Tells the Facts and Names the Names

jan. 1-15, 2012 Alexander Cockburn and Jeffrey St. Clair vol. 19, no. 1 Paul Krugman After Russia’s Winter Break Learns the Facts Liberals and Communists Regroup of Life On Health By Israel Shamir Insurance Moscow idwinter recess stopped ev- in broad daylight. By Rob Urie erything in Russia. It was like As for the natives, there was the bois- rinceton economist and New York August in France some years terous New Year celebration, quite simi- Times editorialist on econom- Mago, mutatis mutandis, with snow in- lar to the Western Christmas, the feast ics and politics, Paul Krugman, stead of sand, fir trees instead of palms, of partying, booze, presents and corpo- isP the preeminent mainstream econo- and vodka instead of pastis. For two rate events. Coming a full week later, the mist of this era. While no innovator, weeks, the whole country laid off work Russian Christmas retained all the qual- Krugman is a knowledgeable defender of and relaxed. Moscow was blissfully ity of a religious feast, so peaceful, so the Keynesian economic framework that empty of its crowds, though Red Square tranquil with its well-attended midnight melded some elements of Marxian analy- was thronged by hundreds of Tajik and service. And afterward there was another sis, such as the recurrent crises of capital- Philippine “guest workers.” Usually busy week for skiing and relaxing. ism, with traditional capitalist econom- shifting snow loads and washing floors, People also traveled a lot. Ordinary ics. Like Keynes, Krugman seeks to patch the invisible class was free to view the masses descended on Turkey and the crumbling façade of the economic tourist sights of the capital and to be seen shamir continued on page 2 orthodoxy, not to repair its rotting foun- dation. The absence of political struggle in his economics is one of the hallmarks The Change They Believed In of Keynesian analysis that Krugman has dutifully carried forward. Krugman has also been, and not just How Obama Got His Start coincidentally, a leading proponent and By Robert Fitch defender of ’s subsidy of Listen to a powerful voice from the grave, On November 14, 2008, right after Obama private health insurers, informally called Robert Fitch. An excellent journalist and all- had been elected, Fitch gave a speech to the Obamacare, under the premise that there around left troublemaker, he died in March Harlem Tenants Association. The warm glow exists some necessary relationship be- last year at the age of 72. ignited in countless progressive and left tween forcing people to buy health insur- Fitch wrote a great deal on the role of Wall hearts by the “Change we can believe in” can- ance and their receiving health care. It Street and the real estate elite in planning didate had not yet been extinguished by the wasn’t until the inventor of Obamacare, New York City, and laid out the full criminal chill embrace of reality. Fitch had no illusions Republican presidential hopeful Mitt saga in The Assassination of New York, pub- about Obama, and expressed none that day to Romney, made his public faux pas about lished by Verso in 1996. As Doug Henwood the Harlem tenants. Better still, with a wealth “firing” health insurance companies that wrote of a central theme of book, “So many of of detail, he set the rise of Obama in the con- the reality of political struggle between the things that were attributed to anonymous text of a city – – in the throes of the them and their victims, sometimes re- global forces, like the deindustrialization of racket known as “urban renewal.” We are ferred to as customers, ever occurred to the city and its transformation into the pro- printing that little-known speech now. Who, Krugman. totype of the globally oriented post-industrial really, is Obama? Here’s an important part of The purpose here is not to criticize metropolis, were consciously guided by bank- the answer. AC/JSC. Krugman, who seems from his public ers, developers, and their hired hands. They persona and work to be an entirely de- used all the instruments of state power – sub- hat is an Obama administra- cent fellow. But it is to argue that once sidies, zoning laws, eminent domain – to get tion going to do for cities, political struggle is brought back in, the their way.” housing and neighborhoods? economics that make the most sense to True of New York; true of Chicago where Of course, we can’t really know what’s the mainstream are flipped on their head. W Barack Obama began his journey to the going to happen in the future. We can What seems like the pragmatic solution, Chicago state legislature, to the U.S. Senate only know what’s already happened. So, given the perceived realities of health and finally to the White House. it’s an exercise that reminds me a little urie continued bottom of page 7 fitch continued on page 3 Col. 3 jan. 1-15, 2012 shamir continued from page 1 but now they are trying to regroup, while significant investments on its own behalf. Egyptian Red Sea beaches. Nationalists negotiating with Putin’s government be- The register shows that its sole contribu- went to Ustyug the Great, a tiny an- hind the scenes. Their numbers are small, tion to the partnership when it was set up cient borough in the permafrost Russian but they are well positioned. Though in December 2007 was the sum of £19.” North. The Facebook revolutionaries ex-Finance Minister Kudrin is now out This is actually an excerpt from the flew away to Bali, Goa and Acapulco. of power and with the protesters, all his Guardian article on Tony Blair, but it Only now have they begun to trickle back former minions are still installed in the could be, with slight change of names, a to Moscow and other big cities. The mo- upper echelons. The opposition has a lot Navalny report on “Russian corruption.” ment of an “orange revolution” – if it ever of media at its disposal barring the pow- Such ugly arrangements – together with was – has been lost, perhaps irrevocably. erful federal TV channels, and the latter profiteering, usury and asset-stripping The long winter break calmed people are mainly putting out entertainment. – are the mainstay of the current world down and cooled their spirits. It is also The opposition has its supporters among political economical system. They should too cold for demonstrations. But some the ultra-rich, and within the inner sanc- be disclosed, outlawed and punished, changes are likely to occur. tum of the Secret Service as well. Liberal no doubt, but they are not uniquely or The Communists finally decided to anti-Putin papers receive quite a lot of predominantly Russian, rather “mod- initiate some demos of their own, while advertising from friendly oligarchs. ern-capitalist.” The U.S. ambassador in inviting other activists to join them. The Alexei Navalny is a new, rising star Moscow reported on Navalny some years first Communist-led demonstration was of the opposition movement, though ago to his bosses, calling him “a Russian scheduled for January 22, to build up he has received some negative publicity Don Quixote” (08MOSCOW2632), for the party chairman Gennady Zuganov he fought a widely spread and common as a credible alternative to Putin in the The opposition has its injustice. forthcoming elections. Zuganov prom- supporters among the Interestingly, this cable was first pub- ised, if he wins, to free the jailed oligarch lished by the Guardian team led by their Mikhail Khodorkovsky and to hold new ultra-rich, and within Russian correspondent Luke Harding, elections to the Parliament, these being the inner sanctum of but Navalny’s name was excised – a ha- main demands of the liberal demonstra- bitual protective tactic by Harding for tors. Thus, the Communists try to attract the Secret Service as Russians connected with Western power the restless liberal Frondeurs to their well. Liberal anti-Putin structures. Navalny spent a few months side. For pro-Western forces in Moscow, on some education program at Yale. that will be a difficult choice: they will papers receive quite Many conspiratorially minded Russians have to decide whom do they hate more: a lot of advertising are suspicious of Navalny and view him Putin or Communists? as a “Washington’s agent,” but, for our The opposition has lost its momentum, from friendly oligarchs. part, we shouldn’t fault Navalny for his muckraking but rather congratulate him too. He made his name on disclosures on his work. of the barely legal tricks of Russian of- Navalny’s other line was the uncover- EDITORS ficialdom integrated with the moneyed ing of shady oil deals. The U.S. Embassy Alexander Cockburn crowd. These disclosures would hardly was not impressed by his results: they Jeffrey St. Clair amaze Americans who remember Enron checked his findings, according to the and the Brits who follow Tony Blair’s tax wikileaked cable 08MOSCOW3380, with ASSISTANT EDITOR saga. Apparently, that is in part where the Western managers who told them in con- Alevtina Rea Russians learned the features of real capi- fidence that Russian seaborne oil trade BUSINESS talism, mainly warts. had became “open and transparent,” in Becky Grant “Windrush Ventures No. 3 LP, for ex- the words of Dave Chapman, general di- Deva Wheeler ample, consists on paper of a partnership rector of oil trading for Shell Russia. between an entity owned by B. himself The idea of Navalny as a new savior ran DESIGN and an anonymous off-the-shelf compa- into obstacles, as his liberal supporters Tiffany Wardle ny. This off-the-shelf company, which ap- were visibly upset by his ties with Russian COUNSELOR pears to have been set up by B.’s lawyer is nationalists. An old Moscow liberal lady, Ben Sonnenberg merely called BDBCO No. 819 Ltd. Set up a respected widow, reported that he 1937-2010 as a nominee company to act as a trustee, called an Azeri party member by a rac- or an executor of a will, this entity does ist term and was expelled from the liberal CounterPunch not reveal its ownership on records at Yabloko party. Navalny reportedly made P.O. Box 228 Companies House. Instead, its shares are snide remarks about Georgian poets qua Petrolia, CA 95558 listed as held by a second off-the-shelf Georgians. However, the Russians are 1-800-840-3683 entity, BDBCO No. 822. This company, quite tolerant of racist abuse and prob- [email protected] in turn, conceals its true ownership. Its ably this story did not hurt him much. shares are listed as held by the lawyers, In a long interview with another liberal www.counterpunch.org acting as nominees. This partner com- luminary, the best-seller writer B. Akunin All rights reserved. pany does not appear to have made any (a Russian Harold Robbins), Navalny

2 jan. 1-15, 2012 tried to dispel such fears, but he did not once. His manner was too rude, as if he Fitch continued from page 1 denounce nationalism. Perhaps Navalny’s were talking to a street gang. His “pro- nationalism is a clever card well played: gram,” as it was presented to Akunin, is of Johnny Carson’s old late night TV at the top of the new Fronde there are concentrated on legal matters: independ- routine with his sidekick Ed McMahon. not many ethnic Russians, and a “real ence of judiciary, subordination of po- Carson played Karnak the Magnificent. Russian” with nationalist background lice to municipalities, honest elections – McMahon would give him an answer. would be a good thing to have in the hardly the stuff revolutions are made of. And Karnak, wearing a giant turban front of a revolutionary movement which Even more odd, when asked for and holding an envelope to his forehead, is blessed by many Jews. a model state Russia should follow, would guess the question inside the enve- “Ethnic origin” is not a major consid- Navalny said, “Singapore.” This is an lope. Ed would give an answer like, “A B eration in Russia – the country has been odd choice for a person fighting Putin’s C D E F G.” Karnak would reply with the led by Tatars (Ivan the Terrible was a son strong-arm style, as Lee Kuan Yew was question: “Earlier versions of Preparation of a Tatar princess), Germans (Catherine probably more authoritarian than Putin. H.” the Great was a German princess by As fond as I am of Singapore street cook- What’s President-elect Obama’s pre- birth), Jews (Trotsky and Sverdlov), ing, I can’t imagine a less suitable model scription for urban pains? I’m going to by Georgians (Stalin) and Ukrainians for a vast multinational ex-empire than put on my urban turban and try to play (Brezhnev, also Khrushchev). Ethnic the tiny Chinese polis. Karnak. It’s a difficult role – not only Russian nationalism was actively discour- If Alexei Navalny is the strongest because the future is hard to predict, aged in Soviet times. Still, it is an advan- champion the liberal opposition can but because Obama himself is not easy tage to have an ethnic-Russian personal- field to challenge Vladimir Putin, there to read. In my lifetime, we haven’t had a ity at the helm of a movement. is little danger to the present regime politician with his gifts: his writing tal- It seems that the anti-Putin move- ent; his eloquence; his charisma; his mas- ment flirts with Russian nationalists of Blue-eyed, good-look- tery of public policy; his ability to run a a new post-Breivik sort: violently anti- ing, a dash of the racist, national campaign against formidable Muslim and rather pro-Jewish. The lib- rivals. Obama projects so brilliant an erals hope that these nationalists will yes, but not an especial- aura that it’s almost blinding. He’s be- become their storm troopers. Moscow ly silver-tongued one, come the bearer of pride for forty-five liberals are strongly anti-Muslim and in million who want to particular they foam against the North Navalny tried to talk to be judged by the content of their charac- Caucasians, a hot-tempered mountain the demonstrators in ter. He’s the prophet of hope, the apostle folk somewhat similar to Sicilians and of change and the organizer of “Yes We Corsicans. Their foreign supporters in December but was cat- Can.” the State Department and elsewhere called more than once. All this makes Obama’s actual politics hope this new breed of Russian national- very hard to put in any critical perspec- ists will break Russia’s ties with Iran and from this corner. Still, some unseen au- tive. By actual politics I mean, above all, Syria, and, not impossibly, will cause dis- thority, call him a master of discourse, the principal interests he represents, his memberment of Russia proper by split- gave the green light to pounce on Putin. authentic political philosophy, where he ting off its Muslim-populated regions of Previously obsequious politicians and fits on the Left-Right political spectrum. Tatarstan and North Caucasus. journalists refer to the prime minister Obama resists being identified with ei- Putin is aware of this trend: he has as if he were already in disgrace. A song- ther the Right or the Left. Even when brought home from his Brussels assign- writer who composed a year ago a hit “All he talks about his mom’s liberalism, it’s ment Dmitri Rogozin, Russia’s envoy to Girls Dream of a Husband Like Putin” with a certain irony: “A lonely witness for NATO, and made him a deputy prime now penned another hit, “Our Madhouse secular humanism, a soldier for the New minister. Rogozin, like Navalny, has a Votes for Putin.” A governor appointed Deal, Peace Corps, position-paper liber- Russian nationalist background, but, by Putin dared to reply to his criticism alism.” Obama is a partisan of the Third as opposed to Navalny, he stands for with scathing, “He does not understand Way. In Europe, the Third Way means Russia’s friendship with its Muslim things.” Columnists made a short shrift of you’re neither socialist nor capitalist. In neighbours, for he perceives the U.S.A. his program. In order to stabilize his hold the U.S., it means you’re neither for lib- poses the greatest threat to Russia. on power, Putin must reinstall respect eralism nor conservatism. The Third Way Though they both are nationalists, and fear, and this can be done by initiat- is expressed very well in Obama’s 2004 for Rogozin, Caucasus is an asset, for ing corruption trials against his subor- convention speech. Navalny, a liability. dinates – or by strong stand against the “Well, I say … tonight, there’s not Many liberals and non-ethnic Russians U.S. plans regarding Iran and Syria. The a liberal America and a conservative are deeply suspicious of Navalny. But visiting Russian warships in the Syrian America; there’s the United States of their presentation of Navalny as a “new port of Tartus and delivery of shore-to- America. There’s not a black America Hitler” is far-fetched. Blue-eyed, good- ship missiles imply that Putin does not and white America … there’s the United looking, a dash of the racist, yes, but not intend to act like a lame duck. CP States of America. The pundits like an especially silver-tongued one. Navalny to slice and dice our country into red tried to talk to the demonstrators in Israel Shamir has been sending dis- states and blue states: red states for December but was catcalled more than patches to CounterPunch from Moscow. Republicans, blue states for Democrats.

3 jan. 1-15, 2012

But I’ve got news for them, too. We are says, “That’s the change I’m looking for.” mism and faith. one people, all of us pledging allegiance Where in the world in which most of Communitarianism flows from belief to the stars and stripes, all of us defend- us reside do we find that higher inter- that we all share a common good. What’s ing the United States of America.” est? I don’t know, except perhaps in the needed to achieve the common good, Are traditional political vocations now higher interest rates that kicked in with communitarians insist, is sacrifice. But obsolete? The Left stands for the interests variable rate mortgages. some parts of the community have to of those who have to work for a living, for What is the common good that ten- show the way in giving up their selfish, the tenants and the poor, for the victims ants and landlords share? Not a lot I can anti-communitarian habits. For commu- of discrimination. The Right in America think of. Maybe that the building doesn’t nitarians, the first responders must be stands for the interests of the employers burn down? But some of you remember the poor. For black communitarians like and the investing class. For those who the ’70s when landlords burned down Bill Cosby and Barack Obama, it’s chiefly own the land, the houses, the banks and their buildings in poor neighborhoods to the black poor. the hedge funds. For Joe the plumber cash in on the insurance. Obama insists that the key to change is who was really Joe the plumbing contrac- The haves and the have-nots have dif- not resistance to oppression; not a battle tor. And for those who see themselves as ferent and opposing interests – land- against the exploitation of workers, or the victims of affirmative action. lords want to get rid of rent stabilization; against institutional racism, or the domi- In a way, though, the Left and the Right tenants have an interest in keeping it. nation of unaccountable financial elites, have more in common with each other Workers want to save their jobs; bosses or the interests promoting gentrification. than they do with the advocates of the want to save their capital, which means These all fade away compared to the Third Way. The Left and the Right argue cutting workers. In pursuing their oppos- need for community self-help, strength- that different interests matter. The Third ing interests, the have-nots are forced to ening the community by building strong Way says they don’t. The oppressed and take up the weapons of the weak – dem- families, by the need to convince the the oppressors, the lions and the lambs – onstrations, direct action; filling the jails African-American poor to pull up their so the Third Way proclaims – should sit with conscientious objectors; taking per- socks. And stop engaging in anti-social down together and celebrate their unity sonal risks. Who benefits when one side behavior. Speaking recently to a group in one great post-partisan, multicultural gives up without a struggle? The haves of black legislators, Obama said, “In 4th of July picnic. One of Obama’s most or the have-nots? Frederick Douglass re- Chicago, sometimes, when I talk to the repeated mantras resonates here: “A minds us, “Power concedes nothing with- black chambers of commerce, I say, ‘You common good and a higher interest,” he out a demand. It never did. It never will.” know what would be a good economic When the Third Way advocates insist development plan for our community... that we share a common good; when they if we made sure folks weren’t throwing Subscription Information refuse to recognize that the interests of their garbage out of their cars.’” the oppressed and the interests of the In fact, as Obama knows very well, for Subscription information can be found oppressors don’t exist on the same moral most of the last two decades in Chicago at www.counterpunch.org or call plane; when they counsel us to stop being there’s been in place a very specific eco- toll-free inside the U.S. partisans of those interests – they’re not nomic development plan. The plan was to 1-800-840-3683 being non- or post-partisan: they’re sid- make the South Side like the North Side. Published twice monthly ing with the powers that be. Which is the same kind of project in New except July and August, In the same way, Obama’s notion of York as making the land north of Central 22 issues a year. change claims to transcend the poli- Park like the land south of Central Park. 1 - year hardcopy edition $45 tics of interest while it steers sharply to The North Side is the area north of the 2 - year hardcopy edition $80 the Right. What kind of change does Loop – Chicago’s midtown central busi- 1 - year email edition $35 America need? Above all, America needs ness district – where rich white people 2 - year email edition $65 a change of heart: her people need to live; they root for the Cubs. Their neigh- give up selfishness; all Americans – rich borhood is called the Gold Coast. 1 - year email & hardcopy edition $50 and poor, white and black; the hod car- For almost a hundred years in Chicago 1 - year institutions/supporters $100 rier and the hedge-fund operator must blacks have lived on the South Side close 1 - year student/low income $35 give up self-interest; stop always asking to Chicago’s factories and slaughterhous- Renew by telephone, mail, or on our “what’s in it for me?” es. And Cellular Field, home of the White website. For mailed orders please In a word, with his emphasis on Sox. The area where they lived was called include name, address and email change coming from people giving up the Black Belt, or Bronzeville – and it’s address with payment, or call 1-800- group egoism and together pursuing the the largest concentration of African- 840-3683 or 1-707-629 3683. Add common good, while practicing old-fash- American people in the U.S.: nearly $17.50 per year for subscriptions mailed ioned virtues, Senator Obama is a com- 600,000 people, about twice the size of outside the U.S.A. munitarian. In The Audacity of Hope he Harlem. Make checks or money orders payable to: invokes the legacy of Ronald Reagan who, In the 1950s, big swaths of urban re- CounterPunch Obama believes, recognized America’s newal were ripped through the Black Business Office need to rediscover the traditional values Belt, demolishing private housing on the of the American community: hard work, southeast side. The argument then was PO Box 228, Petrolia, CA 95558 patriotism, personal responsibility, opti- that the old low-rise private housing was

4 jan. 1-15, 2012 old and unsuitable. Black people needed Daley, the mayor’s brother and the Reinvestment Act of 1995. to be housed in new, high-rise public Midwest chair of J.P. Morgan Chase – an And yet friendly FIRE is just as dead- housing, which the city built just east of institution deeply involved in the trans- ly as the conventional FIRE that comes the Dan Ryan Expressway. The adminis- formation of inner-city neighborhoods from bankers and developers that we’re tration of the Chicago Housing Authority through its support for what financial used to be ducking from. It’s the whole (CHA) was widely acclaimed as the institutions call “neighborhood revital- condominium of interests whose ad- most corrupt, racist and incompetent in ization” and neighborhood activists call vancement depends on the elimination America. Gradually, only the poorest of gentrification. of poor blacks from the community and the poor lived in these high-rises. And, If we examine more carefully the in- their replacement by white people and, in the 1980s, the argument began to be terests that Obama represents, if we look at least temporarily, by the black middle made that the public housing needed to at his core financial supporters, as well class – who’ve gotten subprime mortgag- be demolished and the people moved as his inmost circle of advisors, we’ll see es – in a kind of redlining in reverse. back into private housing. that they represent the primary activ- This “friendly FIRE” analysis stands For a while, the election of the city’s ists in the demolition movement and the in opposition to the two main themes first black mayor, , primary real estate beneficiaries of this of the McCain attack ads. Either they blocked the demolition. But Washington transformation of public housing pro- try to frighten people into believ- died of a heart attack while in office, and, jects into condos and townhouses: the ing that Obama is a dangerous leftist after a brief interregnum, the mayor’s profitable creep of the Central Business who hangs with Bill Ayers, the former office was filled in 1989 by Richard M. District and elite residential neighbor- Weatherperson, or they assert he’s a Daley, whose father had carried out the hoods southward, and the shifting of the creature of the corrupt Chicago ma- first urban renewal. Daley was his father’s pile of human misery about three miles chine. There are a few slivers of meat son in many ways. By 1993, with subsidies farther into the South Side and the south floating in this beggar’s broth of charges. from the Clinton administration’s HOPE suburbs. Yes, Obama worked with Ayers, but not VI program, the public housing units The area demolished the Ayers who blew up buildings, but began to be destroyed. And, by 2000, the Ayers who was able to bring down he’d put in place something called the included the com- $50 million from the Walter Annenberg Plan for Transformation. It targeted tens munities that Obama Foundation, leveraging it to create an of thousands of remaining units. With $120 million nonprofit organization with this proviso: that African Americans had represented as a state Obama as its head. Annenberg was a to get 50 per cent of the action – white senator; and the top billionaire friend of Ronald Reagan and developers had to have black partners; Margaret Thatcher. Why would he give there had to be black contractors. And black administra- mega millions to a terrorist? Perhaps Daley chose African Americans as his tors, developers and because he liked Ayers’ new politics. top administrators and planners for the Ayer’s initiative grew out of the backlash clearances, demolition and re-settlement. planners were people against the 1985 Chicago teachers’ strike: African Americans were prominent in like Valerie Jarrett. his plan promoted “the community” as a developing and rehabbing the new hous- third force in education politics between ing for the refugees from the demolished Obama’s political base comes primar- the union and the city administration. projects, who were re-settled in com- ily from Chicago FIRE – the finance, Friendly FIRE wants the same kind of ed- munities to the south, like Englewood, insurance and real estate industry. And ucation reform as conventional FIRE: the Roseland and Harvey. Altogether the the wealthiest families – the Pritzkers, forces that brought about welfare reform Plan for Transformation involved the the Crowns and the Levins. But it’s more have now moved onto education reform, largest demolition of public housing in than just Chicago FIRE. Also within and for the same reason: crippling the American history, affecting about 45,000 Obama’s inner core of support are al- power of the union will reduce teachers’ people – in neighborhoods where eight lies from the nonprofit sector: the liberal salaries, which will cut real estate taxes of the 20 poorest census tracts in the U.S. foundations, the elite universities, the which will raise land values. were located. nonprofit community developers and the Is Obama a minion of Richie Daley? But what does this all have to do with real estate reverends, who produce mar- It’s true that Obama has never de- Obama? Just this: the area demolished ket rate housing with tax breaks from the nounced Daley. He actually endorsed included the communities that Obama city and who have been known to shout him for mayor in 2007 – even after fed- represented as a state senator; and the from the pulpit, “Give us this day our eral convictions of Daley’s top aides, after top black administrators, developers Daley, Richard Daley bread.” the minority hiring scandals, and after and planners were people like Valerie Aggregate them, and what emerges is a the Hired Truck scandal, which showed Jarrett, who served as a member of the constellation of interests around Obama that the Daley machine shared its favors Chicago Planning Commission, and that I call “Friendly FIRE” – firepower with the Outfit. Martin Nesbitt, who became head of disguised by the camouflage of commu- But the Daley dynasty has expanded the Chicago Housing Authority. Nesbitt nity uplift, augmented by the authority of far beyond wiseguy industries. The may- serves as Obama campaign’s finance trea- academia, greased by billions in founda- or’s brother, William Daley, who served surer; Jarrett as co-chair of the Transition tion grants, and wired to conventional on Obama’s transition team, also serves Team. The other co-chair is William FIRE by the terms of the Community now as a top executive of J.P. Morgan

5 jan. 1-15, 2012

Chase. He heads the Midwest region and Pritzkers to earn hundreds of millions. Daley machine. But in 1980, Davis got chairs J.P. Morgan Chase Foundation, the Notwithstanding the Superior Bank di- a call from the Ford Foundation’s little core of friendly FIRE. Here’s an excerpt saster, Penny is being touted as Obama’s known but immensely influential affili- from a recent report: next secretary of commerce. ate LISC – the Local Initiatives Support “[We] achieved significant progress Valerie Jarrett is another black real es- Corporation – that had just been toward our 10-year pledge to invest $800 tate executive. Described as “the other founded. LISC, whose present chair is billion in low- and moderate income side of Barack’s brain,” she also served Citigroup’s Robert Rubin, connects small, communities in the U.S. – the largest as finance chair during his successful mainly minority community nonprofits commitment by any bank focused on 2004 U.S. Senate campaign. Jarrett was with big foundation grants, and especial- mortgages, small-business lending and Daley’s deputy chief of staff – that was ly with bank loans and tax credit-driven community development. In 2006, we her job when she hired Michelle Obama. equity. LISC wanted to coopt Davis in committed $87 billion, with total invest- Eventually, Daley made her the head of their ghetto redevelopment program. He ment to date of $241 billion in the third city planning. But Jarrett doesn’t work agreed, and the Davis firm came to spe- year of the program. for Daley anymore. She’s the CEO of cialize in handling legal work for non- “Played a leadership role in the cre- David Levin’s Habitat – one of the largest profit community development firms. ation of the New York Acquisition Fund, property managers in Chicago – and the Eventually, Davis left the firm to go into along with 15 lenders and in conjunction court-appointed overseer of CHA proj- partnership with Tony Rezko. with six foundations and the City of New ects. Habitat also managed Grove Parc, Meanwhile, Obama did legal work York. The Fund is a $230 million initia- the scandal-ridden project in Englewood for the Rezko-Davis partnership, and tive to finance the acquisition of land and that left Section 8 tenants, mostly refu- for community development organiza- buildings to be developed and/or pre- gees from demolished public housing tions like Woodlawn Organization. In served for affordable housing.” projects, without heat in the winter but 1994, the LA Times reports, Obama ap- It’s also true that key black members inundated with rats. Grove Parc was de- peared in Cook County court on behalf of the Obama inner circle are Daley ad- veloped by Tony Rezko, who’s white, and of Woodlawn Preservation & Investment ministration alumni, but they’ve moved his long-time business partner, Allison Corp., defending it against a suit by the up – now they’re part of Chicago FIRE. Davis, who’s black. city, which alleged that the company Like Martin Nesbitt. Obama is the god- Let’s look at Rezko and then Davis. It failed to provide heat for low-income father of Nesbitt’s son. He’s the African- was Rezko’s ability to exploit relation- tenants on the South Side during the American chairman of the CHA. But ships with influential blacks – includ- winter. There were several cases of this his principal occupation is the vice ing – that enabled him type, but, as the Times observes, Obama presidency of the Pritzker Realty group. to become one of Chicago’s preeminent doesn’t mention them in Dreams from Although they’re not well known outside cockroach capitalists. Altogether, Rezko My Father. of Chicago, the Pritzkers rank among wound up developing over 1,000 apart- In the 1960s, under the leadership the richest families in the U.S.A. There ments with state and city money. There of Arthur M. Brazier, bishop of the are ten Pritzkers among the Forbes 400: was more to the Obama-Rezko relation- Apostolic Church of God, Woodlawn Thomas is the richest, at $2.3 billion. ship than the empty lot in Kenwood. gained a reputation as Chicago’s out- Anthony and J.B. are next, at $2.2 billion; Rezko raised over $250,000 for Obama’s standing Saul Alinsky-style commu- Penny is fourth, at $2.1 billion – Daniel, state senate campaign. While Obama was nity organization. Mainly, TWO [the James, Gigi, John, Karen, and Linda a state senator, he wrote letters in sup- Woodlawn Organization] battled the weigh in with $1.9 billion each. port of Rezko’s applications for devel- University of Chicago’s urban renewal Penny is finance chair of the Obama opment funds. But Obama ignored the program. But gradually Brazier’s po- campaign. Martin is the treasurer. Penny plight of Rezko’s tenants who complained litical direction changed. Now TWO is Pritzker herself has had a rocky career as to Obama’s office. [On November 23, partnering with UC in efforts to gentrify a commercial banker. In 1991, she found- 2011, Rezko was sentenced to 10 1/2 years Woodlawn. ed something called the Superior Bank of in prison, convicted in a federal court of When Barack Obama left Jeremiah Chicago, which pioneered in subprime “corrupt use of power and influence,” so- Wright’s church, he switched to Brazier’s lending to minorities. Superior was an liciting kickbacks. Editors.] Apostolic Church of God. Brazier is typi- early casualty of the subprime meltdown, Rezko’s Grove Parc partner, Allison cal of a much larger group – real estate crashing in 2001, when it was seized by Davis, was a witness in the Rezko trial. reverends – who play the Community the FDIC. Depositors filed a civil suit He’s pretty radioactive too. You could Development game and, in the process, against Penny, charging that Superior see why Rezko wanted to hook up with have acquired huge real estate portfolios. was a racketeering organization. The him since Davis was the senior partner in But it’s really a national phenomenon. government charged that Superior paid Davis Miner Barnhill & Galland, a small, Here, in New York, we have Rev. Calvin out hundreds of millions of dividends to black law firm, where Obama worked Butts whose church has a subsidiary, the Pritzkers and another family while for nearly a decade. As the editor of the the Abyssinian Development Corp. In the bank was essentially broke. There Harvard Law Review, Obama could have partnership with LISC, the ADC now was a complex settlement, in which the worked anywhere. Why did he choose boasts a portfolio of $500 million in Pritzkers were forced to pay hundreds of the Davis firm? Harlem property alone. Rev. Floyd Flake millions in penalties, but the agreement Davis had been a noted civil rights at- of the Allen African Methodist Episcopal contained provisions that may enable the torney and a progressive critic of the first Church in Jamaica, Queens, has a size-

6 jan. 1-15, 2012 able portfolio of commercial property. Side, in Dreams from My Father he wrote I have to stop now and put Karnak’s Chicago’s disciples of development about his encounters with Rev. Jeremiah envelope to my forehead. What we see include Wilbur Daniel. He’s the pastor Wright. Obama says he was impressed is that the Chicago core of the Obama of Antioch Missionary Baptist Church by Wright’s emphasis on the unity of the coalition is made up of blacks who’ve in Englewood who really did exclaim, black community. But he’s a little skep- moved up by moving poor blacks out of “Give us this day our Daley bread,” mean- tical of too broad a unity, of achieving the community. And very wealthy whites ing free land and free capital for real es- unity without conflict. He says, “Would who’ve advanced their community de- tate development. Daniel’s prayers were the interest in maintaining such unity velopment agenda by hiring blacks. Will answered in 2001, when, with Daley’s allow Reverend Wright to take a force- this be the pattern for the future in an help, Antioch was chosen to be the lead ful stand on the latest proposals to re- Obama administration? I can’t read the church in Fannie Mae’s $55 billion House form public housing?” Here he’s referring envelope. But I do believe that, if we want Chicago plan for the redevelopment of to Clinton’s Hope VI, which provided to disrupt the pattern of the past, we have the South Side. matching federal money for the demo- to make some distinctions: between the How has Obama earned the sup- lition of public housing and the corre- change they believe in and the change port and allegiance of friendly FIRE? sponding local initiatives, which culmi- we believe in; between our interests and Where does he stand on the Plan for nated in the Plan for Transformation. theirs; between a notion of community Transformation? Generally speaking, “And if men like Reverend Wright failed that scapegoats the poor and one that re- he’s been careful not to leave too many to take a stand, if churches like Trinity re- spects their human rights – one of which footprints. If you google Obama and fused to engage with real power and risk is not to be the object of ethnic cleaning. public housing, nothing comes up. But genuine conflict, then what chance would Between Hope VI and genuine human in 1995, a year before he ran success- there be in holding the larger community hope. CP fully for state senate seat from South intact?” urie continued from Page 1 economists the fact that ordinary citi- what they have provided is more custom- care politics, has the opposite of its in- zens can’t even get their health insurance ers for insurance companies. tended effect when insurance companies companies to answer their telephones, let So, yes, Mr. Krugman, Barack Obama wield social power and their customers alone to provide the healthcare for which handed us over to the health insurers don’t. they receive premiums. because doing so created the appear- In September 2007, in an article en- The uniting characteristic between ance of providing a public service while titled “The Insurance Hoax,” by David Barack Obama, Mitt Romney and Paul actually strengthening the hand of the Dietz and Darrel Preston, Bloomberg Krugman is their deference to and use of insurance companies that stand between Business reported that major Property hegemonic social power. Barack Obama Americans and health care. It took Mitt & Casualty insurers had hired the giant thought he was playing the clever poli- Romney’s slip of the tongue to bring this consulting firm McKinsey to figure out tician by handing our health care more paradox to light (for you). And now that how they could continue to take in insur- fully to the health insurers under a it has, the insertion of political struggle ance premiums without paying out legiti- into the models that you cherish renders mate claims. The hiring of McKinsey, the Barack Obama handed your friction-free economic program article makes clear, wasn’t about increas- us over to the health more than a little dubious. Sure, the plan ing operational efficiency but straightfor- might have worked if health insurance wardly about the insurance companies insurers because doing was really health care, but it isn’t. using their political power to system- so created the appear- Take a look at the world through this atically pay out less than the contractu- new-found prism and ask yourself how ally agreed upon amounts on legitimate ance of providing a politically neutral the Fed is being when claims. public service while running up the prices of financial assets Property & Casualty insurance isn’t through the Quantitative Easing pro- exactly health insurance but it’s close actually strengthen- gram for the few hundred families who enough. The relevant points from the ing the hand of the in- own all of the financial assets? In main- article are that there is no effective regu- stream economics, you have the “wealth lation of insurance companies and that surance companies. effect” and growth of the money supply. there is little recourse for customers In the 99.7 per cent’s political economy, when insurance companies simply refuse plan devised by Romney. Mitt Romney we have rich folks more empowered to to pay legitimate claims. It really doesn’t played the same game as governor of inflict misery by cutting social programs matter what “safeguards” are written into Massachusetts. (Massachusetts was busy that we have paid for, to take from us Obama’s health insurance law, unless removing the poor and dispossessed with impunity, and to start needless wars they make insurance companies do what from the rolls of the insured as of a few that murder a few million people. Mitt they have dedicated their existence to not months ago, per multiple local news sto- Romney has shown you the light, Paul doing, that is, paying claims. ries.) And Paul Krugman uses his politi- Krugman. CP It apparently takes Mitt Romney’s pub- cal friction-free economics to facilitate lic delusion about “firing” insurance com- the illusion that Obama and Romney Rob Urie is an artist and political econo- panies to make apparent to healthcare have provided more health care when mist in New York.

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is on Barack Obama and Newt Gingrich, wealthiest Americans are paying the low- “A cockleshell adrift Nicolas Sarkozy and François Hollande, est taxes in over half a century … Some on the ocean” rather than the hedge funds and credit billionaires have a tax rate as low as 1 per institutions. cent. One per cent!” He also insisted that But what use are the candidates? “the free market has never been a free Presidents Who Sarkozy, whose monetary policy reflects license to take whatever you want from the interests of BNP Paribas, has ac- whoever you can” and that he considered Don’t Preside cused the British prime minister, David it essential “to rebuild the middle class.” Cameron, of trying to make the U.K. “an No one thinks he will achieve that ob- By Serge Halimi off-shore zone in the heart of Europe.” jective, or reduce the hold that money The German finance minister, has on the political system, or impose uropean summits come and Wolfgang Schäuble, angrily attacked progressive tax reforms. He has done go, and the White House and “the boundless greed, the quest for ev- nothing about these for the past three Congress bicker endlessly, to no er-increasing profits on the financial years, and has not said how he means effect.E “The markets” are well aware of markets, which are to blame for the eco- to achieve them if he is re-elected. In this, they see the elected representatives nomic and banking crisis we have been this respect, he is a living incarnation of of the American people running around facing since 2008, a crisis that has come what the system has become: a cockle- like headless chickens, at the mercy of to affect whole countries.” It did not stop shell adrift on the ocean, with a demoted forces they created but are now unable to him from exposing ruined and penni- captain shouting orders as the hurricane control. Yet, there will soon be presiden- less European nations to that “bound- brews. If this election year does not pro- tial elections in the U.S.A., France, Russia less greed.” The comfortable future duce the political will and necessary and elsewhere. The media are concen- lined up for capital doesn’t save it from means to regain the powers currently trating on these, creating a surreal sense verbal abuse. This is now the paradox held by finance, all future elections will of disconnection between words and ac- that marks all pre-election periods. Last be to no avail. CP tion. Ordinary people may not expect the month, Obama warned fellow citizens candidates to do much, or anything at of threats to social mobility and democ- Serge Halimi is director of Le all, but they do, at least, know all about racy: “Inequality distorts our democracy. Monde Diplomatique. By agreement, their records, their faults, their friends, It gives an outsize voice to the few who CounterPunch features two or three ar- associates and networks. The attention can afford high-priced lobbyists. … The ticles from LMD every month.

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