous over the past year is the fact that federal pandemic aid to colleges allowed them to keep operating, even when the revenue they were bringing in was reduced.

That aid has now dried up.

“As long as those bailout checks were flowing to the institutions, they were able to navigate not only COVID declines, but also some of the more structural weaknesses that existed,” Grawe said. “Then when the funding disappears, all of a sudden those cracks in the foundation appear.”

Many students who experience a college closure never return to higher education. For students with no prior credential, watching their college close while they’re attending makes them 50 percent less likely to earn a degree than a student who didn’t experience a closure, according to research from Burns and co-authors at SHEEO. Numbers drop even lower for students of color and for men.

For alumni and students, a closure can be a gut punch. Montagno said the closure at Saint Rose, her rush to graduate, and the subsequent cuts at Potsdam, have cast a shadow on her career.

William Gibbons, dean of Potsdam’s music school, said that while the decision to cut the music performance master’s program was difficult, it was a small program, with only 11 students at the time. Sunsetting the program, he said via email, allowed the school to focus on traditional strengths in its undergraduate curriculum.

Even students who have yet to attend college can be impacted by a closure.

“A lot of people assume that private colleges cater to the upper class, or at least the upper-middle class. That’s actually often not the case,” said Paula Langteau, the last president of Presentation College in South Dakota, which closed last year. “There may be less opportunity for students of a lower socioeconomic class to access a four-year degree.”

Langteau now consults for small colleges, helping them with “compassionate closure.”

Part of that process, she said, is announcing early, to give students and faculty time

What if the education system was never truly meant to lift millions into economic security? industries over the years,” he said. “Those colleges have earned the right to close.”

The College of Saint Rose is now selling off its campus, made up of 81 different properties in Albany.

“It’s a ghost town now,” said Bruce Roter, a professor of music at the college for 24 years.

Roter lost his job initially in the 2020 cuts, but was reinstated as the result of a lawsuit. When the college won an appeal, he was out again. The process, he said, was like “fighting to get back on the Titanic.” But the closure has substantiated his belief that a liberal arts college like Saint Rose cannot exist without the arts.

Retrenchment in higher education hasn’t solely affected the humanities, arts, and social sciences. Programs in hard sciences such as physics, chemistry, and math have also been shut down. But the fact that “soft” disciplines have been particularly hard-hit is not a coincidence.

Those disciplines have largely seen declining or flat enrollment. The number of bachelor’s degrees awarded in English declined by nearly 24 percent between the 2012-2013 and 2017-2018 academic years.

Degrees in foreign languages declined by 22 percent in that period, and degrees in history and social sciences declined 10 percent. For contrast, the number of bachelor’s degrees awarded in health sciences increased by 35 percent in that time.

It’s likely these subjects are less popular because students believe that a degree in those subjects won’t get them a good job.

One of the biggest buzzwords in the high-

er education world now is “ROI”: return on investment. A program’s ROI is the difference between costs and earnings benefit, and numerous researchers have devoted their time to calculating it.

The federal government has also gotten in the game, posting data about earnings and debt on its College Scorecard website. The Education Department’s “gainful employment” rule, which will go into effect in July, removes funding for career education programs if graduates don’t make more than people in their state with just a high school diploma. If a program doesn’t leave students better off, accountability advocates say, why should the federal government subsidize it?

But some academics have begun to argue that much of the conversation around ROI is missing the point. A growing number of students have found themselves underemployed after college and declared higher education a “scam.” But what if the education system was never truly meant to do what we’ve tasked it with; namely, lifting millions into economic security? What if the fact that the economy is dominated by low-wage service jobs reflects an economic issue, rather than an educational one?

“I don’t want the federal government or anyone else to subsidize programs that are bilking students,” said Neil Kraus, a professor of politics at the University of Wisconsin–River Falls. “But the education system cannot change the labor market. It cannot change the jobs that exist in the world or the wages that those jobs pay.”

American politics has increasingly offered educational solutions to economic problems, Kraus writes in his book The Fantasy Economy. When workers are frustrated by stagnating wages and growing inequality, they are told to upskill by getting a degree. Economic policies like raising the minimum wage aren’t part of the conversation.

The gospel of upskilling at any cost has driven countless low-income Americans into poor or predatory education programs.

When the responsibility for job training shifted from companies and governments to individual workers, many low-income Americans found themselves pursuing high-risk programs at for-profit colleges, writes sociologist Tressie McMillan Cottom in her book Lower Ed. “When we offer more credentials in lieu of a stronger social contract, it is Lower

Ed,” she writes. “When we ask for social insurance and get workforce training, it is Lower Ed.” Things used to be different. People always understood that education could give you a better job. But higher education’s current role, as the sole way to compete for a diminishing number of good jobs, is unique to the past 50 years, argues historian Jon Shelton in his book The Education Myth.

Private colleges have few options when money is tight. But in public systems, academics and faculty have increasingly argued that austerity is a choice, not a mandate. When public education is viewed solely as job training, cuts can happen, sometimes dramatic ones. And less-wealthy students inevitably see their educational opportunities foreclosed.

“Students who go to elite universities or even go to a place like [the University of Wisconsin] Madison, the flagship, they still get to study everything,” Shelton said in an interview. “But those students who are in regional comprehensives or smaller liberal arts colleges that are private, they’re going to have limits.”

It’s difficult to say exactly what will happen next. All but seven states saw enrollment declines between 2017 and 2022.

However, the National Center for Education Statistics predicts that enrollment will increase over the next few years. The center forecasts a nearly 8 percent increase in undergraduate enrollment at four-year colleges between 2022 and 2031. Graduate enrollment is projected to increase 7 percent in that time.

Grawe has said he expects enrollment to continue falling, particularly in the North, with a brief recovery around 2031.

Of course, we may not be able to say exactly what enrollment will look like in the future. But we do know that when an institution is gone, it can be difficult to impossible to bring back.

Lydia Flynn was another student at the College of Saint Rose when the cuts to the music department were announced. Devastated by the decision, she took to practicing her flute in public, just hoping someone would hear it.

Students like her still mattered, she said.

“I’m still here.” n Lilah Burke is a freelance reporter based in New York.

AUGUST 2024 THE AMERICAN PROSPECT 17

The Future of ____________ STADIUMS

Neighborhoo Hardball For decades, wealthy owners and financiers have gotten cities to pay for their sports stadiums.

It’s not so easy anymore.

By Gabrielle Gurley

It’s lunchtime on a hot, sunny late-June day.

The students are long gone from the schoolyard at the Folk Arts-Cultural Treasures Charter School in Philadelphia’s Chinatown.

Summer vacation has started, and save for a few cars cruising by, this corner is quiet.

Twenty-four years ago, the city imagined a very different vibe, with cheering crowds at a new Philadelphia Phillies baseball stadium.

During a neighborhood walk, Debbie Wei, a founder and a former principal of the school that focuses on the needs of Asian American and immigrant children, told me that FACTS would have been a stadium parking lot.

Philadelphia has been coming for Chinatown for decades. An indoor shopping mall hems in the neighborhood to the south, and the massive Pennsylvania Convention Center does the same to the west. The Vine Street Expressway, a six-lane connector between two interstate highways, splits the heart of the neighborhood off from homes and community gathering places to the north.

If not for the 1970s protests that resulted in a scaled-back roadway, the Chinatown that exists today would have been obliterated.

18 PROSPECT.ORG AUGUST 2024

When federal infrastructure dollars arrived in March for the Chinatown Stitch, a cap for the expressway that will hide the division with parks, play spaces, and other community amenities, it was a significant victory against what residents have viewed as an attempt at erasure. At a news conference announcing the grant, John Chin, the Philadelphia Chinatown Development Corporation’s (PCDC) executive director, pronounced the $160 million grant “transformative unlike any that Chinatown has experienced.”

“We will finally be repairing a historic wrong, an injustice that was done to a community,” said Rep. Brendan Boyle (D-PA).

Chinatown’s several thousand residents have fought for generations to build up and keep what they’ve got—homes for low- and moderate-income families, new shops and small businesses, and a cornucopia of restaurants and small eateries. They’ve beaten back plans for the Phillies stadium, a federal prison, and two casinos.

But the sports world has intruded again, this time with a new Philadelphia 76ers basketball arena proposed by a troika of

oods Play private equity and real estate executives.

Their pitch boasts of new jobs and revenues, economic revitalization, and above all street cred for a team aspiring to join other NBA cities with downtown arenas. But there’s nothing more inconsistent with repairing historic wrongs than the existential threat posed by the hoop dreams of billionaires, which could spell the end-times for this working-class neighborhood of color.

“We truly believe that if this gets built Chinatown will die,” says Wei, who cofounded Asian Americans United, a neigh-

borhood advocacy group. “This has become, to me, at least, much bigger than Chinatown because this is a fight against that kind of private equity development that’s destroying communities around the world.”

Throughout the country, professional sports teams dangle arenas and stadiums as civic dreams come true. But for the communities and the taxpayers subsidizing them in one way or another, they are often more like cynical exercises in urban grift. Dollars that could have been spent on housing, schools, parks, or recreational facilities flow into the

bulging portfolios of wealthy team owners.

It’s all slam dunks and three-pointers for Philly until the real costs materialize: epic traffic jams, ambulances caught in gametime traffic, top-chef restaurants elbowing out modest local favorites, and more of the gentrification that is already noshing on the northern end of Chinatown.

With leases expiring across the country after the last major period of sports facility construction in the 1990s and 2000s, teams are casting about for new deals. The dif-

AUGUST 2024 THE AMERICAN PROSPECT 19

The Future of ____________ STADIUMS

ference today is that community members are more sophisticated and skeptical about mega-projects’ costs and benefits and more vocal in their demands for transparency and accountability from the dealmakers about these proposals.

“Simple price escalation in the costs for building these things has been so great that politicians can’t get away with pushing a bill through the city council or state legislature nearly as easily as they could have in the past,” says Andrew Zimbalist, a Smith College professor emeritus of economics. “One of the ways that politicians and team owners have tried to get around the cost is by lowering the apparent public contribution.”

Dozens of academic studies show that arenas and stadiums are not only not economic catalysts, but that cities end up spending additional millions more in transporta20 PROSPECT.ORG AUGUST 2024

tion infrastructure enhancements, among other things, to keep them purring. The data hasn’t made a dent: Teams sell their dreams not only to fans but to local and state politicians who want to keep those fans happy.

Politicians fear the threat of teams pulling up stakes, and either don’t reckon with the long-term impacts of their decisions, or resort to subterfuge to hide them.

“The Buffalo Bills are ingrained in the heart and soul of every Western New Yorker,” Erie County, New York, executive Mark Poloncarz gushed in a statement after New York Gov. Kathy Hochul shocked angry but compliant lawmakers with a nearly billiondollar state commitment for a new stadium at the end of the 2022 legislative session.

Politicians like cutting the ribbons on legacy-building sports investments, and don’t want to be the one who “lost” the team. “You

get the credit for saving whatever team it is, but the costs don’t come until later, by which time, hopefully, from your point of view, you’re governor,” says Michael Leeds, a Temple University professor of economics.

“The bill gets paid on someone else’s watch.”

In the 1990s, team owners recalibrated their expectations. Rather than multipurpose stadiums, they wanted sport-specific, centrally located facilities, which they preferably wouldn’t have to share. Those costs were largely borne by the taxpayers, who were wooed by the idea that a sports facility would revitalize an economically depressed area.

Camden Yards, the home of Major League Baseball’s Baltimore Orioles, was one of the first purpose-built baseball stadiums.

According to a Baltimore Sun analysis, in the more than 30 years since the stadium opened in 1992, it has cost Maryland taxpay-

MAT T ROURKE / AP PHOTO

Philadelphia’s Chinatown Friendship Gate, which is near the site of the proposed 76ers basketball arena

Community members are more sophisticated and skeptical about mega-projects’ costs and benefits. ers more than a billion dollars to support the needs of the team, currently run by David Rubenstein, a private equity billionaire.

Stadiums and arenas now come with minimum price tags of $1 billion, even before the infrastructure wish lists appear.

Where voters can weigh in, they’ve often said, “No thanks.” In Tempe, Arizona, three separate measures failed by nearly 60 percent of the vote in 2023 for a $2.1 billion entertainment district that included an arena for the Arizona Coyotes National Hockey League team. A tech billionaire acquired the Coyotes and moved the team to Salt Lake City.

The MLB’s Oakland Athletics could not pull together an agreement with the city (which refused to put a stadium question on the ballot) and declined to renew their expiring lease. The A’s will take their bats and balls to a Sacramento minor league park before moving to Las Vegas when their new stadium opens there. But the proposed move prompted protests from Nevadans over the legislature’s approval last year of $400 million in public funding, through tax credits and bonds, for a $1.5 billion, 30,000-seat stadium on the former Tropicana casino site. The furor has fueled two lawsuits and a “Schools Over Stadiums” ballot referendum drive led by teachers unions. The state supreme court disallowed the referendum over ballot language, and that battle continues.

Tussles over teams can unleash economic warfare between states. Jackson County, Missouri, voters decided not to extend a 3/8cent sales tax for 40 years to generate $2 billion for a new stadium for the MLB Kansas City Royals, and renovations for the Super Bowl champion Kansas City Chiefs’ home field. It failed 58 percent to 42 percent. Kan-

sas and Missouri once had a decades-old understanding that they would not get into the business of poaching projects and jobs from one another. But Kansas state lawmakers, seeing a long-standing dream taking shape, have jumped to lure the teams.

They recently passed a financing plan for two stadiums. That move led to a counteroffensive by Missouri lawmakers, who announced that they’d do what it takes to keep the teams. Taxpayers will soon find out how much this battle will cost them— and it’s not over yet; there may be another Jackson County vote.

The clearest signal that the unconditional acceptance of wealthy owners pushing lopsided deals on pliable pols and taxpayers is coming to an end unfolded at the end of 2023. Virginia’s Republican Gov. Glenn Youngkin and Ted Leonsis, the billionaire owner of Washington’s NBA Wizards and NHL Capitals, suddenly announced a plan to construct a $2.2 billion arena in an unsuspecting neighborhood in Alexandria, a wealthy suburb of Washington. Leonsis had been angling for a half-billion-dollar renovation package from Washington Mayor Muriel Bowser for the Capital One Arena, the team’s home base (located, like the proposed Sixers arena, in the heart of Chinatown), and had decided to play Maryland and Virginia against the District. By the time Bowser came around, it was no deal.

The Washington Metropolitan Area Transit Authority had just opened a new metro station near the proposed site, which only had one exit. Residents of Alexandria’s Potomac Yard neighborhood were apoplectic about traffic and parking and new highway modifications. Maryland fans, who preferred the convenience of the Chinatown arena with its access to multiple Metro lines, weren’t eager for either a long drive or much longer Metro ride to the other side of the Potomac River.

But the final blow to Youngkin and Leonsis’s dream came from the state capitol in Richmond. In a breathtaking failure to read the room, the two white men ignored the key decider: an 80-year-old African American woman who’d been in the Virginia legislature for more than three decades. They failed to run their plan—resting on bonding through a stadium entity that didn’t yet exist—by Democratic state Sen. L. Louise Lucas, the chair of the Virginia Senate’s finance and appropriations committee. She had to sign off on the deal though the state

budget process and steer it through a General Assembly that had swung over to unified Democratic control in 2023.

On X, formerly Twitter, Lucas was unequivocal about her role: “Anyone who thinks I am going to approve an arena in Northern Virginia using state tax dollars before we deliver on toll relief and for public schools in Hampton Roads must think I have dumbass written on my forehead.” By the end of March, Leonsis worked out a $515 million investment toward the total $800 million cost of renovations—with Bowser.

Washington Chinatown’s recent history reverberates with warnings for Philadelphia.

The construction of the Washington arena in the 1990s destroyed the last vestiges of a recognizable Chinatown. The 1968 riots after Martin Luther King’s assassination spurred families and business to leave for the Maryland and Virginia suburbs. The construction of the Metro in the middle of the neighborhood in the 1970s accelerated the exodus.

The siting of the city’s convention center on the northern edge of the neighborhood in the 2000s also affected the community.

Ted Gong, the executive director of the 1882 Foundation, which works to raise awareness of the historical impacts of the Chinese Exclusion Acts that prohibited Chinese immigration in the late 19th century, wasn’t among the Washingtonians agonizing over the teams’ possible departure. “We were saying, ‘You know, if that thing falls into the ground and becomes a parking lot, that’s fine with me,’” he says.

The longtime residents’ exodus to the suburbs precipitated a decline; the arena finished Chinatown off. “One of the major causes of demise of Chinese Chinatown is the loss of restaurants that can do banquet business,” says Gong. “I’m not talking about the little noodle shops—something everybody talks about, how to protect the mom-and-pop shops. It’s the weddings, the birthdays, the wakes, all these rites of passages, things that bring the family together.

That process of coming and sharing maintains the community. If you don’t have that banquet facility for these rites of passages, you’re finding someplace else.”

Gong is already reimagining Chinatown.

He points to Georgetown University’s new multimillion-dollar undergraduate and graduate campus near Capitol Hill, a development he believes will have a positive impact on Chinatown over the next decade. City planning AUGUST 2024 THE AMERICAN PROSPECT 21

TADIUMS The Future ofS____________

In the summer of 2022, Josh Harris and his Philadelphia 76er co-owner David Blitzer, along with local businessman David Adelman, announced a plan to move downtown. Blitzer is a senior executive with the Blackstone private equity firm. Adelman is a Philadelphia entrepreneur best known in the city for Campus Apartments, a large on- and off-campus student housing firm.

22 PROSPECT.ORG AUGUST 2024

Currently, the team is a tenant of the Wells Fargo Center, about four miles away in the Sports Complex in South Philadelphia, which also houses the stadiums for the MLB’s Phillies and the NFL’s Eagles. Comcast Spectacor owns the Wells Fargo Center and its co-tenant, the NHL’s Flyers. With their lease expiring in 2031, the Sixers’ owners want to control their own scheduling in a state-of-the-art arena with luxury boxes, the newest Jumbotron scoreboards, and premium food offerings.

Comcast Spectacor put another offer on the table, a 50/50 partnership to build the Sixers their own arena in the Sports Complex “at the right time,” CEO Dan Hilferty told the Philadelphia sports blog Crossing Broad in June. The offer comes on the heels of the corporation’s multibillion-dollar upgrades to the Sports Complex, including $400 million in Wells Fargo Center renovations with restaurant “experiences,” bars (with the privilege of standing-room tickets at $25), stores with high-end merchandise, and more exclusive club seating.

According to Hilferty, the Sixers owners have not responded.

Is an 18,500-seat arena worth the further encroachments on the Chinatown neighborhood? The arena, with the name “76 Place at Market East,” would replace a section of the Fashion District mall between Philadelphia City Hall and the Independence Mall historic district, where blocks of once-busy stores are now boarded-up, disused spaces.

The one-two punch of the convention center and arena bears an eerie similarity to the construction patterns that unraveled Washington’s Chinatown.

An August 2021 study of sports facilities and local businesses by a pair of Columbia University and Northwestern University researchers found that, unlike football and baseball stadiums, basketball and hockey arenas do not generate comparable foot traffic to local businesses. But 76 DevCo, the team’s development arm, points to events at the Convention Center, when the average daily population walking in front of shops and restaurants increased by 74 percent to 35,300.

But window-shopping does not necessarily translate into purchases. The team’s owners will want people to spend their money in the arena’s eateries and not in Chinatown or any other downtown restaurant district. “That’s where a lot of their revenue actually comes from,” says Arthur Acolin, a

Dozens of academic studies show that arenas and stadiums are not economic catalysts. professor of real estate at the University of Washington-Seattle who studies historical Chinatowns on the East Coast and who completed a study of the arena plan.

The Sixers would play about 50 games, depending on the playoffs, with up to 100 concerts and other events, team owners claim. But 76 Place would also compete with the Wells Fargo Center for big acts, and one of those two facilities would struggle to stay profitable. It would also compete with two other nearby concert venues: Temple University’s Liacouras Center and the Met Philadelphia. The Sixers plan includes a 250-unit mixed-income residential tower with 20 percent of the units (up to 79) affordable, but that aspect of the project remains in flux. 76DevCo did not respond to requests for comment.

“Real estate is kind of the latest kind of bright and shiny thing teams and leagues are using,” says Leeds, the Temple University professor. “‘It’s not a stadium. It’s a mixeduse entertainment district that is going to have housing and stores.’ First of all, a lot of the time that stuff never happens, and even if it does happen, why do you need this spaceship in the middle of it that is empty most of the year?”

In their 2022 announcement, the Sixers cited Jefferson Station, a Southeastern Pennsylvania Transportation Authority (SEPTA) downtown hub, as one reason for the move. But with federal COVID funds running out, the system is nursing a $240 million deficit going into its 2025 fiscal year.

Where will SEPTA get the ongoing funds for infrastructure improvements to Jefferson Station, or tweak schedules to better accommodate Sixers crowds headed downtown?

What the owners ignore are the lifelong behavioral patterns that are hard to shake,

AARON M. SPRECHER / AP PHOTO (RIGHT)

has to focus not just on sports fans attending games a few days a year, but the wider implications of students and workers from the city and federal courts and Capitol Hill who will seek experiences that a sports arena does not provide, like the area’s theaters, libraries, and the Smithsonian American Art Museum and National Portrait Gallery.

“The sports arena is either going to be a hub for all these places, or it’s going to be a roadblock,” he says. “Right now, it’s a roadblock.”

Another District neighborhood wants a football team to stay far away. Resistance is heating up over the possible return of the Washington Commanders from suburban Landover, Maryland, to a new NFL stadium constructed on the site of the soon-to-bedemolished Robert F. Kennedy Memorial Stadium. Ebony Payne, a member of the Advisory Neighborhood Commission, an elected citywide body that handles local affairs, opposes the stadium. “There’s a lot of nostalgia around the team,” says Payne, who grew up in the Kingman Park neighborhood around RFK. “Being in D.C., when they were playing at RFK, they won the Super Bowl.”

What her constituents want is more affordable housing in a city where it’s scarce, and a new neighborhood supermarket that would also be an option for people living in the food desert across the river from the stadium. They want a popular skate park, a farmers market, and especially the multiuse playing fields preserved. But The Fields, as the space is known, have been viewed as temporary by other mayors and by Bowser herself. She is leading the drive to get the team back. “I think she sees it as part of her legacy,” Payne says.

Bowser has said that the Wizards-Capitals deal should show the Commanders ownership, led by Josh Harris, the co-founder of private equity firm Apollo Global Management, that the city is serious and is committed to new investments in sports and infrastructure. Harris is a busy man. He’s also behind the Philadelphia arena deal.

particularly among suburban fans used to driving to the Sports Complex, which sits at the confluence of Interstates 76 and 95.

Nor is SEPTA the best ambassador for mass transit. Although the regional commuter rail experience is better than either of the city’s two subway lines, which can slide into Mad Max territory, the system has long had an abysmal reputation for safety.

“This is Philly, this is not New York,” says Rev. Michael Caine, of Power Interfaith, a statewide group of congregations opposing the arena. “The way subways and trains are right now, oh my God, they’re going to drive their cars.”

How ambulances would get to Thomas Jefferson Hospital, the main downtown hospital that provides the highest level of trauma care, is a concern that hasn’t been addressed to the satisfaction of medical professionals who work there. How the city would handle traffic when Sixers games conflict with events at the Convention Center like the PHS Philadelphia Flower Show, a ten-day-long

March horticultural extravaganza, the country’s largest, is anyone’s guess.

The project promises thousands of temporary construction jobs. But it is unclear how it would create stable, year-round employment that a family can live on. Many Sports Complex concession jobs are part-time, seasonal positions with wages that match. Workers have responded by linking together several of those part-time jobs at the Sports Complex to generate an income that can support a family. Splitting off the Sixers won’t produce a raft of new jobs, but it would move existing ones from the Sports Complex to Center City, placing new commuting demands on already hard-pressed workers.

Several African American organizations, including the NAACP Philadelphia and the Black Clergy of Philadelphia and Vicinity, have come out in favor of the project.

The groups have signed a memorandum of understanding with the Sixers that 40 percent of the concession, vending, and food businesses would go to African American

owners, with a $2 million fund to prepare people for these opportunities. The team has proposed a $50 million, 30-year community benefits agreement. But $1.6 million annually won’t go far in a major city that has the highest poverty rate in the country.

When the 76ers moved their practice facility to Camden, New Jersey, across the Delaware River from Philadelphia, in 2016, out of 275 staff members, they only hired 11 city residents.

Caine sees 76 DevCo’s moves as divisive.

“It’s used some of the political and historical divisions between the Black and Asian communities in Philly over and over again, promising things to the Black community over and against the Asian community— and I’m of neither community,” he says. “It’s just been kind of horrifying to me to watch these kinds of clumsy efforts, to be honest, on their parts.”

The owners may be paying for construction and swearing off city subsidies. But 76 DevCo has expressed interest in seek-

Chinatown in Washington has been hobbled by Capital One Arena (left); Mayor Muriel Bowser wants to build a stadium for the NFL’s Commanders on the RFK Stadium site next to the Anacostia River.

AUGUST 2024 THE AMERICAN PROSPECT 23

The Future of ____________ S STADIUM

ing out monies from “existing federal and state programs”—which means taxpayer dollars. The unstable political situation in the nation’s capital throws doubts on substantial increases in transportation funding for highways or large transit systems like SEPTA. A Jefferson Station reconfiguration would cost multiple millions. And despite a Democratic governor from the city’s northern suburbs trying to shore up support for new statewide public-transit investments, there is no love lost for Philadelphia in the Republican state legislature.

The Sixers have said that they plan on the building lasting 40 to 50 years without major renovations, and that over a 30-year period, it will create over $1.5 billion in new tax revenue for the school district, city, and state. That works out to a paltry $50 million per year across three jurisdictions. The Philadelphia School District’s budget for the 2024-2025 academic year is $4.4 billion.

An independent study by Acolin of the University of Washington-Seattle found that no matter how a potential deal is done, during the five years of construction, the city and the state stand to lose. Acolin’s conservative estimate projects that the arena would cost the city 170 businesses, nearly 5,000 jobs, and about $265 million in tax revenues; on the high end, the city would shed 566 businesses, about 16,000 jobs, and nearly $1 billion in tax revenues.

24 PROSPECT.ORG AUGUST 2024

Arena officials have presented “broad strokes” solutions to Chinatown’s concerns about a sports facility on their doorstep, which John Chin of the PCDC describes as “security, quality of life, supporting the business environment and preserving the authentic culture that Chinatown has to offer.” Chin arrived to head the PCDC just in time for the Phillies fight, so he’s back on familiar ground.

He characterizes 76 DevCo’s efforts as “good-intentioned” but says that solutions for this unique live-work neighborhood are “very, very complicated.” “I’ve said that to them, you don’t bring organic benefits. I don’t want to accept and hear that you’ve got to mitigate all these negative impacts of the arena,” he says. “That’s not what we want; it doesn’t benefit Chinatown one bit.”

Chinese laborers came to the United States in the 1870s to work in mines and on railroad construction in California and other Western states. Where white job seekers resented immigrants and viewed them as competitors, the Chinese became targets of violence and lynch mobs.

North and west of Independence Hall, Philadelphia Chinatown emerged as a refuge from terrorism. The city’s white power brokers initially had little interest in the red-light district where the Chinese settled. That changed when transportation infrastructure projects began to take

shape, beginning with subway work in the 1930s. The construction of the Vine Street Expressway and other projects prompted the earliest protests and galvanized the new community organizations.

“We’ve gone beyond that Chinese American identity, and we’re a symbolic place for Asian Americans who are minorities in this country and are reminded of it every single day,” says Chin. “In Chinatown, we feel like we’re the majority—we hear languages other than English spoken, and nobody criticizes that.”

There’s been furious debate over the Sixers plan. In its study of the project, the Market Street East Improvement Association, a pro-arena group, concluded that the arena would help the area become a “place for all.” The independent Design Advocacy Group had a tart critique: “Center City Philadelphia has some problems,” the analysts noted. “The proposed Sixers’ arena is not the solution.” They called for “an influx of 24/7 street-oriented activity, preferably connecting with and amplifying the vibrancy of Chinatown.” Inga Saffron, The Philadelphia Inquirer’s architecture critic, wrote that the Sixers arena “would import the insular dullness of a typical American sports arena onto Philadelphia’s traditional retail corridor.”

“They seem only interested in this one spot, and that seems a little curious,” says Caine. “So many of us feel that it’s really

GABRIELLE GURLEY

Left, a poster opposing the 76ers arena; right, Debbie Wei, a leader in the community opposition movement.

Chinatown has successfully beaten back several development proposals, including a Phillies stadium and two casinos. about a long-term game, and it’s about development of that part of Center City, which is the least developed at this point.”

Chinatown has successfully beaten back several development proposals. In 2000, when Mayor John Street announced that he wanted to put the Phillies stadium downtown, it took the threat of a racial discrimination lawsuit from Chinatown leaders to stop the plan. (Chin says the PCDC has no plans for such a strategy today.)

The Phillies weren’t exactly excited about moving the team. “The Chinatown site poses significant challenges, including parking, accessibility, traffic, timing and cost,” Larry Shenk, the team’s vice president for public relations, told The Washington Post in 2000. The Sixers may be paying for the arena construction, but nothing else has changed.

“Places like FACTS and places like the Asian Arts Initiative, all of which actually do exist in the footprint of what would have been the baseball stadium in 2000, are arguably a lot more beneficial to the community and development than a private corporation,” says Kaia Chau, Wei’s daughter, a 2024 Bryn Mawr College graduate who cofounded the Students for the Preservation of Chinatown, an anti-arena coalition of area college students. (Adelman’s machinations with high-priced student housing near the University of Pennsylvania have helped Chau with recruitment there.)

In 2008, a casino tried to move in, and five years later, a second casino plan emerged.

Chinatown activists and residents fought

them both off. “As a community, they are knit together in a way that you don’t see with just regular taxpayer coalitions,” says Victor Matheson, a professor of economics at the College of the Holy Cross. “This has been a much more organized grassroots fight against a stadium.”

A decision to proceed or pull back hinges on the results of long-delayed city impact reports that have been paid for by the Sixers. Many economists take a dim view of these types of studies. Zimbalist of Smith College says this research is done by consulting firms that cater to their clients’ interests: “Those are called economic impact reports, but really what they are is elaborate press releases based upon inappropriate methodology and unrealistic assumptions.”

The final word on the project lies with the city council and the arcane procedural quirk known as “councilmanic prerogative.” This unwritten rule gives any city councilor the power to advance or block projects in the area they represent. There is an understanding that the rest of the council abides by the decision of that councilmember regarding their own district.

“They may be against the arena behind closed doors, but when it comes time to vote, I don’t know if that ‘no’ converts to an opposition vote,” says Chin.

Councilmember Mark Squilla, who represents Chinatown, has that prerogative. He says he’ll eventually hold public hearings once the final economic impact reports are released and studied. I asked him about the suspicion in some circles that the arena is a done deal. “Well, if that was the case,” he says, “there would have been legislation already introduced and it would be resolved.”

A few weeks after the Sixers’ 2022 announcement, a group of Philadelphia Chinatown residents traveled to Washington to get a sense of what their hosts said was a preview of what would happen if Philly greenlights a downtown arena.

Beyond its magnificent Friendship Arch, Washington’s Chinatown neighborhood is a mix of a few traditional Chinese restaurants like Tony Cheng’s and cheap-eats favorite China Boy to high-end offerings from chefs like José Andrés. But fast food predominates: Chick-fil-A and Taco Bell—a banner on the storefront says it’s “Coming Soon!”

Retail stores like the Da Hsin Trading Co. that sell Chinese herbs, teas, and gifts are

scarce. The Gallery Place mall next to the Metro station houses a movie theater, an entertainment equipment store, and not much else of interest.

“It was so obscene, almost like a parody,” recalls Wei over a meal in Philadelphia Chinatown at Cily Chicken Rice, one of many small eateries that quickly filled up at lunchtime. “We saw that most of the businesses that were there have shut down as well as the ones that were supposed to revitalize that area. But also, what’s notable is that these aren’t small family businesses.

They’re chains, Bed Bath & Beyond, Starbucks, and Fuddruckers. Even at that level, they can’t survive, so how do they think that we’ll survive?”

Their Washington host told Wei, “Take a lot of pictures, because if they build the arena, that’s all you’re going to have left,” she says. “That was my biggest takeaway from visiting.”

The heat did not seem to have curbed the energy levels of people navigating Philadelphia Chinatown. In many ways, the enclave is more alive on a weekday afternoon than the bruised Market Street East retail district the arena aims to replace. The neighborhood’s greengrocers were full of shoppers. The small restaurants had filled up. Workmen seemed to be everywhere.

The arena proposal has the look and feel of a quick fix—let’s run with the first shiny thing that comes along that someone else will pay for. It is out of scale with both Chinatown’s unique history and Center City’s vibe as a shopping, cultural, and residential area with human-sized aspirations. 76 Place at Market East seems like a throwback to the big box-ification of Center City—with a basketball overlay—that was already apparent at the nearby shopping mall, itself a clumsy attempt to suburbanize a downtown.

What Philadelphia needs more than a new sports arena is a strong dose of longrange vision that allows city residents, urban design professionals, small-businesspeople, students, and others to put their collective brains together. That would be a far better step forward to invigorate and dazzle the city rather than dealing with a circus maximus that will never do justice to the place that it would grace. The residents of Chinatown have mobilized once again, to preserve not only their community but the rest of the city from skilled and determined billionaire opportunists. n AUGUST 2024 THE AMERICAN PROSPECT 25

The Future of ____________ NONPROFITS

THE LEFT’S

Fragile Foundations

Could a weaponized Trump IRS wreck the progressive infrastructure by attacking the entire nonprofit ecosystem?

By Robert Kuttner

26 PROSPECT.ORG AUGUST 2024

The great social justice movements of the mid-20th century were all built on selffunding and direct organizing, often at heroic personal risk. Their tactics were not constrained by the need to keep the confidence of foundation program officers, or navigate the vagaries of the Internal Revenue Service. They were able to blend organizing with electoral politics by working to elect allies, without pretending to be nonpartisan out of concerns for their tax status.

The industrial labor movement of the 1930s and 1940s was self-funded by union dues. The CIO invented the first political action committee, CIO-PAC, which raised extra money from members and organized massive door-knocking efforts to help elect

progressive Democrats. There was no pretense that building unions and electing sympathetic Democrats were unrelated.

The civil rights movement of the ’50s and ’60s was also built on direct action and was largely self-financed by Black churches with some help from unions and individual donors. Modest foundation grants came later. The self-funding was all the more remarkable because civil rights activists were mostly working-class or poor.

By contrast, today’s progressive infrastructure is heavily dependent on foundations. No major movement groups are self-funded, with the exception of unions, which are much weaker than in their heyday. Think tanks, advocacy groups, and grassroots organizations all rely on grants.

(And the Prospect, as a nonprofit, relies partly on readers and partly on grants.)

Progressive electoral machinery, meanwhile, has become reliant on a model that uses two categories of tax-exempt nonprofits—501(c)(3) and closely connected 501(c)(4) groups—to target, register, and mobilize voters. Foundations as well as individual donors have stepped up to provide a lot of financing.

In one sense, this shift is providential.

Grassroots mobilization fills a long-standing gap in election strategy that was previously dominated by Democratic Party organs and presidential campaigns, which sucked out resources and energy, overly concentrated on election cycles, and failed to build for the long term.

But using tax-exempt political organi-

AUGUST 2024 THE AMERICAN PROSPECT 27

FITS

The Future of ____________ NONPRO zations is also risky, because the IRS has never clarified just what (c)(3) and (c)(4) groups, which are supposed to be charities, may legally do in politics. That makes the model a potential sitting duck for a Trumpified, weaponized IRS, which in turn could intimidate foundation funding for progressive groups generally.

The New Georgia Project, founded by Stacey Abrams in 2013, has become a national template. It conducts year-round issue organizing and voter registration through its (c)(3).

Then, in election years, it mobilizes likely Democratic voters through its (c)(4), the New Georgia Project Action Fund.

Over the years, the project has trained and deployed some 3,000 organizers. In its first year, New Georgia and its affiliates registered 69,000 voters. In 2020, they registered a quarter of a million. They also knocked on two million doors, made seven million phone calls, and sent four million texts. These heroic efforts produced a margin just sufficient to enable Joe Biden to carry Georgia, send two Democratic senators to Washington, and give Biden a Democratic Senate.

The tax code defines a (c)(3) as a “social welfare group” organized for charitable, educational, religious, or scientific purposes. A (c)(3) may not do electoral politics at all, although nonpartisan voter registration and education is allowed. Donors get a tax deduction for grants or gifts to a (c)(3).

A 501(c)(4) is similarly defined by the tax code as a social welfare organization. The key difference is that a (c)(4) can do some politics. According to the most recent IRS regulation from 1959 (!), a (c)(4) may engage in politics as long as that is not its primary purpose. Lawyers advising (c)(4) groups have generally defined that to mean 49.9 percent, though the IRS has never made that explicit. Traditionally, major issue groups such as the Sierra Club and the National Rifle Association have been organized as (c)(4)s, which are also exempt from paying taxes. Unlike a (c)(3), their donors don’t get a tax deduction.

In the past decade, it’s become common for the same organization to set up closely coordinated (c)(3)s and (c)(4)s, on the model of the New Georgia Project. To take one other example, Forward Montana has a (c)(3), which raises money for targeted voter registration, and an affiliated (c)(4), which is more explicitly partisan. The (c)(3) sells its 28 PROSPECT.ORG AUGUST 2024

list of likely Democratic voters to the (c)(4).

People’s House, a national group working to turn the House Democratic, recommends donations to several state groups, including Forward Montana. The People’s House website says: “Republican Ryan Zinke won this district [MT-1] by just 3 points in 2022 … To win in MT-1, People’s House recommends that donors support Forward Montana,” adding, “To turn out young voters in MT-1 this fall, helping both defeat Zinke and re-elect Senator John Tester, Forward Montana plans repeated contact with tens of thousands of young Montanans through canvassing, events, phone, mail, and social media.”

This sure sounds explicitly partisan— and is exactly what Democrats need to be doing—except that Forward Montana is a (c)(4), which is supposed to limit its electoral work to less than 50 percent of its activities.

Yet this (c)(3)/(c)(4) gambit has become the standard playbook for Democrats in state after state.

At the national level, groups such as the closely affiliated Voter Participation Center, a (c)(3), and the Center for Voter Information, a (c)(4), raise and move hundreds of millions of dollars. They share the same CEO, Tom Lopach. Nationally and at the state level, there are “tables” of (c)(3) and (c)(4) groups that meet regularly and compare strategies, as well as tables of their funders.

These creative efforts to mobilize potential Democratic voters partly compensate for the overwhelming Republican money advantage, as well as Republican gerrymandering and voter suppression. In that sense, they are a godsend. But a politicized IRS under Trump could demand internal documents and conduct harassing audits.

The IRS could work hand in glove with a Republican Ways and Means Committee to conduct fishing expeditions, demonstrating that the supposed separation of (c)(3)s and (c)(4)s is a sham. The ultimate target would be the foundations that fund these groups.

I’m not giving the right any ideas it hasn’t thought of already. The Republican-led House Ways and Means Committee has already begun a broad investigation of (c)(3) and (c)(4) groups, and Texas Attorney General Ken Paxton has been on a crusade to harass liberal nonprofits. And legislation introduced in the Senate this April by Sen. John Cornyn (R-TX) would eliminate taxexempt status from so-called “terrorist sup-

Progressive electoral machinery has become reliant on a model that is a potential sitting duck for a Trumpified, weaponized IRS. porting nonprofits,” which is obviously in reference to Israel’s war on Gaza and could be wielded at the will of a future IRS to punish even mild criticism.

A major catalyst for this set of political tactics was the Supreme Court’s 2010 Citizens United decision. Citizens United was a conservative (c)(4). Among other projects, it sponsored and promoted a film attacking Hillary Clinton, planned for wide distribution before the 2008 Democratic primaries.

The Federal Election Commission directed Citizens United to desist, on the grounds that this was explicit electoral activity too close to an election. But the Supreme Court, in a 5-4 decision, held that groups like Citizens United had First Amendment rights to spend unlimited sums, as long as they were “independent expenditures” not directly affiliated with a campaign. That distinction often proved to be fake, but collusion was hard to document.

Citizens United opened the floodgates to oceans of unlimited campaign spending by corporations and individuals, blowing away a century of regulation (upheld by previous Supreme Court rulings) trying to limit the influence of big money in politics. A less remarked-upon effect of Citizens United was that the Court seemed to be saying that despite the plain language of the tax code and earlier IRS regulations, a (c)(4) could operate as a mostly electoral operation.

This can be understood as a bad news/ good news/bad news story. The first bad

JEFF AMY / AP PHOTO

The New Georgia Project, a 501(c)(3) and (c)(4), has been instrumental in registering and organizing voters.

news is the unleashing of PAC and super PAC money, much of it dark money. The good news is that after decades of being rather timid about funding activities that might be construed as partisan, the big center-left foundations saw the opening, grasped the stakes, and began taking more risks.

But the other bad news, as noted, is that the IRS has never clarified what coordinated activities between a (c)(3) and a closely affiliated (c)(4) are permissible. Some progressive groups have been sloppy about strictly segregating their (c)(3) and (c)(4) operations. Others have been scrupulously careful about following what are understood as the current IRS rules and norms. But those rules are imprecise and could be changed. All

this is ready-made for selective persecution.

Planned Parenthood is high on the list of groups that the right would like to shut down.

It is the leading provider of birth control and abortion, as well as an effective advocate for keeping abortion legal. As defense of reproductive rights has become central to Democratic electoral fortunes, Planned Parenthood is more essential than ever. Through its large network of supporters and clients, Planned Parenthood also raises vast sums to benefit Democratic candidates.

Planned Parenthood is technically four affiliated organizations. Planned Parenthood Federation of America and its state chapters, which provides reproductive services through its clinics, is a (c)(3); Planned Par-

enthood Action Fund, which lobbies, does public education, and helps elect allies, is a (c)(4). Both have the same president, Alexis McGill Johnson. The group also has a PAC and a super PAC. All of this has doubtlessly been carefully lawyered, and Planned Parenthood is evidently in compliance with the tax rules as currently defined and enforced.

But what if those rules were changed?

A fishing expedition against progressive nonprofits, of course, would represent an extreme double standard, since the right plays these same games. The NRA is both a membership organization and a gun lobby, and effectively part of the MAGA machine. It operates a (c)(4) and several (c)(3)s, including the NRA Foundation, the NRA Civil AUGUST 2024 THE AMERICAN PROSPECT 29

NONPROFITS The Future of ____________ The right has long been angered that Planned Parenthood is a major recipient of government funds.

Rights Defense Fund, and the NRA Freedom Action Foundation, which litigate and engage to get out the gun-owner vote, invariably to help Republicans. Evangelical churches are tax-exempt nonprofits, whose pastors are often partisan. But Trump epitomizes the use of double standards.

When Republicans controlled Congress during the Obama administration in 2013, in fact, they attacked career IRS officials for failing to grant 501(c)(3) status to some Republican-affiliated groups.

The IRS had incautiously compiled a list of words and phrases that should be red flags for political activity. One such phrase was “Tea Party.” A Republican congressional committee investigated and hounded 30 PROSPECT.ORG AUGUST 2024

the director of the nonprofit division, Lois Lerner, out of office. In an effort to quell the uproar, President Obama fired the acting IRS commissioner, a career official named Steven Miller.

But ironically, the only group that actually lost its tax status in the IRS crackdown was a Democratic one. Emerge America was created to help train Democratic women to run for office and had been granted 501(c) (4) status in 2006. The IRS in 2013 revoked its tax status on the grounds that the group was too flagrantly partisan. Ever since then, the division that supervises nonprofits has been notably quiescent. But this case suggests that the IRS, in the absence of precise regulations, has a fair amount of discretion

in deciding when a group crosses a badly defined line. And in a Trump second term, they would be likely to use it.

There is precedent for an all-out war on progressive funding mechanisms. During the Reagan years, several reports by conservative groups found that about one-third of the income of progressive public-interest groups came directly or indirectly from government. Conservatives were incensed that government underwrote progressive legal services litigation, while right-wing legal groups were on their own. What remained of the War on Poverty heavily subsidized on-the-ground progressive organizing. The conservative movement

Big foundations and left social movements are far from natural allies. wanted to do something about this, and embarked on a project to “defund the left.”

They had some wins. Under the Carter administration, left community organizing was heavily subsidized by the use of VISTA volunteers. One of the most effective such groups, Mass Fair Share, went out of business after the Reagan administration cut off all VISTA funding in 1981.

But the project did not reach its goals.

A detailed postmortem report on the “defund the left” project written toward the end of the Reagan administration and published in the conservative journal National Affairs bemoaned the fact that government grant funding to progressive nonprof its, via the NIH, NSF, EPA, and several other agencies, continued and even increased under Reagan.

“Government funding of advocacy groups had become too deeply engrained in the structure of American government,” the report lamented.

These vulnerabilities remain in place today. It has long galled the right that Planned Parenthood is a major recipient of government funds; of its budget of over $2 billion, about $700 million comes from government health service reimbursements and grants. While the Hyde Amendment prohibits federal funding of abortion, 17 states allow Medicaid funding of abortion through their state contributions to the mixed federal-state program. In addition, Planned Parenthood is a major recipient of federal Title X family-planning support of its clinics. As right-wing groups keep complaining, money is fungible and federal family-planning funds free other money to pay for abortions. Under Trump, the government did bar Planned Parenthood from the Title X program in 2019, but this was restored by Biden in 2021.

The battle to defund the left would be far more sophisticated under a second Trump administration. The Heritage Foundation’s

detailed blueprint, Project 2025, systematically targets the entire range of agencies, and one of its tactics is to undermine agencies that help progressive organizations such as the NLRB and numerous others. With a second Trump presidency, the right’s war against Planned Parenthood will only intensify.

Big foundations and left social movements are far from natural allies.

Funders often ask grant applicants for their “theory of change.” The theory of change of the industrial labor movement was straightforward: class struggle. Use the raw power of mobilized workers to bring production to a halt, and compel the company to recognize and bargain with the union.

The civil rights struggle also had a theory of change. It sought radical transformation by confronting, nonviolently, the racist power structure of the South, often relying on civil disobedience against unjust police authority, and using the power of shame to win over broader public opinion.

Both movements looked to government for help. Labor got the Wagner Act and FDR’s enforcement during World War II of the requirement that military contractors recognize their unions. The civil rights movement used its alliance with Lyndon Johnson to get three landmark laws passed. Both movements also relied on friendly courts and were fortunate to be operating during a rare era of a progressive federal judiciary.

The groups depended on their own organizing and were largely self-funded.

That also describes the movements for gay rights (later LGBTQ rights) that began in the 1960s, second-wave feminism, disability rights, and early environmentalism.

It describes the consumer movement of Ralph Nader, which soon became a more general movement to reform the excesses of capitalism.

During these early movement struggles, major foundations were mostly absent. A few small family foundations such as the Taconic, Field, Stern Family, and New World Foundations did support Dr. King and voter registration. One very small leftwing foundation called the Garland Fund bankrolled the NAACP’s civil rights litigation under Thurgood Marshall, beginning in the 1930s. But the big philanthropic foundations like Ford, Rockefeller, Carnegie, and their community counterparts were mainly funding the arts, education, public broadcast-

ing, research, public health, and a range of benign civic ventures.

Liberals and conservatives both became increasingly critical of foundations, for different reasons. Many private foundations were being used not as legitimate philanthropies but to stash family wealth. By putting stock in a family-controlled company into a foundation, the owners could avoid taxes but keep control. Some progressives, such as Sen. Albert Gore Sr. (D-TN), wanted to require all foundations to spend down their assets and go out of business after 25 years.

Eventually, some foundations became more venturesome in underwriting progressive activism. In 1967, the Ford Foundation incensed conservatives by funding targeted voter registration in Cleveland, clearly intended to help elect Carl Stokes as the city’s first Black mayor. Ford also invited controversy by supporting the movement for community control of schools in New York, which pitted militant Black neighborhood leaders against the heavily Jewish teachers union.

All of this came to a head in 1969 after Ford’s patrician president McGeorge Bundy bestowed fellowships on several staffers to Robert F. Kennedy, who had abruptly lost their jobs as well as their leader when he was assassinated in June 1968. Bundy, formerly JFK’s national security adviser, was a longtime ally of the Kennedy family.

After hearings before the Senate Finance Committee, where an unrepentant Bundy served as a punching bag, Congress enacted the 1969 Tax Reform Act. It closed the family control loophole for private foundations, required all foundations to pay out at least 6 percent of their endowment in grants, and imposed a 4 percent tax on their earnings.

This shot across the bow of organized philanthropy caused foundations to pull back from underwriting social activism.

After the fervor of the 1960s, organized labor was steadily weakened by Republican presidents, increased resistance from industry, outsourcing, and its own bureaucratic passivity under then-AFL-CIO president George Meany. The civil rights movement had won its major legislative goals and was working to implement them. Both became somewhat less militant and more institutionalized. For the left to stay relevant, a new model of social change would have to emerge.

About 20 years ago, I was invited to the annual conference of the association of conservative funders, the Philanthropy RoundAUGUST 2024 THE AMERICAN PROSPECT 31

ROFITS The Future ofP____________ NON table, to debate Bill Kristol, then the editor of The Weekly Standard. We were to be the after-dinner entertainment.

I agreed to do it on condition that they let me arrive in time for the afternoon program.

The afternoon panel was made up of the presidents of four of the most influential rightwing think tanks: the American Enterprise Institute, Heritage, Cato, and the Manhattan Institute. The audience was their funders, the heads of the leading right-wing foundations.

Each think-tank president thanked the foundation presidents in the audience for their long-term financing, with commitments of 10 and even 20 years. Ed Crane, president of Cato, pointed out that change takes time.

Cato had been investing in the Federalist Society for many years before it became powerful enough to pick federal judges. Chris DeMuth, president of AEI, gave the example of the right’s long-term investment in the case for school vouchers, which took decades to become mainstream. As the panelists pointed out, conservative funders gave long-term support to right-wing intellectuals such as Charles Murray and Robert Bork for many years before their work became influential on public debate and policy.

As an influential paper written in 1997

by Sally Covington on “the strategic philanthropy of conservative foundations” explains, these strategies began in the 1970s.

Right-wing funders like the Coors, Scaife, Olin, and Bradley families connected ideology to institutions to politics to policy.

They invested in public intellectuals and in media. They saw their common project as movement-building, and they provided long-term funding.

Center-left funders did none of this. Their philanthropy was project-based, scattershot, and faddish. Priorities and grantees changed with new presidents. The idea that they were engaged in a long-term ideological struggle made them uncomfortable.

“The resulting imbalance has had profound consequences for policy debates and legislative decisions,” Covington wrote. “It has also had serious implications for how well American democracy functions …” In addition, the quest for foundation support tended to intensify the left’s chronic tendency to fragmentation and rivalry, as applicants for grants sought to differentiate their group from other natural allies.

In 2003, a former Clinton official named Rob Stein reduced these arguments to a PowerPoint presentation, which he shopped 32 PROSPECT.ORG AUGUST 2024

around to center-left donors and activists.

The result was the creation of the Democracy Alliance, intended to bring more strategic coherence to center-left funding. The DA was dominated by its largest funders, who had outsized influence on which groups were selected as priority grantees.

As Micah Sifry wrote in a withering appraisal, written just after the littleremarked passing of Rob Stein in May 2022, “Unfortunately, instead of building the kind of institutions and investing in the kind of leaders who could genuinely counter the New Right, the Democracy Alliance’s donors prioritized institutions that were meant to strengthen the existing Democratic party, not replace it with something more ideologically coherent or less beholden to corporate power.”

A perfect example was the DA’s major underwriting of a new think tank called the Center for American Progress, founded in 2003. It was widely considered the Clinton administration in exile. Its founding president was longtime Clinton strategist John Podesta. CAP was political, but utterly safe ideologically, and far from a movement organization.

The DA replaced the anarchic incoherence of center-left funding with a small group of power brokers who decided which progressive organizations were worth funding. More insurgent groups had a hard time getting on the DA’s preferred list. And the bias toward short-term funding persisted. Interviews with heads of progressive groups suggest that one-, two-, and threeyear grants are still the norm. One leader cited the acronym MYGOD, which stands for Multi-Year General Operating Dollars, a heaven-sent imperative that the right understands far better than the liberal left.

Progressive funders are especially uneasy about financing challenges to the excesses of capitalism. It took decades for EPI, a labororiented think tank and advocacy group (on whose board I serve), to get more than a few million dollars a year from foundations.

Meanwhile, the Center on Budget and Policy Priorities, which researches issues of poverty but has far less to say about the abuses of concentrated wealth, raises upwards of $80 million a year, and no less than Robert Rubin has been a regular speaker at its fundraising events.

In 2010, the details of what became the Dodd-Frank Act to reform Wall Street were being debated, setting up a classic David-

Center-left philanthropy is project-based, scattershot, and faddish. and-Goliath battle between the small progressive lobby pushing for stronger remedies, a coalition called Americans for Financial Reform (AFR), and the concentrated lobbying power of Wall Street. AFR was having a terrible time raising foundation money. I was enlisted as half of a delegation of two to seek support from George Soros, whom I knew slightly.

My partner in this effort was a longtime senior employee and confidant of Soros.

For 45 minutes, we pitched our hearts out. Soros listened. Finally, he responded.

“As you know,” he said, “I am conflicted,” referring to the fact that his multibilliondollar fortune came from his speculations as a hedge fund operator. “But I will tell you one thing,” he continued. “If anyone is going to criticize Wall Street with my money, it’s going to be me.”

Needless to say, Americans for Financial Reform did not get any money from Soros, nor did Soros testify in favor of Dodd-Frank.

However, he did underwrite reform of capitalism at one careful remove by bankrolling a new global think tank called the Institute for New Economic Thinking. INET in turn supports dissenting academic research that challenges the orthodox neoliberal model.

However, in another example of the risks of dependence on capricious philanthropy, when Soros retired and the next generation took over his various projects, the promised long-term support for INET was downgraded.

The hopeful news on this front is that foundations have begun serious funding in one area that does address predatory capitalism: the abuses of economic concentration. Two key players who resurrected the lost cause of antitrust are Lina Khan, now the FTC chair, and the leader of the organization where she used to work, Barry Lynn.

Lynn’s anti-monopoly group, the Open Markets Program, had been housed at the New America Foundation, which was partly funded by Google’s foundation. When Lynn

RONALD ZAK / AP PHOTO

George Soros did fund INET, which challenged orthodox economics. But when he retired, long-term support for INET was downgraded.

criticized Google, New America fired him in August 2017. Lynn went independent to create the freestanding Open Markets Institute. Along the way, he because a successful missionary for the idea that foundations should be underwriting research and advocacy on antitrust. A second group that combats the excesses of economic concentration, the American Economic Liberties Project, has also succeeded in raising foundation money. (The Prospect has partnered with both groups.)

A cynic might say that holding capitalism accountable to its own first principle of free competition is a slightly easier sell with foundations than championing rights of workers and unions, or going after Wall Street financial abuses. The two main groups working on financial regulation,

Americans for Financial Reform and Better Markets, still have difficulty raising foundation money.

A related problem is the significant increase in philanthropies associated with Silicon Valley. These include some genuinely progressive funders such as the Omidyar Network and a made-over Hewlett Foundation that has invested heavily in grants to counter neoliberalism. But the more typical Silicon Valley funder has a net conservatizing effect.

Silicon Valley funders are typically selfmade billionaires, and they tend to be libertarian. That explains the support of many tech foundations, such as Gates and Lumina, for charter schools. They also come out of a culture where you make several bets, one pays off big, and you dump the others.

Applied to philanthropy, this is the antithesis of long-term funding.

Billionaire entrepreneurs, who tend to remain active in the foundations they create, also tend to have great faith in their own genius. Some of their philanthropic forays turned out to be embarrassing blunders, such as the $200 million investment

by Mark Zuckerberg in Newark’s public schools. Silicon Valley foundations, especially newly created ones where the benefactor plays a controlling role, epitomize what Anand Giridharadas termed “the elite charade of changing the world.” The theory is that there is no conflict between doing well and doing good, and that technical win-win solutions are better than struggles. “The world may be cruel and unfair, but if you sprinkle seeds of technology on it, shoots of AUGUST 2024 THE AMERICAN PROSPECT 33

PROFITS The FutureNO ofN____________

equality will sprout,” Giridharadas writes in his 2018 book Winners Take All. Even apart from the particular style of Silicon Valley funders, who do include some liberals, the overall impact of progressive reliance on foundations on balance has been conservatizing. Activist program officers tend to be more progressive than presidents, who are looking over their shoulders at even more conservative boards. The anomaly of very rich people underwriting social change has no counterpart on the right, where self-interest, ideology, and political investments operate in lockstep.

So is there any solution to the twin problems of overreliance on foundations that are still 34 PROSPECT.ORG AUGUST 2024

too short-term and faddish in their strategies and the risk of a general assault on tax-exempt groups generally? You might think that one protection is the logic of mutually assured destruction. Right-wing foundations and nonprofits would presumably resist a crackdown on (c)(3) and (c)(4) status, just as much as progressive ones.

The problem with that is twofold. Trump is nothing if not the epitome of double standards, and a weaponized IRS could do real damage to progressive organizations while leaving conservative ones alone. Texas Attorney General Ken Paxton has demonstrated this by launching harassing investigations of at least two dozen Texas groups advancing progressive causes such as immigrant rights, while cozying up to far-right

Texas nonprofits that are at least as political, such as the Texas Public Policy Foundation.

In 2018, Paxton intervened in a TPPF-led lawsuit against Austin’s short-term rental ordinance. In 2019, Paxton gave the keynote at TPPF’s policy orientation meeting. In 2021, he appointed TPPF lawyers to lead an attack on the EPA’s Clean Air Act. The more fundamental problem is that the liberal left, for all of its frustrations with philanthropists, is today more reliant on foundation support than the right. Fifty years of foundation funding of right-wing think tanks has been invested in programs to enlist individual donors. Heritage now boasts some 200,000 small donors, and many hundreds of large ones. They are motivated by ideology and movement-building.

KYLE ROBERTSON / AP PHOTO

At its peak, community organizing group ACORN had some 500,000 duespaying members and a budget of $100 million.

There has been a return to genuine mass membership groups, promoted by a new wave of on-the-ground organizing.

There is nothing comparable among liberal think tanks. If a Trump IRS did serious damage to foundations and their progressive grantees, right-wing donors would go right on financing right-wing infrastructure, with or without the (c)(3)s and the tax breaks.

And the right simply has more money. The Kochs and kindred right-wing billionaires give some of their money via several family foundations, but they also just write checks, and could live without the tax advantages.

Individual wealthy donors on the left are a partial cure, but they can be even more imperious and impulsive than foundations.

Liberal billionaires are ambiguously liberal. Conservative billionaires are rock-solid conservative. What else would you expect from capitalism?

Another supposed breakwater is the law that Congress passed in the aftermath of Nixon’s flagrant attempt to use the IRS to get information and punish political enemies.

That law made it a felony for the president or any member of the executive office of the president to meddle with the IRS. All tax policy questions have to go through the Treasury.

But a Trump IRS commissioner would know the game plan with nary a word from Trump.

And even if Trump did try to get involved, risking criminal liability, the Supreme Court has just given him a blanket pass.

The only effective defense is for progressives to go back to our roots. Political scientist Theda Skocpol, in her 2003 book Diminished Democracy, famously calculated that a century ago, there were 58 large groups with dues-paying members equal to

at least 1 percent of the adult population, organized democratically into local and state chapters, which in turn sent delegates to make national policies. Some of them were civic, others were more political. None relied on foundation grants. Over time, they were succeeded by what Skocpol termed “organizations without members,” run by professionals, speaking for oppressed people and groups, but with no base membership. The right, meanwhile, did have some genuine membership organizations, such as the NRA and evangelical churches, and some astroturf ones, like the Tea Parties.

The hopeful news is that there has been something of a return to genuine mass membership groups, promoted by a new wave of on-the-ground organizing. Even without foundation support, the New Georgia Project is a very impressive feat, and it will survive even if foundations pull out. We’ve seen a model for that in the recent past, in fact.

The Association of Community Organizations for Reform Now (ACORN) was a working-class membership organization established in 1970. At its peak, ACORN had some 500,000 dues-paying members in more than 1,200 neighborhood chapters in 30 states, and a total budget of over $100 million. Members doubled as doorknockers in political campaigns, which gave the group substantial leverage to pressure candidates and incumbents on policies in exchange for endorsements.

The combination of a conservative doctored video and an embezzlement scandal among its leadership sent ACORN into bankruptcy. But its organizing model is thriving, through both successor organizations such as the Center for Popular Democracy and scores of local groups that have active duespaying members. The Working Families Party is at the center of this model. Interestingly, many foundations have grasped the importance of these efforts, but the groups, importantly, have an authentic life independent of their foundation backing and foundations do not dictate their agendas.

An emblematic example is Make the Road New York, a grassroots membership group founded in 1997 that connects immigrant rights issues and practical immigrant help with a struggle for better working conditions and is very engaged in electoral politics. MRNY is closely affiliated with both the Center for Popular Democracy and the New York Working Families Party. It has some

23,000 dues-paying members, and also gets support from trade unions including SEIU, Teamsters, Steelworkers, and RWDSU, as well as several major foundations, such as Ford, Rockefeller Brothers Fund, Surdna, Mertz Gilmore, and others.

MRNY also gets around a third of its total budget from local and state government contracts, to help members get access to health benefits and vaccines, and to assert tenants’ and labor rights. In addition to supplementing its budget, “it helps people see the direct connection between organizing, policy, and direct benefits,” says Steve Kest, a leader of the Center for Popular Democracy.

Think of this strategy as a virtuous circle of progressive activists helping to elect public officials, who in turn support programs that help underwrite base groups—a progressive version of Tammany. Needless to say, a right-wing national government, in the spirit of defunding the left, would try to shut this down, but blue states and cities can keep it alive, as they did during Trump’s first (and one hopes, only) administration.

One leader who personally connects the new wave of grassroots organizing with foundation support is Deepak Bhargava.

In his perceptive 2023 book written with Stephanie Luce, Practical Radicals, Bhargava and Luce write about the renaissance of grassroots groups that have actual members and assess the efficacy of different organizing strategies. They insist that the only long-term counterweight in a democracy to organized big money is organized people.

“When people come together in mass organizations, they have the power of numbers and solidarity to win concessions.”

Bhargava is now in a position to practice what he preaches. In early 2024, he became president of the $3 billion JPB Foundation, one of the nation’s largest, and has made clear that the foundation’s new priority will be underwriting base-building. Other foundations have shifted in this direction, recognizing that their support needs to complement on-the-ground organizing and activated dues-paying members.

If Trump does become the next president, we are in survival mode, on all fronts. The least we can do is to tithe ourselves to keep alive movements that work to keep democracy alive. If our grandparents, far less affluent than we are, could self-finance a radical labor movement and a militant civil rights movement, why can’t we do as much? n AUGUST 2024 THE AMERICAN PROSPECT 35

USIC The Future of M ____________

36 PROSPECT.ORG AUGUST 2024

Five years ago, Britney Spears was rehearsing for her tenth concert series in 20 years when she suggested a tweak to one of the choreographer’s proposed dance moves. “It was as if I planted a huge bomb somewhere,” she said later under oath. Her tour managers, choreographers, and dancers disappeared into a room for 45 minutes. “I feel like they’re going to come back and be mean to me or punish me or something,” she remembered telling her assistant at the time.

Days later, Spears’s psychiatrist switched out her medication for a lithium prescription, advising that she wasn’t cooperating and was refusing to take her medication.

The “Domination” residency, which had been announced to great fanfare months earlier, was quickly canceled, and Spears

was once again involuntarily admitted to a psychiatric facility by handlers who— according to a paralegal who spoke to the podcast Britney’s Gram—theorized that the media buzz would boost ticket sales when she returned to the stage.

But the pandemic intervened, and Spears, for once freed from a punishing work schedule that entailed seven-day workweeks for all but one or two family vacations per year, began praying and researching her legal options, triggering the unlikely chain of events that ultimately led to the public unraveling of her jaw-dropping conservatorship. According to her public testimony and other reports, for 13 years the pop star had been quite literally trafficked by a shadowy clique of entertainment industry fixers and

The Domination Tour

Four decades of intensifying corporate concentration turned the music industry into a wasteland of institutionalized control and abuse. Are antitrust enforcers ready to reckon with that?

By Maureen Tkacik AUGUST 2024 THE AMERICAN PROSPECT 37

The FutureMof IC US____________ professional parasites who wiretapped her bedroom, medicated her, outfitted her with an IUD against her will, and monitored every morsel of food (no dessert) and keystroke, using a sophisticated surveillance apparatus one of the operation’s nine-year employees described as typical “counterterrorism.”

A half dozen streaming documentaries and Lord knows how many true-crime podcasts would ultimately chronicle the courtroom drama through which Spears emancipated herself from her indentured servitude. And yet three years after Spears detailed how she was imprisoned in her own home by a battalion of leeches who institutionalized her (at her own expense) in retaliation for attempting to tweak her own choreography, the pop music industry remains more thankless and constricting than ever.

Just as summer was beginning, both Jennifer Lopez and the Black Keys were forced to cancel tours in which they had invested considerable sums of their own cash, due to lukewarm demand for tickets that had been priced too aggressively. The prolific hit machine Bebe Rexha unleashed a torrent of social media posts about how “hopeless” she felt working in an industry she claimed had repeatedly conspired to “undermine” her. And Spotify, as if on cue, announced it was tweaking its “mechanical royalties” compensation formula; songwriters could expect to receive $150 million less in 2025 than they had in 2024. The Guardian convinced 12 musical acts, including two with recent album releases that had charted in the top ten, to share their balance sheets from their most recent concert tours.

Just one had turned a profit, of only about $7,000 for 29 performances.

These problems are more connected than they might seem, because power and resources in the music industry are so unbelievably concentrated. Since the demise of recorded music sales in the early 2000s, pop music in America has increasingly become a single-payer system, in which virtually every working musician relies for the majority of his or her earnings on a concert promotions cabal, anchored by Live Nation/Ticketmaster and its former CEO, the diminutive mogul Irving Azoff. Collectively, they own or control nearly 500 of the nation’s most important concert venues, sell more than 80 percent of the nation’s concert tickets, and perversely also solely or jointly manage the careers, brands, and business affairs of hundreds of artists, from U2 and Dua Lipa to Drake and The Weeknd.

38 PROSPECT.ORG AUGUST 2024

Readers of the Prospect are well aware that the Biden Justice Department brought a case against Live Nation in May, seeking to unwind the 2009 Azoff-brokered deal that merged it with Ticketmaster. The lawsuit has much to say about Azoff, arguing that his new venue management company Oak View Group operates as a “pimp” for Live Nation. But the action was inspired in part by the intergalactic backlash after ticket-buying algorithms infested a supposedly fan-only presale of Taylor Swift’s Eras Tour in November 2022 and drove prices up a thousand percent and more.

As f lashpoints in protracted struggles against tyranny go, the Eras-trophe left something to be desired. Media coverage tended to focus on the plight of spoiled 13-year-old daughters of affluent white women—many of whom ultimately solved the problem by purchasing more accessibly priced tickets in Dublin or Vienna and mentally reclassifying the expense as an educational enterprise— which in turn enabled Live Nation and its legions of surrogates to spend the ensuing year and a half proposing legislation to crack down on ticket-hoarding bots. A far more illustrative media event for the purpose of illustrating the dangers of unchecked concert monopolies was probably the 2021 mass casualty event at Travis Scott’s Astroworld concert, which numerous settled lawsuits alleged was the predictable result of combining Scott’s feral live persona with Live Nation’s relentless cost-cutting and outsourcing.

But to truly grasp the terrifying insidiousness of the concert cartel’s control over the music industry and the artists who are its lifeblood—and why even a successful antitrust case may not change much of anything—one must peruse the work of the leading scholar of the #FreeBritney movement, namely a Northern Virginia antimonopoly activist named Melanie Carlson, whose deeply researched Substack explores the corporate and para-political relationships behind celebrity drama.

A licensed clinical social worker who is currently working on a doctoral dissertation about the institutional failures of domestic violence shelters, Carlson was originally drawn to #FreeBritney out of a combination of pandemic boredom and domestic abuse expertise.

But upon diving into the court documents, she quickly realized that there was nothing “domestic” about Britney’s house arrest.

For starters, it was abundantly clear from

Since the decline of recorded music sales in the early 2000s, virtually every working musician relies on a concert promotions cabal. business records, court filings, and Britney’s public appearances that a Nashville-based bookkeeper-turned-talent management specialist named Louise Taylor—dubbed #Loucifer by the movement—had played the most conspicuous role in orchestrating the conservatorship. But Loucifer herself was just one in a long list of seemingly interchangeable music managers turned mini-moguls (Scooter Braun, Sal Slaiby) who appeared to trade the same blue-chip clients every few years. And in an interview with The Hollywood Reporter, Taylor named Irving Azoff and current Live Nation CEO Michael Rapino as her biggest mentors.

The month Britney was conserved, Azoff had been attempting to orchestrate a merger between Ticketmaster and Live Nation’s only legitimate competitor, AEG Live, a company he had essentially co-founded in 2000.

At that company, Azoff had personally outbid Live Nation, then known as Clear Channel, to promote Spears’s fourth concert tour in 2001, and it seems likely that he played a role in wooing her back to AEG in 2009.

The company her manager Larry Rudolph incorporated to operate the tour, ReignDeer Entertainment LLC, listed its office at the exact address of Azoff Music Management, and was later sold to Live Nation—which Azoff left soon afterward to found a new talent agency with his son Jeff, who wooed Spears as a client away from William Morris Endeavor in 2013. But Live Nation would only invest in Britney Spears on one strict

JAMES NIELSEN / AP PHOTO

Britney Spears was forced into conservatorship by a shadowy clique of industry fixers and professional parasites. condition, according to an anonymous paralegal who contacted the fan podcast Britney’s Gram: The conservatorship—which was supposed to end after the 2009 Circus tour—needed to continue; otherwise Team Britney would have to handle its own insurance. A spokesperson for Live Nation denied the allegation: “Live Nation is a concert promoter—not an insurance company— and Live Nation never made any statements regarding the conservatorship.” The spokesperson also said that Live Nation had no relationship with Taylor.

The conservatorship was further codified

by Caesars, the gaming conglomerate that hosted Spears’s “Piece of Me” residency in its Planet Hollywood casino and reportedly included a clause in its contract with the

singer allowing it to cancel the residency if the conservatorship ended.

Carlson sees Live Nation, with its hands in ticketing, venues, artist management, and hospitality, as Azoff’s re-enactment of the old MCA, which before a 1962 antitrust settlement operated simultaneously as Hollywood’s largest talent agency—Marlon Brando, Paul Newman, Marilyn Monroe, and Grace Kelly were all clients—and its biggest television studio, under a special waiver it received from Ronald Reagan’s Screen Actors Guild. Owning both the talent and the distribution was not always the most profitable strategy, and wherever he went shareholders grumbled that Azoff was overpaying his marquee clients. But it made both companies uniquely ubiquitous in their industries.

Today, Live Nation manages the careers of some 2,000 artists through a dizzying collection of subsidiary management firms cofounded by such legendary managers as Guy Oseary, Scooter Braun, Jack Rovner, and the aforementioned Larry Rudolph, who discovered Spears when she was just 13 years old.

Unlike many of her contemporaries, Spears had plenty of revenue streams other than concert tours to tap into. (She is, for example, estimated to have sold $1.5 billion in licensed perfume alone during the period of her conservatorship, and she made a reported $15 million a season as a reality show judge.)

But by the mid-2000s, the music industry was in a state of existential despair. Recorded music sales had plunged two-thirds from the peak they hit in 1999, the year “Baby One More Time” sold most of the 25 million copies it moved. Britney’s critically lauded Blackout album, which had been released early in 2007 after getting leaked to the blogger Perez Hilton, sold just 2.5 million copies. “After her divorce, all her rehab expenses and her constant nights on the town at pricey L.A. restaurants,” opined one Fox News gossip columnist in April 2007, “Spears had better get back to work. And just an album won’t cut it. She’s got to figure out a way to tour. It’s the only way left to make money in what was once known as the music business.”

In hindsight, the conser vatorship appears to have turned Spears, who at that point was far more interested in hanging out with her children than performing night after night, into a touring machine. And it worked: Spears brought in nearly $400 million in ticket revenue between 2009 and 2017, all while the battalion of lawyers, business managers, financial advisers, and medical professionals on her payroll continued to insist she was unable to care for herself.

It was while recording Blackout that Britney Spears began to report she was being stalked by a “crazy lady” who had been FedExing her strange gifts, photos of herself with butterflies and letters in which she advised the superstar, using a creepily maternal tone, that she was “possessed” and needed to exorcise her “demon spirits.” As Spears wrote in an email to her then-lawyer Gary Stiffelman, “We told her a million times to leave me alone and now she is saying she is going to visit my drunk fucking father in Kentwood [Louisiana].”

The crazy lady was Lou Taylor, who specialized in a certain kind of pseudofaith-based celebrity crisis management.

AUGUST 2024 THE AMERICAN PROSPECT 39

The Future of ____________ MUSIC

40 PROSPECT.ORG AUGUST 2024

For years, #FreeBritney activists have dug for the truth behind who benefited from her ordeal.

tithing 10 percent of their income to a megachurch called Churchome on whose board Taylor served; rumors have since swirled that P. Diddy, now hit with nine separate lawsuits for alleged sex trafficking, tithed large portions of his income to churches Taylor controlled. Diddy has denied all of the allegations.

Earlier this year, Taylor’s right-hand woman Robin Greenhill, who for ten years personally intercepted every message Britney sent or received on her phone and gave every man who asked her out on a date a comprehensive debriefing on her sexual and medical history, was also named as the accountant who facilitated wire transfers and cash payments from Diddy’s various music and promotional companies. (Greenhill could not be reached for comment.)

Both Taylor and her mentor Azoff have done business with Diddy for decades: Taylor worked in the early 1990s as a bookkeeper for Uptown Records, where Diddy got his start as a talent manager before launching Bad Boy in 1993, and in which Azoff acquired a stake at MCA when he was the label’s CEO and boss of current Universal Music CEO Lucian Grainge, who is also named in one of the many Diddy lawsuits. (Grainge has denied involvement and threatened to sue the plaintiff lawyer who added him to the complaint.)

Another member of the conservatorship team, talent manager Larry Rudolph, who incorporated the company that managed Spears’s concert tours at Azoff’s family office and then sold it to Live Nation the following year, was a longtime friend and business partner of Lou Pearlman, the convicted financial predator who formed NSYNC and the Backstreet Boys, siphoned away virtually all the earnings from their first albums, and according to several allegations made sexual advances on members of the bands he managed. Rudolph also worked with Pussycat Dolls founder Robin Antin, whom a former Pussycat Doll alleges used the girl group as a glorified prostitution ring whose members she pimped out to powerful and rich men.

(Antin has called these “lies” from someone “clearly looking for her 15 minutes” of fame.)

In 2013, Rudolph, Antin, and Azoff/Live Nation–affiliated producer Lukasz “Dr. Luke” Gottwald bankrolled a new project called GRL anchored by an X Factor contestant named Simone Battle who was found dead of an apparent suicide the following year after suffering from depression and “money problems.” That same year, Gottwald’s protégé Kesha alleged Gottwald had raped her before her platinum-selling debut was released; the pair recently

CHRIS PIZZELLO / AP PHOTO

Unbeknownst to Spears, Taylor had been working behind the scenes for at least four years to insinuate herself into the family business: managing little sister Jamie Lynn’s budding career as the star of the popular Nickelodeon show Zoey 101, “praying and fasting” with their estranged father Jamie, hiring a ghostwriter for the memoir Lynne Spears announced she was writing shortly after Jamie Lynn became pregnant at age 16 with the child of a boy she’d met at a church camp, even loaning Jamie Spears $40,000 shortly before his daughter was involuntarily hospitalized. Taylor exchanged emails with Jamie Spears’s lawyers, brainstorming about who would manage the conservatorship, even agreeing to postpone the request until a particular judge who was known to frown upon giving conservators the power to administer psychotropic drugs to their charges went on vacation. #FreeBritney activists have spent years researching Taylor’s role in the conservatorship, attempting to assess her actions and quantify how much she extracted from the Britney Spears brand, a figure that has ranged from $18 million to $600 million.

Taylor, for her part, told The New York Times that she “did nothing wrong” in the Spears case; the Prospect sought comment from her but did not receive a response.

But the most alarming thing about Taylor and the rest of “Team Con,” which is short for conservatorship in the #FreeBritney world, is the way their careers link some of the tawdriest episodes of institutionalized abuse to the uppermost echelons of corporate America.

Just two years after Britney was conserved, Lindsay Lohan’s parents told X17 Online that Taylor had approached them to manage a conservatorship for the former child actress.

Around the same time, Kurt Cobain’s widow Courtney Love revealed in social media posts that Taylor had attempted to impose a “muted strain of a conservatorship” on her as part of an elaborate plot—masterminded, Love claimed, by Azoff and Lester Knispel—to secure control over Cobain’s publishing rights, which she held.

For most of Taylor’s clients, a “spiritual” connection is one of the selling points: She and her pastor husband Rob have controlled many churches, to which most of her clients seem to tithe a large portion of their paychecks. (Jamie Spears contributed hundreds of thousands of the dollars he made as his daughter’s conservator to Rob Taylor’s Cavalry church.) The Kardashians and Biebers were reported to be

The history of the music industry has been one of artist exploitation, even as the names of the exploiters have changed. settled the matter after a nine-year court fight. “Only God knows what happened that night,” Kesha said in a statement.

At the time, Azoff had interfered to assist Kesha, encouraging her to come forward with the allegations as a means of punishing Gottwald, whom he found personally “disgusting.” But similar allegations have dogged Azoff as well. Kellye Croft, a massage therapist Azoff hired to serve as official tour masseuse for the Eagles’ 2013 concert tour, alleges in a lawsuit filed earlier this year that the gig turned out to be cover for nonconsensual sex work, first with Azoff’s best friend, Cablevision billionaire and Madison Square Garden owner James Dolan, and then with Harvey Weinstein, a close friend of both men who’d joined the band briefly on the tour. Azoff did not respond to a request for comment.

Last year, Britney Spears published a bestselling memoir, The Woman in Me, about her life in the gilded gulag of her conservatorship. The details were somehow even more dystopian and heartbreaking than all the documentaries and magazine narratives had conveyed. Spears vividly described the process of repeatedly making peace with the arrangement so she could spend time with her sons, only to have the tiny pleasures she was still allowed—french fries and desserts, over-the-counter energy supplements, vacations with her children—taken away for tiny perceived infractions. And she wrote with disarming wistfulness about 2007, the year of the head shaving and serial meltdowns before she turned into a “robot doll,” when

she was still allowed to sleep in and drink shots with Paris Hilton when she wanted.

She describes rediscovering her love for performing over the course of a three-year “Piece of Me” residency in Las Vegas, only to be driven insane by her handlers’ refusal to let her make even minor tweaks to the performance. She sang the same 22 songs in the same order 248 times. “It was so lazy it was actually odd,” Spears wrote. “I worried what my fans would think of me. But as always the answer was no. Because if I actually took control of my show, it could awaken people to the fact that I might not need my dad as a conservator. I feel like he secretly liked me feeling ‘less than.’ It gave him power.”

Spears’s specific predicament was so exotic that it’s easy to forget her imprisonment was just a more intense version of the control that middlemen like Lou Taylor and Live Nation exert over all of their “product offerings,” no matter how famous and uniquely beloved.

Just two years after Britney’s house arrest, Axl Rose sued Azoff, his then-manager, for allegedly sabotaging the release of his album Chinese Democracy—on which he’d worked for nine years—in an attempt to force him to make amends with his longestranged bandmate Slash so Live Nation could promote another Guns N’ Roses reunion tour. In a post on a Guns N’ Roses fan site, Rose accused Azoff and Slash of denying him creative input over the band’s performances: “I was specifically told no lyrics, no melodies, no changes to anything and to sing what I was told or fuck off.”

In his lawsuit, Rose highlighted the power Azoff amassed through control of “the trifecta of (1) artist management, (2) concert and touring promotion and (3) ticket sales” to “punish artists and harm their careers if they do not follow his orders.” But Azoff ultimately prevailed, and the ensuing three-year “Not in This Lifetime …” reunion tour grossed nearly $600 million. The lawsuit was settled out of court.

Rose more recently has had nothing but rosy things to say about Slash, Azoff, and Live Nation; he is, after all, one of the lucky ones. In the Spotify era, an album is nothing more than an incredibly costly and laborintensive marketing campaign for a concert tour that might end up getting canceled anyway. But a select few megastars are lucky enough to have all the demand they need to make a good living until they die from an accidental drug overdose or occupationally

exacerbated bout of pneumonia. The smart ones understand that integrity is an albatross, and do as they’re told.

At this point, they all know the sordid backstory of the original Las Vegas residency, wherein Elvis Presley’s personal Loucifer, his longtime manager “Colonel” Tom Parker, leashed the King to the exhausting sevenyear, 837-performance contract at the International Hotel that would arguably cause his early death, all to sustain the Colonel’s own vicious gambling addiction. (The International would send a roulette wheel to Colonel Parker’s room so he could gamble away.)

When Britney’s “Piece of Me” residency debuted shortly after her 32nd birthday in 2013, it was immediately hailed as a transformative event in the annals of the “Las Vegas musical landscape,” historically the realm of past-their-prime easy-listening talents. Britney’s engineered Sin City enslavement may seem in the modern day far more cynical than the King’s, because she was a young mom of two little boys. But Elvis had a one-year-old at home when his Vegas residency began, and he was just two years older than Britney at 34. The history of the music industry has been one of artist exploitation, even as the names of the exploiters have changed.

Carlson remains optimistic that the federal antitrust investigation against Live Nation could yet break apart the insidiousness of the music biz: After all, Spears, who by her own admission does not care if she ever goes on another concert tour, would make an ideal witness. I wish I shared her faith in the system. But after vowing to sue Taylor and everyone else who skimmed a fortune from her, Britney has receded from the public discourse a bit, and in late June the top-shelf attorney who emancipated the star from the conservatorship, Matthew Rosengart, withdrew from the case, saying in so many words that his work was done.

The antitrust complaint is compelling, but the primary victims of the abuses it unmasks are stadiums and arenas that get shut out of Live Nation’s vital supply of concert tours and music festivals. Musicians are mentioned more theoretically, as necessary evils Azoff and Rapino repeatedly vow never to offer more than the absolute minimum, but with few details, most likely because, as Bebe Rexha pointed out to an exasperated Twitter fan who wondered why she wouldn’t just spill the tea already: “THEY PUNISH YOU.” n AUGUST 2024 THE AMERICAN PROSPECT 41

SOCIALISM The Future of ____________

THE CASE FOR

Pragmatic Socialism

The times are right for a socialist agenda that America can accept. We even have examples of it in practice.

By Ryan Cooper The most distinctively American contribution to the world’s philosophical tradition is pragmatism. Developed by Charles Sanders Peirce, John Dewey, and others in the late 19th and early 20th centuries, pragmatists typically approach classic philosophical questions from the angle of usefulness and practicality. Peirce famously summarized it like this: “Consider the practical effects of the objects of your conception. Then, your conception of those effects is the whole of your conception of the object.”

Whereas other philosophies attempt to uncover the fundamental nature of existence, truth, or thought, pragmatists tend to set such questions aside. “Truth cannot be out there—cannot exist independently 42 PROSPECT.ORG AUGUST 2024

of the human mind—because sentences cannot so exist, or be out there,” writes philosopher Richard Rorty in Contingency, Irony, and Solidarity.

Socialism has not been distinctively American at all throughout its history. But maybe by directing it through a pragmatic lens, we can make a case for how it can function here, and indeed how it has functioned elsewhere in the world. This won’t be a perfect fit, but in keeping with a pragmatic viewpoint, it may at least be something we can live with.

Morality and Value

The most prominent socialist tradition, of course, is Marxism, whose basic argument is that capitalism is based on the exploita-

tion of the labor of the working class, and will undermine itself thanks to its inherent contradictions, ultimately leading in dialectical fashion to a socialist revolution.

I think this is a fundamentally flawed approach. Marx’s theory is built on Hegelian dialectics, and is incommensurate with arguments in which a moral standard is outlined and then strategies to achieve it worked out. As Polish philosopher Leszek Kołakowski writes in Main Currents of Marxism, the working class has “no need of a separate imperative telling them that they should strive for liberation in general or that freedom from oppression is a good thing.”

The economic institutions of America and the world are so flagrantly unjust that

one doesn’t need a metaphysically and logically airtight theory to justify radical reforms. It is howling injustice for a handful of oligarchs to control nation-state-sized hoards of wealth while millions go hungry. Economic institutions should be rearranged to produce the most equal practical distribution of resources. That’s enough to get started, without the need to wait for the system to collapse of its own weight.

Before any kind of detailed program, we need a rough story of how an economy can work. Marx’s labor theory of value (LTV) comes directly from classical economists David Ricardo and Adam Smith. If labor produces all value, then it follows that capitalist profits are all appropriations of labor’s surplus.

There are several objections to the LTV from a pragmatist standpoint. First, Marx-

ian value is impossible to measure. Workers use tools and machinery, which are of course produced by other workers. You can account for this by separating out the labor time used to make the tools, but of course those workers used tools as well. For a pragmatist, this is a lot of complicated, pointless abstraction.

The upshot is that workers are being exploited, which can be easily demonstrated on other grounds. For instance, because a traditional firm is organized as a dictatorship, with the boss able to fire any of his employees on a whim, the worker’s time and energy is necessarily exploited.

Furthermore, if labor produces all value, one can easily conclude that laborers are the only ones who deserve to enjoy that value. Lenin and Stalin argued along these lines; the biblical aphorism “He who does not work, neither shall he eat” was

inscribed in the Soviet constitution. But at any one time, about half the population is not working, and most of them are children, seniors, disabled people, students, carers, and the unemployed. These are not capitalist exploiters, and yet they need income too.

The Social Product

What I’ll call the “social product” consists of everything associated with an economy above the level of subsistence hunting, gathering, or farming, where significant cooperation becomes necessary. This includes virtually everything in our modern economy, even food. Workers are centrally involved in the social product, of course, but so are raw materials, infrastructure, money, credit, the legal system, customers, and many other factors.

I’ll even admit that entrepreneurs can, in

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The Future of ____________ SOCIALISM

certain circumstances, be quite important to the process. By all accounts, Bill Knudsen, a top executive at Ford and General Motors in the early 20th century, and later one of the central architects of the American war machine in the 1940s, was instrumental in the development of the modern automobile assembly line. However, I do deny that a capitalist business owner is necessary for the economy to function. The core functions of Knudsen and those like him are leadership and innovation, which do not require one or a few persons to own the entire firm.

Indeed, there are examples of highly successful noncapitalist firms owned by the state, their workers, or their customers, particularly in the Nordic countries, which have the most real-world experience with a democratic, pragmatic form of socialism.

Last year, I reported on S Group, a massive consumer cooperative business in Finland.

There I found a culture of highly professional managers who had modernized and upgraded its business practices, taking it from accounting for about 15 percent of the Finnish grocery market to almost half.

They were well paid, but not by American standards. Tesla CEO Elon Musk, for 44 PROSPECT.ORG AUGUST 2024

instance, recently got a one-off pay package of something like 55,000 times the annual salary of the S Group CEO. There are further background conditions necessary for economic activity that most people take completely for granted. Modern manufacturing, for instance, requires scientific theories and evidence that have been painstakingly built up over centuries and written down, so we don’t have to perpetually rediscover them. If you are designing or building anything, you’ll need to determine what size the pieces should be. Weights and measures have also been standardized over centuries and today can be assessed using highly accurate tools that cost only a few dollars. Remove any one of these (and no doubt many other) pieces of economic architecture, and the economy would cease to function.

Therefore it is not possible even in principle to determine which portion of economic production is produced by labor, or capital, or raw materials, or whatever else, since each one is a but-for requirement necessary for the whole operation. It is the entire system in concert that produces the social product.

In other words, it doesn’t actually matter

where the social product comes from exactly.

Because of this, everyone deserves the most equal possible share of the social product, not only because we are all equal citizens, but because virtually everyone participates in its creation in some way, at some point.

I find this vastly more plausible—and far less complicated—than the labor theory of value, or neoliberals’ marginal productivity theory, or anything else. Of course economic production depends on workers, able leadership, raw materials, machinery, builtup technology, and who knows what other stuff. In addition, it underlines a point that I think is rather underappreciated on the American left: The functioning of economic systems of production, whether capitalist or otherwise, is extremely dependent on complex technical details, above all government policy frameworks. The ultimate destination of the social product is based on millions of conditions: the kinds of businesses and who owns them, the number and character of competitors, the rate of taxation on all the various kinds of income, state rules and regulations, the population and income level of the public, and so on.

Whether a market exists is often much

AP PHOTO

Entrepreneurs like the developers of the assembly line can be critical to creating social product, but are not necessary for an economy to function.

For a pragmatic socialist, antitrust is a critical tool, not an enemy school of thought. less important than how it is structured and regulated. This is informed by a lot of Prospect reporting. Our special series on pricing, for instance, explored how something so seemingly straightforward as the price of something can vary wildly depending on business behavior and regulation. Economists typically picture prices as being set through an auction with open offers from sellers, and open bids from buyers. But the internet and constant data-gathering from surveillance advertising allows companies to use price discrimination—that is, charging each person the absolute maximum the company estimates they are willing to pay, using an endless array of surveillance dossiers. If this were to become the norm for every price, it would render nearly all traditional economic theories of price, including supply and demand, completely useless. But the government could head off this disastrous future by protecting online privacy or banning surveillance advertising.

The financial system deserves special attention, because while sundry financial products can be used to finance new productive investment, they can also be used to finance unproductive boondoggles, or suck the life from existing productive investment. The great housing bubble of the mid2000s saw Wall Street handing millions of loans to people who could not pay them back, eventually causing an economic crisis.

Or I’ll once more cite Prospect reporting on how parasitic vulture capitalist firms have ruined regional hospital chains, thousands of local newspapers, Red Lobster, and many others. Heavy regulation on the financial sector—or the state directly funding wanted investments, as the Biden administration has done with clean energy—is necessary to get financiers to behave.

This is why for a pragmatic socialist, antitrust is a critical tool, not an enemy school of thought. Public options are a useful tool for curbing corporate power, but regulatory safeguards can also do the job. Insofar as businesses operating in a market are part of the economy—and given the undeniable success of at least some businesses in producing high-quality goods and services, there is every reason to grant them some space—we will need an elaborate regulatory state to get them to function properly.

Elsewhere, I’ll freely admit that markets are an unsuitable tool. In home insurance, you are charged precisely what you are statistically expected to claim, plus some profit for the insurer. But in health care, many people have severe or chronic conditions that are certain to cost much more than they could possibly pay. In a pure health insurance marketplace, such people would find themselves uninsurable, and quickly thereafter, dead.

Market-based health care policies like Obamacare rely on a bewildering array of regulations that add great expense and complexity and still don’t work particularly well. American health care is by far the most expensive in the rich world, while the health outcomes of the American people are mediocre to appalling.

A pragmatic socialist judges economic institutions not with reference to some abstract metaphysical notion, but by what results they produce in practice. Markets are a technology—a form of government planning—that are useful in some areas if properly controlled, but less so in others. Neither markets nor anything else deserves pride of place in the socialist economic toolbox.

What Is to Be Done?

The objective of pragmatic socialism is to equalize the distribution of resources as far as practically possible. How far, you ask?

Well, let’s give it a try and see how far we can get! Luckily, there are working practical ideas in other countries and even the United States itself to provide inspiration.

The first thing is to help rebuild the union movement. The National Labor Relations Act should be overhauled to require sectoral bargaining, meaning union contracts will be negotiated on an industry-wide basis rather than at each individual shop, and the resulting contract will be extended to every firm regardless of union membership. Stiff penalties will be levied on

employers who refuse to negotiate. Second, build a proper welfare state. This will provide an income source to all categories of nonworkers mentioned above, and equalize incomes between households with different numbers of nonworkers. Welfare programs for each category of nonworker—a child allowance, disability and unemployment benefits, a pension for the elderly—will virtually eradicate poverty. Medicare for All will ensure universal health care, and paid family leave, a child allowance, and public day care will enable citizens to have whatever size of family they want.

U.S. policymakers are obsessed with means-testing the welfare state, to prevent anyone deemed undeserving from qualifying. But you can just as easily ensure that with stiff and progressive taxation, particularly on the rich. The point is to raise revenue from the broad population to fund the welfare state, while also legally prohibiting the accumulation of vast wealth.

Third, rebuild the regulatory state. The government must ensure the safety of transportation, the cleanliness of water and air, the purity and nutritiousness of food, swift punishment for scams and fraud, and so on. The regulatory state in America does a lot of good, but it is unforgivably slow and dysfunctional, primarily due to a lack of state capacity.

As a motivating example, two years ago I traveled to the Faroe Islands to report on their tax system, which tracks every wage payment through a central database, automatically takes out any tax owed, and adds any owed benefits. Ordinary workers never have to think about it, businesses don’t have to bother with payroll processing, and the government has almost perfect real-time economic data. That’s good government.

Fourth, democratize property. Wealth ownership in America is hideously concentrated—the top tenth of American households own 67 percent of all wealth, the top one-hundredth 30 percent, and the top thousandth 14 percent. The bottom half, meanwhile, own a whopping 2 percent. The fact that about a third of national income accrues to capital owners makes property a gigantic engine of inequality. Taxing large fortunes out of existence is one remedy. Or we could nationalize various firms, or require publicly traded firms to hand over part or all of their stock to their workers, as the Bernie Sanders campaign suggested in 2020.

But the simplest and most effective stratAUGUST 2024 THE AMERICAN PROSPECT 45

The Future Sof ____________ OC IALISM egy, as Matt Bruenig argues, would be to levy a variety of taxes and use the proceeds to build up a social wealth fund. Eventually, the government would own most of the country’s stock, and pay out the returns as a citizen dividend to every American equally. Alaska has a similar fund (built up with oil revenues rather than ordinary taxes, but the principle is the same), and it is both immensely popular and greatly reduces inequality. A rapidly growing share of American wealth is already held by index funds, where investors simply own a representative slice of the stock market. Morally, there is every reason to spread out the capital income resulting from wealth ownership, and practically, the institutions are already there and functioning.

All this may sound like neoliberal, technocratic “government by experts.” But the problem with technocracy is a conflation of morality with technical competence. Experts can only give you a menu of options, along with their particular upsides and downsides. They cannot tell you which option is morally best—which may be a more expensive one. As British economist John Maynard Keynes remarked in 1942: “Where we are using up resources, do not let us submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income, with no other denominator of values but this.”

Real-World Models

We don’t have to reach for a real-world example of this kind of setup. The Nordics make a good starting place for this discussion, given how many of my ideas were lifted wholesale from those countries. I have already mentioned the national co-op arrangement in Finland and the highly efficient tax administration of the Faroe Islands.

On the one hand, we have the long reign of the Swedish Social Democratic Party, which started in 1932 but ultimately ended in the 1970s thanks to capitalist opposition to the party’s Meidner Plan, which had been gradually building up “wage earner funds” filled with company stocks and managed by the state. After the 1976 loss, the party moderated and did something of a neoliberal turn. On the other, we have Norway, where the state actually has built up a majority share of the national wealth through its tremendous social wealth fund, and maintains direct ownership of numerous large com46 PROSPECT.ORG AUGUST 2024

panies, with no evident problems. Finland and Denmark are somewhere in the middle.

In my view, Nordics are very unusual, and in Norway in particular the resources for its social wealth fund are mostly based on revenues from North Sea oil. Nevertheless, they are a proof of concept that extremely stiff taxation, an ultra-generous welfare state, and collective ownership of most national wealth are not only possible, but compatible with a cutting-edge wealthy economy.

By and large, they are just as productive and innovative as America. It shouldn’t be ignored that America has the largest set of natural resources in the world, and thus the raw materials to carry out this program.

When we examine the history of where the Nordics got where they are today, we find a great deal of contingency, opportunism, and most of all hard work. Contrary to popular myth, for instance, these countries have not always been egalitarian paradises.

At the turn of the 20th century, Sweden was one of the most unequal countries in the world, with a voting system where the rich literally got more votes. But when the electoral system was reformed in 1910-1911, leading to universal suffrage in 1921, the Social Democrats eventually took power and wrenched down the share of wealth held by the top hundredth of Swedes from 60 percent to about 20 percent. (They stayed in power for the next 44 years.)

Finland’s S Group did have the advantage of having been established for decades, but by the 1990s it was severely dysfunctional and verging on bankruptcy. It took a lot of grinding work to build it up to where it stands now.

What we can question is whether Nordic pragmatic socialism can be instituted elsewhere, especially in the largest countries, given the dominance of global capitalism.

The Meidner Plan faced opposition from the Social Democratic Party’s own finance minister, in part because he feared a loss of confidence in money markets. The relentless undertow of capitalism can tend to undermine pragmatic socialism, even when pragmatic socialists are the government.

However, established socialist institutions, especially the welfare state, tend to be so popular that conservatives hesitate to demolish them. It’s not a guarantee, but it does help. Conservatives were in power in Norway from 2013 to 2021 (after which the Labor Party retook power), but did not tear up its welfare state, nor attempt to give

U.S. society may be more primed for pragmatic socialism than people think. away its social wealth fund to the rich. Additionally, a strong union movement serves as a check on state power. Finland recently elected a sharply right-wing government, but its proposed welfare cuts and attacks on union rights led to a massive strike wave.

Even the Trump administration could not repeal Obamacare.

Certainly the U.S. does not have the same strength of labor unions or a large cooperative movement as in the Nordics.

Moreover, the homogeneity of Nordic society does make it somewhat easier to pitch egalitarian solutions; indeed, immigration has become a flashpoint in countries like Denmark. Translating that to a multicultural society like the U.S., where out-group fearmongering accompanies any and every attempt to reduce inequality, will be a serious challenge.

But the U.S. does also have its own substantial advantages. Indeed, in many ways the tiny Nordics face a far more challenging economic context. Unlike America, they do not have a gigantic internal market, and so depend utterly on international trade. Unlike America, they do not control the global reserve currency or the pipelines of international finance, and therefore have far less ability to prevent capital flight or chase down tax cheats. U.S. society may be more primed for pragmatic socialism than people think.

History and the Road Ahead

Marx predicted a French Revolution–style uprising in capitalist societies sooner or later as their internal contradictions come to a head. The working class will gradually become the overwhelming majority and will seize power, dispossess the capitalists, and usher in a new classless society largely devoid of political conflict, as there will no longer be any exploiter or exploited classes.

Norway, thanks largely to oil revenues, has engrossed three-quarters of its national wealth into state-owned institutions.

But this hasn’t happened and shows no sign of happening. People working for wages have made up the overwhelming majority of the population in all the original capitalist countries for over a century, yet to this day nothing has produced a leftwing revolution. The Great Depression was something of an exception, but the reforms it ushered in, while noble and overwhelmingly positive, did not end history. Workingclass voters are just as likely to vote for liberal or conservative parties as socialist ones—indeed, overwhelmingly more likely, in most countries.

The certainty among Marxist factions in the late 19th and early 20th centuries that the revolution was bound to come was ironically an immensely powerful stimulus to political action, as it gave the socialist movement great confidence. But when the promised revolution failed to appear year after year, decade after decade, the air gradually drained out of Marxism.

Sophisticated Marxists, including Marx himself, make space for contingency and agency. As Friedrich Engels wrote, “The determining element in history is, in the last resort, the production and reproduction of real life … If therefore someone twists this into the statement that the economic element is the only determining one, he transforms it into a meaningless, abstract, and absurd phrase.” While this is certainly more convincing than the turn-crank historical

schema of Soviet Marxism-Leninism, it also verges on meaninglessness—akin to saying that economic factors predominate, except when they don’t.

But even if we could somehow isolate what “in the last resort” means precisely, I simply deny that it is possible to predict the grand sweep of history, no matter how vague the formulation is. History is everywhere and always contingent and unpredictable. So long as there are people, they will be fighting and arguing about something or other. As British socialist Tony Benn once said, “Every generation has to fight the same battles again and again and again. There is no destination called justice or democracy and if you catch a train driven by the right man you’ll get there.”

The idea that someday we’ll have a classless society without serious political conflict can create its own dangers. Believers in a final revelation have a nasty habit of trying to make it come true by force. Soviet Communists portrayed themselves as the vanguard of this future utopia, and hence banned all competing political parties as being counterrevolutionary by definition.

As a result, the “socialist” USSR became in practice largely the same Russian Empire as before, with a dictatorial ruler, brutal police state, slave labor system, and imperialist foreign policy.

Any reform effort as I’ve outlined above must be done through democratic institu-

tions. Socialists should take whatever they can practically get depending on political conditions, but conversely must be willing to submit themselves to the judgment of the people through elections, and should the verdict be unfavorable, relinquish power willingly. When the socialist movement is weak and the economy is reasonably thriving, as it has been in the United States for most of its history, then piecemeal reforms are likely the best that can be hoped for. When the socialist movement (or similar ones like the labor movement) is strong, and/or the economy is in shambles, like in the early 1930s, then one ought to aim higher.

Ideologically, the key task for American socialists is to convince voters that taxes are not theft, but a way to pay for vital needs that otherwise have to be funded out of pocket. Universal, explicit benefits should be the goal, rather than hiding benefits in the tax code. If that high barrier can be surmounted, much of the rest of the philosophy can fall into place.

The best president in American history, Franklin Roosevelt, was a model political opportunist for the left. Though he was no socialist, he seized the opportunity of the Great Depression to pass the most aggressive set of policies in American history.

Whenever opportunity arises from whatever quarter, socialists should be ready with a program to hand. n AUGUST 2024 THE AMERICAN PROSPECT 47

The Future of ____________ COLLEGE SPORTS

Wall Street HITS THE Locker Room Private equity firms are maneuvering to invest in college athletes, their schools, and the conferences they play in. The deals could add risk to the whole system.

By Luke Goldstein

In 2022, Gervon Dexter, who starred at defensive tackle for the University of Florida’s football team, was entering his junior season, a pivotal year before players are officially eligible for the NFL draft. Dexter, a five-star recruit out of high school, was projected to be a top selection if he delivered another high-performing season.

In the near term, though, he found himself in the same financial bind as scores of college athletes before him: struggling to pay his bills, as most of his waking hours were devoted to training and attending classes. Despite receiving a full-ride scholarship, Dexter ran into some trouble with a high-interest auto loan he agreed to as an 18-year-old. He couldn’t pay rent at his 48 PROSPECT.ORG AUGUST 2024

apartment and got evicted. As the bills piled up, Dexter had his first child on the way.

Around this time, he received an email from a company called Big League Advantage, promising a six-figure financial opportunity that could unlock his market value and make all his troubles go away. By signing with them, Dexter immediately received more than $436,485 up front, more money than he’d ever seen before.

But in the fine print, Dexter had signed away 15 percent of his future pretax earnings to BLA for the rest of his athletic career. When the Chicago Bears drafted him 55th overall in 2023, giving him a $6.7 million contract plus a $1.8 million signing bonus, BLA came calling for their

share. Dexter took BLA to court, alleging they’d deceived him.

Big League Advantage, an investment fund with top investors such as Cleveland Browns executive Paul DePodesta and George W. Bush’s younger brother Marvin Bush, operates like something between a payday lending outfit and a private equity firm. It is just one of the many predatory actors prowling college campuses, slipping ambiguous language into contracts that force athletes to pay commissions up to 40 percent or sign away their intellectual-property rights.

Investment firms have entered the burgeoning market for college athletics because of expanded opportunities for profit.

Thanks to new state laws and a Supreme

Court ruling, Division I college athletes can finally earn their fair share from a business that raked in $17.5 billion in revenue in 2022. Student athletes are now able to profit off their name, image, and likeness (NIL), an activity previously banned by the National Collegiate Athletic Association (NCAA). Practically overnight, top stars can sign deals for brand sponsorships and other commercial advertising. Caleb Williams, a Heisman Trophy winner, quarterback for USC, and the number one draft pick in 2023, made $10 million from NIL last year.

But that bounty is only available to a small segment of the college sports universe.

Dexter’s case speaks to how the booming market for college athletics has become a

Wild West full of promise and peril. With little regulatory oversight of the brand-new NIL process inviting all kinds of questionable financiers, top athletes can score big while others get left holding the bag.

And that’s just one side of the immense shake-up playing out in college sports.

Financial firms are investing in the NIL market on the one end, while also eyeing private credit deals with college programs and power conferences on the other.

The business of running a college sports program is about to dramatically change after the NCAA’s recent $2.8 billion legal settlement that establishes athlete compensation as the future for Division I sports.

Private equity wants a major cut of that new

market in exchange for providing capital for the programs to manage the transition period and invest in revenue-generating areas of the business to make up for the added workforce expense. In other words, investors want to do to college athletic departments what they did to Gervon Dexter.

As the settlement takes effect, it’s still unclear whether students will be considered employees entitled to full collectivebargaining rights, which the NCAA and its member colleges are aggressively fighting.

The long road to a unionized college athletics workforce is especially arduous, because organizing must take place at each individual sports program, not just school by school.

Athletes may need some form of a play-

AUGUST 2024 THE AMERICAN PROSPECT 49

COLLEGE SPORTS The Future of ____________ ers’ association to weather the storm of financialization coming for college sports, which threatens to shortchange universities too if they’re not careful.

The NCAA has operated for decades as a monopoly over college sports, mainly through their control of lucrative television contracts, including for the popular March Madness basketball tournaments. Though the athletic conferences are somewhat independent and negotiate their own TV contracts, schools need to be a part of the NCAA to participate in Division I athletics.

For decades, the NCAA prohibited athlete compensation, even banning individual players monetizing their own name, image, and likeness. This ensured that the NCAA would capture all the money that flowed into the industry. Their justification was that college sports operate on an amateurism model, not a professional one, which they claimed was a huge part of its popularity with consumers. The only form of compensation allowed was academic scholarships. “NCAA uses a standard consumer welfare defense [in antitrust terms], basically claiming that consumers enjoy watching an unpaid workforce,” said Ted Tatos, an associate professor of economics at the University of Utah who has researched the anticompetitive impact of the NCAA on athletes.

For years, the NCAA used a throwaway line from a 1984 Supreme Court decision as a legal shield. In NCAA v. Board of Regents, the Court ruled that the NCAA abused its monopoly power by threatening to blacklist any college football programs that broke away to negotiate their own television contracts with a separate association. But in one part of the decision, judges said that the ruling was not based on “our respect for the NCAA’s historic role in the preservation and encouragement of intercollegiate amateur athletics.”

Amateurism might have seemed more plausible 40 years ago, before the full commercialization of college sports. In subsequent decades, Division I colleges have built up a multibillion-dollar industry through merchandising, licensing, and primarily television deals to broadcast games.

The Power Four football conferences bring in $16 billion from broadcasting agreements with various networks, which is roughly on par with other professional sports leagues. The Big Ten, which now has 18 schools, signed the largest television deal in history for exclusive broadcasting rights 50 PROSPECT.ORG AUGUST 2024

at $8 billion, greater than the TV deal for the PGA Tour or European soccer leagues.

The deal involves Fox, NBC, and CBS, along with cable and streaming networks.

Colleges invest more than ever in winning football and basketball programs, based on the theory that it brings in more alumni donations and boosts student enrollment. But there’s hardly any feedback loop for sports revenues to actually improve a school’s core educational mission. The funds typically go right back into the athletics department, for a new football stadium or head coach. Football coaches are the highest-paid public employees in most states.

Until recently, the athletes themselves weren’t seeing a penny from their on-field performance, despite enriching their schools.

In the 2010s, antitrust actions started being filed against the NCAA for using its monopsony power over athletes to suppress wages. Former UCLA basketball player Ed O’Bannon was at the center of a critical case challenging the NCAA’s licensing of his image to EA Sports for their NCAA basketball video game without his approval.

In 2015, the Ninth Circuit Court of Appeals ruled in favor of O’Bannon, affirming that the NCAA’s ban was an illegal restraint of trade. The Supreme Court didn’t take up the case. Then, in 2021, the Supreme Court ruled in a related case, Alston v. NCAA, overturning the NCAA’s ban on NIL deals as a violation of antitrust law. This implicitly meant that the NCAA’s long-held amateurism defense was dead. The decision led to a slew of state laws that legalized NIL deals for athletes.

This opened the door for former athletes to then file numerous class action lawsuits, demanding fair compensation from past revenue streams the programs brought in.

In House v. NCAA, which involved back pay damages for student athletes, the NCAA and the power conferences chose to settle this May, agreeing to pay $2.8 billion for violations against 14,000 athletes dating back to 2016. The settlement also set up a direct compensation system for the first time in NCAA history. This is driving a full-scale overhaul of college program finances.

As of last year, only 25 of the 130 Division I football schools’ athletic programs were revenue-positive. Only a couple of sports actually make money for colleges, and often not enough to offset other costs. The $2.8 billion settlement will come out of colleges’ revenue distributions for the men’s basketball tour-

Investment firms have entered the burgeoning market for college athletics because of expanded opportunities for profit. nament and other events. That means that schools, most of which were already in the red, will take a hit, and once athlete compensation is fully established in 2025, they’ll have even more liabilities on their books.

As a result, college programs are undergoing a huge transformation to drive new revenue growth. It began with power conference consolidation to obtain bargaining leverage for television contract negotiations. Last year, 10 of the 12 universities from the West Coast–based Pac-12 left for other conferences, triggered by UCLA and USC departing for the Big 10, which has the most lucrative TV deal. It has created the absurd situation where Stanford and Cal Berkeley, both in the Bay Area on the edge of the Pacific Ocean, will compete this fall in the Atlantic Coast Conference (ACC).

League games that span the continental United States are worse for the student athlete experience, as players will have to repeatedly travel cross-country for games, making it all but impossible to be a student. The decisions were driven by revenue sports like football, which only plays once per week in the fall.

The ACC could soon collapse as well, if Florida State and Clemson win a lawsuit over the conference’s exit penalty that would allow them to leave. Ultimately, we could see one or two national “super-conferences” spanning the country, able to earn maximum revenue. Novel opportunities are under discussion; the Big 12 is apparently considering auctioning off naming rights to the highest corporate bidder. Reports

SUSAN R AGAN / AP PHOTO

UCLA star Ed O’Bannon successfully sued the NCAA for licensing his image to EA Sports for their college basketball video game.

indicate that it could become the Allstate 12.

But consolidation doesn’t solve all of university athletic departments’ problems. With the new cost of paying players estimated at $15 billion over a decade, colleges are in dire need of operating capital, so they can continue to upgrade facilities and compete for coaches. Some non-revenue-driving sports are at risk of being phased out because of the cash crunch. Conferences also need upfront investment in the realignment wars,

to bring in additional schools and fend off raids from rivals.

Enter the private equity industry.

From Wall Street’s perspective, there’s been growing interest in the overall sports industry for a number of years. Virtually every major sports league has allowed alternative investment funds to take minority stakes in teams, though the footprint is largest in the European soccer leagues. This trajectory follows a pattern for private equity,

expanding into previously non-financialized sectors, such as family businesses struggling after the Great Recession and more recently the higher-education business.

Seeking larger returns, university endowments helped establish the flow of institutional investment cash into private equity and hedge funds. Private equity also has other existing relationships with higher education, for example backing the management companies that run online college courses in an attempt to grow enrollment numbers.

Amid uncertain finances, private equity and other investment firms are inserting themselves into college sports, on both the player and the program side. Middlemen platforms like Opendorse that help athletes find NIL brand deals have top investors such as Advantage Capital, Serra Ventures, and Flyover Capital. Two companies, Learfield and Playfly, which negotiate television contracts on behalf of conferences, are financed by private equity and venture capital funds.

Now, Wall Street is looking to provide direct financing to college athletics, and the first dominoes may be about to fall. The Big 12 is in an advanced stage of negotiations with Luxembourg-based CVC Capital for a roughly billion-dollar investment in exchange for 15 to 20 percent of revenues over an unspecified number of years. Another firm, Weatherford Capital, co-founded by a former Florida State quarterback and his brother, the former Speaker of the Florida House of Representatives, is seeking to invest in individual college athletic departments. Weatherford and another firm, RedBird Capital, have formed Collegiate Athletic Solutions (CAS) for this purpose.

The structure of the deals being discussed with college programs is not anything like the leveraged buyouts or ownership takeovers typically associated with corporate raiders, where acquisition targets are loaded up with piles of debt. For now at least, the terms of these deals could be structured as two different types of investment vehicles: either some form of growth equity and private credit, or a quasi-joint venture where the school licenses out its intellectual property and splits royalties with its investors.

The Big 12 deal with CVC represents the former, where private equity invests in an industry for a set amount of guaranteed future revenues. According to The Athletic’s reporting on the deal, the Big 12 claims that CVC would be “prohibited from involvement in any sports decision.” In other words, it’s just a straightforward private credit transacAUGUST 2024 THE AMERICAN PROSPECT 51

COLLEGE The Future of ____________ SPORTS

tion, with the effective interest rate fluctuating depending on the success of the business.

But sports programs are still more exposed if a bad deal goes awry. If they don’t invest the capital successfully to grow the business, they’ll be on the hook for future payments down the road. If the circumstances are dire enough, they might have to raise student fees or make cuts to other sports programs. That’s why the terms of the deals negotiated and what percentage of revenues are locked in for investors are being scrutinized.

This explains the mounting skepticism about whether this pairing with private equity is in the long-term best interest of higher-education institutions, given the industry’s track record of hunting shortterm returns. “You’d think if they’re so worried about the financial burden of paying players, [colleges] wouldn’t want to auction off another portion of the revenue to Wall Street,” said Sandeep Vaheesan, legal director at the Open Markets Institute.

As private equity expert Jeffrey Hooke explains, universities have a knowledge 52 PROSPECT.ORG AUGUST 2024

disadvantage in negotiations with sophisticated Wall Street sharks, which makes him concerned about their ability to protect their interests in these deals.

“The first deal that’s done will be the template for all the rest, because in banking and finance people just copy the one that’s been done before,” said Hooke, who spent several decades working inside private equity firms.

Some of the firms at the center of the negotiations have been in litigation for shortchanging professional sports franchises in similar transaction deals. For example, CVC was embroiled in a legal dispute over a 50-year deal with La Liga, the Spanish soccer league, where the fund invested $1.7 billion through a new company, in exchange for control of the league’s intellectual-property and marketing rights.

Several of the soccer clubs in La Liga— including FC Barcelona, Real Madrid, and Athletic Bilbao—sued to block the deal, because they’d lose out on a major chunk of their future business.

Private equity expert Eileen Appelbaum

also warns that growth capital may seem benign, but it’s often a first step for firms to dip their toes into a market before coming back for a much larger position or even a takeover. “That’s often the playbook we’ve seen with takeovers in health care or insurance companies,” said Appelbaum.

Other financial arrangements being discussed could cede more control to Wall Street fund managers. Since 2022, Florida State has been in extensive negotiations with Sixth Street, an investor in Real Madrid, FC Barcelona, and the San Antonio Spurs. Florida State may need capital in part to offset the massive exit fee it will have to pay to leave the ACC. A trove of documents obtained by Sportico and the Tampa Bay Times offers a window into the terms of the deal, known internally as “Operation Osceola.” With JPMorgan Chase serving as its main financial consultant, Florida State would receive a roughly $250 million capital infusion from Sixth Street. Similar to the La Liga arrangement, the capital would come through a separate entity called a “NewCo” created

GR AY QUET TI / AP PHOTO

Florida State University’s athletic department has been negotiating with an investor for a $250 million capital infusion.

Some call the new system player empowerment, but it does set up a glaring disparity between stars and all other athletes. under a “super license agreement,” a legal workaround because technically a state agency can’t form an official joint venture with a for-profit entity.

The university would then transfer its intellectual-property rights to this NewCo, license it out to Sixth Street, and share the revenues, according to emails between FSU and Sixth Street. In documents obtained by Sportico, Sixth Street is pushing for the IP rights to be made “exclusive.”

It’s not clear what the exact profit split would be, but according to sports finance blogger and former USC professor Bill Farley, it’s typically proportional to the outside investors’ equity stake. There’s discussion in the documents about a “management fee” to investors in the NewCo, which might amount to $500,000.

Sixth Street would not be a passive investor; it would acquire some degree of influence in managing the use of the program’s IP to grow revenues. With a separate outside entity, there would be far less transparency about the finances than is usually offered for a state-run school.

Some of the revenue growth outlined in the documents entails FSU investing in a minor league baseball team in Tallahassee, selling off the naming rights to its football stadium, and using it for more live entertainment events, similar to a partnership University of Texas struck in 2022 with Oak View Group and Live Nation.

Health care management companies are also cited on numerous documents, the details of which are entirely redacted.

University-run hospitals are a huge revenue

source for school systems and also a major target for private equity firms, potentially indicating that through the NewCo, Sixth Street could try to expand its control of FSUaffiliated hospitals.

These are high-risk gambles, and higher education doesn’t have the institutional know-how or track record of pulling them off. Individually, these moves might sound justifiable to grow the overall money pot for college sports. But they could put schools in a fragile predicament down the road.

The terms of the House settlement set a cap for total athlete compensation, which can top out at 22 percent of their athletic department’s revenues. This is much smaller than the revenue-sharing agreements for professional sports leagues, which are closer to 50 percent. Moreover, it’s at the discretion of each school to decide how to spend their 22 percent, and there’s no floor for each athlete. Outside of star players and recruits in revenue-producing sports, many might not get much pay at all.

Another complication is Title IX, which requires that equal benefits be offered to female students. “Scholarships had to be doled out evenly to both men’s and women’s sports and it’s unclear how exactly that will apply to athlete compensation,” said Richard Paulsen, a sports management professor at University of Michigan School of Kinesiology.

The House settlement accompanies two other major NCAA rule changes, allowing certain forms of inducements to recruit players. Players can also enter the transfer portal after each consecutive season without needing to sit out for a year, creating potential bidding wars from colleges for their services, much like free agency in professional leagues.

Some call this new system player empowerment, but it does set up a glaring disparity between top stars and all other athletes, who may put in just as many hours of labor outside of being a student.

And it doesn’t prevent players like Gervon Dexter from being lured into up-front cash agreements that could damage their financial futures.

A bigger complication would arise if a private equity deal with a university goes awry.

In that case, athletic departments could be legally obligated to pay off debts to the investment firm, leaving players with nothing or slashing athletic programs entirely. It

puts players in much the same situation as workers at private equity–owned portfolio companies, taking on added risks through no fault of their own.

This all raises the question of employee status and unionization. After the Alston decision, National Labor Relations Board General Counsel Jennifer Abruzzo issued an official policy statement putting schools on notice that misclassifying workers as “student athletes” violated federal labor law and would subject them to violations. The National Labor Relations Act, in Abruzzo’s interpretation, “fully support[s] the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment.”

In a recent ruling, the Third U.S. Circuit Court of Appeals opened the door to college athletes being classified as employees protected by federal minimum wage and hour laws, though not in all instances for every sport.

Colleges and the NCAA do not accept this designation, and are fighting against this classification of athletes as full-time employees of the school. They’re trying to lobby for an antitrust exemption to make their problems go away. Last month, a House committee marked up a bill that would prevent college athletes from being seen as employees of their schools, and thus leave them unable to unionize.

In March, the Dartmouth men’s basketball team formed the first college athletics union, which could set a template for other programs. But for that tactic to be sustainable, there would likely need to be some version of a sectoral-bargaining law. There are over 350 Division I schools, with over 500,000 male and female student athletes as of 2022. The Dartmouth vote created a union for just 15 players.

“Players’ associations work for professional sports, and I don’t see why college athletes shouldn’t have their own to get a real seat at the table,” said Vaheesan, who submitted an amicus brief to the Supreme Court in the Alston antitrust case.

Sen. Chris Murphy (D-CT) has actually introduced such a law to Congress, which would make all colleges within an athletic conference a single bargaining unit. That’s the kind of protection that may be necessary for players to avoid being caught in the same private equity trap that so many have fallen into in America. n AUGUST 2024 THE AMERICAN PROSPECT 53

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CULTURE

Broken Cords We’re moving toward replacing cable TV with a bundle of streaming

networks. Will local and news programming get lost in the transition?

By David Dayen There were so many CNN logos on the set of the June presidential debate between Joe Biden and Donald Trump that it became a running

since 2004, and of the estimated 51.27 million viewers across 16 channels, fewer than 1 in 5 watched it on CNN. Part of this was due to the June airdate, months before Election Day. But CNN took solace from the fact that Nielsen ratings only register broadcast and cable channels, not its burgeoning digital platforms. Indeed, they said, this was the largestever audience for CNN on Max, the streaming network owned by parent company Warner Bros. Discovery. But that was a low bar; the digital audience for WBD platforms was 2.5 million, and for Max, only 864,000.

The numbers exemplify a confusing moment for the television business. Broadcast and cable, the mainstays for decades, have diminishing audiences. Cable is mostly a rerun machine, except for the news channels like CNN, MSNBC, and Fox, which have

The Future of ____________ TELEVISION joke. This was the first general-election debate produced by a single television network since 1960, and CNN, whose numbers had sagged to the point of irrelevancy, was going to milk it for all it’s worth. CNN’s moderators would ask the questions, and the logo would appear everywhere, even on rival channels simulcasting the program. The network added an unprecedented two commercial breaks and sought millions of dollars from advertisers.

In the end, ratings revealed the smallest audience for a general-election debate

older, dwindling viewership. Entertainment conglomerates have placed their bets on streaming, a production and distribution system they control. But so far, streaming hasn’t made any money, and likely won’t until it looks more like cable, with a single payment for maximum access.

The streamers are making their final assault on the current system, bidding up sports broadcasting rights and experimenting with bundling. If the formula ever gets perfected, it’s the end of cable as we know it. That clouds the future for one type of programming in particular: news, which streaming networks currently have no obligation or seeming interest to produce.

Given the distorting influence of cable news on our politics, that might be a great thing. But recent history demonstrates that, whatever you think of our old news struc-

AUGUST 2024 THE AMERICAN PROSPECT 55

CULTURE tures, what rises to replace them can always be more corrupting. And with most Americans today receiving local broadcast channels through their cable box, trading a cable bundle for a streaming bundle might leave networks and local affiliates behind, too, further dehumidifying news deserts that have popped up as local newspapers die out.

There are policy options to fix this, the same ones placed on the cable industry in its infancy. But nobody seems to be considering these issues; we’re rolling into the streaming age mostly with nonchalance.

More than anything, the potential fall of cable—and with it the transformation of broadcast and local channels that have been in operation since 1928—creates a giant dose of uncertainty. As Doug Creutz, a television industry analyst with TD Cowen, told me: “I don’t know that I’d call it a hinge point so much as a gray zone.”

As recently as ten years ago, 100 million households in the U.S. paid for a cable TV connection. Last year, it fell to about 72 million. And the first quarter of 2024 saw the biggest exodus from pay TV, which includes live digital channels like YouTube TV and Hulu Live, since the start of the cord-cutting era. Analysts estimate pay TV will fall to 47.8 million households by 2027. Last year, only six of the top 70 cable networks gained audience, and broadcast and cable pulled in less than half of Americans’ viewing time for the first time in television history.

By contrast, 99 percent of all U.S. households now pay for a streaming service. And YouTube was responsible for more viewing time on television than the entire broadcast and cable slate of NBCUniversal, or Paramount/CBS, or Warner Bros. Discovery. “Digital video is the future of video and streaming companies are well-positioned to capture more advertising dollars,” said David Cohen, CEO of the Interactive Advertising Bureau trade group.

The damage to cable is self-perpetuating.

Advertisers have already sharply reduced broadcast and cable ad budgets, while increasing digital budgets more than tenfold. Fewer cable subscribers reduces ad rates more, along with lower revenue from “carriage” fees that cable companies pay to air channels. This leads networks to cut costs further, making the product less compelling and giving people more reasons to cancel. This is what the end of a business life cycle looks like.

It is a truly bizarre experience to watch 56 PROSPECT.ORG AUGUST 2024

cable TV now. Comedy Central airs only one original show, and two years ago WBD ended all scripted programming on TNT, TBS, and TruTV. Networks like USA, A&E, Lifetime, and countless others, regardless of their original branding, have been hollowed out, almost uniformly running old TV shows and movies, with the occasional cheaply produced reality show sprinkled in. Even once-bankable regional sports networks are slowly dying, unable to recoup the cost of airing sports from diminishing audiences.

Because parent companies have made up for financial losses by licensing their catalog to streaming channels, cable’s main competition is being constantly enriched.

FX, which had a run of hit original shows over the past decade, spent months hyping Emmy-winning dramedy The Bear and docuseries Clipped, only for them both to appear exclusively on Hulu.

One company personifies the death of cable: Paramount, owner of a giant cable library (Comedy Central, MTV, VH1, Logo, Nickelodeon, TV Land, BET, Showtime) and the top broadcast network, CBS. A decade ago, that would have been a lucrative portfolio. Today, it’s more like owning a series of oil rigs after the world has switched to clean energy. Paramount has been in sale talks all year, swinging in and out of a deal with production company Skydance on three separate occasions. (At press time, the deal appears to be back on.) In the meantime, the CEO left and the company started slashing costs everywhere, including taking down the MTV and Comedy Central online archives, putting decades of beloved programming out of reach. And BET is reportedly for sale.

Paramount has a weird stock structure where controlling shareholder Shari Redstone owns 77 percent of voting stock but less than 10 percent of the company itself.

But the bigger problem is that the company’s value keeps falling. “The stock market doesn’t hate losing money, it hates when your business is declining,” explained the anonymous analyst who runs the website Entertainment Strategy Guy. Just one thing stands in the way of cable’s complete dissolution: Streaming media is a bad business.

The first wave of streamers mainly sought to grab eyeballs; Netflix even gave their DVD-rental customers free access when it started streaming in 2007. People loved paying a few bucks a month for big libraries of

content without ads. But once Netflix got into the original-programming game with House of Cards in 2013, studios engaged in costly bidding wars against each other, with deep-pocketed tech giants like Amazon and Apple distorting the market further. They all essentially punched each other out, losing billions in the process. “Netf lix was offering a product below market price and people wanted to join that,” said Entertainment Strategy Guy. “That does not make for a great industry.”

Disney+ has lost $11 billion since launch.

Peacock, Paramount+, and Max all lost 96 of the top 100 programs on broadcast and cable were football games.

money in 2022. While Netflix is profitable, after the company announced its first-ever decline in active subscribers in April 2022, shares fell by 35 percent; the company’s stock is just now getting back to where it was in late 2021.

Trying to turn a profit now means degrading the product. Practically every streaming company has raised prices, making subscriptions no longer a great deal. Companies are introducing ad tiers and increasing interruptions to programming. Moguls like Disney’s Bob Iger are openly admitting that they invested too much in streaming; layoffs and cost-cutting have become commonplace. And original programming has peaked in frequency. That sapped the value from streaming and angered customers.

Traditional broadcast/cable setups maintain three distinct advantages over streaming: sports, news, and “lean-back” TV, with programs running on a set schedule rather than viewers having to actively choose. But the real three advantages are sports, sports, and sports. Of the top 100 rated shows on television last year, 93 were NFL football games, three were college football, and one was the show that aired right after the Super Bowl.

That’s why streamers are diving so aggressively into sports, which have long, built-in ad breaks and can finally create the tipping point for cord-cutting. Amazon has

age, and this year Netflix struck a three-season deal for NFL games on Christmas. Last year, NBC moved a Chiefs-Dolphins playoff game to its Peacock service, creating the largest streaming audience in history. YouTube TV now hosts NFL Sunday Ticket, the hardcore fan package of all league games.

None of this has thrilled sports fans, who would have to shell out more than $800 to see every NFL game this year. They resent the one-off subscriptions and constant jumble of finding their favorite team. But help is on the way. A class action antitrust lawsuit against the NFL for colluding to raise the

to survive. Always having something to watch across an array of streaming channels helps solve the problem of users subscribing, blasting through the most popular programs, and canceling, a phenomenon known as churn. There are potential antitrust concerns if companies that control both production and distribution make exclusive deals with one another; FuboTV, which offers live sports and local channels, has already sued Venu Sports. But a third party could step in to sell the bundle, essentially reinventing the cable business, which was relatively profitable for all parties.

Prestige cable shows like The Bear don’t even air on cable; it streamed exclusively on Hulu.

Streaming hasn’t made money, and likely won’t until it looks more like cable, with a single payment for maximum access. designs on becoming the streaming sports leader, with Thursday night NFL, NASCAR, and now the NBA, through a new contract worth around $1.8 billion per year that steals men’s basketball from Warner Bros.

Discovery. Apple TV+ has a baseball pack-

price of Sunday Ticket when it was on DirecTV resulted in a $4.7 billion verdict and could pave the way for single-team streaming services, which would give superfans no reason to turn back to cable, and destroy an emerging broadcast play for local sports.

Meanwhile, Disney, Fox, and Warner Bros. Discovery have teamed up for a sports-only streaming network called Venu Sports that will show all sports programming from its families of networks, which includes ESPN. This was more impressive when Warner Bros. Discovery had basketball, but it still would carry nearly all hockey and baseball broadcasts and more than half of all sports contests overall.

That points toward a recognition that streaming must consolidate or bundle

Creutz says this would be better for viewers, too. “When you’re in a bundle with a lot of people and splitting revenue up, you can take more risks on programming,” he said.

“If on your own, you have to speak to most people. Would Mad Men or Breaking Bad be greenlit by a streamer now?”

Disney+, Hulu, and Max are about to offer a bundle; Comcast already offers a bundle of Peacock, Netflix, and Apple TV+ in a package called StreamSaver. During contract negotiations last year, Charter asked Disney to bundle its streaming services along with linear TV channels at the same carriage fee rate. Disney mostly relented in the settlement, giving Charter an ad-supported version of Disney+ and ESPN+ for more premium subscribers. Add these options to Venu Sports AUGUST 2024 THE AMERICAN PROSPECT 57

CULTURE and free ad-supported streaming television (FAST) channels like Tubi and Pluto, and you’ve covered the vast majority of what’s on TV, at a comparable if not lower price than cable.

You don’t have to hit zero cable subscribers for cable to cease to be a functional business.

At some point, providers will determine that the costs of maintaining cable exceed the revenue coming in, and focus on other ways to make money. This spring, Consolidated Communications, whose revenue mostly comes from broadband, dropped cable entirely. “The video ecosystem is broken,” Chris Winfrey, CEO of cable giant Charter Communications, told investors last year.

In cable’s place, we can expect an entertainment and sports bundle. Generating “appointment” viewing at a particular time, like Netflix’s successful experiment this spring with the live roast of Tom Brady, could become more prevalent. But what we haven’t seen is a news bundle. And in a world where partisan tribes match with their partisan news sources, there’s no value in a bundle. “People don’t want to watch MSNBC and Fox News, like baseball and football, or pro and college sports,” said Courtney Radsch, director of the Center for Journalism and Liberty at the Open Markets Institute.

The highest-profile attempt to create a streaming news channel, CNN+, failed so utterly, lasting just one month with fewer than 10,000 viewers at any one time, that there’s little appetite to try again. Cohen, of the Interactive Advertising Bureau, insists that “there is a significant amount of news content that can be accessed via streaming platforms. While it may not have the same mass appeal as sports or entertainment, it is definitely part of the streaming landscape.” Indeed, CNN programming has been folded into Max, the way NBC News is available on Peacock and CBS News on Paramount+. ABC News is scheduled to create programming for Disney streamers. But little of it produces original programming rather than nightly news rebroadcasts, and CNN’s streaming debate audience shows that it doesn’t interest audiences.

Fox Nation, the subscription service of Fox News, is a good example. It has been a very modest success, with two million subscribers. (Netflix has nearly 250 million.)

But the streaming version of Fox is drifting decidedly away from news, adding lifestyle programming from Hollywood stars like 58 PROSPECT.ORG AUGUST 2024

Broadcasters are required by license to maintain news operations; as streaming channels, they aren’t.

Kevin Costner, Matthew McConaughey, and Martin Scorsese.

I am hardly pining for the possible loss of cable news, given its mostly negative impact on political discourse. Anyway, cable news has a relatively small audience, and making it less visible really only lowers the notorious amplifying effect rather than the access. But there’s more to consider here.

After a cable collapse, the major broadcast channels will likely not hope that the world rediscovers antennas. Only about 12 percent of all households watch television over the air without cable, according to Nielsen. Creutz says he’s talked to broadcast executives, who have told him they are willing to convert to streaming if necessary to preserve the networks. Many sports contracts are tied to free over-the-air viewing, but that’s already being chipped away and can be renegotiated.

Meanwhile, broadcasters are required by license to maintain news operations; as streaming channels, they would be less accountable to the public interest. “Let’s say CBS decides tomorrow they’d be better off as a streaming channel,” Creutz suggested. “Would they keep their news organization? I don’t know. None of these guys make money off their news … Walter Cronkite ain’t coming back.”

Broadcast abandonment of linear TV would also likely swallow up local channels, which would have too small a footprint on over-theair television to stay in business. What do local stations primarily produce? Local news.

Two hundred counties in America lack a local newspaper. Television remains a large source for news consumers, particularly those over 50, and local news viewership has

been relatively stable. What happens if those channels go away? “It further underscores why you have to look at market dynamics with the news industry,” said Radsch. “It’s already not very profitable to run a news outlet on cable or broadcast. That’s going to become a broader problem.”

Maybe you can replace the cable news talking head wasteland with opinion-heavy streaming and YouTube content. But the substitute for local news in particular is hard to find. Putting heavier blinders on what happens in our communities would be a nightmare. And democracy demands a variety of news and information available to people wherever they can be reached.

The way America solved this during the move to pay TV was through must-carry requirements put in place in the 1960s.

Local channels can demand carriage on cable systems, and cable operators must pay them to transmit their broadcasts, while setting aside space for local programming.

A must-carry mandate doesn’t exist in streaming, but that doesn’t mean Congress or the Federal Communications Commission (FCC) cannot create it. Local streaming channels could become required on smart TV sets or as part of streaming bundles, as well as retransmission fees.

It may require a new Telecommunications Act to reimagine local programming in the streaming age. Radsch thinks policymakers need to start exploring it. “I don’t think policymakers are either addressing the current challenges adequately nor are they looking to the history of governing our information communication technology,” she said. “We’ve got to get on top of this faster and not wait two decades in.” n

Red Weather Vanes

in the 1930s, where they helped organize unions and built an unprecedented corps of Black activists. Three events triggered these cadres’ exodus in the mid-1950s: Nikita Khrushchev’s 1956 speech revealing the mass murders and imprisonments ordered

by Joseph Stalin, which the U.S. party had ignored, downplayed, or just plain denied; the Soviets’ 1956 invasion of Hungary, which had been flirting with a less repressive version of communism; and the shutting down of the party’s newspapers and journals to longtime members who, also in 1956, had begun writing in to reject the Soviet Union as a model and condemn the U.S. party’s adherence to top-down “democratic centralism,” under which all members had to espouse the party’s current policies (themselves dictated by the Kremlin), internally as well as externally, or face censure or expulsion.

In Los Angeles, however, leaders and members stayed beyond that exodus, continuing to voice such heresies and engaging in activities (like nurturing the early New Left) that the national party opposed. The national office tried repeatedly to oust L.A. leader Dorothy Healey and deputy leader Ben Dobbs, but the members rejected all such attempts.

When Dorothy and Ben (I knew them well enough that it’s hard for me to refer to them by their last names) finally left, they and their comrades formed a group they called “Forty Socialists in Search of a Party.” Many—Ben first—eventually joined DSA. In the late 1970s, Ben began asking me over to his house to talk politics and much else. “How do you find the workers?” was his customary greeting, at once both serious and comical. He had his own method of finding them, volunteering on any number souls who’d boarded buses in pre-’60s Free- of campaigns he thought sufficiently stratedom Rides through the South. gic, where he performed so many tasks with Most had been members of the Socialist good-humored dedication and smarts that Party or some Trotskyist sect. But not Ben campaigns vied for his involvement. During Dobbs, who was an old Commie. And not one city council election, two races—one in just any old Commie, but the deputy leader Hollywood, the other in Venice—featured of the party’s Los Angeles local from shortly progressive candidates with serious prospects after World War II straight through the Soviet of winning. The campaigns had to work out a Union’s 1968 invasion of Czechoslovakia, which modus vivendi: One would get Ben on Monprompted Ben and the rest of the L.A. leader- days, Wednesdays, and Fridays; the other on ship to resign their posts and eventually Tuesdays, Thursdays, and Saturdays, leave the party over its support for the with Sundays up for grabs. Both canBooks didates won. invasion and all things Soviet.

As the years went on, Ben began That they’d lasted so long in an organization with which they were so clearly asking me to join occasional meetings of his at odds was a function of L.A. exception- old comrades, usually seven or eight onetime alism. Most of their party contemporaries party members arrayed around his living had joined the Young Communist League room. At one such meeting, the talk turned

Maurice Isserman’s history of American communism documents both its achievements and its fatal obeisance to Soviet doctrines.

A protest during a sit-down strike in Detroit. Communists were indispensable organizers for the unions of the 1930s.

By Harold Meyerson

AP PHOTO

Reds: The Tragedy of American Communism

By Maurice Isserman Basic Books From the late 1970s through the 1990s, a good chunk of my ongoing political education came from Ben Dobbs. As an active member of what would become the Democratic Socialists of America (DSA), I got to know a number of comrades who’d been active in the Old Left in the 1930s and ’40s.

They included participants in the great sitdown strikes of the ’30s, activists who’d built public-employee unions years before they had legal bargaining rights, and the brave

AUGUST 2024 THE AMERICAN PROSPECT 59

CULTURE to a new left-of-center group that was making waves in the state Democratic Party. The question was how that group determined its policies, a process I outlined as best I could.

After a moment of silence, one of the comrades said, “democratic centralism.” Another mumbled, “top-down democratic centralism.” That had been a rule that had defined party life and much of their own lives, finally compelling them to conclude it was something they could no longer abide.

60 PROSPECT.ORG AUGUST 2024

spectives, and to future CPUSA leaders like unionist William Z. Foster and Elizabeth Gurley Flynn. Before they willingly subordinated themselves to Moscow’s every whim, these activists formulated their own perspectives and pronounced them for all to hear. “I speak my own piece,” Flynn famously said.

The second congress of the Communist International, held in Petrograd and Moscow in 1920, put an end to that. Rule Number 16 of its requirements for member parties stated, “All decisions of the Congresses of the Communist International and decisions of its Executive Committee are binding on all parties belonging to the Communist International.”

The twists and turns that Joseph Stalin took to establish his rule over Russia following Lenin’s death turned those parties into singularly inept quick-change artists. Inside Russia, failure to adjust was often fatal. In the U.S., Stalin’s turn against Trotsky and the Bolshevik “left” required the expulsion of such Trotsky-symps as James Cannon and Max Shachtman. But after embracing the mixed-economy policies first championed by Nikolai Bukharin, Stalin then repudiated these “rightists,” too, at the end of ’20s. Jay Lovestone, the CPUSA head who had faithfully followed what had been the Stalin-Bukharin line, was slow to pick up

Isserman provides a lucid, succinct history of American communism, at once sympathetic and scathingly critical. on the change and found himself unceremoniously expelled. Party members drew the lesson: If even their topmost leaders could be dumped, they had better not contemplate any deviations themselves.

For the first half of the 1930s, the party line was stunningly sectarian and downright dangerous to democracy. To Stalin, what prevented the potential for revolution in the West during the Great Depression were other left parties and unions (deemed “social fascists”) that favored nonviolent means to reformist, if sometimes systemic, change. Therefore, in the waning days of the Weimar Republic, the German Communists focused more on fighting the Social Democrats than the Nazis.

For its part, the CPUSA opposed the New Deal, including its 1933 legalization of collective bargaining, as a fraud perpetrated on otherwise revolutionary American

AP PHOTO

Maurice Isserman is one of the pre-eminent historians of the American left, having previously authored a history of the U.S. Communist Party (CPUSA) during World War II, a biography of DSA founder Michael Harrington, and Dorothy Healey’s memoirs, for which he provided commentary. His new history, Reds: The Tragedy of American Communism, provides a lucid, succinct, yet comprehensive history of the party, at once sympathetic and scathingly critical, as befits such a bewilderingly contradictory institution and mindset. Isserman shines light on not just official party pronouncements, but leaflets and internal communications, dizzying shifts of party lines, the diaries and memoirs of zealous and doubting members, and the documents in Moscow’s vaults that became available after the USSR’s 1991 collapse, that showed which (relatively few) U.S. party members were also Soviet spies.

He does not stint in his praise when praise is due, particularly for the party’s role in building the great unions that arose during the New Deal and in advancing the interests of African Americans at a time when such advocacy was scarce. But he does not stint in his criticism of how the party not only subverted itself but damaged the prospects of the entire American left through its undying obeisance to the Soviet Union, which required the kind of screening out of reality we now associate with Fox News.

“In what is the central contradiction that both defined the character of American communism and doomed its political prospects,” Isserman writes, “it was a movement that claimed to be founded on a rigorously self-aware and self-critical rationalism, the ‘science’ of Marxism-Leninism, but sustained itself over many decades through what proved to be the blindest of faiths.”

Isserman begins his story with a survey of the pre-Communist American left before 1918 and its major institution, the Debs-era Socialist Party, home to a cacophony of per-

Joseph Stalin’s USSR initially condemned reformist left parties as “social fascists” that prevented the potential for revolution.

workers. When longtime socialist author Upton Sinclair won the Democratic nomination for governor of California in 1934, the party condemned him as a social fascist, too (though one recent study of Bay Area communists, showing that the party’s own gubernatorial nominee drew far fewer voters than the party’s candidates for downticket statewide offices, suggests that party members ignored Sinclair’s “social fascist” mislabeling and gave him their votes in the privacy of the voting booth).

In 1935, Stalin himself recognized that this social fascist nonsense wasn’t working very well. In Germany, the Communists had been wiped out once Hitler took power.

In France, faced with the prospect of a rising fascist right, Communists and Socialists banded together in what they called the Popular Front to elect the nation’s first socialist government. (This history, you likely have noticed, has recently repeated itself.) So the line shifted. Suddenly, Franklin Roosevelt and New York City Mayor Fiorello La Guardia were not social fascists after all, but progressives worthy of support.

Fortunately for the communists, the new embrace of popular fronts coincided with serious efforts to unionize the nation’s manufacturing workers. The newly formed Congress of Industrial Organizations hired hundreds of communists (and not a few socialists) to do the organizing. Party members’ organizing tasks were made easier by the party’s less sectarian approach: No longer were they compelled to urge the workers to “build a Soviet America,” as they had been (to no avail) before 1935. Communists Wyndham Mortimer and Bob Travis, along with Socialist Roy Reuther (Walter’s brother), organized the historic sitdown strike against General Motors in Flint, Michigan, which jump-started the rise of the United Auto Workers and American industrial unionism generally. The relatively small number of workers who barricaded themselves inside GM’s factories until the company recognized the union were disproportionately Communist and Socialist party members.

Isserman notes that the Communists’ immersion into the real world of American workers brought an unaccustomed pragmatism into their ranks. In two states, California and Washington, party members became active within the states’ Democratic Parties; in New York, they worked alongside New Deal champions to form the American Labor Party, enabling them, under New York’s system of fusion voting, to support

FDR without having to join the Tammanydominated Democrats.

Ben Dobbs and Dorothy Healey honed their political skills during the Popular Front, making effective alliances with nonparty progressives, and working in campaigns that created a modicum of worker power in this most capitalist of countries.

Under the broad left banner of opposing fascism, party members participated in a host of coalitional organizations like the National Negro Congress and the Hollywood Anti-Nazi League.

But the Front came to a shuddering halt in August of 1939, when the Kremlin abruptly signed a nonaggression pact with Nazi Germany and proceeded to divvy up Poland with them. The party’s anti-Nazi focus was redirected to a critique of the “imperialist” war; Roosevelt and La Guardia, who supported aiding Britain, soon to be under attack by the German air force, were once again social fascists and agents of British imperialism. The communists who dominated the National Negro Congress passed a resolution opposing such aid and the prospect of U.S. involvement in the war, prompting NNC’s leader, socialist A. Philip Randolph (president of the Brotherhood of Sleeping Car Porters, America’s first successful Black union), to leave the organization. The Hollywood Anti-Nazi League closed its doors.

This grotesque episode in the party’s history was mercifully cut short by Germany’s invasion of the USSR in June of 1941, which enabled the CPUSA to re-enter the mainstream of American liberal sentiment. Isserman characterizes party members’ reactions as an “overwhelming sense of relief.”

After Pearl Harbor, the party’s allegiance to the USSR made any policy that might conceivably hinder full U.S. prosecution of the war somewhat suspect. The party still defended Black rights, but it opposed desegregating the armed forces while the war persisted, even as ex-Communist and active Socialist Bayard Rustin spent the war in a federal prison camp for his refusal to fight in a segregated Army. Scandalously, rather than question the war’s exigencies, the party even stayed silent when Japanese Americans were interned in prison camps.

The line changed yet again after the war, once Stalin no longer regarded the U.S. as an ally (and vice versa). CPUSA leader Earl Browder, like Lovestone before him, was wrong-footed by this change, and removed both from leadership and membership. The

advent of the Cold War and the waning of the New Deal majority led to a sharp governmental turn against the party, very much abetted by revelations of Soviet spying (particularly on the Manhattan Project) that had involved a small number of CPUSA members.

A series of inquisitorial hearings and trials followed, leading to convictions of party leaders chiefly for belonging to the party rather than anything even remotely resembling insurrection advocacy. While the Supreme Court upheld those convictions in the early 1950s, it reversed itself when another set of convictions—chiefly of California leaders including Dorothy and Ben—came before it in 1957. By then, Stalin was dead, Joe McCarthy was dying, the Korean War had ended, and the specter of an internal Communist threat looked increasingly absurd.

It was around the same time that Khrushchev revealed the crimes of Stalin, invaded Hungary, and directed the U.S. party to shut down internal criticism. And so, the cadres quit. Except in Los Angeles.

A few days after New Year’s in 1992, I got a call from Ben. One week before, the Soviet Union had ceased to exist.

“I’m having some people over,” Ben said. “You should come. I think you’ll be interested.”

I went. It was all old comrades, including the lawyers who’d represented blacklisted Hollywood screenwriters, and the New Deal economist who’d written speeches for Henry Wallace’s 1948 presidential campaign. The subject of discussion, of course, was what to make of the former Soviet Union, and the CPUSA, which had defined itself by defending everything the Soviet Union had done.

Without making light of the party’s positive achievements, they asked: Where had it gone so terribly wrong?

The men in the room—it was all men— spoke in quiet voices, their tone measured, but their meaning clear. (I didn’t say a word.)

They went around the room, and when they were done, Ben spoke.

“We had a joke,” Ben said. “A guy is standing on a soapbox on the corner, making a speech. He says, ‘Come the revolution, we’ll all have peaches and cream.’ A guy in the crowd shouts, ‘I don’t like peaches and cream!’ The guy on the soapbox says, ‘Come the revolution, you’ll like peaches and cream!’

“Why did we find that funny?” Ben said.

Slowly, the men in the room nodded. n AUGUST 2024 THE AMERICAN PROSPECT 61

CULTURE

Chicago Public Schools—From Worst to (Almost) First A system that used to be ridiculed has become a model for schools in other cities.

By David Kirp How a City Learned to Improve Its Schools

By Anthony S. Bryk et al.

Harvard Education Press Across the country, the war against public education proceeds apace, and in many states the anti’s are winning.

Forty-one years ago, in “A Nation at Risk” (1983), a blue-ribbon national commission decried “the rising tide of mediocrity” in public schools. The report’s rhetorically masterful opening salvo drew widespread attention to what otherwise would likely have been a file-and-forget document: “If an unfriendly foreign power had attempted to impose on America the mediocre educational perforBooks mance that exists today, we might well have viewed it as an act of war.”

“A Nation at Risk” made education a hotbutton issue on the nation’s political agenda and turned the bashing of public schools into a national pastime. As James Harvey, a senior staffer on the commission, pointed out years later, “The argument of wholesale school failure has been an essential bulwark of the effort to privatize public education by diverting public funds into school vouchers and unaccountable charter schools, particularly the scandal-plagued for-profit charter sector.”

Fast-forward to 2024: “Public Schooling in America,” a survey of state policies nationwide, concludes that seemingly distinct attacks on public education—through expanding charter and voucher programs; cutting funds for public schools, while providing added support for homeschooling; censoring what educators can teach and students can learn—are in fact intertwined, as “Christian nationalism and the extreme 62 PROSPECT.ORG AUGUST 2024

right have become mainstream in many states.”

The report grades states according to how well they safeguard public schools.

Seventeen states, almost all of them solidly Republican, received a grade of F. An increasing number of states (seven, in 2023 alone) have launched new voucher plans, often with little if any oversight. Money that previously went to public schools is being siphoned off to vouchers. Count Donald Trump among the public-school haters.

In his 2017 inaugural address, he blasted “an education system flush with cash but which leaves our young and beautiful students deprived of all knowledge.”

The drumbeat of criticism has generated widespread lack of confidence in public education. A 2023 Gallup poll found that, while just over three-quarters of parents report that they’re satisfied with their oldest child’s education, 41 percent believe the schools are doing a good job—that’s fewer than at any time since 2000.

How a City Learned to Improve Its Schools, a deep dive into Chicago’s public schools, delivers a powerful rejoinder to the naysayers. A district that used to be ridiculed has evolved into a model for big-city school systems.

In autumn 1987, Bill Bennett, then the U.S. secretary of education, paid a whirlwind visit to Chicago. He didn’t like what he saw: “You’ve got close to educational meltdown here in Chicago … Is there a worse case? You tell me.”

The fact that Chicago’s public schools were a disaster area wasn’t news in the Windy City—half of the district’s high schools ranked in the bottom 1 percent nationwide; nearly half of the students dropped out before graduating. Some schools were danger zones: “When I took my oldest daughter to school,” Florence Cox,

Chicago PTA president, said in a documentary, “I actually felt that if I left my daughter there that day I would not see her ever again alive.” Almost a decade before Bennett’s visit, fiscal corruption prompted state lawmakers to fire the school board and create a body to oversee the system’s budget.

These failures had been the city’s dirty little secret, but the “worst in the nation” label went national. Naysayers pointed to Chicago as exhibit number one for the miseducation of America’s children. Bennett’s “gotcha” infuriated Chicagoans, catalyzing a reform effort that had already been ticking along, and since then Chicago public schools have become markedly better. Black and Latino third graders from low-income families have been, at least according to 2017 data, outperforming their counterparts elsewhere in the state. Graduation rates rose to 84 percent in 2023, within hailing distance of the national average. In 2022, three-fifths of high school graduates enrolled in college immediately upon graduating high school, an increase from previous years, countering the national trend of declining college attendance during COVID; more of them are earning degrees than in the past. This track record is among the best urban school systems in the nation.

The hunt for a panacea—what historians David Tyack and Larry Cuban memorably labeled “tinkering toward utopia”—has long been a fixture of public education. But that hunt is doomed to failure, for transforming a system that’s as intricate as a Swiss watch is necessarily a complex task. Chicago is a cauldron of racial and ethnic politics, and simple explanations for the schools’ success, like the city’s changing demographics and the growth of charter schools, do not capture the dynamics of change. Many of the best ideas for change have emerged from the bottom up, as initiatives launched at one site are brought to scale by networks of teachers, principals, and community leaders.

At the same time, pressure from civic and business organizations helped to transform the management of the system. The federal government also played a notable role, as Chicago, like school systems nationwide, had to adjust to the “no child left behind” regime of high-stakes, test-based accountability for student achievement.

These structural changes, and the policies and practices that they generated, have not been driven by a master plan.

Rather, they have emerged from a contin-

CHARLES BENNET T / AP PHOTO

A public school in the Cabrini Green neighborhood in Chicago

uous improvement, “tortoise beats hare” approach. That’s the main takeaway from How a City Learned to Improve Its Schools.

The otiose central bureaucracy, 3,000 administrators strong, was broadly condemned as a major roadblock to reform. A 1988 state law shifted decision-making power away from the bureaucracy to neighborhood councils. Parents and community members were given significant responsibility for managing their school, including hiring the principal and weighing in on the budget.

Across the 600-plus schools in the district, the impact of that measure was uneven—some councils worked well while others struggled, and there was no mechanism to support those that needed help.

What’s more, there was no buck-stops-here, system-wide accountability. To address these weaknesses, a second round of state legislation gave Chicago’s mayor the power to appoint the school board and hire a “chief executive officer,” changes that supplemented but didn’t supplant community control.

An emphasis on teacher training, led by the central office, was a significant result of this shift. In short, “a parochial system [was opened] to new energies, new pressures, new people, and new ideas.”

The Chicago story is not a straightforward march-to-success narrative. There have been setbacks along the way, including prolonged teacher strikes, fights over school closures, administrative churn, and highprofile CEO misconduct. This shouldn’t come as a surprise—who could reasonably antici-

pate smooth sailing in the country’s fourthlargest school system, a massive institution nested in a controversy-addicted city?

Remarkably, the public schools have withstood these challenges, as graduation rates and other measures of accomplishment have continued their steady rise. Nor has the system lost its penchant for evidence-driven changes. The most significant example is the ongoing expansion of early education, with its demonstrated promise of shifting the arc of children’s lives, auguring well for their success. A commitment to experimentation has prompted the system to partner with the University of Chicago Education Lab in testing promising innovations, such as intensive math tutoring for ninth and tenth graders who were mired amid long division and fractions; and a summer internship program that has given students the soft skills they would need in the world of work. The district has a long way to go, especially in closing the gap between poor and minority students and the rest of the school population. Still, if Bill Bennett were to make a return visit to Chicago, he would be singing a very different tune, if he knew one.

The Chicago school system is hardly a unique success story. Disrupting Disruption: The Steady Work of Transforming Schools, which I co-authored with colleagues from the Learning Policy Institute, shines a light on three midsized districts— Union City, New Jersey; Roanoke, Virginia; and Union, Oklahoma—where a majority of

the students are racial and ethnic minorities from low-income families. Unlike celebrated communities like Lexington, Massachusetts, and Palo Alto, California, these districts operate beneath the radar, but they merit a shout-out: In each instance, the graduation rate has steadily increased, while the opportunity gap has essentially become a thing of the past.

A generation or two ago, each of these districts was a basket case, with below-par student achievement and dropout-factory high schools. Union City’s schools were so wretched that New Jersey was a hair’s breadth away from taking them over. Their progress didn’t come from a cookbook; instead, it emerged from a diagnosis of the district’s particular needs and a step-by-step, research-driven approach to addressing them.

In Union City, an almost entirely Latino school system, school leaders devised a nationally renowned prekindergartenthrough-high school bilingual program.

Roanoke focused on the trauma its students suffered from, engaging everyone from the superintendent to the bus drivers in the effort to recognize and respond effectively.

Union developed a STEM program for all students, from kindergarten through secondary school. Each district had other priorities, such as a nationally honored music program in Roanoke and world-class early education in Union and Union City, but none of them succumbed to faddishness.

These school systems all aimed for 100 percent graduation. That’s not a rhetorical flourish—it’s an aspiration with profound implications. The educators didn’t blame the students who dropped out; instead, they looked for underlying explanations.

Sometimes, as with students who couldn’t handle high school math, the problem could be traced to how arithmetic was taught in elementary school.

Chicago enrolls about 23 times as many students as these districts. Some of its challenges are different, and so are its responses.

But these districts have one big thing in common—a bedrock commitment to steady improvement, building on earlier accomplishments while forever striving to do better. There’s no reason why every school district cannot do the same. n David Kirp, professor emeritus at the Goldman School of Public Policy, is the author of The Education Debate: What Everyone Needs to Know.

AUGUST 2024 THE AMERICAN PROSPECT 63

PARTINGSHOT

Dystopia Now, Socialism Soon?

I’ve seen enough: The Future sucks. I don’t mean the future, as in our planet’s survival or America’s descent into authoritarianism. Those things also suck, but I mean The Future: that technological utopia where everything is clean and made of rounded chrome that seamlessly syncs with the natural world. A combination of Wakanda, Naboo, and Back to the Future Part II, where waterfalls cascade around high-speed railways and children race their hoverboards around a multiethnic marketplace. That only happens in Hollywood, where things are designed to give people what they want.

But in today’s late-stage consumer capitalism, things are designed to give people what they never asked for, and give shareholders a boatload of cash.

Here, The Future is thrust upon us like a round of drinks from the creepy guy in the club. It may seem cool in the moment, but there are strings attached. Also, why is the drink cloudy? The Future according to Elon Musk, Marc Andreessen, or Sam Altman amounts to needless technology to solve problems that don’t exist. On its face it’s not evil, until you recognize someone has to get rich and someone else has to be put out of a job while doing it.

Take driverless cars, which are being trained in cities across America without consent from residents so we can curb climate change by ending personal car own64 PROSPECT.ORG AUGUST 2024

ership … I mean end the scourge of having to strike up a conversation with your Uber driver. Or the dawn of military robotics, using titanium dogs and humans to rescue civilians caught in conflict zones … I mean kill civilians in conflict zones. And of course the AI gold rush, currently requiring megatons of fresh water to cool its energyhogging processing centers, just so your cousin can generate an AI girlfriend with two butts. Nobody asked for AI (besides your cousin, maybe). I can’t even write this column without an AI tool popping up to ask me if I want to “change the tone” of the essay like some jacked-up Microsoft Clippy, while draining Albania’s energy grid during the hottest month ever recorded. The Future is quite literally robbing us of a future. And MY TONE IS FINE. There couldn’t be a more perfect example of how much The Future sucks than the Tesla Cybertruck, which is as hideous as it is dysfunctional. The Cybertruck has the vibe of an apocalypse getaway car that says to the world, “I don’t need to move a sofa or do manual labor, I need to poke my way through the poors when the masses eventually rise up.” Only Tesla’s rush job has meant it keeps getting recalled for a stuck accelerator pedal, defective windshield wipers, and exterior trim that can fly off into traffic. And in a way too on-the-nose flaw, the Cybertruck’s front trunk, with its sharp adjoining

body panels and no obstruction detection, is being called a “finger guillotine,” which will soon become a useful feature when that uprising of displaced workers pops off.

The Future in the hands of billionaires is a dangerous dystopia, full of dissonance and hubris.

I once saw a homeless man wearing an Oculus Rift in San Francisco and the irony was so overwhelming I had to laugh.

I hope that he was at least virtually in a house? Right now in the richest country in the world, I could buy my two-year-old an AI learning robot but I can’t access an affordable preschool. Technology and innovation could play a role in helping humans with food, housing, voting, education, or climate change. But where’s the money in that? BOOOOO. Maybe The Future has always been a massive lie, meant to only exist in movies.

There were probably still homeless people in Back to the Future Part II, probably behind that clock tower, and surely Naboo had an underclass if they had a queen. (Wakanda is perfect.) The Future doesn’t magically get better because the technology is cooler, as long as it is still orchestrated by the same pig-headed power ghouls who run the present. There will be no future for us under this kind of extreme wealth hoarding, striking lack of regulation, and trash can trucks. To the finger guillotines!—Francesca Fiorentini

JANDOS ROTHSTEIN USING VARIOUS AI HIJINKS

THE FUTURE THAT NO ONE ASKED FOR

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Why unions are having a renaissance

By Randi Weingarten, President, AFT

What do performers at Disneyland, editorial staff at the publisher Dotdash Meredith and players on Dartmouth’s men’s basketball team have in common? They all have recently chosen to join a union. (And that’s just the D’s.) Kidding aside, working people get it: We can accomplish things together that would be impossible on our own, which is why unions are having a renaissance.

The AFT represents workers who make a difference in peoples’ lives—in education, in healthcare and in public services—and they are joining the AFT at a record pace. Recently, we have welcomed librarians in Ohio, professors in New Mexico, hospice professionals in Washington and resident physicians in Michigan. And in June, after a nearly 50-year fight to win collective bargaining, more than 27,500 teachers and staff in Virginia’s Fairfax County Public Schools voted to join the AFT and the NEA in one of the largest union elections in modern history.

The economic advantages of belonging to a union are clear. Union members enjoy higher wages and better benefits than nonunion workers. Union households have nearly four times the wealth of nonunion households, and they are more likely to own a home and have a retirement plan than nonunion households.

Collective bargaining is the not-so-secret sauce, and the AFT supports our members with the tools to bargain to increase wages, achieve a better life for themselves and their families, and improve the quality of their services, whether in education, healthcare or public employment.

The Oregon Nurses Association’s new collective bargaining agreement for nurses at Oregon Health and Science University establishes staffing plans that build on the new state law to improve patient care and combat nurse burnout.

All these contracts also include substantial pay increases.

Support for unions is at the highest level since 1965, with two-thirds of Americans approving of labor unions, including nearly 90 percent of Americans under age 30. Nearly half of nonunion workers say they would vote to join a union if they could.

Yet only 1 in 10 workers in America is in a union.

One cause is five decades of efforts to decimate unions in the United States by billionaires and businesses. Research by the Economic Policy Institute shows that de-unionization is a significant factor in the surge in inequality and the decline of the middle class over the last 40 years. Working people are now losing about $200 billion per year because of the erosion of union coverage—with that money being redistributed upward, to the rich.

Such rapacious corporate greed is behind current efforts by Amazon, Starbucks, Tesla and other hugely profitable corporations to crush unionization drives. Under current law, there are few or

no consequences when employers intimidate or retaliate against workers exercising their legal right to form a union. That is why Congress must pass the Protecting the Right to Organize Act and the Public Service Freedom to Negotiate Act, which will level the playing field by holding employers accountable for violating labor laws and by empowering workers to collectively bargain.

It’s not just billionaires who try to snuff out workers’ rights. Florida Gov. Ron DeSantis is using the same tactics former Wisconsin Gov. Scott Walker used to kill public employee unions. In Fairfax County in Virginia, the fight for the right of teachers and other public employees to bargain collectively goes back nearly half a century, to a 1977 law banning public sector bargaining. It took the AFT and others until 2020 to win legislation there granting local governments the option to recognize and negotiate with unions. As the great American abolitionist Frederick Douglass observed, “Power concedes nothing without a demand.”

We can tilt the balance of power so working people can forge a path to a better life.

Perhaps the strongest argument for unions and collective action is also the simplest: Individuals seeking change can be powerless alone; together we can tilt the balance of power so working people can demand—and forge—a path to a better life. That’s the American dream.

The Newark (N.J.) Teachers Union’s new contract permits teachers to design curriculum, an acknowledgement of their professional expertise. The Saint Paul Federation of Educators in Minnesota negotiated mental health teams in every school, including social workers, counselors, nurses and psychologists.

Photo: Brett Sherman

After the United Federation of Teachers in New York City and the faculty union at Portland State University in Oregon blazed the trail for paid parental leave, others have followed. The Cleveland Teachers Union’s new contract includes 12 weeks of paid parental leave for educators as well as a first-in-the-nation cellphone policy that will decrease distractions from social media in the classroom.

Weingarten, center, at Kings Park Elementary School in Fairfax County, Va., on June 7.

Follow AFT President Randi Weingarten: threads.net/randiweingarten

IDEAS, POLITICS &POWER

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