The American Prospect, #312

THE RISE OF NEOFEUDALISM ORGANIZING GIG WORKERS KUTTNER & STONE BRYCE COVERT

THE CORONAVIRUS CRISIS DAVID DAYEN

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

Trump’s hostile takeover of the public’s business

BY JIM LARDNER

MAR/APR 2020

Progressives can’t afford to abandon the working class.

For decades, progressives led the way in fighting for policies to protect, strengthen and grow the working class.

From fighting against offshoring to rallying for better wages and working conditions, progressives stood up for America’s blue collar workers when nobody else would.

Progressives can’t quit the fight now. In 2020 and beyond, we must continue to fight for America’s workers.

americanmanufacturing.org

21 WWW.PROSPECT.ORG MAR /APR 2020

contents PAGE 52

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PAGE 57 L NMENTA ENVIRO N AGENCY IO T C E T O PR

PROSPECTS 7 THE BIDEN DNR (DO NOT REAPPOINT) RLIST

BY ROBERT KUTTNER MENT DEPA T TERIOR THE INDAVID DAYEN 10 THE MAN WHO KNEWOFBY LTURE AGRICU MENT T 12 ALL THE WAYS YOUR VOTE MAY NOT BE COUNTED IN SOUTH CAROLINA BY BRITTANY GIBSON DEPAR

D O

FEATURES 14 COVER STORY MAPPING CORRUPTION BY JIM LARDNER AN INQUIRY INTO HOW THE TRUMP ADMINISTRATION TRANSFORMED WASHINGTON 22 POWER TO THE PERSON BY BOB MOSER SENATE MINORITY LEADER CHUCK SCHUMER TELLS PROGRESSIVE SENATE CANDIDATES TO STOP RUNNING IN PRIMARIES AND FUNNELS MONEY AND OPERATIVES TO HIS CENTRIST PREFERENCES. 30 THE RISE OF NEO-FEUDALISM BY ROBERT KUTTNER AND KATHERINE V. STONE THE PRIVATE CAPTURE OF ENTIRE LEGAL SYSTEMS BY CORPORATE AMERICA GOES FAR BEYOND NEO-LIBERALISM. IT EVOKES THE PRIVATE FIEFDOMS OF THE MIDDLE AGES. 38 LIKE UBER BUT FOR GIG WORKER ORGANIZING BY BRYCE COVERT DRIVERS AND DELIVERY PERSONNEL FOR APP-BASED EMPLOYERS KEEP GETTING SQUEEZED. NOW THEY’RE FIGHTING BACK. 45 REMOTE CONTROL BY MATT STOLLER A CIVIL RIGHTS LAWSUIT HIGHLIGHTS HOW COMCAST’S MONOPOLY CRUSHES MEDIA DIVERSITY. 52 THE CONSTITUTIONAL OPTION TO FIGHT THE CLIMATE CRISIS BY MARCIA BROWN UBIQUITOUS PIPELINES CRISSCROSSING AMERICA AND WORRIES OVER CLIMATE CHANGE RAISE THE QUESTION: DOES TRANSPORTING OIL AND GAS SERVE THE PUBLIC INTEREST?

CULTURE 57 HOW THE RIGHT WENT FAR-RIGHT BY PAUL STARR 60 FROM VIRTUE SIGNALING TO POLITICS BY MICAH L. SIFRY 62 PRAISE BY FAINT DAMNATION BY JORDAN ECKER Cover art by Peter and Maria Hoey

1

DEPART OF HOU AND UR P DEVELO

from the Editor

I

write this from my house, which most of the time is fairly normal for me. I’ve been telecommuting for the past seven years, off and on. It takes some discipline and the safety valve of having a dog that needs walking whenever I need to take a break.

As of mid-March, an astounding number of people in America are learning how to cope with somewhat similar circumstances. The coronavirus uncertainty, thanks to an unforgivably botched public response from the U.S. government, has led individuals, businesses, and local governments to take matters into their own hands, and the only course open to them to ensure maximum safety is through social distancing. So here we all sit, joined only by our internet connections and our phones, waiting out the virus, doing our individual duty to minimize the spread.

The Prospect wrote its first story about coronavirus on February 12. (You can see all of our coverage at prospect.org/coronavirus, where you will find dispatches from our new daily newsletter, “Unsanitized.”) We also have some coverage in this issue, including an interview with BARRY LYNN , who wrote in our pages back in 2007 about how centralized supply chains can magnify economic damage.

The outbreak brings together issues that this magazine has been stressing for almost its entire history: the fragility that America ushered in when it hollowed out the industrial manufacturing base, the downside risk to globalization, the unconscionable mistake of not having a universal health care system, and the conservative degradation of reliable, or even functional, governance. This crisis highlights all of these issues to a considerable degree, and part of the necessary work after the situation stabilizes must include making sure the country is better prepared for such disasters by patching these holes in our economy, our self-sufficiency, and our general welfare.

The coronavirus outbreak also highlights the dangers of a government structured as a kleptocracy, with ex-lobbyists and unqualified functionaries installed to provide favors to themselves and the industries they’re supposed to regulate. When the need for a war footing and civic purpose enters the picture, they don’t know what to do when the selfdealing stops and responsible government action must begin. This landscape of Trump’s administrative state is this issue’s cover story, from JIM LARDNER , who looked deep inside dozens of executive agencies to find the corruption lurking therein. We have developed an interactive web feature as a companion piece: a map of Washington, where you can click on federal buildings housing numerous agencies and obtain a dossier about what’s really happening inside. That’s available at prospect.org/mappingcorruption.

Much of the rest of our issue covers the unending battle against entrenched power, from a multitude of angles. BOB MOSER tours the country to check in on the battle for the U.S. Senate, where leading Democrat Chuck Schumer makes often unilateral decisions about who will prevail in primaries. Our co-founder BOB KUTTNER and his co-author KATHERINE V. STONE chart out the phenomenon of “neo-feudalism,” in which the structures and norms of public democracy are overtaken by private governance and private law, where multinational corporations limit the rights of workers and consumers. BRYCE COVERT looks at gig workers organizing across the country, as they fight for meaningful protections and dignity in an atomized workplace. MATT STOLLER of the American Economic Liberties Project writes about a lawsuit between Comcast and an African American television mogul that reveals the relationship between monopoly and the destruction of cultural diversity. And writing fellow MARCIA BROWN details how private companies use the power of eminent domain to lay new pipelines to transport fossil fuels, and how eminent domain could instead become a tool for a progressive climate policy.

As the world battles a pandemic, these stories of how power concentrates and how everyday people can wrestle it back take on even more resonance. This is a time when we must understand what brought us to this point and how we can find that better place.

The Prospect, as ever, will be doing our part to light the way. —DAVID DAYEN

2 PROSPECT.ORG MAR /APR 2020

EXECUTIVE EDITOR DAVID DAYEN FOUNDING CO-EDITORS ROBERT KUTTNER, PAUL STARR CO-FOUNDER ROBERT B. REICH EDITOR AT LARGE HAROLD MEYERSON DEPUTY EDITOR GABRIELLE GURLEY ART DIRECTOR JANDOS ROTHSTEIN MANAGING EDITOR JONATHAN GUYER ASSOCIATE EDITOR SUSANNA BEISER STAFF WRITER ALEXANDER SAMMON WRITING FELLOWS MARCIA BROWN, BRITTANY GIBSON FACT-CHECKER CLAIRE WANG EDITORIAL INTERNS MALCOLM FERGUSON, THOMAS RECCHIO CONTRIBUTING EDITORS MARCIA ANGELL, GABRIEL ARANA, DAVID BACON, JAMELLE BOUIE, HEATHER BOUSHEY, JONATHAN COHN, ANN CRITTENDEN, GARRETT EPPS, JEFF FAUX, MICHELLE GOLDBERG, GERSHOM GORENBERG, E.J. GRAFF, BOB HERBERT, ARLIE HOCHSCHILD, CHRISTOPHER JENCKS, JOHN B. JUDIS, RANDALL KENNEDY, BOB MOSER, KAREN PAGET, SARAH POSNER, JEDEDIAH PURDY, ROBERT D. PUTNAM, RICHARD ROTHSTEIN, ADELE M. STAN, DEBORAH A. STONE, MICHAEL TOMASKY, PAUL WALDMAN, SAM WANG, WILLIAM JULIUS WILSON, MATTHEW YGLESIAS, JULIAN ZELIZER PUBLISHER ELLEN J. MEANY COMPTROLLER ANNE BEECH COMMUNICATIONS SPECIALIST STEPHEN WHITESIDE BOARD OF DIRECTORS MEHRSA BARADARAN, DAAIYAH BILAL-THREATS, CHUCK COLLINS, DAVID DAYEN, STANLEY B. GREENBERG, JACOB S. HACKER, AMY HANAUER, DERRICK JACKSON, ROBERT KUTTNER, ELLEN J. MEANY, MILES RAPOPORT, JANET SHENK, ADELE SIMMONS, GANESH SITARAMAN, WILLIAM SPRIGGS, PAUL STARR, MICHAEL STERN SUBSCRIPTION CUSTOMER SERVICE STEPHEN WHITESIDE, 202-753-0937, INFO@PROSPECT.ORG PRINT SUBSCRIPTION RATES $36 (U.S.), $42 (CANADA), AND $48 (OTHER INTERNATIONAL) REPRINTS PROSPECT.ORG/PERMISSIONS

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Prospects

Mind the Trust Gap

BY DAVID DAYEN

O

n the last day of February, U.S. Surgeon General Jerome M. Adams implored Americans to stop buying protective equipment in the midst of a contagious viral outbreak. “Seriously people— STOP BUYING MASKS!” Adams exclaimed. “They are NOT effective in preventing general public from catching #Coronavirus, but if healthcare providers can’t get them to care for sick patients, it puts them and our communities at risk!” It was a difficult two-step: Adams was trying to tell people that face masks are useless for disease prevention, but also vital for disease prevention—as long as you’re a medical professional.

There’s a kernel of science behind the argument. Face masks can prevent a coronavirus carrier from spreading germs to others. But non-carriers can receive transmission through any part of their body the face mask doesn’t cover.

By contrast, medical professionals and caregivers operate in close proximity to patients, and need maximum protection when treating infectious diseases.

But telling Americans not to protect themselves because doctors and nurses take priority doesn’t sit well, and the empty shelves at stores provide testimony to that. It signifies a long-simmering feature of our politics, what University of North Carolina professor Zeynep Tufekci calls an “age of mistrust.” And a pandemic is the worst possible crisis to spring up in a country suffering

4 PROSPECT.ORG MAR /APR 2020

from a collapse of institutional credibility.

PUBLIC TRUST IN government,

according to the Pew Research Center’s historical data, reached its peak in 1964, with 77 percent favorability. It’s near historic lows of around 17 percent today.

Discrete events, like the end of the first Iraq War, the booming economy of the late 1990s, and 9/11, have provided a temporary sugar high, but the trajectory for trust in government has mostly been straight downward for the last 55 years. This is also seen in Gallup polling regarding the presidency, Congress, the Supreme Court, churches, public schools, news media, and numerous other institutions.

People didn’t spontaneously come to a decision to distrust the government. They endured Vietnam, Watergate, Iran-Contra, the endless ginned-up scandals of the Gingrich era, Iraq, Katrina, the financial crisis, and finally the presidency of Donald Trump, with Citizens United, corporate concentration, and manipulation of government, and 40 years of stagnant wages and skyrocketing inequality hanging over everything.

Moreover, American conservatives believe government cannot function well, and once in power they set about defunding and wrecking it to prove their point. It was a neat trick, and now a fateful one.

In a study with resonance in this moment, Harvard researchers found in 2006, after the sars outbreak, that Americans were less likely to trust government information about

public health than were people in Hong King, Singapore, or Taiwan. And that was well before the Baghdad Bob–style pronouncements about coronavirus from this president and his loyal disciples. Since January, Trump has attempted to downplay the threat for nakedly political reasons, rejecting recommendations that seniors be advised not to travel by air, and even going so far as to muse about blocking an infected cruise ship from coming back to port because “I like the [infection] numbers being where they are … I don’t need to have the numbers double because of one ship that wasn’t our fault.”

People tune out self-interested decision-making, and every one of Donald Trump’s decisions is based on his own self-interest. They decide that the man running the government, who told them the heat will kill the virus in April, is not equipped to protect them. They make the determination that they’re on their own. And then they storm Home Depot to buy face masks and hand sanitizer, and read articles like “What You Can Do Right Now About the Coronavirus.”

This can rapidly descend into panic, with real economic effects. The Centers for Disease Control and Prevention’s botched testing kits put the nation way behind in identifying exposure to the virus.

When uncertainty rules and we don’t trust official sources, we must individually evaluate personal risk. It’s logical in that circumstance to cancel large gatherings and limit travel. But

every concession worker at the shuttered South by Southwest festival, every baggage handler at United and Delta, every rental-car clerk and resort hotel concierge will feel the residual and possibly unnecessary pain.

Panic and fear can induce irrationality into any calculus.

Maybe a government that inspires trust in its citizens could have allayed concerns.

Maybe a government that operates with the intent of benefiting all people could have soberly explained the best means to keep safe, and received broad acceptance. But we live in a you’re-on-your-own society that glorifies the individual in a moment that requires collective action. And the trust gap only exacerbates this worldview.

It’s a source of difficulty for progressives, who know that ideas like paid sick leave and universal health coverage are precisely the kind of policies that can tamp down the virus’s spread. We should enshrine the principle that the lack of resources is not a barrier to personal health, rather than forcing the sick to maintain their daily schedule and reject medical assistance because they cannot afford to do otherwise. But in an age of mistrust, ideologues can scoff at a government that does nothing right, and often win that argument.

Usually at this point, some libertarian economist will suggest that private enterprise must be unshackled to perform the critical functions of government in a more efficient manner. Government must not be trusted to do any job that the private sector

Prospects

can do better; it needs to simply “get out of the way.” Of course, that has been the prime directive of government for the past several decades, ceding control to big business to run wild. How that’s worked out is clear if you follow the trajectory of the simple face mask.

THE WHOLE SPECTACLE of the surgeon general pleading with people to stop buying face masks should strike you as odd. Hospitals don’t typically rush to retail stores for Band-Aids and tongue depressors; they have dedicated wholesale medical suppliers, funneled through middlemen that contract with single sources. The contractors, known as group purchasing organizations (gpos), are supposed to save hospitals money by buying in bulk. But in 1987, Congress enacted a “safe harbor” provision that transferred payment of gpos from the hospitals to the medical-supply vendors. gpos gradually consolidated, with no pushback from the antitrust authorities. And legalizing kickbacks totally changed the incentives; gpos would sell contracts to the manufacturers offering them the highest payment, forcing those suppliers to cut costs elsewhere to eke out a profit.

This sent makers of supplies like face masks looking overseas for cheap labor, with little resistance from a government keen on abandoning its industrial base. The majority of all face masks are manufactured in China and Taiwan, and China spent the last month curtailing production in its factories, in a full-spectrum attempt to prevent coronavirus spread.

The subsequent shortages have led China to declare masks a “strategic resource,” hoarding them for health professionals caring for their stricken population. America’s largest domestic manufacturer of simple surgical masks, Prestige Ameritech, simply can’t keep up with the demand. Honeywell and 3M,

which make the more heavyduty n95 respirators, have been racing to catch up to orders since January.

Even as Chinese factories get back up to speed, a peculiar problem has caused delays.

Reduced sailings between China and ports in the U.S. and Europe have caused an imbalance of shipping containers.

China can’t get ships out of its ports, and U.S. exporters have nothing in which to store their goods for transatlantic journeys. This has snarled global shipping and could take months to work through.

Follow that all the way down the supply chain, and it means that domestic hospitals cannot stock up on face masks to prepare for potentially thousands of new cases. Larger hospital chains have more resources to secure face masks and other supplies, while rural hospitals may lose routine shipments when shortages occur.

Some rural hospitals have already hit up hardware stores just to cover current needs like surgeries and other treatments.

That puts them in the same aisle as ordinary people, trying to secure a face mask for themselves or a family member. None of that should ever happen, and gpo bulk-buying groups forcing outsourcing is a proximate cause.

When retailers see something in high demand, they do the allAmerican thing: shoot the price skyward. That’s not price-gouging, just supply and demand at work, say laissez-faire economists. But it’s undeniable that it leads to limiting protective equipment to the affluent, whether the rich individual or the rich hospital. Thirty-four states have laws against pricegouging, yet enforcement is weak enough that we continue to hear stories about exorbitant pricing on routine goods. Local officials even ask consumers to report the cases, lacking the manpower to engage in their own enforcement.

Our new platform-monopoly economy adds a wrinkle to price-gouging. Prices for items like face masks (as high as $195) and hand sanitizer ($350 for a two-pack) have surged on Amazon, and lawmakers have asked the company to crack down on excessive pricing. But Amazon cannot possibly police millions of items on its site in real time, and has no incentive to do so. Congress, in Section 230 of the Communications Decency Act of 1996, immunized platform companies from liability for the transgressions of their users, in this case the price-gouging sellers in Amazon’s virtual mall. Amazon also takes a cut out of every sale, and the higher the price, the higher the cut. That limits its desire to scour the marketplace for unfair pricing.

Liability concerns are also on the minds of the makers of the N95 respirators typically used in mining and construction.

Manufacturers have expressed worry that someone wearing one of their masks might contract coronavirus and sue them for negligence, and have approached Congress for the same immunity from lawsuits that makers of hospital masks get. That would be a license to produce ineffective equipment without fear of reprisal.

LET’S PUT THIS ALL together. The

global shortage of face masks and other protective equipment comes in large measure from corporate purchasing contracts forcing a centralized supply chain that increases fragility.

This has pushed hospitals into retail markets to secure face masks, with the largest companies muscling out the little guy.

Routine price-gouging is hard to arrest in largely unregulated e-commerce marketplaces. And face mask manufacturers want to be sure they aren’t held accountable for their products being defective.

Along the way,

government has stood loyally by, providing the legal cover for monopolization, consumer abuse, and profiteering. In this sense, government deserves citizen mistrust, though not solely for the reason that it’s preternaturally incapable of executing policy or managing crisis.

It deserves mistrust because it allowed corporations to rewrite the social contract, and the whims of the free market to overtake the public interest.

The problem, in other words, is not a government that does too much; it’s one that does too little, and outsources its authority to the corporate boardroom.

Activist government, outside of a surveillance state autocracy like China, cannot work without public trust. Progressives generally pay too little attention to this problem, when they’re not explicitly stoking it. But the rebuilding of an activist government must begin by restoring democratic control to the institutions of our democracy.

The cynicism that accompanies corporate collaboration with government feeds a loss of faith that becomes impossible to counteract. That’s bad enough on its own; it’s downright dangerous in a crisis, if the public feels it must rely on its own instincts instead of collective action and sound science.

The times call for a reformer who can make the case against private enterprise as the savior of society, and the case for democratic governance as the best means to solve big problems.

But that requires a new level of education to demystify who has power in America and how they use it. Maybe it starts by telling the real story of the face mask.

MAR /APR 2020 THE AMERICAN PROSPECT 5

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notebook The Biden DNR (Do Not Reappoint) List A third succession of Wall Street Democrats would be a disaster.

Here are the names to look out for.

J. SCOT T APPLEWHITE /AP PHOTO

I

n June of 2008, when it was clear that Barack Obama would become the Democratic nominee, he held a press conference to introduce his campaign economic team. At that moment, those of us who had hoped Obama would be a transformative progressive president knew that it was over before it started.

The team was headed by Jason Furman, a close protégé of investment banker Robert Rubin. But the most senior appointees would eventually be Lawrence Summers as head of the National Economic Council and Tim Geithner as Treasury Secretary. They would make sure that the big banks would be bailed out rather than cleaned out.

Michael Froman, another Wall Streeter and Rubin ally, was put in charge of trade policy. Fiscal conservative Peter Orszag got the top budget job. Rahm Emanuel, an investment-banker-turned-congressman who as head of the dccc loaded the House with corporate Democrats, became chief of staff.

Thanks to these people, even the most catastrophic economic collapse since the Great Depression could not shake the financial industry’s lock on Democratic Party policies. Wall Street–influenced deregulation led to the financial collapse. Their failure to reform the banking system after the collapse kept the financial economy fragile, as we’re now painfully aware watching Wall Street collapse. The premature embrace of fiscal austerity caused the recession to be deeper and more prolonged than necessary.

And all these economic policy failures led to the mother of all political failures—the election of Donald Trump.

As John Maynard Keynes

BY R O BE R T K U T T N E R

Lawrence Summers

famously said, “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”

Indeed, these worthies failed conventionally, and left office with their reputations intact. Most of them repaired to Wall Street, where they increased their incomes many times over. And several of them would like to return to Washington, in senior positions in a Biden administration. If history repeats itself, the second time as farce, it would be a catastrophe—for the Democrats, for the economy, and for the country.

One of several weird things about the Biden campaign is that

there is hardly any policy staff.

Reporters looking to profile the campaign kept looking for one, and concluded that it just wasn’t there. So with Biden now the likely nominee, there will be a stampede of people wanting in. And given Biden’s age and cognitive state, he will likely be a far more handsoff president than Obama. Which makes his senior appointees even more crucial for the future of the country. Herewith, as a public service, the Biden dnr List, which could stand for Do Not Resuscitate or Do Not Reappoint.

LAWRENCE SUMMERS. Number

one on the list has to be Larry

Summers, 65. Under Clinton, Summers was a prime architect and huge enthusiast of what proved to be fatal financial deregulation.

He was also in charge of Clinton’s economic policy for post-Soviet Russia, and was responsible for pushing for early and catastrophic privatization of state assets, a fire sale that led directly to the creation of Russia’s oligarchs. As president of Harvard, he proved to be both arrogant and sexist, to the point where he got himself fired.

Yet Summers has a paradoxical seductive charm, and he persuaded Obama that he was the right person to lead the economic team. In that job, he not only lowballed the necessary economic stimulus and ended it prematurely, but he successfully fought for rescuing the biggest banks rather than taking them into temporary receivership.

Back at Harvard, Summers earns over $600,000 as a university professor but also moonlights at the hedge fund D.E. Shaw, where his compensation is well into the seven figures. (Some would say he moonlights at Harvard.) I was told by a reliable Harvard source that Summers played a back-channel role in blackballing economist Gabriel Zucman from an appointment to Harvard’s Kennedy School. But Summers tells me that despite having criticized Zucman’s competence in a Washington Post piece, he supported hiring him.

The one career-capper job Summers wants is chair of the Federal Reserve. Thanks to the work of Elizabeth Warren and other Summers critics, Barack Obama was dissuaded from appointing Summers to that post, in favor of Janet Yellen. Let’s hope she also wins the rematch.

PETER ORSZAG. As Obama’s budget

director, Orszag was a prime architect of premature fiscal austerity as a supposed badge of economic virtue. After leaving government, Orszag, another Rubin protégé, got a plum job at Citigroup, where Rubin was a senior executive

MAR /APR 2020 THE AMERICAN PROSPECT 7

notebook

President Barack Obama and Vice President Joe Biden hold a press conference on the economy, January 21, 2010.

MIKE FROMAN. Yet another Rubin

protégé, Mike Froman directed

8 PROSPECT.ORG MAR /APR 2020

trade policy under Obama as U.S. trade representative. He served on both the National Security Council and the National Economic Council. Froman was prime architect of the failed Trans-Pacific Partnership, and the continued emphasis on corporate rights and privileges in trade deals. He worked in the Clinton administration for Rubin in a number of staff jobs, becoming Rubin’s chief of staff at Treasury. He then joined Citi after leaving government between 1999 and 2008, also raising money for Obama. Froman, while still at Citi, sketched out Obama’s entire cabinet in an email in October 2008, and did the key economic hiring during the transition. Following the Obama years, Froman took senior executive jobs at Citi’s insurance and “alternative investments” (that usually means private equity) businesses. Since 2018, he has

One of several weird things about the Biden campaign is that there is hardly any policy staff. So with Biden now the likely nominee, there will be a stampede of people wanting in. been vice chairman and president for strategic growth at MasterCard. His annual compensation is in the tens of millions.

Froman’s career epitomizes the revolving door between government and Wall Street, and the way Wall Street Democrats use fundraising to ingratiate themselves with Democratic candidates. Froman endorsed Biden early, in November 2019. Like Orszag, Froman (at 57) is young enough to want another taste of political power before the door revolves again.

STEVE RATTNER. At 67, Rattner is

the epitome of a corporate Democrat. He has worked at Lehman and Lazard and in 2000 set up his own private equity company, Quadrangle. Rattner has been active with the center-right group Third Way, and currently serves as Mike Bloomberg’s personal money manager. As a former New York Times staffer and current contributing columnist, he has been very active writing op-ed pieces and making media appearances trashing progressive candidates, without disclosing the Bloomberg connection.

CHARLES DHAR APAK /AP PHOTO

between 1999 and 2009. Orszag first served as vice chairman of Corporate and Investment Banking and also chairman of the Financial Strategy and Solutions Group.

From Citi, he moved to boutique investment bank Lazard in 2016, and is now ceo of Lazard’s Financial Advisory group, with corporations and governments as clients.

He also chaired the Hamilton Project, underwritten by Rubin.

Orszag’s salary is reported at $15 million a year.

At 51, Orszag is young enough to want another round in government. He didn’t have any of the top power jobs on economic issues— chair of the National Economic Council, Secretary of the Treasury (both previously held by Rubin and Summers), or chair of the Federal Reserve.

notebook

Rattner got in big trouble with the sec in 2010 for a pay-to-play kickback scheme involving placement of New York state pension funds with his company, which he ultimately settled by paying $7 million via Quadrangle and $6.2 million personally. He was barred from the financial industry for five years. The scandal forced him out of his job heading the Obama administration’s auto industry rescue. Rattner has never held a top economic job. “Rattner would cut off his right arm to be Treasury secretary,” says one insider. If Bloomberg personally goes to bat with Biden on Rattner’s behalf, he can probably get something big, though the confirmation would not be pretty.

JEFF ZIENTS. He succeeded Orszag

as director of the Office of Management and Budget, and finished out the Obama presidency as director of the National Economic Council, the job once held by Summers. Zients was in charge of Obama’s disastrous “fiscal cliff” budget strategy, in which Obama’s team played a very strong hand badly. Due to sunsetting Bush tax breaks, if Republicans hadn’t met Democrats halfway, the result would have been a massive tax hike, mostly on the rich. But Zients, a big proponent of deficit reduction, let Republicans call the shots, resulting in the damaging automatic budget “sequester.”

Before joining Obama, Zients became very rich taking two David Bradley ventures public, The Advisory Board Company and the Corporate Executive Board.

When he was 35, Fortune estimated his net worth at $149 million.

He currently heads the Cranemere Group, a holding company on the model of Warren Buffett’s Berkshire Hathaway. Zients today, at 53, is a major fundraising bundler for Biden, and is said by multiple sources to want a top economic post in his administration.

BRUCE REED. Biden insiders say

he is in charge of the campaign’s policy operation. Reed, who

turns 60 this month, is personally close to the former vice president.

He was Biden’s chief of staff between 2011 and 2013. Before that, he epitomized the right wing of the Clinton and Obama administrations. He was head of the Democratic Leadership Council; he directed Clinton’s Domestic Policy Council, and was a key author of the Clinton welfare reform that led to the protest resignations of three subcabinet officials. Under Obama, he was executive director of the pro-austerity Bowles-Simpson Commission. He co-authored a 2006 book with Rahm Emanuel titled The Plan: Big Ideas for America. In short, everything you don’t want in a Biden administration, but a contender for a major role.

Other Wall Street worthies often mentioned as possible top Biden economic officials are TOM NIDES , vice chair and managing director of Morgan Stanley, and JAMIE DIMON , ceo of JPMorgan Chase. MIKE BLOOMBERG has just about everything he wants (except the presidency), but given his key roles in both endorsing and bankrolling Biden, if he wants to top his career as, say, head of the World Bank or even chair of the Fed, it could be hard for Biden to refuse.

Some lesser names include SARAH BIANCHI , an Obama veteran who worked at BlackRock and lobbied for Airbnb, and had a hand in Biden’s health care policy. She’s currently a managing director at bank advisory firm Evercore. TERRELL MCSWEENY, who rotated from the Federal Trade Commission to top corporate law firm Covington & Burling, has also been a key Biden adviser. AUSTAN GOOLSBEE , who endorsed Pete Buttigieg in the primary, has plenty of Obama economic-team experience. And longtime Rubin aide JASON FURMAN , former chair of the Obama Council of Economic Advisers now teaching at Harvard and a close collaborator of Summers, was said to want in. Furman, in an email to me, disclaims any interest in returning to government and says he loves his life at Harvard.

A good rule of thumb is that nobody who has spent much of their career at the largest banks or hedge funds—Morgan Stanley, Citi, Goldman, JPMorgan Chase, BlackRock—should be considered for a top economic job in the next Democratic administration. We’ve had far too much experience of how that works out. By the same token, as antitrust enforcement belatedly begins to catch up with the big-tech platform monopolies, people from the executive/ lobbyist/bundler world of Silicon Valley, and their academic allies, should be kept out as well. Biden has always viewed himself as a mainstream Democrat. To the extent that Wall Street dominance of all the key economic posts has been all too mainstream under both Clinton and Obama, we are in big trouble if Biden looks to that mainstream.

WHO OR WHAT might save Amer-

ica from this fate? One possible counterweight is Ted Kaufman, Biden’s longtime chief of staff, who replaced Biden in the Senate for two years when Biden became vice president in 2009. Kaufman is more committed to regulating Wall Street than his boss, and, liberated from Delaware’s financial elite by promising never to run for re-election, he played a surprising and important role in the financial-reform debate. Working closely with progressives Sherrod Brown, Pat Leahy, Elizabeth Warren, and others, he urged a much tougher stance by the sec, secured successful anti-fraud legislation, and introduced the Brown-Kaufman amendment to the Dodd-Frank Act, which would have limited the size of large banks (it failed).

Kaufman, 81, remains close to Biden. He helped organize his 2020 run for the presidency. If anyone can serve as an internal firebreak against a Wall Street takeover, it’s him. Biden’s onetime chief of staff (2009-2011), Ron Klain, is effectively Biden’s top aide; he’s no progressive, but he’s less Wall Street compromised

than several others. Klain, whose day job is with a venture capital firm, would likely be chief of staff in a Biden Administration.

Given the state of Biden’s cognition, he would be close to de facto president.

The most important possible firebreak is Elizabeth Warren, who has a decent personal relationship with Biden. They even discussed teaming up as a ticket in 2016.

When Warren went after Bloomberg, Amy Klobuchar, and Pete Buttigieg full throttle in her final debates, she largely spared Biden.

Some in the Biden camp, flush with victory, conclude that he can win the presidency without accommodating Bernie Sanders, Warren, or their supporters.

But there are now millions of very unhappy Democratic voters. They did not support Sanders because they liked his Brooklyn accent, or Warren because of those cute selfies. They supported progressives because economic life is going to hell in America for ordinary people. Health security, relief from student debt, decent jobs at decent wages—these are not just ideological fancies but life concerns that will not go away just because Joe Biden is the nominee. And with the coronavirus epidemic, life prospects just got worse.

Whether or not he and his handlers know it yet, Biden will need the support of disaffected progressives in November. One of Warren’s favorite expressions is “Personnel is policy.” If ever that aphorism applied, it applies in 2020. Warren is in a position to broker the deal she attempted with Hillary Clinton in 2016: If Biden appoints more progressives and pursues more progressive policies, both Sanders and Warren will vigorously campaign for the ticket and urge their supporters to turn out.

Alternatively, Biden could strong-arm progressives and appoint the third succession of Wall Street Democrats. And even if he managed to win the election, business as usual would just seed more right-wing nationalism.

MAR /APR 2020 THE AMERICAN PROSPECT 9

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ut it is an efficiency purchased B through the destruction of all flexibility, and hence sustainability. What we should be fretting about now is what happens when, one day soon, we awake to find that war, revolution, disease, or natural disaster has cut us off from some one of the increasingly scattered pockets of workers we rely on to produce keystone industrial components or to process vital back-office information; what happens when, for want of access to one or a few of the links that make up the global assembly line as a whole, our entire industrial system breaks—pins, electronics, pharmaceuticals, food, and all.

The Man Who Knew An interview with Barry Lynn, whose prediction about the dangers of centralizing our manufacturing has sadly come true amid the coronavirus outbreak.

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BY DAV I D DAY E N

he greatest economic impact from the novel coronavirus (covid-19) can be seen in empty container ships and quiet ports around the world. China’s dramatic response to the outbreak put the country on lockdown for weeks, slashing manufacturing production. With China serving as the world’s manufacturing hub, the slowdown rippled out, denying finished goods and component parts that snarled other global factory output. The lack of sailings from China has created a container

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buildup there; even if shippers have goods to move, they don’t even have the repositories to put them in. Combine this with a lack of inventory buildup, and you have a supply chain shock.

This was predictable, and predicted. Thirteen years ago in the Prospect, Barry Lynn, then a freelance writer, wrote a feature called “Why Economists Can’t See the Economy,” where he warned of the dangers of concentrating manufacturing in one region. “Our brand-new global factory does look awfully efficient,” he wrote.

David Dayen: What piqued your interest in this circumstance with supply chains in the beginning?

Barry Lynn: I first approached it after this earthquake that happened in Taiwan, in September 1999. I was running a magazine called Global Business. We wrote about how large businesses were moving things around the world. Within a few days, all these factories in the U.S. shut down, in California and Texas, because the supply chains, the supply of semiconductors from Taiwan, were broken. They couldn’t fly them out because there was no power at the airport, so the shipments couldn’t get out.

It showed me that we took this really important set of eggs and put them all in the same basket.

At the time, I became really quite curious why these really smart people running these corporations would do that, and why the really smart people running government would allow that to happen.

So why did these smart people allow it to happen?

It took me a long time to figure that

JANDOS ROTHSTEIN

We are seeing today these very consequences. I talked to Lynn, now executive director of the Open Markets Institute, about how he recognized supply chain fragility two decades ago, and what we can do about it now.

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out. I was a crazy reporter with an idea. Every door I knocked on, every economist I spoke to, every international-relations expert, either told me this could not be a problem, or that they didn’t know it happened. I was left on my own, so I used my reporter skills. I found people in the semiconductor industry, people who were ceos, who knew what was going on. Over time, I came to understand that it had to do with this radical change in how we do competition policy, pushed by the Chicago school in the early 1980s. It used to be that when we saw monopoly, we saw danger. After Chicago, we only saw efficiency.

Obviously the coronavirus outbreak is an economic and public-health tragedy. But do you in any way feel vindicated that you were on target with understanding this problem over 20 years ago?

I don’t like saying I told you so and I’m not going to say it. People have to learn. This is something where people were indoctrinated for decades to a very different way of seeing the world. It’s not their fault.

The fact that they were made blind

80%

is a little disturbing, but people are now waking up. This is an exciting moment intellectually, as terrifying as so much of what we see around us is, as terrifying as coronavirus is, as terrifying as the power of Facebook and Google is. People are seeing things differently than they ever saw before in their own lives.

That’s a really cool thing. That’s a real opportunity now to take this crisis and make the best use of it.

So we can restructure the political economy in ways that make it work for us. So we can use common sense and facts to understand the world.

I’ve heard stories that manufacturers don’t even know the source of all the components in their goods. It seems that the complexity of the supply chains has become just as big a barrier as the centralization of supply.

The complexity is a huge problem.

But we have the capacity to trace every one of these components at every part of the supply chain. We have rule of origin standards in nafta, we can trace to the nut and bolt what’s North America–based.

We can do that if we choose. It’s a cost to the companies. And if the

Percentage of active pharmaceutical ingredients (APIs) of drugs manufactured in the United States produced abroad

Amount of antibiotics in the United States produced in China: 97 percent

Amount of APIs made in India, a leading API producer, that are themselves dependent on Chinese components: 80 percent Sources: Senate Finance Committee, HealthAnalytics Asia, Department of Commerce

government is not there forcing industry to bear that cost, we’re not able to do it. The complexity itself looks worse than it actually is. This is good, as we turn eventually to restructure the system so we don’t have these problems.

The other thing people have to understand is, these are machines.

These are not pockets of ore under the ground. These are machines, you can put them all in one factory in one place, or you can put ten factories in ten places. That’s up to us. We let the monopolists put the machines in one place, because they can charge more and control the choke points.

So what’s the solution here? Most of the companies that have left China have found some other low-cost country like Vietnam, and maybe production will concentrate there.

Do we need to make the supply chain more redundant, or are there certain goods that need to be produced domestically, in the name of selfsufficiency or national security?

There are certain things that we should have the capacity to serve our entire population in a time of crisis.

That would be things like respirators and masks. We should not be worrying about not having sufficient supply when the capacity is all in China, and they’re hoarding the supplies because they need them. It’s also true for pharmaceuticals. Fact that 80 percent of our active pharmaceutical ingredients for domestic production come from places like China, that’s insane. A large part of that needs to be moved back to the United States.

Also, vaccine capacity. In 2004, we saw the whole system for the flu break down, because monopolies took control of the system and one plant was contaminated.

So there are ways to do this. It’s really not expensive in the overall scheme. What’s expensive is when you don’t have it, because you end up with dead people and a crashed economy. For the lack of really prudent, modest investments, we are now facing a massive sell-off of stocks, and there’s going to be a lot of people who die who did not need to die.

MAR /APR 2020 THE AMERICAN PROSPECT 11

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All the Ways Your Vote May Not Be Counted in South Carolina Voter suppression remains a fact of life in the Deep South, and officials are getting more clever about it.

BY BR I T TA N Y G I B S O N This story was supported by the Pulitzer Center.

CHARLESTON, SOUTH CAROLINA – North Charleston resi-

dent Leslie Deetman decided to vote for Joe Biden in the South Carolina Democratic primary.

The 28-year-old, who has never voted before, had her door knocked by canvassers from Teams Biden and Bernie Sanders, and settled on the former vice president because of his connection to President Barack Obama—and because she wants to “get Trump out of office.”

The only problem is she’s not registered to vote, and the outof-state Biden canvasser who spoke with her two days before the election didn’t know to tell her that in South Carolina, you have to complete your voter registration 30 days before the election to cast your ballot.

Deetman was not even able to cast a provisional ballot for Joe Biden—something that some states with same-day voter registration would allow.

Unfortunately, Deetman’s story is just one example of how South Carolina voters can get left out of the democratic process, through technicalities in the mechanics of voting in the Palmetto State.

With the complexities of absentee voting, the challenges of voter registration, and the rise in confusing voter ID laws, the South Carolina Election Commission has spun a web of obstacles ostensibly meant to protect democracy, but which inevitably catches some voters in the bureaucratic netting.

Compounding the problem, county Voter Registration and Election Commission offices

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lack the resources for voter outreach to guide people through their systems.

“Despite the fact that the Voting Rights Act was passed in 1965, here we are in 2020 and we’re still having to battle disenfranchisement and voter suppression,” says Brenda C. Williams, a retired family-practice doctor in Sumter, South Carolina. While in private practice, Williams and her husband both worked to encourage their patients to participate in the democratic process, asking them if they were registered to vote “as routine as taking their blood pressure.”

In 2009, the couple started The Family Unit, a nonprofit organization that helps people living in poverty participate in elections and registers people in jail who are still pretrial. In the days leading up to the election, Williams spends her time driving around Sumter and North Sumter helping people with their absentee ballots and giving out her phone number so people can reach her if they have problems on Election Day. AT ONE HOUSE STOP in North Sumter, where Williams went to help resident Queen Kennedy fill out her absentee ballot, she ran into three men in their thirties, one of whom called out to her, “Dr. Williams, I know you from County.” Williams says she didn’t recognize the men exactly, but “County” refers to the jail, where she has personally registered more than 7,000 pretrial inmates to vote. In 2008, Williams was the first person ever to go register people in the jail.

Williams goes door-to-door to help with the absentee ballot

process because in South Carolina there are many ways your absentee vote can be discarded from the final count, which gives rise to the so-called “error rate.” There is no early voting in South Carolina, but you can vote absentee with one of 19 excuses for up to 30 days before Election Day. The challenge, Williams explains, comes “once they get that absentee ballot in that big envelope. It comes with four to five pieces of paper … [and] if there’s one little piece of paper in the envelope with your ballot, your ballot will not be counted. Period.”

The Wednesday before the election, Kennedy opened her absentee ballot package in the presence of Williams and one of Kennedy’s neighbors. In a joking tone, Williams scolded the neighbor about smoking; the man laughed and said, “Yes, Dr. Williams,” as he discarded the cigarette. Although most people in the North Sumter area met Williams through her nonprofit work, they also knew her background as a doctor, which became clear as I followed her on her non-medical rounds.

Once Kennedy filled out her ballot, it had to be placed in an envelope that had come with two other pieces of paper providing information on the voting process, which Kennedy had to remove if her vote was to be counted. She removed those papers and then placed the envelope with her ballot in a second envelope called the “voter’s oath” envelope, which had a quarter-sized “I Voted!” sticker inside that also had to be removed. Then Kennedy had to sign the voter’s oath envelope, as did Williams as her witness.

In 2016, 412 absentee ballots were not counted in Richland County (site of Columbia, the state capital) because they were returned without a witness signature, and the office did not attempt to contact these voters about the mistake, according to emails between Williams

and the county election official.

Instead, the votes go into an “Attention Envelope” and are shredded by the county after two years.

“I call it a graveyard,” Williams said. “Thousands upon thousands upon thousands of ballots are thrown out because of a witness signature. Because of a technicality. Because of a missing voter signature or a missing witness signature.”

After Kennedy and Williams handle all of the ballot paperwork, there’s one more form that has to be completed to enable Williams to then hand in the absentee ballot at the County Election Office. This time things ran smoothly, and Kennedy thanked Williams with a hug and a smile.

When Williams assesses her work, she says, “The reaction has been very good … among the poor, among the indigent people in our community. These are the same individuals that have come to us over the decades for help [at her and her husband’s medical office] … When we go into the community, our reception is more than great. The people who are disenfranchised, the indigent, the poor, the forgotten people, they welcome us with open arms.”

From local government officials, however, the reception she’s encountered has been much different. South Carolina has a decentralized election system, so unlike other states where there’s one secretary of state in charge of the elections, decisions in the Palmetto State are made at a county level. This makes it difficult on campaigns with out-of-state volunteers streaming in just before elections. Brief training on the voting peculiarities in each particular county may not be enough.

Williams reaches out to each of the county directors individually when she tracks down which ballots have not been counted and why. When

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she does get answers, they’re often not very satisfying. “Their responses I find to be questionable, not productive to helping us get these individuals and getting their absentee ballots counted,” Williams says.

But she also says she feels like it’s her responsibility to continue the struggle. “We [Williams and her husband] are blessed in the positions we’re in … We believe the biblical scripture which says, ‘To whom much is given, much is expected.’”

MOST OF THE PEOPLE affected by

the hurdles imposed on absentee voting are the elderly and

bono work of local attorneys to help chase down those records from their Sumter office, while in Columbia, Brett Bursey, executive director of the South Carolina Progressive Network (scpn), was taking this issue to court.

Bursey and the scpn have sued the state numerous times over its curtailment of voting rights. South Carolina has a long history of voter suppression that specifically targeted black people and occasionally poor white people.

In 2011, then-Governor Nikki Haley, a Republican, signed into law the voter ID mandate,

cite the impediment that has kept them from having one.

The state also had to find a way to get people free IDs, so it now offers voter registration cards with a photo to South Carolinians able to go to the county Election Commission office and request one. Those who don’t have an acceptable voter ID or don’t have the means to get one on Election Day can fill out “impediment ballots,” citing why they’ve encountered an impediment to getting an ID. But Bursey doesn’t view that legal decision as a win for South Carolina voting rights. “We won

GER ALD HERBERT/AP PHOTO

South Carolina has a long history of voter suppression against African Americans.

people who cannot make it to the polls on Election Day, as per one of the pre-approved excuses. But for those who go to vote in person, things can be equally as challenging.

In 2011, South Carolina passed a strict voter ID law that challenged the voting rights of many people who either didn’t have an official ID or didn’t have a birth certificate to obtain one.

In her family practice, Williams says she encountered many people born in rural areas who were in that position. She and her husband relied on the pro

“I call it a graveyard,” Williams said. “Thousands upon thousands upon thousands of ballots are thrown out because of a technicality.” which she had to argue “was not racist.” The scpn took the case to court, and the law was scaled back. Instead of explicitly requiring an ID to vote, it now requires that officials at polling places ask for an ID, but allows voters to cast a ballot if they can

the battle, but lost the war. The confusion was already done,” he says.

If for some reason a South Carolina voter forgets their voter ID, then they fill out a provisional ballot saying they forgot their ID. For these voters,

however, that just begins the voting process. Two days after a primary or three days after a general election, there are hearings where everyone who filled out a provisional ballot must show up to court and present their ID to a judge to have their ballot counted. Most people don’t realize you have to take that second step, says Susan Dunn, legal director of the aclu of South Carolina.

Those who cast impediment ballots are also put on that court appearance list, and they can face an adversarial process. Anyone can show up and challenge that voter’s impediment to having a voter ID and get the ballot thrown out, Bursey explains.

Given the state’s ongoing efforts to make voting difficult, turnout is typically low in South Carolina elections, ranging from 20 percent to 40 percent of the electorate in primaries, and roughly 70 percent participation in presidential-year general elections.

South Carolina’s history and its current voting obstacles have convinced many residents— disproportionately black and poor—that voting is not worth the effort. As the counties that run the elections in the state continue the bureaucratic troubles, that has placed a special burden to organize and engage voters on activists like Williams and Bursey—and on the campaigns themselves.

The connections between South Carolina’s history as a slave state, its Jim Crow–era laws and segregation, and today’s voting restrictions are inseparable for Bursey, who’s been working in the state for more than 50 years. “You can’t [look at] today unless you know who wrote the rules. The rules that are running the election today, right now, were written in 1895 by Ben Tillman. And if you look up Ben Tillman in the encyclopedia, he is the archetype of a Southern bigot.”

MAR /APR 2020 THE AMERICAN PROSPECT 13

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he defense got one thing right at Donald Trump’s Senate trial. The case against him was thin, his team kept saying; and so it was, compared to the enormity of this administration’s other offenses.

Set aside the hate-mongering and the stream of conspiracy theories and demagogic bombast. Trump has sowed corruption of a breadth and brazenness unseen in the far-from-innocent annals of our nation’s history. In three years as president, he has transformed the executive branch into a giant favor factory, populated with the agents or willing partners of virtually every special interest. Add up all the routine, daily outrages—the quasi-bribery and quasi-extortion, the private raids on public funds, the handouts to the undeserving,

14 PROSPECT.ORG MAR /APR 2020

the massive flow of cash, jobs, and freebies back in return—and Trump’s attempt to squeeze a little re-election help out of the fragile government of a desperate Eastern European country does not loom particularly large in the reckoning.

Adding it all up is a challenge, though.

It’s hard to fathom the depths of the kleptocracy when there’s so much happening on the surface to divert us. The corruption most directly in our faces involves the looting and skimming and self-dealing of the president and his family. Our first hotelowning president has inspired a parade of

foreign diplomats and domestic lobbyists to pay tribute with overnight stays that are functionally indistinguishable from bribes. The Secret Service has blown over half a million dollars on golf carts protecting a leader who has spent nearly one out of every three days of his first term at one of his resort properties, which get free advertising on top of the revenue from lodging his guards and retinue. Ivanka Trump snags a valuable set of Chinese trademarks on the same day she dines with Xi Jinping.

Kellyanne Conway hawks Ivanka’s products in TV interviews.

But the personal corruption of the Trumps themselves perversely masks the sliminess perpetrated by literally thousands of presidential appointees, from Cabinet

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officials to obscure functionaries. Amid all tory—the stories both known and unknown— the distractions, it’s hard to focus on the ENTcan we begin to understand our times.

M DEPART SING more consequential crookedness and follow U O H OFand BANCONSIDER THE ISSUE of immigration. At out the plotlines of all the sordid stories, ND UR ENT grasp the brutal consequences visited Aupon PM its mention, some Americans conjure up DEVELO countless people. We lunge from scandal to images of dark-skinned interlopers threatscandal without ever filling in the bigger ening to steal our jobs or live idly off our picture, or taking proper account of all the public services, while others are more likeknaves, thieves, and corporate stooges and ly to think of children cruelly separated from parents and desperate asylum seektheir handiwork.

Hard, but worth doing—an undertak- ers stuck in Orwellian turnaround. Either ing commenced here and continued and way, we tend to overlook a big central fact of expanded online at https://prospect.org/ today’s immigration policy: the huge sums mappingcorruption, with an interactive, of money drawn from the U.S. Treasury agency-by-agency exhibit of the major offens- in the name of guarding our borders, and es thus far committed. Only by traveling to deposited into the coffers of a booming prithe far corners of this swamp, looking through vate-prison industry.

The two giants in that field, geo Group the muck, and drawing up a map of the terri-

MENT

T and CoreCivic, run a combined DEP41ARfacilities IOR TERheld N I housing more than half the detainees E H T OF in custody by the Department of Homeland Security’s Immigration and Customs Enforcement unit, known as ice; as of mid2019, geo and CoreCivic had collected an estimated $2.9 billion for their services—a huge haul reflecting a remarkable reversal of their fortunes, directly traceable to Trump and his homeland security team.

A cloud had descended over their line of business before the 2016 election. After a succession of scandals involving substandard medical care, deaths, suicides, sexual abuse, and exploitative labor practices, the Obama Justice Department had announced a phaseout of the private sector’s role in the federal prison system.

MAR /APR 2020 THE AMERICAN PROSPECT 15

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say, ‘Hey, we have one of our large givers.

They need an audience.’”

The turning point for payday loan executives came when Richard Cordray, the Obama-era head of the Consumer Financial Protection Bureau, stepped down, and Trump’s top budget official and noted cfpbphobe Mick Mulvaney stepped in to replace TAL of Mulvaney’s appointWhile the Department of Homeland Secu- him.OThe MENvalidity N R I V ENCY rity pointedly excused itself from the new ENment Owas since it went against AGcontested, N I T C E T O the fairly explicit succession provisions of policy, it nevertheless posed a serious threatPR the legislation creating the bureau. The to the industry’s future. And the industry responded: Just a day later, a geo subsid- White House took care of that problem by iary gave $100,000 to a pro-Trump super having its Office of Legal Counsel provide a pac. geo-associated executives and entities supportive memo. Its author, Steven Engel, went on to contribute another $350,000 had been the lead attorney for a payday for transmittal to Trump and other Repub- lender in a dispute over charges that the lican campaigns, plus $225,000 to help cfpb would eventually drop—after Mulfinance the Trump inaugural festivities. vaney took charge.

When Jeff Sessions got tapped for attorney general, geo Group hired two former Ses- LIKE CON MEN everywhere, our president sions Senate aides, David Stewart and Ryan relies on misdirection, using words to disLTUREbit of airtime or menRobichaux, to lobby on its behalf. A month tract from deeds.

GRICUEvery A NT of his performances MEone after Inauguration Day, Sessions revoked tal space claimed PARTby E D the Obama-era guidance, by which time is attention deflected from his government Geo’s stock market value had doubled, and and the actions of his appointees—the former CoreCivic’s was up 140 percent. “Thanks to coal lobbyist charged with protecting our President Donald Trump,” cnn observed, air and water, the pharma executive guid“America’s private prisons appear to be ing health care policy, the oil lobbyist at the entering a golden age.” And thank Presi- Department of the Interior, the Raytheon dent Trump they did, in the form of roughly lobbyist at the Department of Defense, the $1 million in contributions to his election telecom lawyer chairing the Federal Communications Commission, the ex–Goldman and re-election campaigns, at last count.

The payday lending industry made a Sachs lawyer (married to an ex–Goldman parallel comeback, courtesy of the Trump Sachs executive) heading up the Securities administration’s decision to cancel an and Exchange Commission, the ex–GoldObama-era plan to protect borrowers from man Sachs partner directing the Treasury being sucked into long-term debt at triple- Department, the shipping heiress running digit interest. An estimated $2.2 million the Transportation Department, the private donated by payday groups to the Trump equity tycoon holding down the Commerce campaign and inaugural committees dur- Department, and the auto industry lobbyist ing the 2016 election cycle spurred this over at Energy. That’s a partial list. shift, and payday lenders weren’t shy about “One of the overarching narratives of the their intent. The Washington Post caught Trump administration is the total handover Mike Hodges, ceo of the mega-chain lender of the levers of government to corporations, Advance Financial, telling industry peers and particularly the empowering of corporate that money put into the Trump cause would representatives to oversee the very compamean access to top administration officials. nies they worked for,” says Robert Weissman, “I’ve gone to [Republican National Com- the president of Public Citizen, the venerable mittee chair] Ronna McDaniel and said, and still-toothy ethics watchdog. “That is the ‘Ronna, I need help on something,’” Hodges defining story of this administration, and said on an industry webinar. “She’s been it’s been badly underreported and underap-

16 PROSPECT.ORG MAR /APR 2020

corruption of the Trumps themselves perversely masks the sliminess perpetrated by literally thousands of presidential appointees.

TMENT R A P E D preciated due to the whole Trump circus.

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all-pervasive. It includes a lot of examples that look like parodies.”

Personnel is policy, the saying goes, and it has never been so horribly true. Holding the post of secretary of commerce, for example, is Wilbur Ross, whose private equity firm paid a $2.3 million fine in 2016 over undisclosed fees charged to investment partners, and who went on to be described by Forbes magazine as “among the biggest grifters in American history” for siphoning an estimated $120 million from MENT made unhappy former associates.

DEPART SINRoss U G control his name and fortune OFbyHOseizing BA N of financially shaky companies, AND UR MENTclearing their debts for pennies on P dollar, and LOthe DEVEassets unloading the remaining for a quick buck, sometimes after walking away from worker health and pension obligations. For nearly a year after his confirmation, Ross retained his ownership in a shipping company named Navigator Holdings, tied to

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Everest Institute is a now-defunct for-profit college.

For-profit college executives are littered throughout Betsy DeVos’s Education Department.

Russian oligarchs and members of Vladimir Putin’s family. The Commerce Department is deeply involved in commercial shipping matters; the department logo features an actual ship. Just the same, before selling his stake in Navigator, which happens to own “the world’s largest fleet of natural gas carriers,” Ross personally negotiated a deal to facilitate the export of American-produced liquefied natural gas to China. The ethics officer who signed off on Ross’s continued investment got a promotion.

Betsy DeVos came to the administration’s notice through her work as a leading Republican donor and bundler, drawing on the fortune made by her father-in-law, Richard M. DeVos, from the multilevelmarketing giant Amway. At the Education Department, she gave a bunch of top jobs to people formerly employed by the likes of Career Education, Bridgepoint, and DeVry—for-profit college companies that had paid fines or made settlements over charges of deceptive marketing and inflated job-placement statistics. She and her team have treated that industry with remarkable solicitude, insisting that the defrauded former students of Corinthian and itt go on making loan payments and maintaining the

flow of federal funds to some of the smarmiest for-profit schools still on the scene.

Meanwhile, DeVos’s policies have left tens of thousands of teachers, nurses, police officers, and others unable to realize any practical benefit from a congressionally mandated program of public-service loan forgiveness. DeVos would appear to wield more than a typical Cabinet officer’s clout in this administration, to judge, anyway, by the fate of a presidential demand for measures to ease the impact of $1.5 trillion in ballooning student debt on millions of recent college attendees and the state of the economy. DeVos, whose department would have to implement this directive, has essentially ignored it; and Trump, whose re-election prospects depend on her money and Michigan campaign ties, has done nothing to force the issue. So the president of the United States is blocked from his desired goal by a functionary whose wealth confers political protection.

DeVos has achieved a certain cartoonstyle celebrity through her hapless confirmation testimony and evident scorn for the public schools. By contrast, the pervasive corruption of the Interior Department under David Bernhardt has received comparative-

ly little notice. Bernhardt was a longtime partner with the Denver law and lobbying firm of Brownstein Hyatt Farber Schreck, collecting at least $4.5 million from a roster of mining, oil, and gas clients. He replaced one of the administration’s penny-ante grifters, Ryan Zinke, who had become too much of an embarrassment by trying to spend $139,000 on six new office doors in addition to using government resources for travel with his wife. Bernhardt would soon disclose 20 separate declared conflicts of interest, deciding in what he must have imagined as an expression of transparency to carry the list around with him on an index card.

It is far from clear, however, that his list had much effect on his conduct.

Under his leadership, Interior has moved to grant a long-term water supply contract to the Fresno-based Westlands Water District, a big former client of Bernhardt’s and a supplier of water to large almond growers and other agribusinesses in Northern California, potentially at the expense of San Francisco residents who depend on the same source of supply. As deputy secretary in 2017, Bernhardt pushed to weaken protections for fish in order to justify giving more water to Westlands—an issue on which he had recently lobbied. Documents released

by Friends of the Earth show Bernhardt taking part in multiple meetings on the issue, even when the rules said he shouldn’t.

In all, Bernhardt’s department has opened a million acres of California land to fracking and oil drilling, while taking friendly action on a total of 25 measures sought or supported by former clients, according to the Center for Western Priorities. In addition to this stream of services to those he once represented, Bernhardt’s tenure has been a windfall for his former (and possibly future) firm. Brownstein Hyatt Farber Schreck has quadrupled its revenues during his time as a Cabinet secretary. No one should be concerned about any of this, Bernhardt assured The New York Times, because “Everything I do, I go to our ethics officers first.”

Elaine Chao arrived with a shorter list of conflicts, but with a remarkably easygoing posture toward ethics. She would be leading the department that regulates

MAR /APR 2020 THE AMERICAN PROSPECT 17

TMENT DEPAR BOR O F LA

international shipping while her father and other family members ran a huge international shipping business that builds ships in Chinese-government-run facilities and has received hundreds of millions of dollars in loans from a bank tied to China’s authoritarian regime. At the same time, she would be overseeing the distribution of federal transportation funds to states and localities across the country while her TMENTMcConnell, served as Senhusband, DEPARMitch TION ate majority F EDUCAleader. To make matters even O messier, the financial fortunes of the couple rested on the shipping business: In 2008, McConnell and Chao had received a gift from Elaine’s father valued at between $5 million and $25 million, according to federal disclosures.

Critics of the Chao nomination spoke of the danger of her participation in decisions benefiting either the family business or her husband’s political career. In office, she has abundantly justified both concerns. A New York Times investigation last year identiMENT fied actions taken by Chao or her ARTnumerous DEPdepartment G N that could be advantageous to I S U HO family business; OF the they included public N A B D UR NT with her father and a planned ANappearances E ELOPMtrip to China to meet with governDEVjoint ment officials there. Under the secretary’s leadership, the department has moved to cut subsidies for cargo shippers that compete with her family’s business. Until June 2019, moreover, she had failed to sell her holdings in Vulcan, a manufacturer of road construction materials—a line of business profoundly affected by Department of Transportation policies. She took action to divest only after The Wall Street Journal revealed her continued stake.

Meanwhile, Chao set up a special pipe-

18 PROSPECT.ORG MAR /APR 2020

line for Kentucky transportation projects, overseen by a top deputy, Todd Inman, who had previously worked for McConnell. At last report, dot had authorized grants in Kentucky totaling at least $78 million during the run-up to her husband’s 2020 re-election campaign. One highway improvement project went to a McConnell political stronghold, Paducah, that had been twice rejected for previous grant applications. Chao was not bashful about her role: “I try not to come empty-handed,” she quipped at a Lexington, Kentucky, event where she announced a $2.3 million grant ENT PARTMtransit to the authority.

DElocal D N LTH A S Trump’s loyal finance Steven OF HEASMnuchin, CE RVI2016 director in Ethe campaign, got personN A M HU ally rich while working for Goldman Sachs as a specialist in the kind of private-label mortgage securities that nearly wrecked the global economy. He got even richer by capitalizing on the carnage to buy a failing, scandal-stained bank on the cheap and carry out 36,000 foreclosures (many involving high-risk reverse mortgages marketed to elderly homeowners) while collecting federal subsidies intended to help keep people in their homes. In his first six months as Treasury Secretary, Mnuchin spent $1 F million flying MENT O N jets; he would Tgovernment R A P E D one for IO have used if lawyers TAThoneymoon PORhis S N A R T hadn’t advised against it. More crucially, as head of the Financial Stability Oversight Council and leader of the agency overseeing the irs, Mnuchin became the administration’s point man in efforts to weaken bank

regulations, obscure scrutiny of financial activities, and provide favorable tax rulings for wealthy individuals and businesses—an expanse of territory filled with opportunities for him to bestow favors on his industry cronies. In 2017, Mnuchin’s office released recommendations for tax regulations that were almost entirely lifted from a memo put out by the U.S. Chamber of Commerce.

The list goes on and on. Health and Human Services Secretary Alex Azar has refused to commit to making a hypothetical vaccine for coronavirus affordable; Azar is a former executive with pharmaceutical giant Eli Lilly, whose drug prices shot up during his time there. Agriculture Secretary Sonny Perdue was a founder or part-owner in more than a dozen agribusiness companies; he personally collected $278,000 in farm subsidies from 1996 to 2004. While in Wisconsin for a gathering of uneasy dairy farmers at a time of widespread distress and a surge in suicides in their ranks, Perdue implied that they should just get used to it, telling reporters, “In America, the big get bigger and the small go out.”

Housing and Urban Development Secretary Ben Carson ordered a $31,000 dining set for his office. Scott Pruitt, the now-departed epa administrator, spent $43,000 on a soundproof phone booth and dispatched aides to purchase him an old mattress from the Trump Hotel. Seema Verma, the administrator of the Centers for Medicare and Medicaid Services and proud crusader against “waste, fraud and

David Bernhardt, Interior 20 declared conflicts of interest

Elaine Chao, Transportation regulating shipping while family runs an international shipping business

Sonny Perdue, Agriculture founder or part-owner of a dozen agribusinesses

OLIVER CONTRER AS,SIPA USA VIA AP

A Trump cabinet meeting. Personnel is policy, as the saying goes, and it has never been so horribly true.

abuse” in the Medicaid program, apparently had no problem with devoting $2 million of her agency’s budget to a personal PR campaign aimed at, among other things, getting designated one of the country’s top “Power Women” and gaining coverage in places like Glamour magazine.

To an extent uncontemplated by even the most business-friendly administrations of the past, Trump and company have filled decision-making posts at the subcabinet level with industry alums and apologists.

Scott Angelle came to his Interior Department job overseeing safety and environmental enforcement after earning roughly $1.5 million on the board of an oil and gas pipeline company. Before that, he fought the BP-spill-triggered moratorium on Gulf Coast drilling while serving as Louisiana’s secretary of natural resources, a job from which he resigned when a brine company he was in charge of regulating created a giant sinkhole. Addressing an oil industry audience in 2017, Angelle gave out his cellphone number and advised his corporate listeners to communicate with him by phone in order to avoid leaving a paper trail.

One of Angelle’s colleagues at Interior,

Assistant Secretary Doug Domenech, is a former oil and gas lobbyist who ran an industry-financed foundation dedicated to making the “forgotten moral case for fossil fuels.” The Justice Department’s first female associate attorney general, Rachel Brand, had been a lawyer or lobbyist for Google, T-Mobile, and the United States Chamber of Commerce, besides filing a friend-ofthe-court brief that helped Citigroup dodge an admission of wrongdoing for its role in the sale and promotion of toxic mortgage bonds. (In February 2018, Brand left the administration to become a top executive at Walmart.) At the Department of Agriculture, Deputy Secretary Steve Censky had spent 21 years as ceo of the American Soybean Association, which lobbied against disclosure rules for products containing genetically modified organisms, or gmos.

Brooke Appleton, Censky’s chief of staff, had been a lobbyist for the National Corn Growers Association, to which she returned in February 2019. Kailee Tkacz, tapped to serve on a nutritional policy advisory panel, had been a lobbyist for the Corn Refiners Association, the National Grocers Association, and the Snack Food Association,

battling against federal efforts to discourage excessive sugar and salt consumption.

In October 2019, ProPublica reporters attempted to count up the former lobbyists recruited into the Trump administration.

They arrived at a working total of 281—one lobbyist for every 14 non-civil-service job openings, and four times more than Obama had hired during his first six years in office.

Nowhere has industry capture been more extreme than at the Environmental Protection Agency, where the résumés of key staffers glitter with the names of such past employers as Exxon, Hess, BP, DowDuPont, Dynegy, Bechtel, Duke Energy, and (in multiple instances) the American Petroleum Institute and the American Chemistry Council. Even at epa, however, it would be hard to find a more appalling case than Nancy Beck, named to head its office of chemical safety after holding a top job at an industry lobbying group, on whose behalf she had battled against an epa proposal to halt the sale of a trio of chemicals linked to birth defects, nerve damage, and a disturbing number of deaths. Within weeks of her arrival, Beck was leading the charge against that proposal, based on the same

MAR /APR 2020 THE AMERICAN PROSPECT 19

MENT DEPART TERIOR IN OF THE

arguments she had developed as a lobbyist, and over the protests of agency professionals who had been working on the issue. Was there a conflict of interest in there somewhere? Lest anyone think so, the epa had its legal counsel compose a pair of “impartiality determination” memos citing Beck’s “unique expertise, knowledge and past experience” and the need to consider “all perspectives.” If the Senate goes along with President Trump’s wishes, Beck will soon be running the Consumer Product Safety Commission. epa is one of a number of agencies where public-interest advocates find themselves regularly dealing with officials who, in past lives, were working “directly to undermine the agencies they are now serving as managers,” says Andrew Rosenberg of the Union of Concerned Scientists. Agencies are increasingly making policy decisions without “the professionals even being in the room,” and putting out rules or guidance documents with no analysis or supporting evidence, he adds; instead, “It’ll just be ‘We’ve decided to do this.’”

THE TRUMP ADMINISTRATION’S sky-high

turnover rate reflects, among other factors, its open hostility to dissent or indeed to an interest in facts. “You get the sense that … this is not a place for you to be exploring things that don’t agree with someone’s political views,” Lewis Ziska told Politico, after the conclusion of two decades’ work as a plant physiologist at the Department of Agriculture. His resignation had been spurred, he said, by the experience of seeing his superiors blow off a study of climate change’s impact on the future of rice-growing and the 600 million people who depend on it.

One thing you can’t get in trouble for in this administration is the use of official powers to see to the needs or whims of the president. That has proved to be a sound survival strategy. Trump’s original attorney

20 PROSPECT.ORG MAR /APR 2020

general, Jeff Sessions, lost his job for recusing himself from the Russia inquiry; his successor, William Barr, has made himself indispensable by ordering investigations of Trump enemies and squelching probes of Trump himself. Mnuchin, for his part, has worked with irs officials to keep the Trump tax returns on lockdown, reportedly overruling lawyers who argued that the agency had no choice but to turn them over in response to a House subpoena.

The Treasury Secretary also had a hand in tweaking the rules of the Opportunity Zone tax credit so that it might be more readily available to rich real-estate wheeler-dealers.

The beneficiaries we know about include Jared Kushner, former Governor Chris Christie of New Jersey, New York real-estate magnate and longtime Trump associate Richard LeFrak, former White House aide Anthony Scaramucci, and Mnuchin’s longtime friend, the convicted securities crook Michael Milken, who later secured a presidential pardon with Mnuchin’s further assistance.

By looking out for Trump, you gain a license to look out for yourself—that is the credo of this administration. Wilbur Ross accepted the task of cooking up a phony legal pretext for the White House’s effort to discourage Latino voting through the insertion of a citizenship question into the 2020 census, a plan stymied by the Supreme Court. In return for his dutiful service, Ross has been permitted to play a leading role in U.S.-China trade and natural gas export matters, despite his joint investment in the Navigator shipping company (along with a Chinese state fund) and natural gas concerns. In addition, he has conferred with leaders of state-controlled funds in Qatar, Japan, and Singapore, which had previously placed money with his private equity firm.

He has also held official meetings with the ceos of Chevron and Boeing while his wife owned shares in those companies valued at $400,000 and $2 million, respectively.

Officials of the Department of Homeland Security, including current acting Secretary Chad Wolf, have been steady cheerleaders for Trump’s cherished border wall, participating in promotional events that effectively double as re-election commercials. Meanwhile, a stream of dhs people have moved

One thing you TURE Lcan’t U C I R G A TMENTin R get in trouble for A P E D this administration is the use of official powers to see to the whims of the president. on to lucrative positions in businesses that rely on Homeland Security contracts. One of them, Scott Sutterfield, now an executive at LaSalle Corrections, previously ran ice’s field office in New Orleans. During his time there, ice began using eight new forprofit detention centers in Louisiana and Mississippi. Sutterfield then went to work for LaSalle, the company operating six of the new jails. Although he claimed to have recused himself from the contracting process, a colleague didn’t sound so sure. “Not extremely a lot,” said LaSalle Director of Operations Kevin Sumrall when asked if Sutterfield had been involved in decisions affecting LaSalle.

SINCE THE BEGINNING of his presidency, Donald Trump has managed to fend off two long official inquiries, one going as far as impeachment. Now that the goal is to win an election, some investigation-weary Democrats are counseling their party to go easy on the attacks and the whole subject of corruption, to concentrate on kitchentable concerns and accentuate the positive in order to appeal to a small but theoretically crucial bloc of Trump-susceptible swing voters in swing states.

That way lies political disaster. “You don’t bring a knife to a gunfight, Donald Trump taught us that,” says Richard Cordray, who has watched the Consumer Financial Protection Bureau, which he led for six years, get dismembered by Mick Mulvaney and other Trump hirelings. Cordray, who ran unsuccessfully statewide in Ohio twice (once

ALEXEY FILIPPOV/SPUTNIK VIA AP

Though Trump ran on “draining the swamp,” anti-corruption sentiment boosted Democrats in 2018.

for attorney general and once for governor), scoffs at the notion of the Midwest as a zone of comparative indifference to Trump political thievery. Voters everywhere react very badly to public officials “who steal from our pockets and stuff their own,” Cordray says.

There is plenty of evidence to support him. Since the financial crisis of 2008, polls show corruption climbing the ladder of voter concerns to a place near the top.

Unfortunately, voters all too often set their corruption outrage aside out of a weary sense that things will be pretty bad regardless of which way they go. That perception was one of Trump’s triumphs in the 2016 campaign; it was achieved through a combination of his “drain the swamp” chants and his endless attacks on a Democratic nominee who had made herself conveniently vulnerable. He will no doubt deploy the same techniques again if Joe Biden is the nominee, pounding away at Hunter Biden’s highpaid corporate board gigs (emblematic, if truth be told, of small-time, bipartisan corruption that masks the much worse stuff), and ginning up whatever other scandals or pseudo-scandals come to mind. His assign-

ment could be tougher if the Democrats end up making a different choice.

When corruption gets rampant and brazen, however, and when it is heavily concentrated in one political party, it makes for wave elections like those of 1974, 2006, and, indeed, 2018. Voters went to the polls in the most recent midterms with their heads full of tawdriness involving the likes of Michael Cohen and Paul Manafort, and proceeded to oust a record number of House incumbents from office. Many of those legislators lost to Democratic challengers running on strong clean-government platforms and rejecting corporate pac dollars.

Afterward, Nancy Pelosi was one of a number of observers pointing to corruption outrage as the biggest driver of the outcome. This was so, they concluded, even though party leaders had been timid about the issue beforehand, pumping out advice and talking points with an almost obsessive emphasis on health care.

This time around, Democrats enter the 2020 campaign with the advantage of an agreed-on corruption-fighting platform (the already-passed House legislation symboli-

cally dubbed H.R. 1), and with the chance to put the crimes of Trump & Co. front and center. They can do so not only on the campaign trail, but, thanks to their 2018 success, in House oversight hearings, following up on the work of media and watchdog organizations. More digging, with this administration, is bound to unearth more dirt.

They can, above all, follow the lead of Elizabeth Warren (in a valuable legacy of her unsuccessful campaign) by drawing the connection again and again between issue areas where obvious and widely supported policies keep going nowhere, and the industries whose corrupt influence guarantees that. Corruption, in addition to being a powerful issue in its own right, can help the party transcend debates over potentially divisive policy specifics: Progressives and moderates may disagree about Medicare for All and a public option, but they can unite behind the foundational need to rein in the self-interest of the drug, insurance, and hospital industries. Trump’s industryladen Health and Human Services Department exemplifies this kind of influence, and should be held up as a model—one of a great many to be found in the executive branch of government under this president.

Democrats must summon the courage, most importantly, to make the leap from denouncing Trump’s over-the-top personal corruption to acknowledging and challenging the more generic and abiding money corruption that, with or without Trump, gives billionaires and rapacious corporations and financial interests way too much clout, at incalculable cost to the rest of us and the idea of democracy.

As messy as things look right now, a referendum on corruption and clean government is the kind of election that gives the country, as well as the Democratic ticket, the best shot at a decisive victory. “Corruption is not a peripheral concern,” says Jamie Raskin, the Maryland congressman and constitutional law scholar. “It’s the very heart of what ails us … We have to elevate the anti-corruption agenda to the top of our political program.”

Jim Lardner is a journalist and political activist.

MAR /APR 2020 THE AMERICAN PROSPECT 21

Senate Minority Leader Chuck Schumer tells progressive Senate candidates to stop running in primaries and funnels money and operatives to his centrist preferences. BY BOB MOSER

POWER TO THE

22 PROSPECT.ORG MAR /APR 2020

PERSON ALEX BR ANDON/AP PHOTO

M

aggie Toulouse Oliver seemed tailor-made for the political moment. New Mexico’s 44-year-old secretary of state had bootstrapped her way up from a troubled Native American family, put herself through college as a working single mother, become a leading progressive activist (heading the state’s League of Conservation Voters), and then supervisor of elections in Albuquerque. In 2016 and 2018, Toulouse Oliver won double-digit victories for secretary of state. She earned national acclaim as an innovator in ramping up voter participation, running secure elections, combating sexual harassment in the state capital, and bringing dark-money donors—most notably, the Koch brothers— into the light of day. Ask just about any New Mexico Democrat to describe her, it seems, and the word comes back: “She’s tough.”

Last year, she put that toughness to a new test. As expected, three-term Democratic Sen. Tom Udall announced in March 2019 that he’d be retiring rather than stand for re-election. A month later, to no one’s surprise, Toulouse Oliver announced a run to become the first female senator from New

Mexico. Her launch video, aptly named “Possibilities,” told her compelling backstory and made it clear that her gender and heritage were far from the only changes she’d bring to the Senate: Toulouse Oliver would champion Medicare for All, student debt relief, sweeping immigration reform, equal pay, and serious gun control. She was determined, she said, to “set off the alarm on climate change instead of ringing the bell of ignorance.” Flashing a winning smile at the camera, she concluded, “that’s why I’m running for U.S. Senate. Because I still believe anything is possible in America.”

Maybe, maybe not.

Toulouse Oliver was well aware that she’d have competition in the Democratic primary. Senate seats don’t open up often, and with Democrats dominating New Mexico over the past couple of decades, there were plenty of young-ish politicians eager to climb the ladder. Even before Toulouse Oliver’s quick announcement, she’d been beaten to the punch by Ben Ray Luján, the six-term congressman from Santa Fe. While Luján had never run statewide, he was the scion of one of the most powerful Democrats in New Mexico; his father, Ben, had

been speaker of the state House, where he’d served for more than 30 years. In Washington, the younger Luján had risen to number four in House leadership through the usual means: raising truckloads of money.

In 2018, he’d chaired the Democratic Congressional Campaign Committee, making him Nancy Pelosi’s chief deputy in charge of recruiting the “right” kinds of candidates to run, and raising and dispersing $300 million to protect incumbents and boost the party’s chosen newcomers. To put it mildly, the dude had connections.

“We knew from Day One that we were going to be out-fundraised,” says Toulouse Oliver’s campaign manager, Heather Brewer. “A single mom from New Mexico was always going to be outspent by a former chair of the dccc.” But while Luján would have a lock on big corporate donors, Toulouse Oliver’s campaign had reason to think she’d be very appealing to important funders like emily’s List, along with insurgent leftwing groups and—if she could catch on nationally—tons of small donors. “She had a lived experience different from anybody in the U.S. Senate,” Brewer says. “Plus Maggie was the more progressive; she’s always been

MAR /APR 2020 THE AMERICAN PROSPECT 23

Maggie Toulouse Oliver

24 PROSPECT.ORG MAR /APR 2020

of protest from progressives—the dscc is just as powerful and intrusive. Senate Minority Leader Chuck Schumer’s hand-picked favorites gain an insurmountable financial advantage and the establishment stamp of approval, effectively ending most primary elections before they begin. Schumer doesn’t just choose between candidates who’ve declared their interest or started to run; he aggressively shapes the races to suit his narrow idea of “electability,” sometimes elbowing the “wrong” candidate out of the race with strong-arm tactics. And when he’s not happy with his choices, Schumer goes out and finds his own, recruiting centrist candidates with big-donor connections who often turn out to be lackluster campaigners at best.

Toulouse Oliver didn’t want to give in.

She’d fought uphill her whole life. But she and her campaign were about to get a hard lesson in exactly why, since 2010, not a single candidate endorsed early by the dscc had lost a Democratic primary.

BREWER SAYS SHE had tried several times

to get dscc Chair Catherine Cortez Masto or her boss, Schumer, to meet with Toulouse Oliver and see what she had to offer. “They never returned my phone calls,” Brewer says. “We were just ignored.” They had no illusions that the establishment would go against Luján, she says. “We just wanted the opportunity to make the case that they should stay out of the primary. Two strong, viable progressives were running. Given the Democratic edge here, whoever won the primary was going to win the general election. This was the race. Why shouldn’t New Mexicans be able to decide between two worthy candidates?”

For candidates left unchosen by the dscc and the Schumer machine, “there are so many, many, many obstacles that you wouldn’t see if you’re on the sidelines,” Brewer says. “It’s all designed to keep outsiders from even trying.” The highest, hardest hurdle is raising enough money to

TOM WILLIAMS/SPUTNIK VIA AP

a huge advocate on government transparency, and Luján had accepted a large amount of special-interest money. There was going to be a unique choice here.”

But Toulouse Oliver wasn’t going to have just one formidable opponent; she would have two. Because, as she soon learned, she’d have to run against the entire Washington Democratic establishment. On April 18, more than 13 months before the primary, the Senate’s campaign arm, the Democratic Senatorial Campaign Committee (dscc), endorsed Luján. So did Pelosi.

It was a power move designed to “clear the field,” in Washington parlance, and the two other leading Democrats pondering a bid, state Attorney General Hector Balderas and Rep. Deb Haaland, dropped out immediately. They understood they’d be facing the Democrats’ version of the Death Star.

While the dccc, which intervenes early and often in House primaries, tends to garner more press attention—and more howls

Schumer doesn’t just choose between candidates; he aggressively shapes the races to suit his narrow idea of “electability.” compete. “We were told again and again, if you can hold Luján’s financial advantage to 10-to-1, you’re doing great,” Brewer says.

When the party committees decide to weigh in on a primary and pick their favorite, they aren’t just pledging to put millions behind him or her, along with other valuable campaign resources (organizers, consultants, fundraising pros); they’re signaling where other Democratic donors should invest as well—and which candidates they shouldn’t bother with. But the party doesn’t stop there. “I understand, from what we were told, they were using their influence to get organizations who’d endorsed Maggie, or thought about supporting her, to stay on the sidelines,” Brewer says.

When the candidate met with donors and progressive organizations that would be expected to be friendly to her effort, Brewer says, “We got a lot of paternalistic reactions: ‘Are you sure you want to take on this fight?

Because it might come back to bite you.’

What you couldn’t help hearing was, ‘Why aren’t you putting your pretty little dress on and waiting for another time?’”

Toulouse Oliver managed to raise enough to staff up her campaign last spring and summer. But that was just one challenge it had to meet. Top-level campaign vendors—pollsters, field organizers, fundraisers—have grown increasingly wary of taking on non-establishment candidates.

And for good reason: Last year, the dccc announced that it would blacklist any campaign vendor that worked on a primary challenge to a Democratic incumbent. By implication, that also meant steering clear of any challenge to party-endorsed candidates altogether. “The dscc didn’t spell it out the same way,” Brewer says, “but they didn’t have to. If you go with an insurgent

candidate, you’re done. ‘You cross us, and we’ll cross you.’ It cast a shadow over everything about how people approached Maggie’s campaign.”

One person who didn’t take Toulouse Oliver lightly was her opponent. Just two days after she bucked the dscc and officially announced she was running, Luján—whose voting record on the environment had been mixed—declared he would be co-sponsoring Green New Deal legislation in the House.

A month later, he said he would—like Toulouse Oliver—refuse to accept corporate pac money. In June, he tacked left again, coming out for Medicare for All. And in August, he became the highest-ranking Democrat to call for an impeachment inquiry.

By that point, he’d effectively appropriated most of the big issues that Toulouse Oliver was campaigning on. And, no surprise, he was also raising big bucks. By October, Luján had $1.6 million in the bank. Toulouse Oliver had $85,000 heading into the final quarter of the year. “We did polling,” Brewer says, “and we still had a path to victory. It was an ugly, scorched-earth path, though.”

At the end of October, after six months of fighting the system, Toulouse Oliver withdrew, throwing her support behind Luján and celebrating the small-but-unsatisfying feat of pushing him to the left. For the rest of the campaign, she’d continue working as secretary of state to make voting easier—work that will, of course, benefit Luján in November.

The dscc had won again. Field cleared, check! Months later, Brewer, who’s been working in New Mexico politics for two decades, still hasn’t gotten over it. “You’re going 100 miles an hour trying to fight the establishment, and then—bang, it’s over.

This policy of hamstringing challengers, strong-arming vendors, warning donors

not to give to challengers—it’s completely contrary to the Democratic spirit. What they’re doing is shutting out different voices.

It’s not OK.” IT USED TO BE A rare thing for the national

Democratic committees to step into—much less step on—party primaries. “The party’s traditional view was that you should be neutral until the states or districts picked a nominee,” says Andrew Romanoff, a former Colorado House Speaker who served on the Democratic National Committee in the late 1990s. But since the mid-2000s, under the leadership of Pelosi, Schumer, and former Senate Majority Leader Harry Reid, the notion that voters should choose their own nominees has become an anachronism.

Schumer made his bones in the Senate by chairing the dscc during his first term, in the 2005-2006 cycle, making good use of his home-state ties to Wall Street. From the start, he’s shown no hesitation about meddling in primaries—and no interest in changing his ideas about what an “electable” candidate looks like, despite the fact that his handpicked recruits have regularly bombed in winnable general elections. This year, the strategy of fixing primaries has reached its logical zenith: In every single state where there’s an open Senate seat or a vulnerable Republican, the dscc has chosen an early favorite. That adds up to a lot of states this time around—four in which Democrats are favored to win (Arizona, Colorado, Maine, New Mexico), and seven more where they have fair-to-middling chances (Georgia, Kansas, Kentucky, Iowa, Montana, North Carolina, Texas).

The dscc, of course, says it’s all a matter of pragmatism. The rationale for preventing voters from choosing Democratic nominees is supposedly to avoid “divisive” primary battles that drain resources and goodwill heading into general elections.

And the choice of candidates is based on cold, hard calculations of what it’ll take to win a particular state. “These are not decisions made on a whim or a popularity contest,” Dan Sena, who ran the dccc in 2018, said when questions were raised about this year’s Senate picks. “These are decisions that are very well thought-out, take time to

MAR /APR 2020 THE AMERICAN PROSPECT 25

develop, and often they’re critical to being able to flip a seat.” dscc spokesperson Lauren Passalacqua put it more simply: “We’re working with the strongest candidates who will help Democrats take back the Senate.”

So what does the lineup of “strongest candidates” in key 2020 races look like?

Eight of the 11 are white. Six are men. Three have never run for any office. Six have never won an election. All but two oppose both the Green New Deal and Medicare for All. All but one—the Rev. Raphael Warnock in Georgia, the lone African American on the list—are demonstrably more conservative than their main rivals bypassed by the dscc.

The list of viable contenders rejected by the dscc is a study in contrast. The tone was set with the first early endorsement of the cycle: A couple of weeks before the committee chose Ben Ray Luján over Maggie Toulouse Oliver last April, Schumer’s blessing went to former astronaut Mark Kelly in Arizona, a political novice who only registered as a Democrat in 2018, over Rep. Ruben Gallego, a 39-year-old rising star in the progressive caucus who’d long been planning to run. (Gallego subsequently opted to bow out.)

Another Schumer recruit was rolled out in June 2019 in the state every Democrat would most love to win: Mitch McConnell’s Kentucky. Democrats there, and many progressives around the country, had gotten fired up about the prospect of an out-ofthe-box challenger to the self-proclaimed “Darth Vader of the Senate,” who’s never lost in six Senate elections and also never been liked: Twice over the past year, McConnell’s approval ratings in Kentucky hit a rock-bottom 18 percent. Matt Jones, a 41-year-old Eastern Kentucky native with the gravelly drawl to prove it, started Kentucky Sports Radio after finishing Duke Law School, and has become one of the most beloved figures in the state, mixing politics into his sports talk and specializing in McConnell takedowns. “For a lot of this state, I’m their one progressive friend,” he told me last summer, when he was still considering a tilt at the McConnell windmill.

Like other Kentucky Democrats, Jones had watched with mounting frustration as McConnell demolished a series of well-fund-

26 PROSPECT.ORG MAR /APR 2020

When the party committees weigh in, they’re signaling where other Democratic donors should invest as well—and which candidates they shouldn’t bother with. ed centrists backed by the dscc. Kentuckians mostly vote Republican now, and they gave Trump a 30-point blowout margin in 2016, but they’ve still elected Democrats to the governorship three of the last four cycles.

Jones couldn’t help wondering, “What if you stand up for progressive economic values and do it with a down-home Kentucky spin?” His hope was that the dscc, which he calls “a complete disaster when it comes to selecting candidates,” would stand back and give him a chance to test his theory. “Kentucky is a blue-collar, anti-establishment state,” he says, “The reason that people like Trump here has nothing to do with ‘issues’ per se. They like him for the exact same reason they don’t like McCon­nell. To beat him, you’ve got to run somebody who runs against his mainstreamism.”

The dscc did not stand back, of course. It never reached out to Jones. Instead, Schumer wooed Amy McGrath, the ex-Marine who came up just short in a House race in 2018.

McGrath is running straight down the middle, emphasizing “country over party,” and raising a ton of money—just as the dscc favorite in 2014, Alison Lundergan Grimes, did, before losing to McConnell by 15 points.

Jones ultimately decided to stick with his radio network and channel his McConnell animus into an upcoming book, Mitch, Please. The whole thing left him, and a lot of his fans, anguished. “I was looking at this and saying, ‘I’m thinking about taking on the most powerful senator since lbj. I’m going to do it as a radio host, and risk having people turn on me for good and ruining my career if I lose. And then there’s Schumer coming along to say that I’m going to have

to run against the Democratic establishment as well.’”

Join the club, Matt. With Jones out of the running, first-term state Rep. Charles Booker of Louisville, an African American, stepped up late last year to give McGrath some competition from the left with a scrappy grassroots campaign touting Medicare for All and universal basic income.

And so it went, throughout 2019. In Iowa, where first-term Republican Joni Ernst looks eminently beatable, the dscc came out in June for real-estate executive Theresa Greenfield, another first-time candidate, over two young progressives with broad appeal who’d been looking to run: J.D. Scholten, whose grassroots populist campaign nearly unseated the white supremacist Rep. Steve King in 2018, and Linn County Supervisor Stacey Walker, an African American Bernie Sanders supporter who’s viewed as a rising force in the party. Scholten wound up running against King again. When Walker decided to stay out of a “primary orchestrated by Washington elites,” as he put it, he was brutally honest about his reasons. “I don’t have the privilege of challenging institutional forces on this scale without incurring significant damage to my political career,” he said, “and at the end of the day, this fear won out over my courage and I’m not proud about that.”

The Iowa seat, it’s worth noting, almost surely wouldn’t be in Republican hands if the dscc hadn’t given an early, fieldclearing endorsement in 2014 to famously haughty Rep. Bruce Braley after longtime Democratic Sen. Tom Harkin retired.

Soon after receiving Schumer’s blessing,

MAT T ROURKE /AP PHOTO

Schumer’s selections don’t always work out: Katie McGinty, here debating Republican Pat Toomey, went on to lose the Pennsylvania Senate race in 2016.

Braley made headlines complaining about the shortage of locker-room attendants in the Senate gym during a government shutdown; worse, he was caught on tape poking fun at the idea that popular Republican Sen. Charles Grassley, a mere “farmer” without a law degree, might soon be chairing the Senate Judiciary Committee.

Farmers, a large contingent in Iowa, took notice; Braley lost handily.

It wasn’t the first or last time the dscc’s strategy left it to ride or die with a candidate who proved inept or downright offensive.

In 2016, with Republican Sen. Pat Toomey looking like a sure loser in Pennsylvania to populist Democrat Joe Sestak, Schumer recruited Katie McGinty, who’d run for election exactly once and won 8 percent in a primary. Sestak had infuriated the dscc by challenging and beating Republican-turned-Democrat Arlen Specter in a 2010 primary, and he had to pay the price.

McGinty, propelled into the general election by $5 million in dscc spending against Sestak, became a laughingstock for her wooden public presence and a pariah for her deep ties to oil and gas companies. She lost a race that set spending records on both sides.

Even when Schumer’s recruits win general elections, the upshot for Democrats can

be problematic. His great success story of 2018, Arizona Sen. Kyrsten Sinema, votes regularly with Republicans on judicial nominees, backed Attorney General Bill Barr’s confirmation, opposes net neutrality, and was ranked—by one nonpartisan votetracking group—as more conservative in 2019 than Mitch McConnell. The Arizona Democratic Party threatened to censure her last year for “failing to support the tenets of the 2016 Democratic Party platform.”

In newly competitive Kansas, where gop Sen. Pat Roberts is retiring, the early dscc nod went to longtime Republican state Sen. Barbara Bollier, who’d switched parties only one year before. In Maine, where Sen. Susan Collins’s serial capitulations to President Trump have wrecked her reputation for independence in a state that’s been trending blue, a potentially lively Democratic primary was squelched in May, when the dscc endorsed state House Speaker Sara Gideon. “They didn’t just get in putting their thumb on the scale,” marveled progressive activist Betsy Sweet, who stayed in the race while other contenders dropped away, but struggled to raise money and find campaign vendors. “It was like the full body.” Collins, Sweet noted, has beaten Schumer picks in the past, partly because of the way the dscc

dictates they run campaigns. “What I see Chuck Schumer trying to do for all these candidates is to package them like a cookie.

Their formula is to raise a lot of money and [run] a lot of negative ads, and you win.”

If anyone doubted her assessment, Schumer’s interventions in North Carolina provided ample proof. First-term senator Thom Tillis is considered one of the most beatable Republicans in the country. After trying and failing to recruit a series of candidates last year, Schumer landed on moderate military veteran Cal Cunningham, a one-term state legislator in the early ’00s who lost the Democratic nomination for Senate in 2010, despite a dscc endorsement, and hasn’t run for office since. The dscc was determined to block state Sen. Erica Smith, who’d been running a progressive campaign from the start. “Sen. Schumer, for whatever reason, did not want an African American running for Senate in North Carolina,” Smith said. Just before they tapped Cunningham, Smith claimed that party leaders had told her, “unequivocally that they were not, had not, did not intend to endorse in the primary.” Smith stayed in, defiant but drastically outspent.

Toward the end of the campaign, a mysterious pac—its funding later traced to the

MAR /APR 2020 THE AMERICAN PROSPECT 27

28 PROSPECT.ORG MAR /APR 2020

that he’d be a terrible senator and didn’t want the job.”

Romanoff was undaunted by Schumer’s kiss-off. “If Washington were a town known for its good judgment,” he says, “I might have been more inclined to defer.”

But Schumer wasn’t blowing smoke. In late August, a week after Hickenlooper put a merciful end to his presidential bid, he released a video declaring that he’d changed his mind about running for Senate. “I’ve always said Washington was a lousy place for a guy like me who wants to get things done,” Hickenlooper said. “But this is no time to walk away from the table.”

Huzzah! The dscc endorsed him two days later.

Colorado Democrats were dumbfounded and furious. The move was especially mystifying, as candidate Trish Zornio noted, because “any Democrat running against Cory Gardner is slated to win. It’s a wonderful thing: A potted plant would probably win in November.” Six of the women running in the primary fired off a public letter to Schumer and Cortez Masto, demanding that the dscc “reconsider its early endorsement” of Hickenlooper and accusing the party of gross gender bias. “Those of us who have run for office before have been told

ERIC GAY/AP PHOTO

Republican Senate Leadership Fund—spent more than $2 million on dirty-trick ads touting Smith as the “true progressive” in the race and criticizing Cunningham’s stances on lgbt rights and climate change. But pacs supporting Cunningham, which put $7 million behind him, simply ramped up their spending in response. Cunningham won 57-35 on Super Tuesday.

Schumer’s quest for a nonSmith candidate in North Carolina produced the most embarrassing, and revealing, glimpse yet into the dscc’s criteria for selecting the “strongest” candidates.

Jeff Jackson, a 37-year-old National Guardsman who’s M.J. Hegar, a Schumer-picked Senate candidate in Texas, greets supporters. crusaded against Republican voter suppression and gerrymandering in Bennet, who’d been appointed to the Senate the state Senate, met with Schumer early in 2009 when Ken Salazar became Presiin 2019 to discuss his own possible candi- dent Obama’s secretary of the interior.

Back then, Romanoff admits, his supdacy. In September, long after he’d decided port for single-payer health care, radical not to run, Jackson revealed why in a talk at unc Charlotte. Jackson, all gung ho, environmental reforms to combat climate said he’d outlined his plans for the cam- change, and same-sex marriage were a few paign, telling Schumer he wanted to start election cycles ahead of their time in Colowith “100 town halls in 100 days” across rado. Ten years later, as he tried to mount his the state. political comeback, those views had become Schumer responded brusquely, Jackson mainstream—so much so that at least a halfreported. “Wrong answer … We want you to dozen other potentially viable progressives, spend the next 16 months in a windowless including two women who’d also been state basement raising money, and then we’re House Speakers, were planning to run for going to spend 80 percent of it on negative the chance to unseat unpopular first-term Republican Sen. Cory Gardner. But hey, ads about Tillis.”

Romanoff thought: Maybe his old foes at Democracy in action. the dscc would give him a leg up this time.

“It turned out that it was all a ruse,” EARLY LAST YEAR , as he laid the groundwork for a Senate campaign in Colorado, Romanoff says. “Sen. Schumer made it Andrew Romanoff got a call from the dscc. clear to me that he was going to recruit “They said Sen. Schumer would like to meet Hick”—former Gov. John Hickenlooper, with you, see what you’re putting together, who was then running a hopeless campaign see if we can recommend any consultants,” for president from the right, likening Berhe recalls. The outreach was a bit surpris- nie Sanders to Marx and Stalin—“into the ing. A decade before, Romanoff, who’d been race. They were very naked about this. They the youngest House Speaker in state history, didn’t want to see a primary; they didn’t had gotten crosswise with the Washington want Democrats to fight each other. And establishment when he’d mounted an unsuc- they didn’t seem terribly concerned that cessful progressive challenge to Michael Hick had said publicly, more than once,

Since the mid-2000s, under the leadership of Nancy Pelosi, Chuck Schumer, and Harry Reid, the notion that voters should choose their own nominees has become an anachronism. to ‘wait our turn’ and ‘don’t rock the boat’ more times than we care to mention,” they wrote. “Now the dscc, by its endorsement, is implying that we should defer to a male candidate because you seem to believe he is ‘more electable.’”

This wasn’t just sexist, they said, but a recipe for losing a Senate seat that should be a gimme. Hickenlooper’s popularity had waned during his two terms as governor, as he fought against legalizing marijuana, sued two towns that tried to ban fracking, and quintupled oil and gas production in the state, earning him the nickname “Frackenlooper.” His reactionary presidential campaign hadn’t burnished his image. “We would hate to see Colorado as another state that could not take back the U.S. Senate because of poor candidate selection by the dscc,” the women wrote, referring to Schumer’s habit of wooing older white men out of retirement to run and lose—including former governors Ted Strickland of Ohio (2016) and Phil Bredesen of Tennessee (2018), and former senators Bob Kerrey of Nebraska (2012) and Evan Bayh of Indiana (2016). They all looked strong in early polling. And they all lost by double digits in November.

Before long, as money poured in for Hickenlooper and dried up for the others, fury gave way to resignation for most of the hopefuls. By the end of November, five of the letter writers had dropped out, along with former U.S. Attorney for Colorado John Walsh and Obama-era Ambassador Dan Baer, the lone openly gay contender. But the resentments remained fresh, especially as Hickenlooper followed the dscc’s “windowless basement” formula and skipped 19 of 20 candidate forums and debates

between September and March. On March 7, Romanoff—the strongest progressive left standing (“I’m either stubborn or slow to take a hint”)—beat Hickenlooper in the state’s Democratic caucuses, the first step in Colorado’s long and convoluted process of choosing a nominee.

Hickenlooper remains the favorite to prevail in the June 30 primary, with a large lead in the polls and millions to spend. But the dscc’s heavy-handed intervention on his behalf won’t soon be forgotten. If early endorsements are supposed to foster unity and quell bitter divisions in the Democratic ranks, this one backfired spectacularly.

So did Schumer’s even more unaccountable maneuvering in Texas, where demographic trends finally began to translate into Democratic votes in 2018. Rep. Joaquin Castro was expected to head up a big, impressively diverse field of Democrats hoping to topple Sen. John Cornyn, a powerful Mitch McConnell lieutenant in Washington who’s a faint presence back home. Even if Castro opted out, the contenders would include the most powerful African American in the state capital, Sen. Royce West of Dallas, and the dynamic organizer of the Jolt Initiative that’s registered hundreds of thousands of young Latino voters, Cristina Tzintzún Ramirez. No matter who won, the top of the Democratic ticket in Texas was going to look like the future. Until Schumer stepped in.

In December, before Castro made up his mind, the dscc threw its weight behind the most conservative white candidate in the mix, M.J. Hegar. A female Air Force pilot and Purple Heart recipient in Afghanistan, Hegar had come close to knocking off a House Republican in the suburbs of Austin

in 2018, largely on the strength of a viral campaign video, “Doors,” which memorably highlighted the personal and professional obstacles she’d overcome. She’s an appealing character—a motorcycle-riding mom with tattoos and a knack for cornpone putdowns (she loves to call Cornyn “cupcake”)—with the kind of mushy ideology that might have made her a strong candidate in the Texas of the 1980s or ’90s. Back then, Democrats needed to woo white voters back into the fold to win. Today, they can only win with record turnout from the nonwhite majority.

Even Texas Democratic Party officials were left stunned by the endorsement. Castro soon decided to keep his House seat and wait for another day to run statewide, but the others stayed in. West and Ramirez both ran against the dscc, which he accused of “trying to block African Americans out of the process.” Ramirez spoke openly of her discussions with the national party: “I let them know that if they did endorse her, I would hate for it to backfire on her in the general election with voters of color who already felt underrepresented and ignored.” On Super Tuesday, Hegar led the field, but with only 22 percent of the vote—an anemic showing for a candidate who spent $3 million, with an additional $3.5 million boost from VoteVets Action Fund, a dark-money group that backs Afghanistan and Iraq veterans. West, who spent less than $1 million, narrowly edged Ramirez for a spot in a May 22 runoff.

If Hegar makes it to the general election, it’ll cost millions more to get there. So much for the Schumer strategy of avoiding expensive and divisive primaries. There was no guarantee that Castro, West, or Ramirez would have beaten Cornyn in November if they emerged from a fair and unmediated primary, of course. But Texas Democrats would have had a candidate who looked like Texas circa 2020, rather than an echo of the good ol’ past.

But the past is never past, it seems, when Chuck Schumer and his brain trust play God in Democratic primaries.

Bob Moser is a contributing editor for the Prospect and The New Republic, and the author of Blue Dixie: Awakening the South’s Democratic Majority.

MAR /APR 2020 THE AMERICAN PROSPECT 29

Neo-Feudalism The Rise of

T

he history of the modern democratic state can be understood as a story of shifting authority and lawmaking, first from private potentates to sovereign monarchs, and then to publicly accountable democracies. Today, this centuries-long democratizing trend is rapidly being reversed. Western democracies are not simply embracing neoliberalism in the sense of deregulating the economy. Elites are pursuing something aptly described as a new form of feudalism, in which entire realms of public law, public property, due process, and citizen rights revert to unaccountable control by private business.

The system of finance, once supervised by bank regulatory agencies and the Securities and Exchange Commission, has been delegated to private realms of law. The financial collapse of 2008 is best understood as the seizure, corruption, and abuse of entire domains of regulation and jurisprudence.

Laws to protect workers and consumers, reflecting 70 years of struggle to expand rights, are now erased by compulsory arbitration regimes. Trade law permits similar private tribunals to overturn or sidestep public regulation. Tech platform monopolies have created a proprietary regime where they can

crush competitors and invade consumer privacy by means of onerous terms, often buried in online “terms of service” provisions.

The unity of common scientific inquiry has been balkanized by confidentiality agreements and abuses of patents, as scientific knowledge comes to be “owned” by private entities. Companies like Monsanto, manipulating intellectual property and trade law, prevent farmers from following the ancient practice of keeping seeds for the next planting season. This is not deregulation or neoliberalism. It is legally sanctioned private jurisprudence—neo-feudalism.

The Brief Era of the Democratic Commons For part of the 20th century, the democratic state served as a counterweight to the concentrated power that flowed to concentrated wealth in a capitalist economy. Laws helped workers offset the power of employers, protected small investors from the schemes of bankers and brokers, gave some countervailing power to tenants against landlords, and added consumer safeguards to constrain abuses of manufacturers and retailers. All of this has been thrown into reverse—not just

by the more visible forms of deregulation, but by the creation of entirely private realms of property and law.

It is easy to miss what has been occurring, because the age-old elements of private law, such as contracts and torts, have long coexisted with public law and regulation. Contention between public law and private power is a very old story. What is new and alarming is the displacement of entire areas of public law by private commercial interests and the resurrection of abusive forms of private law.

Not only did the 20th-century state expand democratic public law. Acting through the courts, the state intervened to police private contracts and protect weaker parties from abuse by the powerful. Twentieth-century courts moved away from the formalist contract law of the late 19th century, which was characterized by rigid contract interpretation and deference to the principle of caveat emptor.

In its place, 20th-century judicial interpretation and enforcement of contracts emphasized fairness between the parties.

Using such doctrines as unconscionability, duress, and impracticability, courts in the 20th century refused to enforce con-

BY ROBERT KUTTNER AND KATHERINE V. STONE ILLUSTRATION BY ROBERT MEGANCK

30 PROSPECT.ORG MAR /APR 2020

The private capture of entire legal systems by corporate America goes far beyond neoliberalism. It evokes the private fiefdoms of the Middle Ages.

MAR /APR 2020 THE AMERICAN PROSPECT 31

tracts between parties with vastly unequal resources, knowledge, or bargaining power when they found agreements to be oppressive, coercive, grossly one-sided, misleading, or blatantly unfair.

For example, courts refused to enforce loans to consumers with excessive interest rates; consumer contracts that disclaimed standard warranties; employment contracts with broad covenants not to compete; contracts between mining companies and farmers to sell family homesteads for a pittance; and leases with draconian liquidated-damage clauses for minor tenant infractions. Moreover, the courts scrutinized the process of contract formation for real, as opposed to fictitious, consent. In a similar vein, the Uniform Commercial Code, drafted by legal-realist scholar Karl Llewellyn in 1952 and subsequently adopted in all 50 states, expanded the doctrine of good faith in commercial contracting and adopted “commercial reasonableness” as the standard for interpreting contractual ambiguities.

The trend in contract law took a U-turn in the 1980s, as the law and economics movement began to permeate the judiciary. The new “efficiency” theory of contract law held that all contracts should be enforced, notwithstanding either deception or vast power inequalities between the parties. Thus the capture of public law and the reversion to one-sided private law reinforced each other, creating vast pools of proprietary power.

The extreme privatization of jurisprudence overlaps the privatization of public services, but it is more sinister. When a public service such as a voucher school, a park, a highway, or an entire town (such as Disney’s town of Celebration) is privatized, it alters the cost, quality, and distribution of the service, and also reduces public accountability. Voucher schools are able to manipulate admissions, avoid costly special-needs kids, and have their own legal and disciplinary procedures, which are supervised only very loosely by the state, if at all. Public prisons, already replete with abhorrent conditions, have become much worse as private, for-profit entities, with even less opportunity for redress.

The carving up of public law and property into proprietary domains is the new trag-

32 PROSPECT.ORG MAR /APR 2020

a one-way seizure of private power and law by elites.

From Feudalism to Democracy—and Back

For part of the 20th century, the democratic state served as a counterweight to the concentrated power that flowed to concentrated wealth in a capitalist economy. That role has been reversed as private potentates have captured the state. edy of the commons. The environmental tragedy, at least in principle, is amenable to public regulation that applies to all players.

In the new tragedy, public regulation is precluded because law has been sundered from the democratic commons, in a manner that evokes the original tragedy of the commons— the English enclosure movement of the 17th and 18th centuries—in which lands that had been cultivated by the peasantry since time immemorial were carved up into commercial properties by local lords, with the blessing and legal protection of the Crown.

In some respects, the new feudalism is even more lopsided than the original, in that historic feudalism had some forms of reciprocal obligation between lord, vassal, and serf; between king and aristocrat; Church and Crown; and between apprentice, tradesman, and master. For all of its absolutism, feudalism had aspects of what J.K. Galbraith, describing capitalism at the apex of the mixed economy, was to call “countervailing power.” Neo-feudalism is

The historic movement from feudalism to the modern state and then to political democracy began in the late Middle Ages and the early modern era. Feudal lords had massive landholdings wherein their word was law. They maintained their own military forces, and operated feudal courts to resolve disputes. These quasi-states had understandings (and sometimes clashes) with monarchies and with the Church. Feudal lords had plenary authority over their domains, although they themselves were subject to the higher authority of the monarch and the Church. During the heyday of feudalism, most contract questions, property disputes, criminal matters, domestic relations, inheritance, and other matters affecting ordinary folks were handled in the local courts. In principle, serfs had some customary rights, but masters ruled.

The feudal system arose in response to the anarchy and vacuum of sovereignty left in Europe after the collapse of the Roman Empire and the ebb and flow of invaders from the east, north, and south—Huns, Goths, Arabs, Norsemen, and others. Some monarchies were potent, others weak; but as long as a feudal lord was a faithful vassal of the king, he was sovereign in his own realm. For nearly a thousand years, there was a four-way contention for power among kings, feudal lords, the Church, and the rising imperatives of commerce, with the monarchy gradually gaining sovereignty.

In the late Middle Ages, commerce among different principalities was governed by a transnational body of customary commercial law known as the lex mercatoria.

Commercial disputes were resolved by private tribunals created by the commercial community according to the norms of the merchant community itself. The results were recognized by monarchies. This system made it possible for a product to pass from country to country with the property rights of the owner recognized by other merchants and sovereigns. The slave trade

was part of this commercial system, and it could only function thanks to this symbiosis between traders and kings, in which ownership rights to a chattel were recognized by monarchies.

By the end of the 18th century, these struggles for primacy had been largely resolved in favor of the state. This came to be known by scholars as the Westphalian system, after the 1648 Treaty of Westphalia, which ended the Thirty Years’ War by giving the king the right to dictate the religion of his subjects.

Nation-states gained more and more authority over realms previously governed by feudal lords, including the power to define and protect property rights, maintain a military and judicial system, and regulate commerce, labor, the professions, finance, trade, and domestic relations. The state gained a monopoly on the legal use of force. A postfeudal aristocracy still existed, but the monarch became increasingly sovereign. Yet the bias in favor of economic elites persisted.

There followed another century of struggle to make the state democratic. Despite the democratizing trends, some feudal remnants remained well into the modern era.

For example, until the early 20th century, under the English doctrine of primogeniture and the device of the entail, property owners were required to keep their estates intact and leave them to a single heir. In the U.S., supposedly “born free” of feudal heritage, many feudal doctrines from the common law of England were nonetheless incorporated into Britain’s North American colonies. In the U.S. as well as Britain, the doctrine of coverture effectively made wives the property of husbands. In much of the West, there were still property requirements for the franchise, left over from the aristocratic era.

Throughout the 19th century, employers in the U.S. retained quasi-feudal rights over their workers through the operation of two common-law doctrines—the “entire contract” doctrine, which provided that workers who left an employer mid-contract had no right to be paid for any work they had performed, and the tort of enticement, which enabled employers to prevent their workers from departing their establishment to work for someone else. However, with the rise of commercial principles in the late 19th centu-

ry, some individualistic approaches emerged.

For example, the at-will rule that emerged in the 1880s gave individual laborers the right to quit their employment with impunity— and gave employers the right to fire workers for any reason, or for no reason. And, in the area of industrial accidents, no matter how egregious an employer’s negligence, courts reasoned that the worker had freely contracted to accept the risk and therefore had no recourse. Thus, in the case of labor law as well as other areas of commercial law, both the feudal remnants and the evolving modern market system favored the property owner.

IN THE UNITED STATES, the democratization

of the modern state was realized in the economic realm only in the 20th century, as new citizen and worker protections were enacted

by Congress and upheld by courts. In the 20th century, government acted to balance the commercial interests of emerging companies and industries against a broader public interest. Railroads, radio, television, electric utilities, civil aviation, telephones—all sectors with actual or potential monopoly abuses— were subject to public law after many had attempted to install regimes of private law relying on coercive market power. Railroads, which had operated like feudal baronies, dictating terms of commerce for shippers and destroying rivals, became subjected to public rate-making. In the telephone industry, the dominant Bell System had sought to make and enforce rules to crush or capture potential competitors, but it came to be regulated by the Federal Communications Commission.

So did the emerging radio industry, dominated by one company, rca, which had sought to rule the airwaves. In all of these cases, the democratic state intervened both to supplant areas of private law with public regulation and to assure that systems of private law had some balance and accountability that would protect the economically weak from the economically strong.

The law became more procedurally transparent as well as more substantively egalitarian. The Administrative Procedure Act of 1946 (apa) created an orderly and transparent process for regulatory agencies to make rules and to ensure greater citizen participation in the rule-making

process. The apa also imposed restrictions on ex parte contracts between the regulated entities and the regulators, and prohibited conflicts of interest in many other respects.

Thus, the gains for democracy were both procedural and substantive.

The high watermark of the democratized legal and policy regime was the 1960s and 1970s, when numerous consumer and environmental laws were enacted, unions represented almost one worker in three, and courts defended citizen rights.

Beginning in the 1980s, power shifted again. Entire domains were handed back to private entities that were empowered to exercise quasi-state functions and create their own proprietary systems of law.

These developments have been described in mainstream policy discourse as “deregulation” and “privatization,” but those terms are misleading. The term “deregulation” suggests a reversion to a pre-existing system of nonregulation, a realm in which state authority is absent. But this is a fantasy.

There is no pre-legal, law-free realm. There is always regulation, albeit sometimes invisible and private, and hence unaccountable.

Similarly, the term “privatization” is misleading. The term suggests a neutral transfer of governmental functions to the private domain for the sake of efficiency. But privatization invariably has distributional as well as civic consequences, since it changes the structure of costs and benefits and obscures public accountability. Privatized water and highway systems raise costs to users. Public parks are generally free; privatized ones charge. The privatized entity can avoid public obligations such as due process, transparency, and nondiscrimination requirements.

Outsourcing of public functions, which gained ground beginning in the 1980s, brought with it outsourcing of jurisprudence. Private prisons turn a quintessentially public function—incarceration for criminal actions—into a profit-making venture with minimal public accountability. In private “voucher schools” (financed by public funds), a private entity makes the rules.

Gated residential communities, such as Disney’s Celebration, are privately controlled municipalities that make and enforce their own laws. Private mercenary armies, such

MAR /APR 2020 THE AMERICAN PROSPECT 33

as Blackwater (now rebranded as Academi), are hired by the Pentagon so that their “soldiers” will be less accountable for what might otherwise be war crimes. Eminent domain, the inherent public prerogative to claim private property for a public purpose, has been commandeered by private developers. And courts—the ultimate embodiment of law in a democracy—have been privatized by the vast expansion of compulsory arbitration.

Neo-Feudalism and the Financial Collapse of 2008 Under the system of financial regulation created in the New Deal, commercial banks were strictly supervised under one regulatory regime, while the issuance and sale of securities were tightly governed under another. In exchange for federal deposit insurance and/or membership in the Federal Reserve System, commercial banks had to abide by reserve requirements, conflictof-interest strictures, and regular supervisory examinations. Their ability to merge or open branches was limited. The interest they could pay on deposits was regulated. They were not permitted to turn loans into securities. This regulatory regime was designed to ensure both safety and soundness of the system as a whole, as well as protection of investors, savers, and borrowers.

From the New Deal to the 1980s, investment bankers, retail stockbrokers, and issuers of stock were governed by the Securities and Exchange Commission. Publicly traded stocks were subject to extensive disclosures and prohibitions against insider trading and other abuses such as over-leveraging, selfdealing, and deceptive marketing and pricing, which had led to the Great Crash of 1929.

There were no derivatives, no private equity, no complex securitization, no pyramid schemes, no off–balance sheet assets, and above all no opaque system of private law.

The system was simple enough for supervisors to comprehend and thus to regulate.

In a parallel process of public invention and regulation, the New Deal created and governed a new system of mortgage finance.

A new home loan bank system backstopped the (mostly nonprofit) savings and loan sector. The government invented the long-term,

34 PROSPECT.ORG MAR /APR 2020

self-amortizing mortgage. A new agency, the fha, insured these mortgages so that ordinary people could acquire homes with low down payments. Yet another public agency, fnma, used Treasury bond financing to purchase mortgages and replenish the capacity of banks and thrift institutions to make more loans. Still another new agency, the Home Owners Loan Corporation, helped refinance mortgages for borrowers at risk of foreclosure. The entire system was closely supervised and scandal-free.

The important point is that this entire post-Depression architecture of financial structure and regulation was publicly created and subject to public scrutiny. It existed for the benefit of the broad citizenry, not for the profit of industry insiders. Even transactions and contracts that were ostensibly private, such as the sale of stocks and bonds, were subject to public rules. This system worked well. Not only did it protect ordinary investors, savers, mortgagors, and the economy as a whole; the financial part of the economy supplied plenty of capital to the real economy during the long postwar boom.

As the distribution of political power shifted in the 1970s and 1980s, the financial industry began reprivatizing systems of law and finance. They invented new strategies of financial speculation to which regulators gave their blessing. Leverage buyout artists began acquiring entire companies using almost none of their own money, with the target company’s stock as collateral. In the new, pro-market environment, regulators concluded that this was legal.

The lbo business mutated into private equity, in which trillions of dollars of transactions were outside the system of securities regulation on the premise that these were not public offerings of shares. What had been a very small loophole in the structure of New Deal securities law metastasized into a largely unregulated multitrilliondollar industry. Complex layers of derivatives securities were invented, in which immense and largely hidden multiples of leverage were possible. When some regulators expressed an interest in taking a closer look, a Congress newly beholden to the financial industry acted in 2000 to expressly prohibit regulation of derivatives, either

as insurance, securities, or as gambling.

In the same period, public agencies delegated regulation to regulated industries via more than a dozen industry-controlled entities known as self-regulatory organizations (sros). The original self-regulatory organization was the New York Stock Exchange, created in 1792. Prior to the New Deal, the Stock Exchange functioned as a private club, and its failure to enforce transparent and fair dealing had vast consequences for the public wellbeing when markets periodically crashed.

From the inception of securities regulation in 1933, there was bitter contention over how much enforcement would be the direct province of the new sec and how much would be delegated to the privately operated stock exchange. It is a testament to the residual power of capital that even at the nadir of its disgrace, the New York Stock Exchange won many of these initial skirmishes, setting an unfortunate pattern to be exploited once fdr was gone. Against the wishes of the sec’s original architects, the stock exchange was permitted to supervise many of its own activities with the sec relegated to watchdog, supervising at one remove. In 1939, the sec allowed the first explicitly recognized sro, the National Association of Securities Dealers, to govern the system of over-thecounter (off-exchange) stock trades. This was just the beginning of a vast reversion.

After Wall Street invented financial derivatives in the 1980s, the whole field of derivatives creation and trading came to be governed by rules established by the industry trade association, the International Swaps and Derivatives Association (isda).

At its simplest level, a financial derivative is analogous to an insurance policy against a bond or other security failing to pay back interest or principal. But isda, not a government agency, gets to decide how derivatives work and under what circumstances that obligation must be paid. This is neofeudalism, par excellence. The democratic state plays no role whatever, except to bless the privatized realm of law.

In the area of accounting standards, the sec expressly delegated monitoring and enforcement to the industry trade association, the American Institute of Certified Public Accountants (aicpa). When self-regu-

lation failed and accounting frauds led to the Enron scandal and kindred abuses, Congress restored some direct regulatory standards via the Sarbanes-Oxley Act of 2002. However, that same legislation created a new body, the Public Company Accounting Oversight Board (pcaob), that enabled industry self-regulation to persist in a different form. pcaob was created as a dot-org, not a government entity. Its president is paid over $670,000 a year. It is dominated by the Big Four accounting firms.

The sec delegated a great deal of regulatory enforcement to it, as well as to another industry private association, finra, the Financial Industry Regulatory Authority (which used to go under its original and more accurate name, the National Association of Securities Dealers). By definition, the self-interest of securities dealers is not identical to that of the investing public. sifma, the Securities Industry and Financial Markets Association, is a lobbying and trade association. But with the approval of the government, sifma also sets the regulatory standards for repos (overnight loans) and money-market and securities lending transactions through its “master templates.”

There are similar industry groups that “regulate” the terms of municipal bond underwriting and sales (the Municipal Securities Rulemaking Board); the terms for creation and trading of futures (the National Futures Association); as well as the Financial Accounting Standards Board (fasb).

All of these industry self-regulatory bodies have their own systems of jurisprudence, far less transparent or committed to the public interest than the direct public regulation of the New Deal schema. Roosevelt’s original alphabet soup of new public agencies has mutated into a toxic stew of self-regulatory and self-interested organizations. It is one giant conflict of interest.

Private Jurisprudence and the Mortgage Collapse The subprime collapse of the early 2000s was the direct result of the invention of new toxic financial products and private systems of law. Loan originators created new categories of mortgages in which the borrowers’ rates would explode after a few years,

Franklin Roosevelt’s original alphabet soup of new public agencies has mutated into a toxic stew of self-regulatory and self-interested organizations run by and for regulated industries. It is one giant conflict of interest. and marketed them aggressively to unsuspecting homebuyers who could not afford them. Deceptive mortgage products such as “pick-a-pay” had low nominal interest rates, while the true interest costs were added to the principal. Others had low teaser rates that rose dramatically after a few years. The mortgages in turn were sold to investment bankers who packaged them into securities that, through the alchemy of private credit rating agencies, were given triple-A ratings.

When investment bankers devised pyramids of asset-backed securities and collateralized debt obligations, they needed complex private legal and financing systems.

The government basically got out of the way and let the bankers run the show and write the rules as private contracts, even though a variety of existing laws and principles of sound banking were violated. The credit rating agencies that rewarded the securities based on exploding mortgages with triple-A ratings were essentially unregulated.

In order to make the system of highvolume mortgage securitization work, the financiers had to devise an end run around

a property-recording system that has been in place in America since before the Revolution. The banks invented a private database that tracked transfers of title to the property, called Mortgage Electronic Registration Systems (mers). mers was basically a shell company, wholly owned by major banks, designed to enable the securitization industry to evade recording fees incurred when banks transferred mortgages multiple times.

Rather than using the traditional system of transferring and recording property and mortgage liens with the local recorders of deeds, the mers system listed itself as the mortgagee of record. Banks could make unlimited transactions inside mers; the recorder of deeds would only know about the original sale.

At the height of the housing bubble, most of the existing mortgages in the United States listed mers as the mortgagee. But this mass tax evasion scheme was susceptible to widespread database errors that proved disastrous when the whole subprime system blew up. mers would either try to claim standing over mortgages it had no financial interest in, or would make an after-the-fact assignment to a trustee, which violated the rules governing securitization. mers designated thousands of low-level mortgage industry workers “vice presidents” of the company, and they would sign the unlawful transfers of mortgage in mers’s name.

This phony paper was used as evidence in several million foreclosure cases. Many families lost their homes based on fraudulent documents from a shell company that was at best a legal fiction. A handful of judges threw out foreclosure proceedings on the premise that the deed had been fraudulently recorded by a shell system or there was no record of the loan in the first place, but most foreclosures stood. The industry’s creation of a proprietary fiefdom of law—a private property records system created with no public debate or legislative approval—was richly rewarded. mers still exists.

The Invasion of Arbitration Another emblematic case of neo-feudalism is the use of compulsory arbitration to move consumer and employment disputes from the

MAR /APR 2020 THE AMERICAN PROSPECT 35

public courts to a rigged process of private systems of adjudication. This privatization of justice deprives workers and consumers of the benefits of many of the statutory rights that they achieved in the 1960s and ’70s. It is the result of new, radical judicial interpretations of the Federal Arbitration Act (faa).

The faa was enacted in 1925 at the behest of the business community, which wanted to bolster trade associations by giving them the ability to compel their members to submit disputes to arbitration rather than to the courts. But since the 1980s, the Supreme Court has ruled that the statute could be used by corporations to require arbitration in virtually all settings. Companies began inserting arbitration clauses in their employment and consumer contracts. By the 2000s, large corporations made arbitration mandatory for most employment discrimination disputes, federal and state wage and hour disputes, disputes over alleged violations of state employment protective laws, consumer breach of warranty claims, allegations of consumer fraud, and most other cases involving workers and consumers.

With the approval of the courts, corporations now require arbitration for allegations of lethal negligence by nursing homes, allegations of identity theft, instances of sexual assault of students by teachers in private schools, claims of antitrust conspiracies by large corporations against small businesses, and efforts by on-demand workers to obtain fair working conditions. The corporation picks the arbitrator and defines the rules of the proceedings. It can insist on limited discovery and impose confidentiality gags so that plaintiffs with similar cases cannot share evidence or information about the outcome of their cases. It can also exclude certain types of evidence in advance, and limit the types of remedies a successful claimant can recover.

It is common to also impose fee-sharing so that an employee or a consumer has to pay a significant sum just to have their case heard.

In a recent trend, some employers require the losing party to pay all of the cost of an arbitration—typically several thousands or tens of thousands of dollars—as well as the winning party’s attorney fees. These clauses are designed to discourage workers and consumers from asserting claims

36 PROSPECT.ORG MAR /APR 2020

ated; some corporations were forced to pay multimillion-dollar awards.

But in 2011, the Supreme Court gave its blessing to arbitration provisions that ban the use of class actions, either in court or in an arbitration proceeding. The case involved tens of thousands of consumers, each of whom had been cheated out of approximately $30 by at&t. Without the vehicle of the class action, such a large number of smallvalue claims would never be pursued in any tribunal, giving corporations a license to cheat customers with impunity. Today, the vast majority of arbitration clauses written by corporations include a class action ban.

Compulsory arbitration moves consumer and Private Arbitration employment disputes from Regimes in Trade Law the courts to a rigged process Since the 1980s, major trade agreements have included a device known as Investorof private systems of adjuState Dispute Settlement. This first came dication, depriving workers about in the case of trade deals between European multinational corporations and and consumers of statutory former colonies with weak or corrupt sysrights that they achieved in tems of law. The U.S. government copied this formula in bilateral trade deals to the 1960s and ’70s. altogether. When disputes go to arbitration and an award is issued, the losing party has virtually no right to appeal.

Moreover, arbitration proceedings lack the due process protections we expect of courts. An arbitration hearing has no transparency—there is almost never a transcript of the proceeding; there is often no written opinion; and there is seldom a public record that reveals the names of the parties, the nature of the dispute, or the outcome.

Hence large corporations, who as repeat players have amassed experience with many different arbitrators and seen many similar cases, have a substantial advantage.

Arbitration has seriously undermined workers’ and consumers’ rights to use class actions. With class action suits, individuals with common claims—such as Walmart workers who were denied legally mandated overtime payments—are able to consolidate their claims, obtain a lawyer, and get into court. In the 1990s and early 2000s, employment-related class actions prolifer-

protect U.S. investors from expropriation.

Before they risked their money, American investors wanted some assurance that in the event of disputes, a relatively impartial tribunal would be the judge. Thus were born investor-state panels that could supersede local law. This made a certain amount of sense in the case of trading partners with underdeveloped systems of law. But beginning with the North American Free Trade Agreement of 1993 (nafta), investor-state panels were empowered to override federal and state courts in cases of disputes between private corporations and government regulations in advanced democracies, in this case the U.S. and Canada, as well as Mexico.

Under nafta, a U.S. corporation with operations in Canada or Mexico can bring suit before a special nafta panel alleging that a labor or environmental or financial regulation violates the trade agreement because it operates as an indirect barrier to trade. Not only does the investor-state provision of nafta allow for end runs around national and state courts; the review panels have none of the strictures against conflicts

of interest or the discovery provisions of regular courts. Under nafta, arbitration panels have required governments to pay corporations about $500 billion in damages because national or state health, safety, labor, financial, or environmental laws supposedly infringed on trade freedoms.

Some critics of nafta were surprised and heartened when the investor-state dispute resolution provision of nafta was revised in the renegotiated U.S.-MexicoCanada (usmca) agreement of 2020. But industry did not resist all that strenuously because the investor-state provision lives on in the 2019 EU-Canada Comprehensive Economic and Trade Agreement (ceta), which expressly permits corporate end runs around law to special investor-state panels.

So a U.S. corporation with operations in Canada or Europe can use ceta to bring a complaint before such a panel. Investorstate options also survive in dozens of other bilateral trade deals to which the U.S. is a party. A variation of the process of corporate end run around national law is possible under the World Trade Organization’s rules.

Silicon Valley as a Giant Fiefdom One of the startling trends of recent decades has been the success of the giant tech monopolies at creating their own proprietary systems of law and insulating themselves from public regulation. While citizens are protected from unreasonable searches and seizures by constitutional constraints on government surveillance, the tech giants know far more about us, often with our “consent,” than the government does. The giant tech industry has fought off efforts to regulate its use of personal data.

Instead, companies such as Google, Apple, and Amazon have invented their own jurisprudence, hidden in obscure terms of service, to govern the consent of users to the commercial use of personal data.

The tech monopolies have also succeeded in creating a proprietary legal regime to govern their relationship with their actual or potential commercial competitors, and they have stacked the deck in favor of the house.

Amazon, for example, has agreements with

2.5 million third-party sellers, who use its site to market their products. These agreements are devised by Amazon for its own advantage, often at cost to outside vendors who are both users of Amazon’s platform and rivals who compete with Amazon’s own offerings. By playing the role of both platform provider and competitor, Amazon is able to engage in strategic pricing and marketing, courtesy of its superior access to consumer buying data. Sellers must also pay a basic subscription fee, referral charges, and additional fees if Amazon provides fulfillment and delivery. And of course, Amazon requires all of its independent sellers to sign the now-familiar arbitration clause, requiring submission of disputes to an arbitrator selected by Amazon. Most of this ought to be illegal, but it isn’t.

Instead of being the creation of Amazon’s private law, fair ground rules should be set by some neutral regulatory agency. Critics have suggested a variety of reforms to limit the market power of giant tech monopolies and the resulting abuses. These include the application of common carrier principles, privacy rules, and the enforcement of antitrust laws. Under common carrier principles, Amazon would either be a platform or a vendor, but not both. But so far, the large platform companies have succeeded in fending off these reforms by means of a combination of raw political power and a sly appeal to libertarian values.

Private Law in the Drug Industry Like Big Tech, the pharmaceutical indus-

try is a fortress of privatized law—despite the fact that most drug breakthroughs are ultimately financed by you, the American taxpayer, either through nih grants or through elevated health insurance premiums. The big drug companies have succeeded in manipulating patent law to their advantage, to the point where independent innovators who have new ideas that would lower consumer prices are often silenced by industry lawsuits and confidentiality agreements. The industry has also succeeded in jacking up prices of drugs long in the public domain by devising “new” variants that add little value, obtaining monopoly protection for these “improvements” from the patent office, and then strong-arming medical systems into using the more expensive substitute. The industry also keeps well-established and cheap drugs artificially scarce and expensive by driving out generic producers or merging and carving up markets so that even many drugs that are off-patent have only one producer.

How is all this possible? In the absence of countervailing public regulation, the industry simply makes up its own private law, using its market power to increase profits and insulate itself from either competition or government supervision.

It is a law unto itself. The more powerful the industry is, the more allies it has in Congress to make sure that the fda stays narcotized under Democrats and Republicans alike.

AMERICAN DEMOCRACY today is under

assault on multiple fronts. The autocratic incursions of the Trump administration are only the most urgent and immediate.

But the private capture of public regulatory law is more long-term and more insidious.

If we are to get our democracy back, once we oust Trump we need to begin to reclaim public law from neo-feudalism.

The ultra-libertarian Friedrich Hayek warned that too much state intervention would deprive the citizenry of cherished rights and liberties. With unintended irony, he titled his treatise The Road to Serfdom.

Hayek had it backwards. Today’s road to serfdom is corporate.

MAR /APR 2020 THE AMERICAN PROSPECT 37

LIKE UBER BUT FOR GIG WORKER ORGANIZING Drivers and delivery personnel for appbased employers keep getting squeezed.

Now they’re fighting back. BY BRYCE COVERT

found out about it. As a mother of four children with a husband in the Navy—which requires moving around a lot—it rarely made sense for her to get a full-time, traditional job. When the family needed more income, Instacart offered the promise of extra cash without having to commit to a regimented daily schedule. “I said, ‘Oh my goodness, this is perfect, because I can do deliveries on the weekends,’” she recalled. “I was super excited.”

For the first week, her dream seemed to have come true. She was picky about what jobs she would take, only accepting ones that paid at least $50 and could be done in about two hours. She figured that would be worth her time, after factoring in the gas and mileage on her car. She could do jobs whenever her husband was home to watch the kids. “It was so nice for me to be able to do a job that didn’t include me having to get child care,” she said. “We were able to just do so much more” with the money, from auto repairs to

38 PROSPECT.ORG MAR /APR 2020

new shoes for the kids and day trips to restaurants. “That was a big jump for our family to have an extra $150 a week,” said Davis.

But a few weeks in, things seemed to change. The pace slowed down. The jobs being offered didn’t pay as well. When Davis’s husband decided to sign up to help make more cash, he was offered higherpaid jobs she wasn’t seeing. “It was kind of a red flag,” she said. She thought she was supposed to have priority for decent jobs because she’d already put in enough hours with the company.

Davis decided to take a break, but in the process she lost all the hours she had banked. The pay got even worse when she returned. Rather than finding jobs that paid $60 to $70, she was being asked to do a full shopping trip—which took time to make sure to actually get what customers wanted—for as low as $9 or $10. “That’s not even enough for gas,” she noted.

“I promise you, I tried to figure out how to better work the system in my favor,” Davis said. “There’s no figuring it out. It just does not make sense.” There was an algorithm determining what jobs she would see and how much they paid—but she couldn’t unlock how it worked. “I’d rather stay home with my kids and husband than go do a $12 job,” she said.

For Davis, earnings from Instacart represented something extra to tide her family over. But for many who rely on working for the app, there’s little choice but to accept the paltry pay. According to a 2019 analysis of 1,400 samples of pay data, the Pay Up campaign found that Instacart workers earned just $7.66 an hour after accounting for mileage costs and taxes, while about half of the jobs paid less than the federal minimum wage. Only 13 percent of jobs paid at least $15 an hour plus expenses.

“That’s why a lot of us have banded

COURTESY OF WORKING WASHINGTON

Instacart seemed like a dream when Elisabeth Davis first

Elisabeth Davis

MAR /APR 2020 THE AMERICAN PROSPECT 39

together,” Davis said. “It’s a billion-dollar company … There’s literally no reason why workers should be making so little … They’re not going to move until their hand is forced.”

App workers at delivery services like Instacart and DoorDash, as well as rideshare giants Uber and Lyft, are now trying to force the hands of the tech companies they work for by joining together, getting organized, and making their demands heard.

They want better pay and more control.

Their movement comes amid an important uprising among the American workforce. In the past two years, nearly a million workers took part in a major strike, the most in three decades, including walkouts by public-school teachers, autoworkers, nurses, and grocery store employees. But organizing gig workers is a daunting challenge, given that they rarely see each other and that much of labor law doesn’t even apply. In response, advocates, organizers, and academics have been rethinking how to bring them together and fight for better pay and conditions. New tactics have emerged and new laws have been put forward to rewrite the very rules of labor organizing.

Gig workers may be going up against billion-dollar corporations with few laws to buttress them, but that hasn’t kept them from speaking out and even going on strike.

They’ve already notched significant victories, while promising more.

paign, of course, is connecting with workers.

Davis achieved this through serendipity.

One day at a grocery store, she overheard two people talking about Instacart. She approached them, hoping to get tips on how to beat the algorithm, and found out that they were trying to organize Instacart workers. “That’s when I found out I wasn’t the only one getting low-paying jobs after making good money,” she said. They invited her to a rally against Postmates at its downtown Seattle office.

Davis decided to take her four-monthold baby and go to the rally. “Something told me I just needed to be there,” she said.

“There’s power in numbers.” They marched with signs and T-shirts and brought peanuts to give to the company’s white-collar

40 PROSPECT.ORG MAR /APR 2020

Mariah Mitchell (right) with Jason Reeves at the kickoff event for gig worker legislation in Seattle

employees—symbolizing the pay frontline workers are making.

That protest was organized by Working Washington, a small grassroots nonprofit that launched the Pay Up campaign and has recently found itself at the center of some of the most high-profile gig economy organizing. Rachel Lauter, the organization’s executive director, saw organizing for Uber and Lyft drivers but sensed a gap for other app workers. So, she told me, “we started to fill it.” Working Washington began organizing app workers over a year ago.

It’s required new and different tactics.

Facebook is one of the best ways to reach new members; Working Washington also deploys Zoom meetings and text threads. Her group

has also built a tool that helps calculate app workers’ take-home pay from each job and then prompts them to get involved. “These are digital workers, and these folks see customers more than they see fellow workers, so it has to be a different style,” Lauter said.

The first campaign was launched when one worker recounted an Instacart job where the net pay was $10.80—$10 in customer tip and just 80 cents paid by Instacart. It turned out that the company’s new payment method counted tips toward the guaranteed minimum workers were told they would make on each job, essentially allowing the company to pocket much of the gratuities. The practice triggered sustained outrage. “It was like running into the

COURTESY OF WORKING WASHINGTON

THE FIRST STEP to any organizing cam-

Organizing gig workers is a daunting challenge, given that they rarely see each other and that most of labor law doesn’t even apply. fire,” Lauter said. “Instacart drivers were really agitated.”

Working Washington launched an online petition, and workers began sharing their stories of low pay and tip pocketing on social media. The uproar was ultimately successful, pushing Instacart to announce just two weeks later that it would change its policy and always give workers tips on top of base earnings. DoorDash, which had had a similar practice, announced a few months later that it would do the same.

Building on the success of that campaign, Working Washington has now amassed a list of 12,000 app workers across the country. They are organizing behind three core demands: a minimum pay rate of $15 an hour plus expenses, ensuring that tips are not taken out of base pay but layered on top, and transparency on what jobs will pay and why. The first target is getting the city council in Seattle, where Working Washington is based, to pass legislation that would set pay standards for all independent contractors, and codify the new industry standard of paying tips on top of base pay. The city council passed a similar bill aimed just at Uber and Lyft drivers in November.

The group hopes that momentum will ripple out from Seattle. “Similar to how the Fight for $15 evolved, create the possibility and reality of something happening in strategic jurisdictions and allow it to spread elsewhere around the country so it becomes part of the national conversation,” Lauter explained. Both Fight for $15 and Working Washington have pushed for change

at individual companies, alongside regulatory and legislative change that can ensure all companies are held accountable. But it’s new territory for Working Washington, which has typically focused on community organizing in its own backyard.

The early success had a lot to do with simmering anger, Lauter told me. “I feel like it’s boiling over.”

IN A TRADITIONAL workplace, reductions

in pay are usually announced and documented. With app-based work, it’s governed by an opaque algorithm and is often more subtle. The day I spoke to Gil Worley, his 19-year-old dog had died that same morning. “I could say, and honestly feel in my heart, part of it was not being able to afford the medications I needed to get him the past couple of months because of the job,” he said.

Worley was a social worker for 18 years, but was laid off three years ago. He’s had a hard time finding a new job, and he lives with a chronic health condition. “The gig economy looked like it would be the perfect kind of thing,” he said. He’d seen ads for years saying that you could make $25 an hour. So he started with Uber Eats and then signed up for DoorDash as well.

“I was pretty quick to realize the money they were advertising was not the case,” Worley said. What started as decent pay of between $700 and $800 a week gradually declined to between $200 and $300. He found out from other app employees that falling wages are typical: The companies offer good pay for the first month or so, a way to get employees hooked, and then it starts to wane. “I just kept hoping it would be what they said it is, but it got worse by the day.”

After taxes, expenses, and the app companies’ cut, Worley estimates he makes much less than minimum wage. Working Washington found that, according to its recent analysis of more than 200 samples, the average DoorDash worker makes just $1.45 an hour after mileage and taxes. Nearly a third don’t even break even after those costs are taken into account, while just 11 percent are paid more than federal minimum wage. “It’s really sad. It’s embarrassing,” Worley said.

It’s also a financial burden. At one point, Worley was close to going into foreclosure.

About a month ago, he fell off his scooter while making a delivery and shattered his shoulder, left arm, and elbow, putting him in the hospital for five days. “The first person I called after the accident, I didn’t call my mother and I didn’t call my partner, I called DoorDash,” he said. “Because they’ll downgrade or deactivate you for anything.” Not only was he due no workers’ compensation, but he lost income on every day he couldn’t work. Those financial strains have also created relationship strains with his partner of 30 years. “It’s caused a lot of stress at home,” he said. “We’ve never had this stress.”

Worley found out about other app workers organizing on Reddit and decided to get involved. He wants to see these companies ensure minimum wage, stop penalizing people for declining to take jobs, and actually ensure that customer tips are added on top of pay. “We call it DoorTrash and Uber Cheats,” he quipped. “You’ve got this overwhelming feeling of Uber robbing you to make their billions.”

For workers like Worley, there’s little escape from the nickel-and-diming of gig employers. For instance, he just signed up for Caviar, which seems like a fresh start; but Caviar was bought by DoorDash in August. He’s contemplating joining Amazon as a driver next. “I hate that I have to do it right now, but it is where I am … I don’t feel like the gig economy is good for anybody’s economy.”

Mariah Mitchell has also had to turn to app-based work for the flexibility she needs.

She’s a single mother of three kids, and hasn’t been able to find a full-time employer who can give her the schedule she needs to pick her kids up from school. “Uber kind of saved my life because I could turn my car on whenever I’m free and make some money,” she said, speaking to me as she drove. She also works for Lyft, Uber Eats, and occasionally Postmates. She too was paid good money at the start—making about $100 to $300 a day from all of the apps she worked for—but then saw it decline. The most she can make a day is now $100, what a slow day used to amount to.

“We’ve just had to go without,” Mitchell said. She’s had to cut back on buying clothes for her children and has to watch where she

MAR /APR 2020 THE AMERICAN PROSPECT 41

drives to save on gas. “I make a lot of Top Ramen,” she said. Christmas hit her hard and she’s now trying to dig out of that hole.

She receives food stamps and is applying for help with her electric bill. “I’m really struggling to pay rent and pay Wi-Fi,” she said. Without internet, her children can’t do their homework. Her eldest, who is 17, has to help her watch the other two children a lot because she can’t afford child care.

But despite the hardships of being a gig worker, Mitchell still needs the money, even if it’s dropped so low. “I got to keep going,” she said. “I don’t have any other good options at this point.”

Not long ago, Mitchell filled out an online survey and got connected to organizers planning a rally against Postmates. She showed up. She wants more control over her own work, which she is supposed to experience if she is truly an independent contractor. She wants to know where she’s being sent before she accepts a job. She wants to control how much pay she’s willing to work for. “Let me decide how much I’m going to make and where I’m going to go and how much time it’s going to take me,” she said.

THE LOW PAY and lack of input have moti-

vated a lot of app drivers to stand up to their employers. A 2018 study found that more than half of Uber and Lyft drivers earn less than their states’ minimum wages, and median pay after expenses and taxes is just $8.55 an hour. Eight percent of drivers even lose money driving for these firms, when costs are taken into account. Another study found that about a third of what passengers pay for their rides goes to Uber, not drivers.

Felipe Martinez, owner of an antiques business, signed up to be an Uber driver in Boston four years ago “because I needed, obviously like everybody else, extra money,” he said. Two years ago, he closed his store and started driving full time. It allowed him to spend more time at home with his two young children.

Since he was driving at odd hours, he started making a lot of rides to Logan Airport. It was there that he began talking to other app drivers as they dropped off or waited for new passengers. They compared notes. Drivers weren’t getting the kinds of

42 PROSPECT.ORG MAR /APR 2020

rides they used to get, and the pay for each ride was also going down.

“When you have a bunch of people who are always talking with each other, you notice things,” Martinez said. But the drivers had no insight into what was happening or why, though they harbored suspicions. “I can tell you without knowing what it was, it was the algorithm,” Martinez said. “The algorithm started to change.”

Martinez had never done any organizing. “I never was involved in politics. I don’t know what the labor movement is,” he said. But he felt “enough’s enough.” He helped convene a meeting of drivers to talk about the pay issue. “We thought five people would show,” he recalled. “Almost 100 people showed up.” So many, in fact, that they got kicked out of the hotel Starbucks they’d picked to meet in. Then he helped stage a protest outside of an Uber office in late 2018. “Then we started getting more people, and then more,” he said. He connected with other organizers in different parts of the country.

“I started to get really revolutionized,” Martinez said. “I feel like I’ve been revolutionized to stick up for myself. I’ve never felt like this in my life.” He added, “If you just open your mouth and say something, then something’s going to happen. Doesn’t matter who you are or where you come from or what you do.”

That something took the form of a nationwide driver strike on May 8 last year, led by Rideshare Drivers United in Los Angeles.

Drivers were already agitated about their pay rates declining, and then the company started planning for a $120 billion public offering on the stock market. Drivers in nine U.S. cities and London decided to go on strike ahead of the ipo, to protest low pay and what they say are unfair account deactivations.

“The only way to hurt them is to strike,” noted Tyler Sandness, an organizer with rdu. “The only way to hurt them is affecting that bottom line.” rdu had only been around for a handful of months at the time. But when it came to getting drivers ready to strike, “Uber kind of did the job for us,” Sandness said. “Workers have just been exploited by these companies for years, and everyone was really pissed

A 2018 study found that more than half of Uber and Lyft drivers earn less than their states’ minimum wages. off.” He was the logistics coordinator for a strike staged in Los Angeles on March 25 and then for the nationwide strike on May 8.

Stan de la Cruz started working for app companies like Uber and Lyft in Washington, D.C., in 2015, and initially he could easily make $1,500 a week working 40 hours.

Then he experienced the familiar trajectory: Payment fell, and bonuses and surge pricing dried up.

The money from driving was not only his main source of income, but it also had to cover any car expenses that came up.

Uber and Lyft don’t pay for those. “I’m in debt, and a lot of my friends are in debt,” he noted. After he put so many miles on his car, the transmission and other parts needed replacing, but he didn’t have any money saved up for the repairs. “When you only have one vehicle and you’re only doing Uber or Lyft, anything that happens to that vehicle you have to fix it right away because that’s your main income,” he noted. “If I wanted to keep paying my rent and not end up in the street, I had to fix it.” So he put about $5,000 in repairs on his credit card.

“I’m still paying,” he said.

De la Cruz was part of a network of drivers who kept in touch, and they started talking about organizing. “We had to,” he said. “We started seeing what changes were happening and how quick they were happening.” He helped form Drive United in Washington, D.C., in 2017, and he was part of the organizing team for May’s strike in his city. “It’s the way to get some power,” he noted. “If there is no way of organizing together, then nothing is going to change.”

Martinez also went on strike in May. “It was awesome,” he said. No one went in or

COURTESY OF FELIPE MARTINEZ

Felipe Martinez (center), a member of the Boston Independent Drivers Guild, rallies for protections for rideshare workers.

out of the Uber hub he occupied with 50 other drivers that day. “We shut it down,” he said. “It was a great feeling.”

The strike was a big turning point for the project to organize app drivers. “Last year, the movement for driver dignity and for fair wages in the gig economy absolutely came into its own,” said Henry DeGroot, an organizer with the Boston Independent Drivers Guild. There were loosely organized driver groups before it, but it was afterward, he said, that “they’ve really gotten active and had a lot more energy.”

“By doing this, we have moved a mountain,” Martinez said. “It was only a quarter of an inch, it was only a centimeter. But we moved it.”

GIG WORKERS DEMANDING better pay and treatment from the apps they work for face an even more daunting challenge than those in offices or on factory floors. The app

companies don’t classify rideshare drivers or delivery workers as employees, which renders them unprotected by laws that allow for unionizing and collective bargaining.

Lyft drivers and Instacart shoppers aren’t the first American workers to fight for better working conditions while also fighting for the very right to protest. Farmworkers and domestic workers were deliberately carved out of the National Labor Relations Act in 1935, excluding them from union rights. Yet farmworkers used historic boycotts and walkouts to earn their rights, work site by work site, crop by crop. Domestic and home care workers have since fought for state-level bills of rights to enshrine better pay and benefits while pushing to be included in labor laws.

Another way to solve the problem is to change gig workers’ employment relationship with the apps. If they’re classified as employees of DoorDash and Uber, then they

can form a union and force those companies to sit at the table to negotiate pay and benefits. Then there are bolder visions, like the “Clean Slate for Worker Power” platform released by Harvard Law School’s Labor and Worklife Program in January, which calls not just for classifying more gig workers as full employees but also allowing many non-employees to collectively bargain.

Organizing in this space may be critical to a healthier labor movement. Fighting misclassification in the gig economy shines a light on this problem across industries. And app-style jobs have become a safety valve for workers who are downsized or suffering from low pay elsewhere. If app workers raise standards, it raises the floor for other lowwage employers. If they don’t want to lose all their workers to Uber and DoorDash, they’ll simply have to increase pay and benefits.

Securing the right to unionize requires gig workers to adopt new organizing strate-

MAR /APR 2020 THE AMERICAN PROSPECT 43

gies. As with Instacart and DoorDash workers, drivers connect over social media. They gather in airport parking lots waiting for passengers. The parking lot of lax is “honestly where rdu was born,” Sandness said.

“It was the closest to an office water cooler as a driver is ever going to get.”

Drivers also have an app, developed by the organizers in Los Angeles, with a database of all of the members. Users can then use it to target lists of drivers—by, say, city— to ask them to turn out for a protest or call their legislators in favor of a bill. It makes sense for this group of workers in particular: They’re already used to interfacing with an app that gives them directions.

“We call it a hybrid organizing model,” Sandness said. “Technology is facilitating traditional organizing.”

But the issues at the heart of the movement aren’t new. “There’s nothing new about workers working long hours and [making] poverty wages,” DeGroot said. “It’s really just a new shell on an old form.”

The drivers have coalesced around two main demands: better pay, and an end to arbitrary account deactivations over what they say are often unsubstantiated customer complaints. “A driver being deactivated is the equivalent to a driver being fired,” Sandness pointed out. Eventually, they want the right to form a union, while seeking the immediate demands. More immediately, some gig workers, fearing exposure as they deliver food and passengers amid the coronavirus outbreak, have demanded they be offered paid sick leave, and app companies are discussing the creation of a compensation fund.

They’re deploying a number of tactics to get there. There was, of course, the fight over Assembly Bill 5 in California, which codified and expanded the state’s definition of an employee such that many independent contractors, including app workers, are now considered to be directly employed by the tech companies.

Drivers credit the strike with pushing AB-5 over the finish line. Before the walkout, the bill’s author, Assemblywoman Lorena Gonzalez, told drivers that there wasn’t a good chance of passage, according to activists. “There wasn’t appetite in Sacramento to take up such progressive Uber

44 PROSPECT.ORG MAR /APR 2020

Postmates workers held a strike where they stopped taking jobs until they went into the equivalent of surge pricing, increasing their own pay through denying their labor. labor legislation until it was demonstrated that there was massive unrest in the gig economy,” Sandness said. “The reason all of these issues had come to a head is drivers don’t really have any legal protections when it comes to their rights.” AB-5 was signed into law in September.

After lobbying in favor of the bill, rdu drivers are now launching a campaign to enforce it. In late January, drivers rallied in front of the state’s labor commissioner and filled out complaints of unfair wage practices against Uber en masse, claiming they are owed unpaid minimum wage, overtime, and expenses as employees. In late February, a county judge ruled Instacart misclassified workers under AB-5, a first under the new law. App workers will also be fighting the campaign bankrolled by Uber, Lyft, and DoorDash to put a measure on California’s November ballot that would overturn AB-5.

Sandness and rdu hope that California’s actions on behalf of gig workers will spread across the country. Lawmakers in New York, New Jersey, and Illinois are considering their own legislation similar to California’s AB-5.

But the movement is currently in a power-building phase. “There [are] more opportunities than there is capacity,” DeGroot noted. Lawmakers want to meet with them. They’ve gotten invitations to speak at events. There are potential lawsuits that could be filed. “But the real thing that we need to focus on is the driver-to-driver

organizing,” he said. “The challenge is really to … make sure that we’re doing the groundwork that needs to happen in order for us to have the power to … follow through. To not just meet with lawmakers and have a good conversation, but to build legislation, build support for a bill, get it through the finish line, and make a difference.”

It’s hard work. The drivers who are dedicated to organizing and lobbying are sacrificing pay to do it. “If they’re not out working, they’re not making money,” Martinez noted. “It’s hard when you’re trying to do your own life. We don’t get paid, it’s all volunteer.”

Just as Uber and Lyft drivers went on strike last May, so too have other app-based workers. Postmates workers held a strike where they stopped taking jobs until they went into the equivalent of surge pricing, increasing their own pay through denying their labor. More may come. “There’s some real potential for digital strikes,” Lauter said.

Davis might attend such a protest; she’s still involved, even though she’s mostly stopped working for Instacart. Her husband is deployed now with the Navy, but she does what she can to help the organizing campaigns from home. “Life is overwhelming, but I told myself I would still plug in however I could,” she said.

She attends meetings over Skype where people share tips for how to do outreach to more Instacart workers. She still approaches people who might be doing shopping trips for the service in grocery stores—the tell is that they’re staring at their phones as they shop. She strikes up a conversation about how the pay has been getting worse and worse, inviting them to join the Facebook group and group text. Next she’ll be moving from talking to fellow workers to calling state lawmakers.

“It’s just going to take some time for the right people to hear us and the right people to make changes,” Davis said. “Change is inevitable as long as we keep chipping away and making noise.”

Bryce Covert is an independent journalist writing about the economy. She is a contributing op-ed writer at The New York Times and a contributing writer at The Nation.

Remote Control A civil rights lawsuit highlights how Comcast’s monopoly crushes media diversity.

By Matt Stoller

I

n October, hip-hop artist Curtis James Jackson III, better known as 50 Cent, went after a rival mogul on Instagram.

His target wasn’t a fellow artist, but Brian Roberts, the billionaire ceo of Comcast, the nation’s largest cable company.

Comcast had just announced it was kicking 50 Cent’s show Power off the cable giant’s system. “This is the guy fu**ing up (Power) over at @Comcast,” 50 Cent wrote, showing a picture of a grinning Roberts wearing a wrinkled golf shirt.

A few weeks later, Sean “Diddy” Combs joined the pile-on, despite having worked with Comcast for distribution of his nowdefunct cable channel, Revolt TV. “Comcast spends billions of dollars on content networks every year,” Combs wrote in a statement, “but just a few million go to African American owned networks.” Combs was soon joined by Latino Hollywood director Robert Rodriguez, owner of the El Rey network, as well as a black former Comcast employee turned programming entrepre-

neur named Paula Madison, who runs The Africa Channel.

The ringleader of this revolt is Byron Allen, a black comedian turned media entrepreneur who has pursued a multiyear, $20 billion lawsuit against Comcast for racial discrimination and refusing to negotiate in good faith with minority owners. Allen’s empire is more eclectic and diverse than his allies’; it includes The Weather Channel, among other properties. Allen is using a specific law to challenge Comcast’s behavior, the Civil Rights Act of 1866, America’s oldest civil rights statute, which guarantees all citizens the right to make and enforce contracts. In response, in a case recently argued before the Supreme Court, Comcast worked with the Trump administration to weaken interpretation of the law.

The issue for all of these players is the same. Comcast is the only on-ramp for payTV content to more than 20 million households, many of them African American and Latino. It spends tens of billions of dollars to

acquire or make this content. Yet virtually none of that money goes to black-owned media channels. Comcast, in other words, is a monopoly, and it uses its monopoly power to harm black and brown media owners.

Over the last ten years, the problem of monopoly has changed from a niche concern of academics and scribblers to a mainstream political issue. There is for the first time in 40 years a genuine ideological contest about the political importance of market control, and now black entertainment moguls are getting in on the fight.

But for black businesspeople, concentrated corporate power in media is especially charged. Media is a special industry, as the stories we tell ourselves shape the imagery and iconography of who we are. Concentrated media ownership places the means to shape that imagery of black Americans into the hands of white financiers. But in addition, for black Americans, monopoly power combines with lack of capital as twin barriers to economic inclusion. Even

MAR /APR 2020 THE AMERICAN PROSPECT 45

BYRON ALLEN IS A master showman,

Byron Allen

and he loves a good fight. He peppers his rhetoric with intentionally inflammatory arguments, like calling Comcast “nothing more than a bully” and accusing rivals of engaging in “economic genocide.” There’s a sprinkle of P.T. Barnum and Huey Long in the man; he’s kind of a tycoon populist.

On the popular radio show The Breakfast Club, Allen boasted that his net worth of $300 million is “not a lot of money.” He is aware of his blackness, of both the racism and opportunity that engenders; one of his heroes is Motown impresario Berry Gordy, and he name-drops Coretta Scott King.

But Allen’s other heroes are Henry Ford, John D. Rockefeller, Rupert Murdoch, and Ted Turner; more tycoon than populist.

After pointing out that civil rights organizations like the naacp and the Urban League take large sums of money from Comcast, he likes to mention that he tried to buy the Urban League back from Comcast, making a quarter-million-dollar donation of his own. He’s fully willing to work the system to his benefit, no matter where that leads him.

Allen’s story is extraordinary, and in his retelling, full of nothing but hustle, grit, and winning. His mother took him from a decrepit and riot-torn Detroit to Los Angeles. To avoid being taken away by social services when his mother didn’t have enough money to raise him, Allen says that at ten years old he retrieved used shopping carts at

supermarkets in return for food. At the age of 14, he began selling jokes to comedian Jimmie Walker, and later worked with a young David Letterman and Jay Leno. Eventually he became a low-grade TV star, performing on The Tonight Show and the early-1980s proto-reality TV series Real People on nbc.

In the early 1990s, Allen started his own media company, creating low-budget syndicated shows he often hosted, and giving them to TV networks desperate for cheap content.

He would split the advertising revenue with the stations, eventually growing his empire into one of the largest independent producers and distributors of televised content.

Allen wants to be a global brand distributing all sorts of content, not a Tyler Perry type that puts himself at the center of the show. He uses the language of civil rights situationally, to promote his goals. And he is unafraid to challenge anyone in pursuit of his empire. After the financial crisis, he attacked former President Barack Obama for refusing to audit bailed-out banks over their lending practices to black people.

Later, in 2016, he went after Obama for allowing a giant cable merger between Charter and Time Warner, asserting that Charter refused to carry his content. President Obama and his fcc “have really abandoned the African American community,” he said. “At the end of the day, he is ignoring the fact that African Americans are suffer-

46 PROSPECT.ORG MAR /APR 2020

ing economic genocide. It’s being played out in the homelessness, the unemployment and even the violence.”

Allen is respected for his drive and hustle. “The Byron that I know is a salesman—he’s always got a pitch—combined with a visionary who believes in the need for more diversity,” said Robert Johnson, the legendary billionaire and founder of Black Entertainment Television. When Allen branched into film in 2015, music business icon Quincy Jones said, “I am very proud of Byron, and I hope he adopts me.” Last year, Allen bought The Weather Channel from the Blackstone Group, Bain Capital, and Comcast, and he has a $500 million credit line for more acquisitions.

And yet his colleagues mix this respect with a certain distance, a fear of his raw ambition. He made his money, as one person involved in the Comcast dispute told me, by “gaming the white boy system.” His racial-discrimination lawsuit against Comcast is, he says, about economic inclusion, but it’s hard to avoid the conclusion that in some ways it’s about economic inclusion for Byron Allen himself. In April 2019, for instance, black celebrities Magic Johnson, LL Cool J, and Serena Williams tried to buy 21 networks Disney had to divest as a condition of its merger with Fox. Allen, by contrast, joined the rightward-titling Sinclair Broadcast Group as a minority investor,

ALEX J. BERLINER /AP PHOTO

if media markets were open to all comers, blacks have less access to bank financing.

And because of this lack of capital and a highly concentrated corporate system, black politics has become intimately tied, and in many cases dependent, on the very monopolies oppressing black communities and business leaders.

Allen’s case and the associated battles with Comcast touch on every third rail in American politics: dominance of corporate monopolies, Donald Trump’s racism, Barack Obama’s failures, and even the failure of Reconstruction to make black America whole with “40 acres and a mule.”

It is the story of black businessmen and the oppressiveness of corporate power, in microcosm.

Concentrated media ownership places the means to shape the imagery of black Americans into the hands of white financiers. and Sinclair was able to buy Disney’s assets.

Allen’s company got several of the stations.

But Allen’s basic argument, whether put forward in good faith or not, is right. Black business moguls, having climbed to the top of the cable and entertainment field, now face the most intractable foe of economic inclusion: monopoly.

Cable and Black Voices The cable industry is one of the focal points of this fight, for a few reasons.

It is the first media industry that emerged after the civil rights movement. Cable television exploded from the 1970s to the 1990s, a sort of dot-com boom through coaxial cable.

The wiring was largely done at a municipal level, so black businessmen could win franchises in cities with large black populations.

It was a political business from the start, and where black voters had political power, black businessmen often succeeded.

It also became, very quickly, a big business. Comcast, for instance, was incorporated under its current name in 1969. From 1978 to 1982, as the fcc allowed big cities to wire themselves with cable, networks like espn, Nickelodeon, cnn, usa, and c-span all launched. Cable revenues soared from $3.6 billion in 1981 to over $20 billion in 1990. In 1980, 20 percent of households had cable; by 1990, it was 60 percent.

A host of African American cable and content operators participated in the cable boom. Don Barden became a cable tycoon in the 1980s by wiring cities all over the country, winning the right to the cable franchise in the heavily African American city of Detroit. Malcolm X’s lawyer Percy Sutton got the cable concession for Queens, as did black business leaders Barry Washington in Newark, William T. Johnson in Columbus, and James Wade in West Philadelphia. Rob-

ert and Sheila Johnson started Black Entertainment Television, and bet became the first black company to list on the New York Stock Exchange. By contrast, when similar explosions happened in the radio or broadcast TV industries decades earlier, Jim Crow was still in force, and blacks were left out.

But a different barrier hit the first wave of black cable entrepreneurs: access to capital. Many, like Sutton, faced financial challenges at the cost of wiring cities, unable to fulfill the promises they made to win cable franchises. Even successful cable entrepreneurs had trouble. Barden, for instance, after winning the cable franchise in Detroit in the early 1980s, had to cede some control to a Canadian company that did much of the financing. This lack of access to capital helped consolidate black businesses into the hands of white owners; Barden ended up selling his Detroit cable system to Comcast for $100 million in the early 1990s.

Historically, entertainment is one of the few fields where black businesspeople can succeed on an even playing field, and in the 1980s, black entertainers began building large business empires. Sometimes the playing field was literal; Magic Johnson turned his basketball celebrity into a conglomerate worth $600 million, which has included a movie theater chain, a record label, a film studio, and a partnership with Starbucks.

Forbes listed five black billionaires in America, and three—Oprah Winfrey, Michael Jordan, and Jay-Z—are entertainers. Turning back to cable, bet founders Bob and Sheila Johnson were America’s first black billionaire couple. Black entertainment barons know each other and can help each other, forming a critical network that often doesn’t exist for African American entrepreneurs in other sectors of the economy.

But the problem of capital access still

plagues even the wealthiest black businesspeople. Despite her track record of success, Sheila Johnson couldn’t get a loan in 2019 to finance a new hotel. Even today, the racial wealth gap is extreme. Of the top 100 wealthiest people in America, not a single one is black. Black citizens face hurdles to full economic inclusion; blackowned banks were one-tenth as likely to get bailout funds during the financial crisis.

That’s what makes the fight between black business leaders and cable monopolists so important. While there are black tycoons in technology and finance, the wealth and power in those industries is disproportionately white. In media, there is enough black wealth to build business, but not quite enough to finance it at the scale of Comcast.

And this has created tensions that expose an entire rigged system.

The Rise of Law and Economics For most of American history, big used to be bad, especially in media. The government broke up its giants, doing everything from splitting off nbc from abc in the 1940s, to preventing TV networks from owning their own prime-time content, to imposing restrictive rules on ownership of local radio and television channels.

But the post–civil rights era also coincided with the emergence of a new economic ideology to destroy New Deal controls on corporate power. This movement was led by a law professor named Robert Bork, a conservative antitrust scholar. His strategy was risky, aggressive, and tailored to racist ideology from the jump. In a 1963 article in The New Republic, Bork publicly attacked the Civil Rights Act, earning the trust and respect of Southern white elites and an important place in the Barry Goldwater–led Republican Party.

Using this springboard, over the next 15 years, Bork led the law and economics movement to get rid of antitrust enforcement and public rules for industry, not under the guise of explicit racism, but under the guise of property rights and efficiency. He was joined, ironically, by progressive baby boomer political leaders who came into force in the mid1970s after Watergate. From 1975 onward, the Democratic Congress eliminated laws

MAR /APR 2020 THE AMERICAN PROSPECT 47

48 PROSPECT.ORG MAR /APR 2020

Yet, fcc chairs under Bill Clinton didn’t enforce the Cable Act strongly, and even when they tried, increasingly conservative courts continued to clip their wings. Just four years after the Cable Act re-regulated the industry, the Telecommunications Act of 1996 removed pricing caps for cable, and enabled a new round of consolidation.

Comcast Politics This new legal environment enabled the massive growth of Comcast, which was a small Pennsylvania company in the 1970s.

Comcast began consolidating power as soon as it became legal. It bought Group W Cable in 1986, increasing its base to a million subscribers, and purchased qvc, a home shopping content provider.

In 1994, Comcast became the third-biggest cable operator in the country through a series of mergers. Two years later, it began offering broadband internet access, and bought the Philadelphia Flyers. It launched E! Entertainment Television with Disney. In 2002, Comcast acquired all of at&t’s cable assets for $44.5 billion, giving the company 22 million subscribers and elevating it to number one in cable. It formed the Golf Channel, tried to buy Disney and mgm, and

bought assets from Adelphia Cable in 2005.

Meanwhile, the law and economics shift in thinking influenced black politics, just as it did the whole country. “The Sherman Antitrust Act may at this point be an anachronism,” said Barbara Jordan in 1981; Jordan was one of the few black women who had served in Congress to that point. Many black leaders avoided, or did not see, the racial implications of concentrated financial power, instead choosing to focus on how it might advance the interests of individual businesses, people, and politicians. Corporate donations began to power the black political establishment. Today, the corporate advisory council of the Congressional Black Caucus includes the most powerful monopolies in the land, with representatives from Google, Facebook, Apple, JPMorgan, Altria, Bank of America, and at&t. And cbc members like David Scott and Gregory Meeks have been reliable allies for Wall Street, continually subverting progressive efforts on the House Financial Services Committee.

White financial leaders manipulated the language of racial tolerance for their own purposes. “Unlike other crusaders from Berkeley, I have chosen Wall Street as my battleground for improving society,” said

JOY ASICO/AP PHOTO

protecting small retailers, and deregulated airlines and banks. To many of these new leaders, Bork didn’t look like a racist—the Southern populists who sought to protect the small businessman against monopoly did.

But his corporatist philosophy enabled racial inequality and discrimination across the country through the use of economic power.

Media was always a focal point for Bork’s movement; in the 1960s, scholars penned articles in The Journal of Law and Economics criticizing the fcc’s attempts to organize the nascent cable industry. In 1979, the Supreme Court, in fcc v. Midwest Video Corp., ruled the fcc didn’t have the authority to regulate cable networks to ensure they were treating channel owners fairly. It was a 6-3 decision, with Thurgood Marshall notably dissenting.

Democrats joined Bork’s movement in concentrating media power. At the Federal Communications Commission, Jimmy Carter appointee Charles Ferris removed rules governing cable television. Radio broadcasters reacted with “glee” as Ferris deregulated their industry. Five years later, congressional Democrats and Ronald Reagan passed the Cable Act of 1984, which deregulated the industry. In 1985, Robert Bork, now a D.C. Court of Appeals judge, helped strike down rules mandating that cable operators had to carry local content, citing the cable operators’ First Amendment rights to choose what to carry on their network. It was not a conservative decision; joining Bork in the decision were Ruth Bader Ginsburg and Judge Skelly Wright, a John F. Kennedy appointee.

Cable prices began skyrocketing, and consolidation started. By 1988, the ten largest cable operators served over 60 percent of subscribers. And subsequently, in the three years between 1986 and 1989, cable prices jumped 43 percent. The price hikes soured Americans on the unregulated industry.

Public outrage, along with the desire of broadcasters to charge for their content, led to the Cable Act of 1992, which re-regulated prices and blocked cable operators who owned content from discriminating against competitors or from demanding equity stakes or other favors to carry their content.

The Cable Act was the only bill that passed over the veto of George H.W. Bush.

In 2011, the Obama administration approved the Comcast-nbc merger in part because of the strong support it received from minority groups. junk bond king turned (now pardoned) felon Michael Milken. Indeed, as he was constructing a political machine to defend himself from congressional investigators, Milken financed the creation of the biggest black business in America, Reginald Lewis’s 1988 takeover of Beatrice Foods. Milken also hired Jesse Jackson’s son at his investment bank, reflecting a growing alliance between concentrated finance and black political actors in the post–civil rights era.

From the 1980s to the 2000s, consolidations of power took place across our society, including in black America. There were 50 black-owned insurance companies in the 1980s, and just two as of 2014. Blackowned banks started collapsing in the 1980s, and from 2001 to 2017 the number fell by 56 percent.

Would-be monopolists learned the value of having civil rights groups in their corner.

In 2011, the Obama administration approved Comcast’s largest merger, when it bought nbc, in part because of the strong support it received from the Congressional Black Caucus, the naacp, the National Urban League, and other minority groups. Congressman Bobby Rush, a senior House Democrat on the Energy and Commerce Committee and a critical voice in racial debates over technology and media ownership, was effusive about the deal. “I am pleased and interested and somewhat delighted by the approach that Comcast and nbc have made towards satisfying our concerns,” he said in a House hearing on the merger, citing the promises by Comcast to add diversity in programming to its slate of channels. “This represents a real opportunity that minority businesses and investors must not miss.”

The relationship between black leaders

and Comcast goes beyond policy. Comcast has deep political and charitable relationships with black communities and political leaders. Comcast supports Rush through both political and charitable donations. A few months after the merger was approved, Comcast gave $50,000 to Beloved Community Foundation Family Services, an organization Rush founded. Earle Jones, Comcast’s top lobbyist, is on the board of the Congressional Black Caucus Foundation. From 2011 to 2014, Comcast spent over $500,000 to “honor the Congressional Black Caucus,” and it also donated to the naacp, the Urban League, and the National Action Network. Six months after the nbc merger approval, Comcast’s news division added a black msnbc host, none other than icon Al Sharpton.

To secure support for the nbc merger, Comcast made a host of promises to black and Latino leaders. Comcast signed a memorandum of understanding about diversity with the naacp, National Urban League, and Sharpton’s National Action Network, among others. The corporation agreed to more than 150 conditions upon signing its consent decree with the Obama administration.

Federal Communications Commissioner Mignon Clyburn, the daughter of South Carolina Democratic power broker Jim Clyburn, voted to approve the merger, contingent on certain promises. Comcast committed to improve “diversity of viewpoint and programming,” to avoid discriminating against content f lowing on the internet (the principle known as “net neutrality”), to protect small cable operators and local broadcasters, and to provide more broadband to children who get federally subsidized school lunches.

Comcast essentially offered a deal to black policymakers and leaders. The corporation would serve some of the functions of a government, expanding vital services to black people that white people already get—like broadband and representative media—in return for political support.

Comcast would also pay back political leaders and nonprofit groups with sweeteners like political and charitable contributions; they would use those resources to organize politically in communities starved of capital. Ultimately, policymakers decided that voluntary commitments from Comcast to improve the lived experience of black customers and creators who need the Comcast platform to get their shows to market were as good as they were going to get.

And yet these promises were hollow and mostly didn’t happen, including the pledges to work with black and brown content owners. Clyburn had little leverage, thanks to corruption and fecklessness among white officials. Obama’s fcc Chair Julius Genachowski, who is now in charge of media company buyouts at private equity giant The Carlyle Group, had signaled he would approve the merger no matter what. And six months after the merger, one of the Republican fcc commissioners who voted for the deal, Meredith Baker, went to work for Comcast. The deal didn’t have to happen.

As one person then at the Justice Department told me, “If we had an fcc that was willing to say this is not in the public interest, then we could have gone forward to challenge the merger and may not have had to go to court.” Because of policy choices

by Genachowski and Baker, black policymakers couldn’t leverage their power into anything more than superficial concessions.

The approval of the Comcast-nbc merger in 2011 was one of the most important antitrust actions of the Obama administration. “Comcast’s acquisition of nbc Universal is a transaction like no other that has come before this Commission—ever,” said then–fcc Commissioner Michael Copps.

“It reaches into virtually every corner of our media and digital landscapes and will affect every citizen in the land.”

Comcast is now a Goliath, with 27 million households subscribing to its internet

MAR /APR 2020 THE AMERICAN PROSPECT 49

service and roughly a quarter of the payTV subscriber base. The nbc deal brought Comcast in-house movie assets like Universal Studios, news channels like msnbc and cnbc, dozens of local affiliates, theme parks, and stakes in Snap, Hulu, Fandango, Buzzfeed, and Vox Media. If you want to distribute content to Americans, you are probably going through Comcast’s pipes in one way or another, either through its broadband lines or its TV gatekeepers.

But even the size and scale of Comcast understates the importance of the merger.

The combination of a large content production and advertising company and a large content distributor set a precedent. Media in America would be, as it is said in the industry, vertically integrated, in the hands of a small number of players.

The choice to allow Comcast and nbc to merge drove a wave of defensive-oriented strategic choices by rivals to expand their market power. Netflix, formerly just a distributor of content, soon produced House of Cards, realizing that it wouldn’t be able to perpetually license content from a beefedup Comcast. at&t bought Time Warner, and Disney continued an acquisition spree and launched a streaming service so it can control production and distribution of content. Google, Amazon, and Facebook are all vertically integrated advertising, content production, and distribution machines, and increasingly, so are video game corporations. As Copps put it, the merger conferred “too much power” in too few hands.

It helped set the stage for today’s extraordinarily concentrated Big Tech and Big Media platform political framework.

The consequences of the merger, and the media consolidation from 2011 onward, were catastrophic for black A merica. Black newspapers are largely gone, crushed first by the financial crisis and then the monopolization of ad revenue by Google and Facebook. Disproportionately black counties still trail white counties in broadband access, and American broadband access is among the most expensive in the world. The new world of Big Tech surrounds Americans with algorithms that promote racist content or enable new forms of discrimination.

50 PROSPECT.ORG MAR /APR 2020

The Byron Allen Suit In 2016, Byron Allen filed a federal lawsuit against both Charter and Comcast. The two large cable corporations refused to carry most of his networks, he alleges, because of racial discrimination.

In some sense, Comcast is acting like a standard unregulated monopoly, without racial animus. Earlier this year, The Hollywood Reporter revealed it was removing 17 Starz channels from its lineup, channels owned by non-black company Lionsgate, due to a “nasty” dispute over fees. Comcast will replace them with a rival, Epix. This is the heart of 50 Cent’s fight with Comcast, since his show Power is carried by Starz.

But race underpins the market structure of the entertainment industry, because the entertainment industry sells cultural products. Comcast, as a giant cable company, picks and chooses which channels to carry, giving it massive leverage over what Americans watch. And since Comcast bought nbc, it now has an incentive to carry its own content over its own distribution network, instead of buying content from others.

Comcast, according to Byron Allen, won’t carry his channels, but he alleged it will carry lesser-known channels from whiteowned content creators.

WHEN COMCAST negotiated with Allen’s

company, one of Comcast’s executives apparently gave a racial argument for turning down carriage of Allen’s content, saying, “We’re not trying to create any more Bob Johnsons,” referring to the billionaire founder of bet. It would not be so unusual to hear a racist comment from a corporate executive, except that, as we’ve seen, Comcast and the entire cable industry have particularly close ties to African American leaders.

Allen is suing under America’s oldest civil rights law, the Civil Rights Act of 1866. The law was passed immediately after the Civil War to ensure newly freed black citizens would get the same rights as white citizens to enter into contracts. Like the Civil Rights Act of 1964, this law builds racial equity into the way we define property itself. Black citizens didn’t get land or property, but they got, at least legally, the right to access property through contracts on equal terms with white

citizens. Allen’s argument is that Comcast denied him access to the airwaves, while allowing access for white-owned content.

Allen didn’t limit his suit to the cable giants. He also sued the naacp, the Urban League, and Al Sharpton, all of whom participated in the merger negotiations, because “this was corrupt.” Allen told me, “If you’re going to sign something that black people are supposed to live by, why don’t you tell black people how much money you’re getting from Comcast, that may be controlling your behavior and how you negotiate on behalf of black people?”

Allen’s suits weren’t popular within the black establishment. One judge, Terry Hatter, himself black, dismissed the suit against Comcast. Allen believes his attack on the black establishment may be why. “Judge Hatter may have been offended that … I named the naacp and the Urban League and Al Sharpton” in the suit, he said. In the separate case against Charter, Judge George Wu let the lawsuit go forward. Both suits were later consolidated in the Ninth Circuit Court of Appeals, which ruled that Allen could proceed.

The legal question in the cases thus far wasn’t on the underlying discrimination claim, but on whether Allen could bring the suit without clear evidence that racism is the only reason he was denied business. As Allen put it, “It can be 99 percent because he’s black and 1 percent because he’s wearing tennis shoes and if that’s the case, he can’t even use the law against us to bring a suit against us.

And so what the Ninth Circuit said … it’s not the sole reason, it’s the motivating factor.”

Charter eventually dropped its appeal and will go to trial on the merits of the claim. But Comcast, in response, appealed to the Supreme Court, asking the justices to prevent Allen from even bringing the suit unless he can prove that the decision to not carry his programming was made entirely on the basis of race. This would weaken America’s oldest civil rights statute, making it virtually impossible for a host of workers, consumers, and businesspeople to secure their property rights in the face of discrimination.

The extreme position by Comcast has scrambled the politics of the cable indus-

Allen is suing under America’s oldest civil rights law, the Civil Rights Act of 1866. This law builds racial equity into the way we define property itself. try. Many opponents of Comcast are conservative owners of smaller cable systems.

In 2018, Donald Trump publicly attacked Comcast for “routinely” violating antitrust laws. But in 2019, his administration flipped, supporting Comcast’s attempt to defang the Civil Rights Act of 1866. Comcast even gave Trump Solicitor General Noel Francisco ten of their allotted 30 minutes in oral arguments before the Supreme Court.

Despite Allen’s earlier attack on much of the black establishment, the naacp, the aclu, Color of Change, the Urban League, and the National Association of Black Journalists have all come in against Comcast.

The issue has now become much bigger than one man’s quest to become a media tycoon. Multiple Congressional Black Caucus members, and Senators Kamala Harris, Cory Booker, and Bernie Sanders weighed in, as have lesser political officials like New York City Comptroller Scott Stringer.

Even Bobby Rush reversed his Comcastfriendly position, calling for the cable giant to be broken up. In a bitter letter to ceo Brian Roberts, Rush argued that Comcast, which had “enjoyed the largesse of the African-American communities,” had now become an “enemy of minority communities.” As Rush indicates, Comcast had mouthed soothing words about diversity when it needed support from black leaders, but has unacceptably embraced both the Trump administration and a racist ideology.

In district court, Comcast mocked Allen, sarcastically noting that Allen’s allegation put the company “in a racist plot with the Obama Administration, the oldest civil rights organizations in the country, Diddy, and Magic Johnson.” Comcast, after all, had carried Combs’s Revolt TV network.

In response, Combs, who had been silent, took Allen’s side. “Revolt has never been in a position to truly compete on a fair playing field because it has not received the economic and distribution support necessary for real economic inclusion,” he said. “Our relationship with Comcast is the illusion of economic inclusion.” Indeed, the case reflected back on Comcast’s broken diversity promises. The corporation had pledged to launch minority-owned channels to secure approval for the Comcast-nbc merger in 2011, but then ensured that those channels would be unable to financially succeed. Combs explained that he simply didn’t have the capital to make his channel viable, which seems odd for a man with a net worth of $850 million, but is consistent with the long history of black business leaders being unable to finance even profitable opportunities for expansion.

What of the underlying substance of Allen’s suit?

It’s certainly possible that Comcast’s executives are openly racist. After buying nbc, Comcast switched the chief diversity officer from a black woman to its main political fixer, chief of lobbying David Cohen. But most of the people I spoke with in the industry believe that Comcast is simply destroying independent programmers, not solely targeting black programmers. The company has squeezed out fuse, beIN Sports, the Tennis Channel, and Altitude TV, and is in a fight with the owner of the Los Angeles Rams, who is married to an heir to the Walmart fortune. Comcast has even fought with Michael Bloomberg over carriage for his corporation’s business channel.

Comcast only wants to do business with large integrated systems that produce musthave content, like Disney, Viacom/cbs,

and at&t/Time Warner, with streaming options Netflix and Amazon in the wings.

New technologies such as high-speed 5G mobile technology could fragment the market, providing ample opportunity for new streaming options, at least temporarily.

50 Cent is aggressively promoting Starz’s streaming app. But today, pay TV remains the dominant distribution and investment system in sustained high-quality narrative video content. And there are no legal limits to consolidating what comes next.

It might appear that Byron Allen is just one content creator among many muscled out by a powerful corporation, in a marketplace loosely controlled by four Goliaths.

And he’s not necessarily aiming to start a Black History Channel, or really anything that reflects the black experience. Exchanging white capitalists for black capitalists doesn’t automatically improve opportunities for black actors and writers and filmmakers, or the images watched by black families.

But Allen’s crusade does shine a light on a long-standing system of oppression that, as so often is the case in America, disproportionately affects people of color. Blackowned media entrepreneurs are by and large independent producers, and even the giants among them struggle to finance their operations. Fully expressive black-owned media channels can’t really exist without the open markets into which independent producers can sell. Which means unless we do something about concentration in media, it will be financiers like Comcast ceo Brian Roberts, rather than black leaders, who own the means of control for commercial imagery of black America.

Is this a problem with racism, or is this just discrimination against the little guy that any monopolist might engage in? One person I interviewed said it’s the age-old problem in America. “When white folks catch a cold,” he said, “black folks get pneumonia.” That’s true with being able to raise money to start and run a business. And it’s true with monopolies.

Discrimination is discrimination.

Matt Stoller is research director at the American Economic Liberties Project, and the author of Goliath: The 100-Year War Between Monopoly and Democracy.

MAR /APR 2020 THE AMERICAN PROSPECT 51

The Constitutional Option to Fight the Climate Crisis Ubiquitous pipelines crisscrossing America and worries over climate change raise the question: Does transporting oil and gas serve the public interest?

P

eter Aaslestad is a man surrounded by pipelines. The Atlantic Coast Pipeline is planned to go right through his hometown of Staunton, Virginia. The proposed Mountain Valley Pipeline would wind its way along the state’s southwestern corner, about 100 miles away. Aaslestad lives in what he describes as a deep-red town, but he doesn’t see pipelines as a left-right issue. He makes his living as an artist and photographer, drawing true-to-form sketches of historic structures for preservation and for other architectural projects.

In 2016, Aaslestad learned that the onslaught of pipeline building had followed him back to his childhood summer home in Louisiana. He received a notice in the mail from Bayou Bridge, a company building a pipeline across the Atchafalaya Basin, the largest wetland in the United States. The Aaslestad family co-owns a parcel in the basin, and Bayou Bridge offered Peter $150 to build a 50-foot rightof-way directly through it. In March 2017, the company upped the offer to $899, but Peter again declined.

It was a type of proposal repeated throughout U.S. history, which grew out of the Fifth Amendment to the Constitution.

52 PROSPECT.ORG MAR /APR 2020

The process of eminent domain allows for “private property taken for public use,” as long as the property owner receives “just compensation.” Courts have repeatedly upheld the government’s right to use eminent domain. But in this case, the state of Louisiana wasn’t approaching Aaslestad for his land; the pipeline company was.

The Aaslestads are now embroiled in a lawsuit in state court over Bayou Bridge’s request. While most eminent domain challenges allege a lack of just compensation for the property, this case could turn on whether, in a time of climate emergency and ecological degradation, constructing a pipeline serves a public use. It’s one of the first lawsuits in the country to raise this question, and the outcome could open up a new strategy in the fight to protect the planet: using eminent domain authority as part of a progressive climate policy.

THE 38-ACRE PARCEL, located in St. Mar-

tin Parish, Louisiana, is among many that the 162.5-mile crude oil pipeline spans, winding its way from Lake Charles in the west to St. James Parish in the east, traversing 11 parishes and several crude oil refineries and export terminals. Bayou Bridge, a subsidiary of Energy Transfer Partners,

planned the pipeline as the southern extension of the Dakota Access Pipeline.

Owing to a vestige of Louisiana’s French colonial history, much of the land in the Atchafalaya Basin is joint-owned under Napoleonic law by over 400 people. The Aaslestad siblings, Peter, Lauren, Karen, and Katherine, inherited the chain of title from their mother. Before that, their grandfather used it for a hunting camp, a relatively common circumstance in Louisiana.

This part of the basin is largely uninhabitable; to reach their parcel, Katherine said, they travel by boat for roughly an hour and wade through bayous and other small bodies of water.

But Peter and Katherine didn’t want an oil pipeline cutting through their land, no matter how remote it is. “The truth is I’ve never lived there but that doesn’t mean it’s not a homeplace for our family,” Peter said.

They refused the initial offer, but Bayou Bridge refused to give up, drowning the siblings in legal paperwork and sending lists of other landowners who agreed to the payout. According to Katherine, after the family continued to turn them down, the company basically said, “We’re gonna do it anyway, you can take our money or you can not.” Shortly after this, the Aaslestads

COURTESY OF K ATHERINE AASLESTAD

BY MARCIA BROWN

learned that heavy machinery had already begun carving up their land.

Misha Mitchell first noticed the trespassing. A lawyer for the conservation group Atchafalaya Basinkeeper, Mitchell was conducting a survey of the wetlands and swamps by helicopter for a separate permit compliance lawsuit she had brought against Bayou Bridge, when she spotted bulldozing and trenching for the new pipeline. Mitchell realized that the company had begun excavating land and clearing trees on private property without permission.

Bayou Bridge eventually completed the portion of the pipeline on the Aaslestads’ land, without ever reaching agreement on taking it. “We thought they were building the pipeline, but lo and behold it was built,” Katherine Aaslestad said. Energy Transfer and Phillips 66, which shared ownership, announced the Bayou Bridge Pipeline’s completion in April 2019. In response to a request for comment, Energy Transfer spokesperson Alexis Daniel wrote that the pipeline “was deemed a common carrier under Louisiana Law” and that the pipeline has “complied with all regulations applicable to maintain this status.”

Mitchell’s group, Atchafalaya Basinkeeper, and the Center for Constitutional Rights filed a trespassing lawsuit against Bayou Bridge, working with the Aaslestads and another landowner, Theda Larson Wright.

Unlike the Aaslestads, Larson Wright’s oral testimony showed that her ancestors lived on or very near the parcel until the Great Mississippi Flood of 1927 when her ancestors were forced off the land through eminent domain for levee building.

The lawyers, who are handling the case pro bono, had trouble getting others involved. Pam Spees, an attorney for the Center for Constitutional Rights, said few are willing to sign on to lawsuits because companies take their eminent domain claims directly to landowners, offer them a few hundred dollars, and warn that they’ll take the landowners to court if they refuse.

“It costs $700 just to file suit over eminent domain,” Spees said, adding that not many people have disposable income to fight something that’s often a protracted and expensive lawsuit that they’re likely to lose.

The trial court ruled that Bayou Bridge did commit trespassing when it began construction, but only awarded to $75 for trespassing and $75 in property damages to each landowner on the case. Separately, the judge awarded $75 each as just compensation for the taking. The trial court also granted expropriation to the company, allowing them the easement through the property to complete the construction. “The company assumed that it could just ignore the law,” Spees said. According to the court’s ruling, it seems like they were right.

The landowners decided to appeal, even though the pipeline is already complete.

They argue that they were denied their dueprocess rights because of Bayou Bridge’s trespassing—and that the company’s eminent domain authority should never have been allowed in the first place. The appellate court, Spees explained, could rule that because the company was acting as a state actor, it can be found liable for violating constitutional rights. A ruling in favor of the landowners might reset how eminent domain authority is conferred in Louisiana and perhaps urge a nationwide shift in eminent domain law.

LARGER THAN THE Florida Everglades, the

Atchafalaya Basin is teeming with wildlife, including hundreds of species of birds, reptiles, amphibians, fish, crawfish, shrimp, and crabs. There are bobcats and Florida panthers, mink and armadillos, opossums and muskrats, and it may be the last bastion for species like the ivory-billed woodpecker, Bachman’s warbler, and endangered birds like peregrine falcons. Species unique to the basin, such as roseate spoonbills, are a delight to glimpse.

Bottomland hardwoods, cypress, swamp iris, and tupelo gum trees, as well as small streams and bayous, give the basin its hauntingly beautiful profile. Migratory tropical birds spotted north in the summer months such as herons, kites, thrushes, warblers, and buntings, breed in the basin during the spring months.

“When you look at the ecology of the planet, [the basin is] probably the most important place for migratory birds in the whole hemisphere,” said Dean Wilson, exec-

MAR /APR 2020 THE AMERICAN PROSPECT 53

54 PROSPECT.ORG MAR /APR 2020

COURTESY OF K ATHERINE AASLESTAD

utive director of Atchafalaya Basinkeeper. major floods. Without it, cities like New in 2018, Karen Savage and Sarah Lazare “When everything else is gone, that will be Orleans and Baton Rouge would be even reported for In These Times. The deputies the last place birds can call home.” more vulnerable to flood damage. threatened the activists with charges of felPipelines now crisscross the basin, marThe trenching required to bury a pipeline ony trespassing. Sixteen people were later ring the landscape and irreparably dam- creates spoil banks—mounds of earth dis- arrested under a new Louisiana law barring aging its fragile ecosystem. The Bayou placed and piled on either side of the pipe- trespassing on oil pipelines, punishable as a Bridge Pipeline, 24 inches in diameter, has line’s path. After completion, companies are felony with up to five years in prison. (Simia capacity of 480,000 barrels of oil a day supposed to smooth out the land, return- lar laws, called “critical infrastructure proand required a linear clearing through the ing it to preconstruction leveling, but they tection” laws, have been based on legislation basin 50 feet wide. It crosses 700 bodies often don’t. Because Louisiana has a long in states like Oklahoma and are currently of water, including the Bayou Lafourche, history of not enforcing pipeline construc- being considered in Ohio.)

Since the Deepwater Horizon oil spill in which is a source of drinking water for near- tion permits, companies have no incentive to dismantle the spoil banks. the Gulf of Mexico, Louisiana has spent bilby communities.

Many pipelines are laid east to west, but lions to fix its natural environment. Partly Pipeline construction requires digging trenches and clearing trees; acres of trees water in the basin flows north to south. using settlement funds, the Louisiana Coasthave been felled during the Bayou Bridge The spoil banks prevent natural water al Plan recommended investing $25 billion construction process. The throughway f low, decreasing water quality and oxy- in wetland restoration, to build up ecosystem permanently converted “hundreds of acres of forested wetlands into non-forested wetlands,” according to Mitchell’s permit lawsuit. Perhaps more devastating, because of changing water flow that drowns young trees, cypress and tupelo trees cannot regenerate. “Consequently,” the permit lawsuit adds, “trees that are hundreds of years old … are likely gone forever.”

Pipeline companies often have abysmal records with oil leaks. The permit lawsuit notes that, because of the basin’s remoteness, “even a small leak could have major ecological consequences,” given that it would likely go undetected for a long time. Leaks of 2 percent or less are invisible to remote leak-detection technology, but with the Bayou Bridge Pipeline’s capacity, a 2 percent leak amounts to 400,000 gallons of crude oil every Peter and Katherine Aaslestad’s property in the Atchafalaya Basin, Louisiana day. Energy Transfer, Bayou Bridge’s parent gen content, and preventing natural flood and reduce flood risk. The state is already company, has a particularly shoddy record: abatement flow. Pipelines also destroy the spending millions in the basin on this task— Between 2006 and 2017, the company and natural ecology of the basin. Local craw- remediation that could have been conducted its subsidiary “were responsible for 329 ‘sig- fishermen have watched the deterioration by the companies themselves, had the state nificant’ pipeline incidents,” amounting to and disappearance of the wetlands, once enforced the initial pipeline permits. a rate of more than two per month at an fertile grounds for their livelihoods. Large “It’s a huge issue for the state to spend so estimated cost of over $67 million. Ener- sections of the basin can no longer be fished. much money on coastal land projects but gy Transfer is already noncompliant in the Protesters who prefer to call themselves allowing this to happen on the basin,” said Atchafalaya Basin with a different pipeline. water protectors have sought to block pipe- Misha Mitchell. “If we did the right thing to Perhaps most critically, the basin acts line growth as it has unfolded throughout begin with, we could continue the natural as natural flood abatement. It’s the most the basin. Energy Transfer hired dozens of system and we could do that without all important spillway in the Lower Mississippi St. Martin Parish sheriff’s deputies to pro- the [spending].”

According to the Louisiana ComprehenRiver, and it receives diverted water during tect pipeline construction from protesters

sive Master Plan for a Sustainable Coast, “the Mississippi River Delta provides $12 billion to $17 billion in benefits to people each year.” In the permit suit against the U.S. Army Corps of Engineers, which issues permits and is responsible for their enforcement, the plaintiffs note, “If this natural capital were treated like an economic asset, its total economic benefit to the nation would be $330 billion to $1.3 trillion per year.”

But during the 2018 trial for the landowners’ lawsuit, the judge refused to permit any discussion about the land’s value beyond its monetary worth as a residential or commercial location, or for timber.

“They’re not asking the right questions,” Katherine Aaslestad said. The court did

The Louisiana lawsuit could turn on whether, in a time of climate emergency and ecological degradation, constructing a pipeline serves a public use. allow Bayou Bridge’s representatives to talk about the “economic benefits of oil and petroleum products,” but restricted discussion about the land to that specific parcel, not the Atchafalaya Basin as a whole. In effect, the trial court excluded any discussion of not just the pipeline’s effect on the surrounding environment, but its cumulative contribution to climate change.

THE LAWSUIT IN LOUISIANA challenges the

broad interpretation of the eminent domain clause, and in particular the way it has been

defined through the pivotal Supreme Court case Kelo v. New London (2005).

Understanding Kelo requires stepping back in time, explained Ilya Somin, the author of a book on the case. From the turn of the 20th century to the 1950s and 1960s, the dominant understanding of eminent domain was that property could only be taken for a “public use,” meaning eminent domain was thought to only allow for a government-owned facility or a private project that legally had a duty to serve the public. Examples of this included highways and railroads. The definition eventually expanded to “public purpose,” meaning that it “might benefit the public in some way,” Somin explained.

Alexandra Klass, a law professor at the University of Minnesota, explains a similar history in the interior West, where coal and natural-resource extraction ruled economies. At the end of the 19th century, as states in the West wrote their constitutions, coal interests and other naturalresource lobbyists advocated for provisions they advertised as essential for continued economic development.

During Idaho’s constitutional convention, for example, mining interests argued that the state’s prosperity and industrial expansion depended on conferring broad eminent domain authority to private companies. Opposing delegates argued that such authority was “thievery” and a “tool of monopolists.” Nevertheless, big industry won, and the state added the provision.

Before long, in “natural resource-rich areas of the country,” as Klass wrote in a 2008 law review article, “The Frontier of Eminent Domain,” property condemnations were “more likely to come from a mining, oil, or gas company representative” than from the government. These eminent domain rights were ostensibly in the public interest, despite the fact that the “land condemned by an oil or mining company will not be subject to public access or public use.”

These state constitutional provisions helped pave the way for a century when public use was no longer in vogue, and public purpose was the name of the game.

From 1900 to the 1950s, the broader view gained ground, culminating in the Supreme

Court’s embrace of it in Berman v. Parker (1954), Somin explained. By the time of the Kelo case, economic development and natural-resource “takings” under the broader definition seemed entrenched.

Kelo, Klass argues, was decided on the body of law that the interior West states had pioneered for the expansion of their naturalresource industry. The justices ruled in a 5-4 decision that the city of New London, Connecticut, could condemn residential properties for a redevelopment plan, because private developers would create jobs and increase tax revenues, thereby having the broader “public purpose.” As it turns out, the land was never developed and lies fallow today.

Economic-development takings, like the one in Kelo, are much like natural-resource takings because the “condemnor” has “the right to displace private property interests in the name of economic development that will benefit the public at large.” Similarly, while pipelines are not natural-resource takings per se, eminent domain authority is conferred to private pipeline companies under the broader public-purpose definition in a similar manner. Pipelines themselves are not new; Congress recently took up a bill to repair dangerous pipeline infrastructure over 100 years old. But now, more than a decade after Kelo, there’s increased scrutiny of natural-resource takings and economic-development takings. This could be because “you have a huge build-out of pipelines because of fracking,” Klass said in an interview.

Fracking, a technology used as far back as 1949, has mushroomed into a mammoth industry, as methods like horizontal drilling in shale rock formations have discovered massive underground stores of oil and natural gas. When Kelo was decided in 2005, the U.S. was producing about five million barrels of crude oil per day. In 2019, that number was about 12 million.

The boom also created enough surplus for companies to begin exporting oil and gas, which actually decreases the strength of an eminent domain argument. “Where’s the public use if all the pipeline is doing is transporting gas that’s then shipped overseas?” Klass explained.

Pipeline “takings” were rare in the 19th

MAR /APR 2020 THE AMERICAN PROSPECT 55

and early 20th centuries, compared to other energy infrastructure projects like power lines. But the emergence of the United States as a major energy producer and exporter required significant new pipeline building, and accompanying eminent domain takings.

The Kelo decision so enraged landowners that it helped build the anti-pipeline coalition that exists today. After Kelo, over 40 states passed stricter statutes defining public use, closely scrutinizing approved projects. The national outrage helped forge an unlikely coalition of environmental groups, libertarians, indigenous activists, and property owners, all opposed to further pipeline development—for seemingly incongruous reasons.

With the new conservative majority on the Court, Kelo may be on the chopping block. “Kelo has the marks of a decision that’s likely to be overruled,” said Somin.

“The majority opinion has a bunch of errors and problems.” Somin added that the emails that came out during Neil Gorsuch’s nomination vetting indicated that he disliked Kelo, and Brett Kavanaugh may also be inclined to overturn.

“If it does get overruled completely, I think that would be progress in terms of banning these kinds of economic-development takings nationwide,” Somin said.

In a forthcoming law review article, “Eminent Domain Law as Climate Policy,” Klass makes the case that eminent domain authority can be revoked from fossil fuel industries and conferred, with proper safeguards, on industries like solar and wind, as a way to encourage development of renewable energy. By 2019, 29 states; Washington, D.C.; and three U.S. territories had adopted laws that require a portion of all electricity generation to come from renewable sources; California, leading the way, has mandated 100 percent renewable energy by 2045. But Klass argues that states should consider limiting eminent domain rights for fossil fuel projects, and “extending eminent domain rights for clean energy projects as part of their state climate policies.”

As Klass explains, state legislative reforms after Kelo did little to directly confront natural-resource takings. In

56 PROSPECT.ORG MAR /APR 2020

just keep assuming that more [pipeline] infrastructure is still good.”

“You have to ask a different set of questions. You can’t just keep assuming that more [pipeline] infrastructure is still good.”

Louisiana and other states, giving eminent domain authority directly to private industry remains strong, despite the growing debate about what constitutes public use when it comes to eminent domain.

Even the Federal Energy Regulatory Commission (ferc), which regulates interstate natural gas pipelines, has been urged to reform how it reviews pipeline permits to factor in climate change. A new bill, introduced by Frank Pallone (D-NJ), chair of the House Energy and Commerce Committee, does just this. While the bill has been proposed mainly “for discussion,” it augurs a future where climate impact is a regular part of pipeline permitting when it comes to assessing the public interest.

That’s why the Louisiana landowners’ lawsuit is so critical: It asks the questions advocates have been asking for years. Are pipelines still in the public interest? How do we calculate the benefits, weighed against the costs of a warming planet? As Pam Spees put it, “Eighty years later, you have to ask a different set of questions. You can’t

THE ALLEGATION THAT the pipeline is not in the public interest seems clear to environmentalists and landowners, but the plaintiffs have to convince the court in a state that Misha Mitchell described as “a friend of oil and gas.” Despite the initial loss in district court, Pam Spees told me she is hopeful now that they have appealed to the Third Circuit. “Hopefully [the court] will award significant damages and deter other companies from doing the same thing,” she said. “These private companies should never have had the unfettered power the state gives them.”

But some argue that a favorable ruling may not lend itself to retooling eminent domain as an instrument of climate policy. Despite the short-term benefits to the local environment and landowners in Louisiana, it also has the potential, without further action, to obstruct the switch to cleaner sources of energy, explained James Coleman, a law professor at Southern Methodist University who has worked with Klass on issues of eminent domain. “The status quo is fossil fuel,” he said. “A switch to cleaner sources means building more infrastructure.”

When Katherine Aaslestad traveled to St. Martin Parish for the trial court hearing in 2018, she said the land no longer looked like what she remembered from her childhood.

“It was a moonscape,” she said, describing the spoil banks nearly 15 feet high, and the lack of tree cover.

In areas without spoil banks, Katherine said, “it felt raw in the most beautiful way. No paths. No signs. There’s all kinds of colors and sounds in the basin and when you’re hiking across you see all kinds of flora and fauna.”

With the pipeline already built and spoil banks tarnishing the landscape, the lawsuit cannot recover that. But a ruling in the landowners’ favor could be a sign of the shifting tide on fossil fuel companies’ presumed rights of eminent domain authority.

“I grew up around swamplands, wetlands, bayous,” Katherine said. “I was part of that world. I took it for granted.” Now she wants to help make sure it doesn’t disappear.

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but it is an open question as to whether the change in media is a primary cause of the political shift or just a historical coincidence.

The relationship between right-wing extremism and online media is at the heart of Antisocial, Andrew Marantz’s new book about what he calls “the hijacking of the Ameri-

can conversation.” A reporter for The New Yorker, Marantz began delving into two worlds in 2014 and 2015. He followed the online world of neofascists, attended events they organized, and interviewed those who were willing to talk with him. Meanwhile, he also reported on the “techno-utopians” of Silicon Valley whose companies were simultaneously undermining professional

immediately following the 2016 U.S. election. The strongest chapters profile the demicelebrities of the “alt-right.” As a Jewish reporter from a liberal magazine, Marantz is not an obvious candidate to gain the confidence of neofascists. But he has an impressive talent for drawing them out, and his portraits attend to the complexities of their life stories and the nuances of their opinions.

The media once quarantined neofascists. Not anymore. BY PAUL STARR

WILL VR AGOVIC/ASSOCIATED PRESS

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uring the post–World War II era, anti-democratic extremist movements faded into political irrelevance in the Western democracies.

Nazis became a subject for comedies and historical movies, communists ceased to inspire either fear or hope, and while some violent groups emerged on the fringes, they were no electoral threat. The mass media effectively quarantined extremists on both the right and the left. As long as broadcasters and the major newspapers and magazines regulated who could speak to the general public, a liberal government could maintain near-absolute free-speech rights without much to worry about. The practical reality was that extremists could reach only a limited audience, and that through their own outlets. They also had an incentive to moderate their views to gain entrée into mainstream channels.

In the United States, both the conservative media and the Republican Party helped keep a lid on right-wing extremism from the end of the McCarthy era in the 1950s to the early 2000s. Through his magazine National Review, the editor, columnist, and TV host William F. Buckley set limits on respectable conservatism, consigning kooks, anti-Semites, and outright racists to the outer darkness. The Republican leadership observed the same political norms, while the liberal press and the Democratic Party denied a platform to the fringe left.

Those old norms and boundary-setting practices have now broken down on the right. No single source accounts for the surge in right-wing extremism in the United States or Europe.

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Rising numbers of immigrants and other minorities have triggered a panic among many native-born whites about lost dominance. Some men have reacted angrily against women’s equality, while shrinking industrial employment and widening income inequality have hit less-educated workers particularly hard.

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journalism and providing a platform for the circulation of conspiracy theories, disinformation, hate speech, and nihilism. The online extremists, Marantz argues, have brought about a shift in Americans’ “moral vocabulary,” a term he borrows from the philosopher Richard Rorty. “To change how we talk is to change who we are,” Marantz writes, summing up the thesis of his book.

Antisocial weaves back and forth between the netherworld of the right and the dreamworld of the techno-utopians in the years leading up to and

How the Right Went Far-Right B

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Right-wing extremism has burst forward in recent years— facilitated by social media opening up new channels for hate.

As these pressures have increased, the internet and social media have opened up new channels for previously marginalized forms of expression. Opening up new channels was exactly the hope of the internet’s champions—at least, it was a hope when they envisioned only benign effects. The rise of right-wing extremism together with online media now suggests the two are connected,

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Marantz leaves no doubt, however, about his own view of the alt-right and the responsibilities of journalists: “The plain fact was the alt-right was a racist movement full of creeps and liars. If a newspaper’s house style didn’t allow its reporters to say so, at least by implication, then the house style was preventing its reporters from telling the truth.”

As Marantz describes them, the white nationalists, masculinists, and other elements of the alt-right were “metamedia insurgents” interested chiefly in catalyzing conflict. “They took for granted that the old institutions ought to be burned to the ground, and they used the tools at their disposal—new media, especially social media—to light as many matches as possible.” As they expanded their online presence, they tailored their memes to the medium. On Facebook, they posted “countersignal” memes “to shock normies out of their complacency.” On Twitter, they trolled mainstream journalists, hoping to capture wider attention. On sites such as Reddit, 4chan, and 8chan, they felt free to be “more overtly vile” and “started calling themselves ‘fashy’ or ‘fash-ist,’” sometimes baiting “normies” by claiming that “Hitler did nothing wrong.”

The online alt-right, together with the presidential candidate they decided to champion, Donald Trump, played a key role in making white nationalist ideas part of the national conversation. Until 2016, the two major parties and national media reflected a broad consensus—at least in rhetoric, if not in actual policy—that America was a nation where immigrants were welcome and people of all races and religions were equal.

When Republicans played the “race card,” they did so obliquely in deference to the consensus. Under George W. Bush, the Republican establishment was still pushing immigration reform, while the party was increasingly in opposition to legislation and succeeded in blocking it.

But a few on the far right called

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for Republicans to go further.

They assailed “the Narrative,” their term for the dominant liberal ideas about racial and gender equality. Marantz highlights the role of Steve Sailer, an opinion writer who had been arguing since the early 2000s that Republicans should openly cast themselves as a white-identity party, enact prowhite policies, and take aggressive action against immigration, including the repeal of birthright citizenship. Others on the right called this the “Sailer strategy.”

Social media gave Sailer and likeminded heretics—“many of whom Buckley had banished to the fringes of the movement years earlier”—new ways of disseminating their views that were more powerful than what was appearing in a print magazine like National Review.

Much of Marantz’s story describes how more traditional right-wingers moved further right and brought others along with them. In 2012, a group that had previously supported the libertarian presidential candidate Ron Paul started a blog called The Right Stuff, describing themselves as “post-libertarian” before adopting the term “alt-right.” As a result of the rising numbers of immigrants, they argued, libertarianism wouldn’t be enough to stop the replacement of whites; stronger measures were necessary. The Right Stuff’s “arch, antic, floridly offensive” tone, Marantz writes, attracted “a growing cohort of disaffected young men” who often referred to the blog as a key part of a “libertarian-to-farright pipeline,” “a path by which ‘normies’ could advance, through a series of epiphanies, toward ‘full radicalization.’”

Some of these right-wingers went all the way to out-andproud fascism. Richard Spencer, who coined the term “alternative right” in 2008, advocated “the creation of a white ethnostate on the North American continent,” to be achieved through “peaceful ethnic cleansing.” At an alt-right conference just after Trump’s

ANTISOCIAL: ONLINE EXTREMISTS, TECHNO-UTOPIANS, AND THE HIJACKING OF THE AMERICAN CONVERSATION

BY ANDREW MARANTZ

Viking

election, Spencer declared, “Hail Trump! Hail our people! Hail victory.” This last phrase, the literal translation of “Sieg heil,” led some members of the audience to rise with Nazi salutes. When the leaders of a movement call for “peaceful” ethnic cleansing, it ought not to be surprising that one of their followers decides to do it the oldfashioned way. In October 2018, just before killing 11 Jews in a Pittsburgh synagogue, the murderer posted a cartoon on a rightwing social media site with the caption “The libertarian-to-farright pipeline is a real thing.”

Before he became Trump’s campaign strategist, Steve Bannon, publisher of the web tabloid Breitbart News, said of his own site, “We’re the platform for the alt-right.” Later, though, the association became toxic, and Bannon and others who were anxious about the company they were keeping then relabeled their position as “civic nationalism” rather than “ethnonationalism.” In the United States, however, “civic nationalism” has long been associated with the liberal, pluralist view that embraces ethnic diversity and immigration and insists that American citizenship and identity demand only adherence to the nation’s civic principles. Bannon and others in his circle were trying to appropriate the term for a movement that sought to reverse immigration and citizenship policies that have treated nonwhites as equals.

The normalization of white nationalism on the right and the growth of online media helped prepare the way for Trump’s election. With his disregard for the truth and incendiary use of social media both as a candidate and as president, Trump has been the pivotal and emblematic figure in this political transformation.

Repeatedly over the previous decades, as far back as 1987, he failed to get any traction when he floated the idea of running for president. The mainstream news media did not take him seriously, and his views and even his party

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affiliation weren’t clear. In 1999, he mentioned Oprah Winfrey as a possible running mate when he suggested he might run for president the next year.

In 2011, Trump again tried to stir up support for a presidential campaign, but as Marantz points out, he initially had “nothing to command people’s attention—no news hook, no controversy, no meme with momentum.” Then he turned to two far-right figures, Joseph Farah and Jerome Corsi from World Net Daily, a rightwing online site that had played a central role in promoting the lie that Obama came from Kenya and his Hawaiian birth certificate was a forgery. Seizing on the myth about Obama’s birth, Trump generated the political attention he had always craved, though once again he decided against a presidential run. But Marantz is right that the episode had an obvious lesson: “the more incendiary your message, and the more loudly and forcefully you repeated it, the more attention you could get.”

Marantz’s view of the online media revolves around this central point: Messages that pack a high emotional punch go viral, while low-arousal messages do not. The viral power of emotionally arousing messages is clearly part of the explanation for why extremism has flourished online at a historical moment when native-born whites, particularly men, have felt they are losing control. In the old world of mass media, extremists had an incentive to temper their views to gain access to the mainstream, but now the incentives have been reversed.

High-voltage lies flourish in the environment created by social media. Not only are there no editorial gatekeepers; the platforms’ algorithms have amplified messages that generate user engagement, which high-arousal racist lies unquestionably do.

What’s missing from Marantz’s account, however, is the critical role of Fox, Breitbart, and other major right-wing media organizations that have developed over

the past quarter-century. The new mass media of the right and social media work in tandem. Social media were supposed to create wider public participation, and for better or worse that’s what we have on the right: a system of “participatory propaganda” (as some analysts have begun to call it), involving both media with large audiences and legions of lesser “influencers.”

When the major social media companies began in the early 2000s, their founders did not see themselves as having any responsibility for the content on their sites. The culture of the tech industry has long had an affinity for libertarian ideas that provide a ready justification for a hands-off policy. An absolutist view of free speech has also been economically advantageous for the companies because it relieves them of any obligation to hire the employees that would be needed to monitor all the content users post.

But since 2016, the revelations about the complicity of the tech industry in spreading disinformation have forced the platforms to make adjustments. Reddit serves as Marantz’s chief case study in the techno-utopians’ retreat from free-speech absolutism. Founded in 2005, the company hosts forums (“subreddits”) for virtually unlimited and unrestrained posting of opinions, images, and other content. According to one of its founders, Steve Huffman, the site was built “around the principle of ‘No editors. The people are the editors.’” In its early days, it sold T-shirts with the slogan “Freedom from the press.”

When Marantz visited its offices in San Francisco in October 2017, Reddit had a million subreddits and was the fourth-highesttraffic site in the United States after Google, Facebook, and YouTube. Huffman, now the ceo, had become alarmed about the presence of neofascist activists on the site. Just a few weeks earlier, white supremacists had marched in Charlottesville, Virginia.

After some deliberation, Reddit

In the old world of mass media, extremists had an incen­tive to temper their views to gain access to the mainstream, but now the incentives have been reversed.

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slightly modified its existing policy against “encouraging or inciting violence,” adding language enjoining participants not to glorify or call for “physical harm against an individual or a group of people” or “the abuse of animals.” Marantz was invited to observe a group of Reddit employees as they sat around a table eating snacks and making decisions about which subreddits to ban—109 of them that day, such as r/KillAllJews and r/KilltheJews as well as r/SexWithDogs. But the scene Marantz describes only raises more questions: How were those subreddits accepted in the first place? What others with equally noxious content survived because they had less explicit names? Is it even possible for a company with a million forums to exercise responsible control?

Social media companies have created new and powerful means of political communication without the traditions of editorial responsibility that in liberal democracies have helped make the media into partners of democracy. The companies have now taken some steps to limit the damage they have been doing. Facebook has taken down billions of fake accounts and recently adopted measures against “coordinated inauthentic behavior” to counteract disinformation campaigns by both domestic sources and foreign governments. But it has also declined to block lies in political advertising.

The techno-utopians promised disruption, and they have delivered it. What they haven’t delivered is the ability to prevent that disruption from undermining liberal democratic institutions.

The online media haven’t produced the right-wing surge all by themselves, and Marantz’s book doesn’t persuade me that the online rightwing extremists have changed who Americans are by changing how we talk. But the changes in media and politics have shown us something about what the United States can become. Fascism is a real and present danger in America. Everything we do now politically has to take that into account.

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From Virtue Signaling to Politics Two new books try to put power back into civic engagement BY MICAH L. SIFRY B

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en years ago, the late Jake Brewer wrote an essay for The Huffington Post arguing that the advocacy industry was creating a tragedy of the commons. “The very technology that has allowed virtually any citizen to share a message with their representative has also produced paralyzing noise, making Congress far less able to hear what citizens have to say,” he wrote. As a result, congressional staffs were becoming more reliant on lobbyists, making average citizens even more cynical about the system.

Brewer, a rising star of the netroots generation, was speaking from inside the belly of the beast.

At the time, he was the chief strategy officer for Fission, a leading digital organizing consultancy. (Full disclosure: Previously, we had been colleagues at the Sunlight Foundation.) He knew that the rise of the internet and social media had only intensified the competition between advocacy groups for attention and relevance.

“Relevance for an advocacy group,” he wrote, “leads to influence, and influence leads to funding so that it can conduct more advocacy. This constant struggle also means that it’s likely an advocacy group will ask you to sign meaningless petitions for the appearance of relevance.” More than half the emails supposedly generated to hit congressional inboxes were never even received, and faxes to congressional offices were typically just thrown away. So much of what passed for political engagement, Brewer argued, was a sound-and-light show, signifying nothing.

A decade and a half ago, many of us thought that the rise of personal computing and the openness of the web would lead to the democratization of politics. We celebrated how ordinary citizens made use

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of these tools. We cheered as bloggers challenged powerful politicians and we evangelized for social media, telling everyone we knew that they had to get on Facebook and Twitter. There have been many beneficial outcomes from the rise of the networked age, no doubt.

Groups that were previously marginalized by mainstream media, especially women and people of color, now have more voice. Candidates who choose to avoid dependence on big money, such as Bernie Sanders and Elizabeth Warren, have learned how to amass small donors and run for office with fewer constraints.

But as the authors of two valuable new books, Eitan Hersh of Politics Is for Power, and Sabeel Rahman and Hollie Russon Gilman of Civic Power, make clear, merely opening up the media floodgates and lowering the barriers to participation have not led to the power shifts the early evangelists for tech-enabled democracy expected. Meaningful participation, the kind that ensures that ordinary people can influence the decisions that affect their lives, requires far greater attention to how power is organized and structured.

Hersh, who is an associate professor of political science at Tufts University, focuses his book mostly on the role of individuals in politics. Rahman, the president of Demos and an associate professor at Brooklyn Law School, and Gilman, a political scientist with affiliations at Harvard, Columbia, and New America, focus more on the institutions that foster and channel civic engagement. While complementing each other, the two books have different audiences in mind. If you want to convince your political-junkie cousin to stop sharing memes on Twitter and arguing about the election

POLITICS IS FOR POWER: HOW TO MOVE BEYOND POLITICAL HOBBYISM, TAKE ACTION, AND MAKE REAL CHANGE

BY EITAN HERSH

Scribner

CIVIC POWER: BUILDING AMERICAN DEMOCRACY IN AN ERA OF CRISIS

BY K. SABEEL RAHMAN AND HOLLIE RUSSON GILMAN

Cambridge University Press

on Facebook, buy him Politics Is for Power. If you want to try to get a foundation program officer to adopt a different strategy for fixing what ails American democracy, send her Civic Power.

Either way, what Hersh, Rahman, and Gilman all argue is that many of us are doing politics wrong.

For all the noise generated by the political process, Americans spend shockingly little time on civic activity, Hersh tells us.

According to the Bureau of Labor Statistics, the average person reports having about five and a half hours of leisure per day.

Three-quarters of that time is spent watching TV or on a computer. Americans spend just about nine minutes, averaged across all of us, in civic or volunteer activity.

Even people who are daily news consumers, the so-called “highly informed” part of the electorate, aren’t all that civically engaged.

Fewer than 4 percent told the American National Election Studies survey that they did any work at all on behalf of a campaign or party in 2016. Hersh notes, “Even among those who reported that they were afraid of Donald Trump, only 5 percent reported that they did any work to support their side.” Drawing on his own 2018 survey work, he adds that most daily news consumers report belonging to zero organizations. “Sixty-five percent report that in the last year they have done no work with other people to solve a community problem.

Sixty-eight percent say they have attended zero meetings in the last year about a community issue.”

Most of this data probably skews upward—that is, people tell pollsters they are more active than they actually are.

Worst of all, people think that consuming news and sharing on social media equals being politically active. One-third of all Americans say they spend two hours a day on politics, Hersh found in that 2018 survey. But 80 percent of those people report that time is spent spectating,

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consuming news and social media, and sharing content with others.

Hersh calls those people “political hobbyists” and he damns them, pungently. People who sign petitions online do so as a form of “self-gratification,” he writes.

“We click and post and share not to take a civic action … [but] to convey an image to our social networks and ourselves.”

In lambasting activists for wasting their time in expressive politics rather than on-theground organizing, deriding them as “political hobbyists,” Hersh joins a turn under way among a number of younger progressives who have watched as many on the left have built comfortably pure clubhouses for their ideological soul mates rather than working to convert more people to their causes. I’m thinking of writers such as Astra Taylor and Jonathan Smucker, both of whom cut their teeth in radical left movements like Occupy but who now are, respectively, organizing in places like rural Pennsylvania and among students burdened by college debt.

Hersh shows us several compelling examples of real community organizing, like the Ukrainian ex-pat Naakh Vysoky of Brighton, Massachusetts, who before his death in December built a base in his low-income, immigrant, senior housing complex centered on winning tangible service improvements for his community. Turnout in Vysoky’s ward is off the charts and has been for years.

The challenge of building power for ordinary people is what consumes Rahman and Gilman, though their critique is focused on the upper end of political engagement, where leaders and institutions amass and deploy significant resources. Reformers have been trying for decades to improve the health of American democracy, with a range of strategies including campaign finance reform, greater government transparency, deliberative democracy practices, civic tech, and participatory budgeting.

While each of these approaches

has made some headway, Rahman and Gilman argue convincingly that they are not enough.

“Too often democracy reform policies emphasize the need to optimize governmental functioning and to improve the civility and rationality of politics, in ways that overlook—and therefore reify and further entrench—the deeper structural disparities of power,” they write. Worse, many democracy reformers embrace a “good governance ethos” that imagines a world somehow insulated from special-interest influence and political conflict and centered solely on expertise and good-faith deliberation.

Not only is that world an unattainable fantasy; Rahman and Gilman say that the push to achieve it neuters authentic citizen engagement and obscures, instead of fixing, the realities of political inequality. That’s why, for example, projects that simply push for greater governmental transparency don’t automatically lead to outcomes holding the powerful to greater account. In my years working with the Sunlight Foundation, we learned this the hard way, as we discovered that making things like campaign finance and lobbying data more accessible was of the greatest interest to … lobbyists. We still need institutions that can translate information into action on the part of those with less power, but as Hersh shows, those institutions—local political party committees, civic organizations, labor unions, and public media— have all withered and need to be rebuilt.

What is to be done? Like Hersh, Rahman and Gilman argue for a different kind of politics. Instead of seeking neutral process reforms like greater government transparency, reformers should build new civic institutions that are expressly engaged in increasing the power of previously disempowered groups. They point to examples like the Mayor’s Office of New Urban Mechanics in Boston and the federal Consumer

Instead of seeking neutral process reforms, reformers should build new civic institutions expressly engaged in increasing the power of previously disem­powered groups.

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Financial Protection Bureau. The Boston office develops processes and tools aimed at lifting up disadvantaged neighborhoods and giving them greater say in city planning. The cfpb has an office of community affairs that in the Obama years invested significant staff time in building relationships with grassroots organizations and stakeholders such as minorities, indebted students, and homeowners. The agency also employed a mix of public hearings and town halls around the country to leverage public engagement. As of this writing, it still operates an online, searchable database that has generated millions of complaints against bad actors (www.consumerfinance.gov/data-research/ consumer-complaints).

Rahman and Gilman are also politely critical of the “bodyless heads” of many advocacy organizations—the people filling our in-boxes with pointless requests for petition signatures and urgent calls for “just $3” to keep the sky from falling. “Building organizational power, in contrast, requires something more than simply transactional mobilizing; it also requires organizing that can build the skills and capacities of individual members over time, while simultaneously strengthening the relationships between them.”

Amen to that.

Shifting our personal and collective focus to building political power rather than the empty chase for self-gratification or relevance is a hard but necessary task. The daily distractions delivered by our devices and the constant barrage of negative news only make it harder. But the hole we are in wasn’t dug overnight, and digging out of it will also take time. If people listen to Hersh as well as Rahman and Gilman, maybe at least they will stop digging the hole deeper.

Micah L. Sifry is the president and co-founder of Civic Hall, a collaborative community center in New York City that works to embed civic values at the intersection of technology and society.

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Praise by Faint Damnation In which the liberals’ favorite conservative blames America’s crisis more on decadent culture than decadent capitalism BY JORDAN ECKER B

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he conceit of Ross Douthat’s newest book, The Decadent Society: How We Became the Victims of Our Own Success, is that the political and cultural atmosphere of the United States in 2020 is best summed up by Tony Soprano’s lament: “It’s good to be in something from the ground floor. I came too late for that and I know. But lately, I’m getting the feeling that I came in at the end.”

Douthat’s book argues that while America was once defined by innovation, progress, and a sense of destiny, for a while now, the United States, and Western civilization as a whole, has instead been confronted by the three S’s—stagnation (economic), sterility (sexual), and sclerosis (governmental gridlock)—and that the combination of these three forces has brought us to an eerie repetitive twilight where new things are no longer possible.

All of this is what Douthat means when he calls our society “decadent.” We were once a people with an animating myth that inspired Americans to grow the economy, ward off the threat of communism, and explore either the open West or the darkness of space. Since the end of the Cold War and the end of space exploration, we have been bereft of those myths; and with technological success coming mostly in the areas of entertainment and communication, we have become a disappointed, anomic society. We have done everything we set out to do, landed a man on the moon, and now we have nothing left to do but enjoy whatever pleasure we get from marijuana and the latest Marvel movie. This is the bleak picture Douthat paints.

Less George Orwell’s boot stamping on the face of humanity forever than Aldous Huxley’s future where a spiritually emaciated

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mankind content themselves with Soma.

Douthat has, for a while now, been a bewitching figure for the American left. The grounds for Douthat’s claim on a recent podcast that he is “the left’s favorite conservative” materialize quickly for the reader of his latest book.

Douthat, citing left-wing thinkers like David Graeber and Thomas Piketty, draws an analogy between the fraudulence of Fyre Fest and Theranos and the venture capitalist–backed Uber. Uber, Douthat argues, has no horizon of profitability, yet maintains a valuation in the tens of billions. Worse, following Piketty, Douthat describes an economy secularly moving toward the dominance of a rentier class at the expense of growing inequality as the opportunities for profitability are narrowed by deep structural forces. Economic growth, once seemingly infinite, may actually be constrained by environmental and technological factors beyond human control. In short, Douthat’s arguments about a stagnant economy are broadly consistent with a left-wing tradition that since Marx has believed that capital will one day provoke a crisis by exhausting the possibilities of growth.

And Douthat understands that economic problems are not merely economic in the reductive sense.

He is right that ours is a society in the midst of a widespread cultural malaise, visible everywhere, from rising rates of deaths of despair and the seemingly endless spate of mass shootings, to the proliferation of conspiracy theories and a growing gap between the number of children people claim to want and the number they have. Leftwingers and Douthat could even agree that cultural stagnation in the form of the Marvelification of the movie industry, where broad

THE DECADENT SOCIETY: HOW WE BECAME THE VICTIMS OF OUR OWN SUCCESS

BY ROSS DOUTHAT

Avid Reader Press

swaths of the movies released every year are franchised and written and cut to look and sound alike, is driven by rising levels of market concentration in the entertainment sphere. (Disney accounted for nearly 40 percent of the U.S. box office in 2019.)

Douthat’s claim that culture today is made up of “pastiches of the original pastiche” is basically the point made by the Marxist academic Fredric Jameson when he dubbed postmodernism the cultural logic of late capitalism.

But something important is obscured by naming this interlocking nexus of problems decadence.

“Decadent” evokes a tottering empire on its knees: Roman cornucopias, Gatsbyian black-tie parties, intellectuals in Weimar debating the finer points of the nature of Kultur as the Nazis stage a putsch. It relegates the material causes of problems to a level of secondary, symptomatic importance. The fundamental driver of decadence is framed as a problem of elite culture. This in turn injects a basic contradiction into Douthat’s argument. On the one hand, in the places where Douthat believes more could be happening, the American state is portrayed as sclerotic and would-be inventions as disappointing trifles. On the other hand, elsewhere too much is happening, as young progressive radicals pose energetic demands that the state do more to protect trans rights or recognize America’s long history of imperialist wrongs.

Douthat portrays this energy as nascently totalitarian. Douthat wants it both ways, in other words: He both wants to see the demands by campus protesters for broader Title IX protections as incipient pink totalitarianism—and in that sense, all too energetic—and for us to believe that we live in a society sedate to the problems Douthat believes are truly significant.

Decadence for Douthat is not even a crisis, if by crisis we understand something like a dangerous yet decisive turning point. What we have, Douthat contends, is “sustainable decadence.” Citing

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What Aldous Huxley called “Soma,” contenting a spiritually emaciated mankind, is now manifested in marijuana and the latest Marvel movie, Douthat writes.

W.H. Auden, Douthat claims that the horror of the fall of the Roman Empire is not so much its final moment of fall—which historians struggle to pin to a single moment anyway—but that it endured for so long without renewing itself, without the fact of its decline coming to a moment of crisis and decision.

Douthat concludes this because he is bearish about the odds for opponents of the liberal order, on the right or left, to really change anything.

Douthat’s affect throughout his book is phlegmatic. Socialists and fascists alike for him exist mostly online. The stakes of his book are our spiritual lives, but Douthat does not think of himself as ringing an alarm bell, yelling that a fire has gone up and must be doused now. Instead, he positions himself as calmly describing a situation, which while not immediately dire, poses a distinct threat of spiritually emaciating us. In a way, Douthat’s

narrational voice is not totally divorced from the decadence he describes. His prose displays his own hypothesis—the decadence of the disengaged passive intellectual. He counsels moderation; the solutions he offers—from the hope for some unpredictable religious or technological revelation to a renewed managerial technocracy—are all either beyond his or his reader’s power to bring about or a strategy based on a sort of melancholic resignation to the reality of the situation. The final lines of the book, which expresses the mixed-up nature of religion and technology that has been a theme for Douthat throughout, read almost ironically: “So down on your knees—and start working on that warp drive.”

Douthat’s concern is not new.

At least since the Western frontier closed about 1890, critics have fretted that without its settler-colonial manifest destiny, the United States would enter cultural or economic

In a way, Douthat’s narrational voice is not totally divorced from the decadence he describes.

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decline. Douthat is worried that the inhabitants of the West—and this is the nebulous, never fully defined object of concern—do not know how to live in a world without an infinite frontier for work to move into. This was Max Weber’s worry too: that the Puritans would wake up one morning and realize that the capitalist world they had made left them “specialists without spirit, sensualists without heart.”

But thinking seriously about the interactions between capitalism and anomie exceeds Douthat’s decadence frame.

From the 1930s to the 1970s, the American state built a welfare system and negotiated compromises between capital and labor on the basis of the ideal of the single-white-male-breadwinner household. But political decisions and economic shocks have combined to shred the socialpolitical context in which that ideal thrived; and legitimate concerns about the maleness and the whiteness of the worker at its heart suggest the ideal was never all that ideal to begin with.

All of this indicates not so much the need for a religious revival or space exploration, both of which guide Douthat’s readers’ eyes to the heavens, but rather a grim acknowledgment of the environment and horizon already around us, a recommitment to care for the finite world we actually already inhabit. We need to reconsider what sort of ideal we imagine, if we want a singular ideal or a world where a plurality of different sorts of human lives can flourish, and then we need to think about how to build the economic and political institutions that will sustain that flourishing. What we need is less a melancholic yearning for a new and infinite frontier and more a passionate commitment to the world we find ourselves on.

Jordan Ecker is pursuing a doctorate in political philosophy at Cornell University.

VOL. 31, NO.2. The American Prospect (ISSN 1049-7285) is published bimonthly by The American Prospect, Inc., 1225 Eye Street NW, Ste. 600, Washington, DC 20005. Periodicals-class postage paid at Washington, DC, and additional mailing offices. Copyright © 2020 by The American Prospect, Inc. All rights reserved. No part of this periodical may be reproduced without the consent of The American Prospect, Inc. The American Prospect ® is a registered trademark of The American Prospect, Inc. Postmaster: Please send address changes to The American Prospect, 1225 Eye St. NW, Ste. 600, Washington, DC 20005. PRINTED IN THE U.S.A.

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Parting shot

Mapping Corruption Department of the Interior Department of State Trump’s ambassador to Iceland is a dermatologist who had never visited the country; his ambassador to Slovenia is the founder of an evangelical charity known for sharing bizarre right-wing social media posts.

Consumer Financial Protection Bureau The payday lending industry’s main lobbying arm, the Community Financial Services Association of America, spent roughly $1 million holding its 2018 and 2019 annual conferences at the Trump-owned Doral golf resort.

James Cason, associate deputy secretary, is a former oil and gas lobbyist who held a high-ranking Interior Department post in the Reagan administration. In 1989, Cason had to withdraw from consideration for a top Agriculture Department job over charges that he had permitted oil shale land to be sold for $2.50 an acre.

Environmental Protection Agency While under consideration for his current post, EPA Administrator Andrew Wheeler hosted campaign fundraising events for Senators John Barrasso (R-WY) and Jim Inhofe (R-OK), two senior members of the committee that would handle his confirmation hearings.

Department of Health and Human Services Daniel Best, senior adviser to the HHS secretary for drug pricing reform, worked at Pfizer for 12 years and most recently served as a CVS Caremark vice president.

Department of Education Chief Enforcement Officer Julian Schmoke is a former dean at for-profit college DeVry. He has canceled investigations into Bridgepoint and Career Education Corporation, for-profit colleges that also have former executives working as senior department staff.

Department of Energy

Department of Housing and Urban Development Deputy Chief of Staff Alfonso Costa Jr. is the son of a man described by HUD Secretary Ben Carson as “my very best friend.” In 2017, Costa Sr., a dentist, was convicted of health care fraud after billing insurance companies for $44,000 in fictitious dental work.

Former Secretary Rick Perry announced the creation of a new Office for Artificial Intelligence and Technology. At the time, his wife Anita held stock in three potentially affected companies—Verizon, AT&T, and Splunk.

These facts and more appear in our interactive exhibit, Mapping Corruption, a comprehensive guide to the happenings at federal agencies in the age of Trump.

Visit the exhibit at prospect.org/mapping-corruption.

Progressives can’t afford to abandon the working class.

For decades, progressives led the way in fighting for policies to protect, strengthen and grow the working class.

From fighting against offshoring to rallying for better wages and working conditions, progressives stood up for America’s blue collar workers when nobody else would.

Progressives can’t quit the fight now. In 2020 and beyond, we must continue to fight for America’s workers.

americanmanufacturing.org

21 WWW.PROSPECT.ORG MAR /APR 2020

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