taxes

Extra! Rock Rapids 38 Carroll 0

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By Bruce B. Brugmann

Well, it isn’t Rock Rapids High School any more and it isn’t the almost famous Rock Rapids Lions. It’s now a consolidated high school district and goes under the fancier nomenclature of Central Lyon. (The Central Lyon Lions just doesn’t have it, does it? For the regular Bruce blog readers, you will realize that I am talking about my almost famous hometown of Rock Rapids, Iowa, a little town in northwest Iowa known as the Gateway to the West.)

Jim Wells just flashed me the final score: Central Lyon 35 Carroll 0. A rout and a surprising one since our two quarterbacks have been banged up and it’s been questionable which one could play for how long and with what effectiveness.

Next game is on Saturday for the state championship, a big big thing back in Iowa, much bigger than the presidential primaries. Everybody in town (that’s about 2,800 people) will either be at the game or glued to the radio. I’ll keep you posted.

P.S. This is how things work back in Rock Rapids, by personal contact over the years and the generations. Jim Wells was the cpa for years for my parents at their drugstore, “Brugmann’s Drugs: Where Drugs and Gold are Fairly Sold, Since l902.” And he handled their personal taxes until they died in the early l990s. He is now reporting on Rock Rapids news for the Bruce blog. I am also getting reports from Dave Foltz and others. Dave is the grandson of Glen Foltz, who operated Foltz’s Construction for many years and then became the Lyon County sheriff. He reported earlier that Halloween in Rock Rapids was pretty tame this year and that my boxcar-across-Main Street generation had probably spoiled it for all the succeeding generations.

Working on the Foltz crew, during the summers, was a rite of passage for the young men in town just out of high school or in college. However, my crew was the crew for the Rural Electrification Administration (REA), FDR’s public power agency that brought electricity to the farms. But that is another story for another day.) B3

Editor’s Notes

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› tredmond@sfbg.com

I’ve been talking to the folks at the San Francisco Planning and Urban Research Association about housing. It’s been an interesting conversation — SPUR has been known largely as an advocate for downtown development and rarely as a beacon of progressive wisdom.

But these days there are people on staff who really care about urban issues, and they aren’t always wrong. So when Dave Snyder, SPUR’s transportation person, who was formerly the director of the SF Bicycle Coalition, phoned and asked me to come by and discuss the Guardian‘s call for a new housing policy, I was happy to pay a visit.

And after talking to SPUR’s executive director, Gabriel Metcalf, and policy director, Sarah Karlinsky, I realized that we agree on a basic frame of reference.

San Francisco is in a state of crisis that threatens the future of the city. Housing isn’t just another policy issue to debate; it’s the central factor shaping the future of the city. If we do nothing — in fact, if we go along as we have been doing, building a few thousand units of market-rate housing and some affordable units on the side — we’re heading for disaster. This will become a city where only rich people can live, where a few working-class and poor folks are tolerated but the majority sentiment favors the very wealthy. It will be a city unlike the one so many of us love. The politics will be much more financially conservative. Social liberals like Gavin Newsom will be fine, but anyone who dares talk about business paying for health care or taxes supporting social programs will be irrelevant to electoral politics. As Calvin Welch likes to say, who lives here votes here.

The SPUR board has a lot of downtown types and developers, and some of them probably think it would be a fine thing if San Francisco became a city of wealthier homeowners. I don’t think the staff are of the same view. Snyder, Metcalf, Karlinsky, and I all agree: what’s happening now is simply unacceptable.

We part, sharply, when we talk about solutions. Metcalf argues that building lots and lots of housing, of all kinds — tens of thousands of units a year, bringing San Francisco to the density of Paris — will eventually bring down costs and make the city affordable again. And failing to build enough market-rate housing will just put more pressure on the existing housing stock, driving up prices even more.

That position requires a certain faith in market–based solutions, and I’ve always argued that the economics of San Francisco housing are too unusual for traditional thinking. Luxury condos in this city are like jails and freeways: you build them, they fill up, and the problem you set out to solve is still there. The new housing downtown isn’t keeping down prices (or demand) in the neighborhoods; it’s creating its own new demand.

When I suggested that we stop building new housing for the rich until we have, say, 40,000 new units for low-income and middle-class San Franciscans, Snyder jotted down some figures and told me the price tag for that much affordable housing would be $8 billion. Actually, if some of the housing is put into land trusts and is available for purchase by middle-income people, that number drops a bit, and if you leverage state and federal money, the amount San Francisco has to raise drops again, maybe to $2 billion or so. Still, it’s a very big number.

And it’s a very big problem. And in one sense, if we don’t solve it, nothing else really matters.

Needed: a campaign against privatization

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EDITORIAL It’s time for San Francisco to declare war on privatization.

The local threat is very real: as we reported in last week’s special anniversary issue, Mayor Gavin Newsom’s administration has moved to turn over a long list of city services — from housing for the mentally ill to the operation of the public golf courses — to the private sector. Should this happen, if history is any guide, the city would wind up losing millions, the quality of services would decline, and the economy would suffer as hundreds of well-paid, unionized employees lost their jobs.

Equally important, the public would lose control over the institutions that were and are created and run for its benefit.

Privatization is a recipe for corruption. There always has been and always will be some level of graft, corruption, and incompetence in government operations; there will always be the occasional city employee who sleeps on the job, fudges time cards, doesn’t do the job right, and somehow manages to avoid being fired. But that sort of small-time problem amounts to peanuts in comparison to what happens when large amounts of public money are turned over to the private sector.

Private companies are out to make profits — and for the most part they keep their finances secret. Many of the worst scandals in American history have involved kickbacks, backroom deals, and bribery aimed at sending taxpayer dollars into the coffers of big contractors, and these continue today. And the argument that the private sector is more efficient often turns out to be utterly false; the absolute worst waste of money in the nation’s health care system, for example, is the phenomenal overhead involved in private insurance plans. As much as 30¢ of every dollar spent on private-sector health care goes to administrative overhead and profit. The public Medicare system operates on about 5 percent overhead.

Of course, the public has no way of keeping track of where most of the private health care money goes; the insurance companies keep that information to themselves. So do most other private contractors that take public money. And even if you don’t like the way the system is managed, you don’t have much choice — insurance executives aren’t elected by anyone and aren’t accountable to the community.

San Francisco has a history of allowing private operators to take over public resources, and the results have been almost universally bad. One of the reasons the 1906 earthquake caused such devastation was that the private Spring Valley Water Co. — looking only for quick profits and not at long-term maintenance or service — failed to keep its pipes in good repair. When the city really needed water, to put out the postquake fires, it wasn’t available. That fiasco led city officials to develop a municipal water system, which now delivers some of the best, cleanest, and cheapest water in the country.

Of course, Congress gave San Francisco the right to build that water system, which uses a dam in Yosemite National Park, only on the condition that it also develop public electric power. Instead, in the greatest privatization scandal in the history of urban America, Pacific Gas and Electric Co. wound up initially controlling much of the output of the dam, and it still controls the city’s electric grid. The result: some of the highest electric rates in the nation and terrible, unreliable service.

San Francisco officials led the way to the privatization of the Presidio, turning over a national park to an unaccountable quasi-private board that operates as a real estate developer. The results: A giant commercial office complex, built with a $60 million tax break. Plans for high-end condos. Traffic problems, neighborhood problems — and a stiff bill to the city’s taxpayers, who have to subsidize private businesses that operate in a federal enclave without paying local taxes.

And if Newsom has his way, the pattern will continue: the mayor’s signature project this past year, for example, has been an attempt to let a private company control the city’s broadband communications infrastructure. Tens of millions in city contracts go every year to private nonprofits that fight like hell to avoid sunshine and accountability.

Enough is enough — San Franciscans of every political stripe need to organize to fight back. This city needs a new political coalition, a campaign against privatization.

There are all sorts of specific policies and legislation that ought to be on the agenda. For starters, privatization expert Elliott Sclar, a Columbia University economist, argues that any private business that takes city money to provide public services ought to be required to abide by open-government laws. That means every scrap of information related to that contract — including financial projections, executive salaries, profit and loss statements, and operating overhead figures — would be public record. All meetings of boards, panels, or other policy-making entities involved in managing the contract would be open to the public. If a private business doesn’t want to abide by those rules, fine; it can stick to private-sector work and stop bidding on government contracts.

Beyond that, the city needs to set up a task force to look at every private contract San Francisco hands out and determine why the city isn’t doing the work itself. If selling electricity is so profitable (and it clearly is, or PG&E wouldn’t be fighting so hard to keep its illegal monopoly), why can’t the city take over the job and bring in some revenue? If there’s money to be made building bus shelters and selling ads on them — and clearly there is, since Clear Channel Communications, a giant private company, went out of its way to get a contract with the city to do so — why can’t San Francisco make that money for the General Fund? If a private company can make money running the golf courses, why can’t the city?

Sure, there are times when it makes sense to bring in an outside contractor. We’d argue, for example, that the Board of Supervisors needs an independent budget analyst, not tied to City Hall, to monitor budgets and spending. But there are millions of dollars going out City Hall’s door every year to private outfits that aren’t accountable to the public. And there are millions of dollars that ought to be available for badly needed public services that the city is losing because some private operator is making a profit on public resources.

Organized labor has every reason to oppose privatization and ought to play a lead role in creating a new coalition. So should the public-power coalition and the folks who have been demanding sunshine for the nonprofits. But everyone who uses public services and pays taxes in San Francisco is affected when city money gets stolen, wasted, or diverted. It ought to be a broad-based coalition.

There’s an opportunity to turn things around here and make San Francisco the model city that it ought to be. There’s no time to waste.

Airlines demand corporate welfare

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› news@sfbg.com

The major airlines that serve the Bay Area, with the help of the Hotel Council of San Francisco, are trying to get out of paying millions of dollars in taxes to the city by claiming the right to use a law that was designed to help San Francisco’s poorest residents. And they’re threatening to prevent their employees from staying in the city if the Board of Supervisors doesn’t acquiesce to the corporate welfare demand.

At issue is the city’s 14 percent Transient Occupancy Tax, which is paid by hotel guests. It is the third-largest source of local tax revenue, after property taxes and payroll taxes, bringing in $177 million in the last fiscal year. The only major exemption from the tax is for permanent hotel residents, generally those on the brink of homelessness who live in the run-down single-room-occupancy hotels for months or even years on end.

Major airlines house hundreds of their employees in San Francisco’s hotels each night. They are arguing that because of past court rulings on corporate personhood — in which judges have deemed that corporations have the same rights as individuals — the airlines should be exempt from paying the tax when they rent blocks of rooms for their employees.

The airlines, in collusion with some hotels in the city, have long used the exemption to avoid paying taxes on many of the rooms they rent (about two-thirds, according to the Hotel Council, which translates into millions in lost city revenue every year). A few years ago city officials told the corporations that the exemption didn’t apply to them and that they should be paying the tax.

Enacted in 1960, the Permanent Resident Exclusion exempts from the tax individuals who occupy or have the right to occupy the same hotel room for at least 30 consecutive days. “We looked at the legislative history, and it was clearly put there to help formerly homeless people,” Treasurer José Cisneros told the Guardian. “The city has always said that 30 consecutive one-night stays are not the same as a 30-night stay by an individual.”

The hotels and airlines challenged that interpretation and had their case thrown out of court. So now they’ve turned to the Board of Supervisors in the hope that they can win this chunk of corporate welfare by using threats of an economic exodus.

 

CORPORATE SHAKEDOWN

In October 2004, American Airlines and the San Francisco Hilton filed a lawsuit against the city arguing that airline crew members staying in San Francisco hotels qualified for an exemption from the hotel tax. The lawsuit was dismissed in May 2006 without going to trial, with Superior Court Judge James Warren ruling that the plaintiffs “did not assert and did not present any evidence that any particular room at the Hilton was continuously registered to American Airlines for more than 30 days.”

To clarify any ambiguity in the law, Cisneros in May issued an interpretation stating, “Although an agreement between a person and a hotel may require that the person pay the hotel for a minimum number of ‘guaranteed’ daily reservations for the person’s employees over a period of time longer than 30 days, such an agreement does not create any permanent resident exemption for any guest rooms unless the above criteria are satisfied,” referring to criteria that include “a person is a registered hotel guest” and “that person or any of that person’s employees continuously occupy or have the right to occupy the same room for 30 days or more.”

Yet now, at the request of Sup. Michela Alioto-Pier, the Board of Supervisors’ Government Oversight and Auditing Committee has scheduled a Nov. 19 hearing for the purpose of “explor[ing] the unintended consequences of this decision, including the loss of revenue to the City when the airlines inevitably move their crews to another location in the Bay Area where room rates are more competitive.”

That implied threat comes from Hotel Council executive director Patricia Breslin, who paints a doomsday scenario if the airlines have to pay the hotel tax on every room they rent. Breslin warns that if the Board of Supervisors does not offer concessions to the airline industry, it could bring about an “economic tsunami” that would hit hotels, restaurants, and city government.

Airline employees occupy an average of 1,050 hotel rooms per night in San Francisco, according to Smith Travel Research, an information and data provider for the lodging industry. Given that the tax is collected by the hotels, Cisneros doesn’t have data on how much the airlines should be paying the city. But assuming the airlines negotiate rates of about $100 per night, that would translate into more than $5 million per year.

“We pushed so hard to get them to pay it that they sued us,” Cisneros told us.

Breslin said the airlines have been paying about $1.7 million per year in hotel taxes and that sales taxes generated by airline employees bring another $1.4 million into the city, all money that would be lost if the airlines go elsewhere. She said the airlines have threatened to begin putting their employees in hotels in Peninsula cities near the airport, like Burlingame, San Mateo, and even San Jose, to cut costs. Already Mexicana Airlines has stopped using San Francisco’s hotels for its employees. Other airlines, such as Virgin Atlantic, United, Cathay Pacific, and Lufthansa, have threatened to follow suit.

Breslin said hotels would be forced to lay off cleaners, servers, and other low-income workers due to the loss of business that would accompany the exodus of airline employees. San Francisco, she argues, would “lose a significant revenue stream” if the airlines lose their appeal.

“It will change the economics of San Francisco,” she told us. “This is not a frivolous issue.”

 

CALLING THEIR BLUFF

Granting the exemption would cost the city millions of dollars, but that isn’t the only reason being offered for opposing the gambit. Some city officials simply don’t believe the airlines — or their employees, most of whom are union members, many of whom have contracts specifying their accommodations be in urban centers — will abandon San Francisco.

Sup. Chris Daly, who is on the Oversight and Auditing Committee, is against granting the exemption to the airlines. “They blow smoke all the time,” he told us, referring to major industries such as the hotel and airline industries. “That’s how they get away with not paying taxes.”

Cisneros argues the airlines’ threat to move their employees into suburban hotels isn’t logical, noting that San Francisco hotel rooms are already far more expensive than their suburban counterparts — with or without the hotel tax — and the airlines have always chosen to keep their employees here anyway.

“I just don’t think the threat is realistic at all,” Cisneros said. “If they were basing their decision on which hotels are cheapest, they would have never been staying in San Francisco.”

Recently compiled data and trends in tourism and hotel occupancy rates also suggest that Breslin’s warning of a crippling economic backlash are unfounded. According to an August article in the San Francisco Business Times by Ryan Tate, “Next year promises to be by far the most robust for leisure and business travel in San Francisco since the dot-com boom.”

He continues, “Convention business will reach more than 900,000 hotel rooms in 2008, well above the 740,000 room nights booked by conventions in 2007.” The San Francisco Convention and Visitors Bureau forecasts that overall tourism will top 16 million visitors next year and that visitor spending will exceed last year’s record $7.8 billion.

The taxes the city collects from hotels go toward funding a wide range of public services. Some of the money is earmarked for the Convention and Visitors Bureau and for maintaining convention facilities. Some funds are allocated for low-income housing and rent supplements. The War Memorial Department, the Asian Art Museum, and the Arts Commission all receive funding through the hotel tax as well, with excess dollars poured into the city’s General Fund.

San Francisco’s tourism industry is the city’s largest industry and its second-largest employer, after the city and county government. “You want to make sure your number one industry is protected,” Breslin told us.

Yet the policy that she’s asking the city to enact runs counter to the policies in other major cities, including those thought to be less politically progressive than San Francisco. In Los Angeles, for example, only individuals can be granted exemptions from paying the hotel tax. In Chicago the exemption is even stricter and only applies to people who use hotel rooms as their domicile.

41st Anniversary Special: Wrecked park

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› news@sfbg.com

The San Francisco Recreation and Park Department has a long history of maintaining parks, community centers, and other recreational offerings. In fact, it controls more land in the city than any other entity, public or private. But after seeing its budget repeatedly slashed during lean fiscal years, the underfunded department has become a prime target for some controversial privatization schemes.

There are ongoing efforts to privatize city golf courses, supported by Mayor Gavin Newsom and Rec and Park general manager Yomi Agunbiade (see “Bilking the Links,” page 22). And there are ongoing fears that the city intends to privatize its popular Camp Mather vacation spot, something the RPD studied a few years ago and Sup. Jake McGoldrick has fought and highlighted.

Rec and Park has identified $37 million in needs at Camp Mather — the product of a private study the agency has been unable to fully explain to the public (see “From Cabin to Castle,” 4/4/07) — but left Camp Mather off a big bond measure planned for February 2008.

“They say $37 million you need up here, and how much you got in there for the ballot measure? Zip, zero,” McGoldrick told the Guardian. “It’s a familiar pattern: you underfund the hell out of something, and then you turn around and say, ‘We, the public sector, cannot handle taking care of this.'<0x2009>”

Rec and Park spokesperson Rose Dennis denies there are plans to privatize Camp Mather or that its omission from the bond measure is telling. “Many people disagreed — including you — with the funding needs and whether we could back it up,” she explained as the reason for its omission from the bond measure.

In his Oct. 1 endorsement interview with the Guardian, Newsom said, “We actually made some commitments just this last week with Sup. McGoldrick to help support his efforts, because he’s very protective of Camp Mather, and I appreciate his leadership on this, to help resource some of the needs up there without privatizing, without moving in accordance with your fears.”

And while Newsom said he hoped to avoiding privatizing Camp Mather, he refused to say he wouldn’t: “I’m not suggesting it’s off the table, because I’m not necessarily sure that the conditions that exist today will be conditions that exist tomorrow, and I will always be open to argument.”

But at least the Camp Mather and golf arguments have been happening mostly in public. That’s what voters intended in 1983 when they passed Proposition J, which requires public hearings, a staff study, and a vote by the Board of Supervisors before city services can be privatized. Yet over the past couple of years, there’s been an effort to quietly shift operations at a half-dozen rec centers away from city programs and toward private nonprofits.

It’s called Rec Connect. Its supporters bill it as an innovative effort to bring much-needed recreation programs to underserved, low-income neighborhoods. “This is a pilot program to see if a collaboration between a community-based organization and a rec center yields a richer program and a more engaged community,” said Margaret Brodkin, director of the Department of Children, Youth and Their Families, which created the program and oversees that and other uses of the city’s Children’s Fund.

But to members of the Service Employees International Union Local 1021 — which includes most city employees and has filed grievances challenging Rec Connect — the program is a sneaky attempt to have underpaid, privately funded workers take over services that should be provided by city employees, who are better paid, unionized, and accountable to the public.

“The city took funds from the city’s coffers and gave them to the Department of Children, Youth and [Their] Families,” Margot Reed, a work-site organizer for the union, told the Guardian. “DCYF is using these funds, through Rec Connect, to contract out to private nonprofits work that rec staff were doing for a quarter of the cost.”

Brodkin was the longtime director of Coleman Advocates for Children and Youth — a perpetual thorn in the side of City Hall and the author of the measure that set aside some property taxes to create the Children’s Fund — before Newsom hired her to head the DCYF. She sees her current role as a continuation of her last one, and she sees Rec Connect as an enhancement of needed services rather than a privatization.

“There is a commitment that no jobs would be lost. I’m a big supporter of the public sector,” Brodkin said, while acknowledging that the RPD is chronically underfunded. “I am certainly aware of the resources issue at Rec and Park…. I’d be a happy camper if the Rec and Park budget was doubled. But I’d still believe in this program and say it offers a richer experience.”

Rec Connect began in 2005 with a study that looked at unmet recreational needs and evaluated facilities that might be good places to bring in community-based organizations to offer specialized classes. The whole program was financed through a mix of public funds and grants from private foundations. The three-year pilot program started just over a year ago.

“The Rec Connects,” Newsom told the Guardian, “are a way of leveraging resources and getting more of our CBOs involved and using these great assets and facilities, instead of limiting use to the way things have been done.”

Rec Connect director Jo Mestelle denied that the initiative is a privatization attempt.

“Rec and Park brings the facilities, the sports, and traditional recreation. The CBOs bring the youth-development perspective and nontraditional programming,” Mestelle said. “Hopefully, together we build a community that includes youth-leadership groups and advisory councils.”

Few would dispute the need for more after-school or other youth programs, particularly in the violence-plagued Western Addition, where some of the Rec Connect centers are. But the means of providing these programs is something new for San Francisco, starting with the fact that even though Mestelle works in the DCYF office, her salary is paid for entirely by private foundations.

That relationship and those funders aren’t posted anywhere or immediately available to the public, but Brodkin agreed to provide them to the Guardian. They include the Hellman Family Philanthropic Foundation ($50,000), the Hearst Foundation ($50,000), the San Francisco Foundation ($128,000), the Haas Foundation ($100,000), and the SH Cowell Foundation ($150,000).

Brodkin and Mestelle characterized those foundations as fairly unimpeachable, and Brodkin defended the arrangement as part of a national trend: “The thing that’s odd about SEIU’s perspective is this is happening all over.”

That’s precisely the point, SEIU’s Robert Haaland says.

“It’s been a strategy since the ’70s to, as [conservative activist] Grover Norquist calls it, ‘starve the beast,'<0x2009>” or defund government programs, Haaland said. “On a national level there is a lot going on that impacts us locally.”

Minutes from a recent Recreation and Park Commission meeting confirm that rec center directors have only about $1,000 each year to cover the cost of buying basketballs, team jerseys, referee whistles, and other basic sports and safety supplies. The SEIU grievance also notes that recreation staff positions have decreased by a third just as senior management positions increased by a third.

“We don’t have enough dollars for $20-an-hour rec center staff who are directly responsible for the kids and are well known to the community. We believe kids deserve great coaches, consistency, longevity, and commitment,” Reed said.

SEIU Local 1021 chapter president Larry McNesby is also the Rec and Park manager who oversees Palega Park, one of the Rec Connect sites. He told the Guardian that while his rec directors are “under pressure from the mayor to show him numbers of people that they are serving,” Rec and Park’s new online registration fails to reflect the “hundreds of drop-ins” that rec staff serve on a daily basis.

But he said the department has been set up to fail by chronic underfunding.

“I’d love Rec Connect and DCYF to be on a level playing field, because my directors could out-recreate theirs any day,” McNesby said. “You can’t just eliminate our jobs and replace them with someone who makes just above minimum wage.”

Actually, Brodkin and Mestelle note that negotiations with SEIU over Rec Connect have resulted in a guarantee that no jobs will be replaced and an agreement by the city as to 250 different tasks that the Rec Connect CBOs can’t perform. Still, they say the program brings innovation to a stagnant city agency.

“Before Rec Connect the rec centers always had a Ping-Pong table and some board games, but some of them were really poor, many were tired looking, none had computers or Internet. So we’ve had to think outside the box. Rec [and] Park is a big department, and it’s not always efficient,” Mestelle said.

Public records show that in 2006, the DCYF, whose primary function is to administer grants, sent $1 million in public money to Rec Connect from the Children’s Trust Fund, a pool of cash the city gathers each year by levying 3¢ per dollar of property tax.

Both Rec Connect and city workers stress the importance of offering a range of good programs to young people. “Our work is at a more social level,” McNesby says. “Every minute a kid spends in a rec center is a minute they’re not breaking into a car or victimizing someone or being victimized.”

The question is who should provide those programs. “It’s society’s value system that controls where the money goes,” Rec and Park spokesperson Dennis said. “It’s a really provocative discussion. There are some very compelling trade-offs argued in convincing fashion by intelligent people on both sides. These aren’t easy decisions.”

But the union people say that when it comes to Rec Connect, that discussion isn’t happening in public forums in a forthright way. As Reed said, “Gavin Newsom never went to the voters and said, ‘Here’s what we want to do: cut the rec staff and bring in private nonprofits.'”

41st Anniversary Special: The perils of privatization

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Click here for Amanda Witherell’s exclusive interview with Columbia professor Elliott Sclar

› amanda@sfbg.com

Over the past few weeks almost every major news outlet in the country has reported on Blackwater, a private company the US government hired to do work in Iraq that was once the exclusive province of soldiers.

The deal hasn’t gone so well: on Sept. 16, Blackwater guards opened fire and, according to the Iraqi government, shot 25 civilians. The incident set off an international furor and has brought into focus the breadth of the company’s work for the US government. It’s prompted an investigation by the House Committee on Oversight and Government Reform, which showed that since 2001, Blackwater’s federal contracts have increased 80,000 percent. It’s revealed the massive pay inequalities between private security guards and US soldiers — the cost of one private guard could pay the salaries of six soldiers.

And it’s raised a question that’s critical to understanding how government increasingly works in the United States: should a private company be doing the work of the military?

Privatization of public services is all the rage in this country now, at all levels of government, from Washington DC to San Francisco. Supporters say the private sector can often work better and more efficiently than the old, bureaucratic, much-maligned government.

But Blackwater is a great example of the perils of privatization. And there are many more.

STARVE THE BEAST


Over the past few decades governments at all levels in this country have been in a near-perpetual state of deficit. Taxes are way down from their historic post–World War II levels, and except for a brief period during the tech boom, there is rarely enough money for even basic social services.

"It’s been a strategy since the ’70s to, as Grover Norquist calls it, ‘starve the beast,’<0x2009>" Robert Haaland, an organizer with Service Employees International Union Local 1021, told us.

And because politicians, even Democrats, are terrified of tax hikes, they’ve been looking for more efficient ways to use the money they have. The magic bullet goes by many names — privatization, public-private partnerships, competitive outsourcing, creative financing solutions — but the basic idea is to allow the power of competition, set free in an unregulated market, to provide the public with the best services at the lowest cost.

"To do or to buy is the question that all governments face," says Ken Jacobs, director of UC Berkeley’s Labor Center.

We’ve been buying. Since 2000, outsourcing of federal dollars has increased 100 percent, to $422 billion in taxpayer funds in 2006, according to a September study by the Washington DC US Public Interest Research Group. The US government is now the private sector’s largest customer.

San Francisco may be known as one of the most progressive cities in the country, but this town has also been wooed by public-private partnerships with promises of improvements to the golf courses, construction of a new power plant, and funding for the many civic needs we have.

PRIVATIZE MUNI?


Cheerleaders for privatization look at someone like Nathaniel Ford, executive director of San Francisco’s Metropolitan Transit Authority, and see everything that’s wrong with the public sector. Ford’s salary is nearly $300,000, plenty high enough to attract a talented leader. But the Muni system he runs keeps the average San Franciscan waiting on the corner in the morning, delivers that person to work at an unpredictable hour, and lurches them homeward every night aboard a standing-room-only bus. Nobody thinks Muni is performing well.

That makes the case for privatization seem almost appealing.

"The public has been schooled to think that government is the problem, not the solution," Elliott Sclar, professor of economics at Columbia University, told us. In his 2000 book on privatization, You Don’t Always Get What You Pay For: The Economics of Privatization (Cornell University), he writes, "American folk wisdom holds that, by and large, public service is uncaring, unbending, bureaucratic, and expensive, whereas competitively supplied private services such as FedEx are efficient and responsive."

Competition, the privatizers say, drives innovation. Less red tape means more efficiency. A lack of unions and collective bargaining agreements translates to lower labor costs. Large-scale multinational operations can reduce redundancy and streamline their processes — all of which adds up to a lean-running machine.

But this country has a lot of experience with privatization, and the record isn’t good.

One hundred years ago private companies did a lot of what we now call government work. "Contracting out was the way American cities carried out their governmental business ever since they grew beyond their small village beginnings," writes Moshe Adler, a Columbia professor of economics, in his 1999 paper The Origins of Governmental Production: Cleaning the Streets of New York by Contract During the 19th Century. At one time private companies provided firefighting, trash collection, and water supplies, to name just a few essential services.

But according to Adler, "By the end of the 19th century contracting out was a mature system that was already as good as it could possibly be. And it was precisely then that governmental production came to America. The realization that every possible improvement to contracting out had been tried led city after city to declare its failure."

For example, the 1906 earthquake and subsequent fires in San Francisco were what prodded the city to municipalize water service after the company charged with the task, Spring Valley Water, failed to deliver while the fires raged.

In Philadelphia as well as San Francisco, the business of firefighting was once very lucrative — for both the firefighting companies and the arsonists who were paid to set fires for the former to fight. And corruption was rampant. "Large amounts of public contracting out historically created lots of opportunities for fraud and nepotism," Jacobs said.

So public agencies stepped in to provide basic services as cheaply and uniformly as possible. Towns and cities took on the tasks of security with police and firefighting, education with schools and libraries, and sanitation with trash collection and wastewater treatment. Nationally, the federal government improved roads and transit, enacted Social Security benefits, and established a National Park System, among many other things.

And then, about 30 years ago, the pendulum started to swing the other way. Driven by University of Chicago economist Milton Friedman, enacted in a massive policy shift by Ronald Reagan, proliferated by Grover Norquist and the neocon agenda, and fully appreciated by corporations and private companies, privatization came back.

In Reagan’s first term, he cut taxes 25 percent overall; the rich got a 40 percent cut. Domestic spending fell by half a trillion dollars in the 1980s, although any savings were countered by a rise in the defense budget.

Harvard economist Lawrence Summers, quoted in Looking Back on the Reagan Presidency (Johns Hopkins University), put it this way: "The Reagan budgets will influence the government for the rest of this century. Just as the Great Society left an imprint of Federal commitment to help the indigent and equality of opportunity, the Reagan budget deficits will leave an imprint of non-involvement."

Such a massive realignment of money coupled with tax breaks too politically painful to reinstate led to a boom in the outsourcing of public services. Private companies began doing more municipal work, while nonprofit organizations tried to fill the gaps in funding for social services, welfare, housing, health care, and the environment.

The George W. Bush era has seen even more overt outsourcing. These days no-bid contracts are preferred, and at times government services are completely turned over to the private sector in "direct conversions," and the public agency that once did the job is not allowed to compete to keep it. The Washington Post recently reported that no-bid government contracts have tripled in the past six years.

This doesn’t really sound like the competitive free market espoused by the theory of privatization.

FLUNKING THE TEST


To field-test the primacy of privatization, the Reagan administration sponsored a transportation experiment in the early ’80s: Miami’s Metro-Dade Transit Agency got to compete against Greyhound. The two providers were each given five comparable transit routes to manage over three years, and 80 new buses were bought with a $7.5 million grant from the federal government.

After 18 months 30 of the Greyhound buses were so badly damaged that they had to be permanently pulled from service. Passenger complaints on the Greyhound line were up 100 percent, and ridership was down 31 percent over the course of a year.

Why? There was no incentive in Greyhound’s contract to maintain the equipment or retain riders. The company’s only goal was to deliver the cheapest service possible.

The Miami transit contract could have contained clauses calling for regular inspections or guaranteed ridership, but that would have significantly increased the cost of the work — perhaps to the point where it would have been competitive with what the city provided.

That’s an important lesson in privatization politics: when you add the cost of adequately protecting the public’s interest and monitoring contract compliance, the private sector doesn’t look so efficient.

Which is why many say privatization only succeeds as a theory — and why, for all the problems with Muni, no private company is likely to be able to do a better job.

"Market fundamentalists present an idealized, simpleminded notion of competitive markets in which buyers and sellers have equal knowledge," Sclar told us. "Anyone can be a buyer, anyone can be a seller, everyone can evaluate the quality of the good. In this never-never land, that’s often the way the case is made for privatization by this particular group of economists."

In the real world a number of issues arise when a service goes private. "Accountability gets to be a really big problem," Ellen Dannin, professor of law at Penn State University, said in an interview. "There are predictions about how much money will get saved through privatization, but no one ever goes back to check."

The September study by the US Public Interest Research Group profiled several companies that do government work, including Bank of America, LexisNexis, ChoicePoint, KBR (formerly Kellogg, Brown, and Root), General Electric, and Raytheon, and found instances of illegal behavior in all cases. There were often massive errors in the companies’ work.

Bank of America and LexisNexis had security breaches compromising the data of at least 1.5 million customers they were handling for the government. ChoicePoint allowed identity-theft scams amounting to more than $1 million in fraud. KBR overcharged the government millions of dollars for work in Iraq and Kuwait. GE made defective helicopter blades for the US military. Raytheon failed to fully test the systems of new aircraft. These companies are all still employed by the government.

When companies take over services that aren’t typically part of a competitive market, all sorts of unexpected problems occur. Jacobs points to the rash of contracting for busing services in cash-strapped school districts. Not only did costs eventually rise in many places, but when schools tried to go back to providing their own service, the skilled drivers who knew the routes, knew the kids, and were able to do much more than drive a bus were gone.

Sclar and Dannin agree that any service that lacks competition should be public. Sclar presented the example of electricity. "It’s a natural monopoly," he said. "Essentially it’s either going to be a well-regulated industry or it’s got to be done publicly."

Corporations exist to make money. And although graft, mismanagement, and scandal have always been present in City Halls around the country, in the end the legislative, judicial, and executive branches were not designed to generate profits. That alone means contracting out is financially dubious.

Hiring mercenaries is a classic example. "It costs the US government a lot more to hire contract employees as security guards in Iraq than to use American troops," Walter Pincus wrote in an Oct. 1 article in the Washington Post. "It comes down to the simple business equation of every transaction requiring a profit."

As Pincus details one of the many contracts between the security firm and the US, "Blackwater was a subcontractor to Regency, which was a subcontractor to another company, ESS, which was a subcontractor to Halliburton’s KBR subsidiary, the prime contractor for the Pentagon — and each company along the way was in the business to make a profit."

Blackwater charged Regency between $815 and $1,075 per day per security operative. Regency turned around and charged ESS a slightly higher average of $1,100. After that, the costs dissolve into the enormous bill that KBR regularly hands the federal government.

When the US Army is paying the bill the costs are far lower. An unmarried sergeant earns less than $100 a day. If you’re married, it’s less than $200. If you’re Gen. David H. Petraeus, it’s about $500 — less than Blackwater’s lowest-paid workers.

Very little about the Blackwater contracts would be known by anyone outside the company if it weren’t for the federal investigation, since private businesses are not subject to the same public-records laws as the federal government. They don’t have to open their books or publicize the details of their bids and contracts, and they often fiercely lobby against any regulations requiring this, which leaves the door wide open for corruption — which is what brought sunshine laws to government in the first place.

Sclar said that when it’s a good call to contract out, corporations, private companies, and nonprofits should be required to abide by public-records laws in addition to adhering to a five-year wait for employees departing the public sector for the private. "I think transparency should always be the goal," he said. "As much information as possible." If a company doesn’t want to make its records public, he told us, "[it shouldn’t] go after public work."

THE AIDS LESSON


Privatization comes in many forms and emerges for what often seem like good reasons.

In the early 1980s gay men in San Francisco were starting to get sick and die in large numbers — and the federal government didn’t care. There was no government agency addressing the AIDS crisis and almost no government funding. So the community came together and created a network of nonprofits that funded services, education, and research.

"The AIDS Foundation was founded in response to the epidemic at a time when there wasn’t a response from the federal government," Jeff Sheehy of the AIDS Research Center at UC San Francisco told us.

At first, activists all over the country praised the San Francisco model of AIDS services. Over time the nonprofits began to get government grants and contracts. But by the 1990s some realized that the nonprofit network was utterly lacking in public accountability. The same activists who had helped create the network had to struggle to get the organizations to hold public meetings, make records public, and answer community concerns.

That, Sheehy said, shouldn’t have come as a surprise.

"There isn’t that same degree of accountability that you would have" with the public sector, he told us. "SF General is not going to turn you away at the emergency room, but nonprofit hospitals are less and less interested in running ERs."

Sheehy said he’s seen cases where difficult clients have been banned from accessing help from nonprofits. Unlike at public institutions, "the burden is not on the agency to provide the service. It is with the client to get along with the agency," he said.

Sheehy outlines other issues: nonprofits run lean and are more apt to make cuts and resist unionization, which means workers are often paid less, there can be higher turnover, and upper management is often tasked with fundraising and grant writing and distanced from the fundamental work of the group. There’s no access to records or board meetings. "If service takes a sudden downward shift, what can you do?" Sheehy asks. "You can’t go to board meetings. You can’t access records. What’s your redress?"

And that perpetuates the problem of government not stepping up to the plate. More than half of the social services in San Francisco are run by nonprofits, a trend that isn’t abating.

"When the services are shifted from the public sector to the nonprofit sector," Sheehy said, "that capacity is lost forever from government."

THE LOTTERY TICKET


When Dannin teaches her students about privatization, she uses the analogy of personal finance. "If I find my income does not meet my expenses, I can cut my expenses, but there are certain things I have to have," she said. To meet those needs a person can get a second job. In the case of the government, it can raise taxes.

But "that is not an option governments see anymore," she told us. "So the third option is to buy a lottery ticket — and that’s what privatization is."

When a publicly owned road is leased for 99 years to a private company, the politician who cut the deal gets a huge chunk of cash up front to balance the local budget or meet another need. When the new owner of the road puts in a tollbooth to recoup costs, that’s the tax the politician, who may be long gone, refused to impose. What option does the voting driver have now?

Public goods, from which everyone presumably benefits, are frequently and easily falling out of the hands of government and into the hands of profit-driven companies. In New Orleans, charter schools have replaced all but four public schools. In about 15 municipalities public libraries are now managed by the privately owned Library Systems and Services. (In Jackson County, Ore., it’s being done for half the cost, but with half the staff and open half the hours.) At least 21 states are considering public-private partnerships to finance massive improvements to aging roads and bridges. User fees have increased in the national parks as rangers have been laid off and some of the work of park interpretation is picked up by private companies, as is the case with Alcatraz Island.

Dannin also asks her students to consider who really owns a job. The easy answer is the employer. "But there is another claimant of ownership of that job," she says. "That is the public. Employers depend on roads for their employees to drive to work, a public education system to train their workers. They depend on housing, police, the court system, the system of laws. That is a huge amount of infrastructure we tend not to think about.

"We live within an ecosystem. We’re having a hard time seeing that ecosystem, that infrastructure that we’re all in. That’s what your taxes pay for."

Fast, cheap, and out of control

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tredmond@sfbg.com

Click here for the Guardian‘s interview with Robert Reich.

The fall of the Berlin Wall in 1989 led a lot of pundits to talk about “the end of History.” The big battle of our lives, the defining philosophical and political conflict of the century, was over. Communism lost. Capitalism won.

But in the United States, the real war was just getting under way, a conflict between two visions of society: in one, the public sector, operating under a democratic system, dominated economic and political life; in the other, the central players in the game of life were private corporations. This war, which drags on today, poses a profound question: does the capitalist economy work for us — or are we slaves to its whims? The answer continues to transform almost every aspect of American life.

Clinton-era labor secretary Robert Reich, now a professor at UC Berkeley’s Goldman School of Public Policy, takes on a big piece of this epic struggle in his new book, Supercapitalism: The Transformation of Business, Democracy and Everyday Life. The cogent, well-documented, and critically important argument he makes is that the American people have prospered as consumers and investors at the expense of their role as citizens.

And in the end, we’ve been hurting ourselves.
This is the essential paradox of modern global capitalism: you can buy high-end electronics cheap, get amazing bargains at Wal-Mart, enjoy the growth of your 401(k) plan — and in the process, become poorer. Because the race to the bottom of the price chain and the top of the market has costs, and in the end, we’re all paying them. The only solution, Reich says, is a more aggressive government: more regulation, higher taxes, and, quite possibly, some consumer and investor sacrifices.

Reich goes back to what he calls the “Not Quite Golden Age,” the roughly 25 years after the end of World War II that were marked by continuous economic growth, relative prosperity, and remarkable (compared with today) economic equality. The top tax rate, for the very rich, was 91 percent (compared with 35 percent today). American industry was controlled by an oligopoly, in which a handful of businesses held the reins — and because they faced little competition, they were able to share their profits with labor. Back then, companies didn’t distribute their wealth to investors; it went to the employees.

For all the denunciation of socialism and idolization of the free market that goes on in American politics today, Reich points out that cold war America was defined by centralized economic planning. It just wasn’t the government doing that job; it was private industry.

He doesn’t contend that the model in operation back then was perfect — and anyone who has followed the postwar transformation of San Francisco, driven by secret private-sector planning, knows the painful impacts of such policies. But public resources were adequate to pay for massive infrastructure advances (the interstate highway system), gigantic educational benefits (the GI bill), and phenomenal tax breaks for home ownership. Labor unions, dealing with domestic companies that didn’t face competitors with cheaper offshore labor, were able to negotiate a division of the wealth that helped create the modern American middle class.

The gap between rich and poor was much, much smaller during that period than it is today; as Reich notes, “the potent incentive of great wealth was often absent,” so the economy was far more equitable and stable. High taxes on the rich didn’t slow a period of remarkable economic growth. And in 1964, 75 percent of the American public thought the government could be trusted to do the right thing most of the time — a statistic that seems inconceivable today.

That was, of course, before Vietnam, before Watergate, before the (first) energy crisis, stagflation, the California tax revolt, and cultural disillusion with the public sector, factors Reich doesn’t discuss in great detail.

But he does point to the changes that came in the 1980s and later: Deregulation, which transformed the banking industry, turning savers into investors. Globalization, which created a cutthroat type of capitalism promoting low prices and high returns at any cost. And government policies — such as the creation of private retirement plans and the promotion of the stock market as the central tool of investment — that encouraged Americans to focus on their own bottom line and ignore the larger issues facing society.

The result today, Reich says, is a supercapitalist world, in which you can fill your house with amazing piles of cheap stuff — but in the end those bargains wind up hurting you. “Consumers get great deals because workers get shafted,” he notes. “Ironically, they’re often the same people.”

Unlike a lot of people on the left, Reich doesn’t go around bashing big corporations and blaming them for society’s ills. In today’s ultracompetitive world, he says, corporations are simply doing what they have to do to survive: cutting costs, fighting for the bottom line, striving for the best possible returns for investors. There is no such thing as corporate social responsibility, he argues; under supercapitalism, it’s all about making money.
Instead of complaining about corporate greed, he says, we need to think as citizens and demand new rules, new laws and regulations, that force companies to do what we want them to do. We have to take back control of the American economy — and to do that, we have to reclaim democracy.

Reich places a large part of the blame on the role money has assumed in politics. He suggests that corporations, which are in reality just paper constructs, should be stripped of any rights to legal standing, any rights to participate in the public process — any rights to act as anything but pieces of paper. Campaign contributions should all be put into blind trusts: anyone could give money to a candidate, but that candidate would never be allowed to know who gave what.

Those reforms would be tough, and they might not happen anytime soon. But the value of this book isn’t in promoting any specific policy prescription. It’s about waking up and educating several generations of Americans who can’t seem to understand that you can’t have it all for free: that a decent society with universal health care, good public education, safe cities, and a commitment to protecting the environment requires some sacrifice; that the very rich (and even the run-of-the-mill well-off) among us have to pay taxes and accept responsibility for a decent nation and a decent world. That means creating a public sector we can trust — and not dismissing out of hand the notion that government has a positive role to play.

It’s the most important message anyone can impart today to the deluded, selfish population that makes up so much of modern America.

READING
Oct. 16, 7:30 p.m., free
Moe’s Books
2476 Telegraph, Berk.
(510) 849-2087, www.moesbooks.com

SUPERCAPITALISM: THE TRANSFORMATION OF BUSINESS, DEMOCRACY AND EVERYDAY LIFE
By Robert Reich
Knopf
272 pages
$25

SFist thinks we’re commies

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So the folks at SFist have decided that we’re all commies over here because we think it’s okay to tax the rich and provide services for the homeless.

I thought we were all too intelligent in these circles to resort to stupid quips about the “proletariat,” and I’ve posted a response on SFist. But since I’ve had to have this fight since I was an economics major at Wesleyan way back in the dark ages, I have to make a point here:

The Soviet Union as we knew it in the post-War era was not built by Karl Marx. There were some guys named Lenin and Stalin who built a political system in the name of his economic theories. Neither of them had much use for democracy or freedom. One of them was a savage butcher.

That said, you have to admit that Marx was, and remains, one of the most important economists of the modern era. You can’t understand capitalism just by reading Adam Smith and John Maynard Keynes. The critique of capital that Marx put forward was brilliant; I never fully understood the role of labor in productivity and the way labor-price theory actually works until I studied Marx. So yeah, he should be on the reading list of anyone who wants to talk intelligently about economics.

I would add Robert Reich’s Supercapitalism to Steve’s reading list, too; I did an interview with him last week which will be posted on sfbg.com shortly.

The theory of money — how it’s created, what it is, how it effects the economy — is that stuff of dozens of textbooks and a thousand doctoral theses. But the bottom line is, money today is not a direct measure of labor productivity; it’s a far more artifical construct, as Steve points out. Money is created by the federal reserve and by private banks. At times, the government in effect prints more money at the mint to inject it into the economy. In practice, money — the dollar — is an internationally traded commodity, and the money supply in the United States is desperately hard to even track,much less manage or control.

Yes, taxes come from labor. But these days, a sane system would tax investment income and speculative income much higher than what we typically think of as labor. And a lot of the economy today is built on investment income and speculation that has nothing to do with productive labor.

Yeah, it’s all more complicated than that, but folks: If you can’t understand that money doesn’t directly equal labor, and that you can use Marx’s economic analysis without being a commie .. geez. I thought people in San Francisco were smarter than that.

Endorsements: Local ballot measures

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Proposition A (transit reform)

YES


This omnibus measure would finally put San Francisco in a position to create the world-class transportation system that the city needs to handle a growing population and to address environmental problems ranging from climate change to air pollution. And in the short term it would help end the Muni meltdown by giving the system a much-needed infusion of cash, about $26 million per year, and more authority to manage its myriad problems.

The measure isn’t perfect. It would give a tremendous amount of power to the unelected Metropolitan Transportation Authority, a semiautonomous agency created in 1999 to reform Muni. But we also understand the arguments of Sup. Aaron Peskin — who wrote the measure in collaboration with labor and other groups — that the MTA is free to make tough decisions that someone facing reelection might avoid. And the measure still would give the Board of Supervisors authority to block the MTA’s budget, fare increases, and route changes with seven votes.

We’re also a little worried about provisions that could place the Taxicab Commission under the MTA’s purview and allow the agency to tinker with the medallion system and undermine Proposition K, the 1978 law that gives operating permits to working drivers, not corporations. Peskin promised us, on tape, that he will ensure, with legislation if necessary, that no such thing happens, and we’ll hold him to it.

Ultimately, the benefits of this measure outweigh our concerns. The fact that the labor movement has signed off on expanded management powers for the MTA shows how important this compromise is. The MTA would have the power to fully implement the impending recommendations in the city’s Transit Improvement Project study and would be held accountable for improvements to Muni’s on-time performance. New bonding authority under the measure would also give the MTA the ability to quickly pursue capital projects that would allow more people to comfortably use public transit.

The measure would also create an integrated transportation system combining everything from parking to cabs to bike lanes under one agency, which would then be mandated to find ways to roll back greenhouse gas emissions from transportation sources to 80 percent of 1990 levels by 2012. And to do that, the agency would get to keep all of the revenue generated by its new programs. As a side benefit — and another important reason to vote for Prop. A — approval of this measure would nullify the disastrous Proposition H on the same ballot.

San Francisco faces lots of tough choices if we’re going to minimize climate change and maximize the free flow of people through our landlocked city. Measure A is an important start. Vote yes.

Proposition B (commission holdovers)

YES


Proposition B is a simple good-government measure that ends a practice then-mayor Willie Brown developed into a science — allowing commissioners to continue serving after their terms expire, turning them into at-will appointments and assuring their loyalty.

Members of some of the most powerful commissions in town serve set four-year terms. The idea is to give the members, many appointed by the mayor, some degree of independence: they can’t be fired summarily for voting against the interests (or demands) of the chief executive.

But once their terms expire, the mayor can simply choose not to reappoint or replace them, leaving them in limbo for months, even years — and while they still sit on the commissions and vote, these holdover commissioners can be fired at any time. So their jobs depend, day by day, on the whims of the mayor.

Prop. B, sponsored by the progressives on the Board of Supervisors, simply would limit to 60 days the amount of time a commissioner can serve as a holdover. After that period, the person’s term would end, and he or she would have to step down. That would force the mayor to either reappoint or replace commissioners in a timely manner — and help give these powerful posts at least a chance at independence. Vote yes.

Proposition C (public hearings on proposed measures)

NO


Proposition C sure sounds good: it would mandate that the supervisors hold a hearing 45 days in advance before putting any measure on the ballot. The mayor would have to submit proposed ballot measures for hearings too. That would end the practice of last-minute legislation; since four supervisors can place any ordinance on the ballot (and the mayor can do the same), proposals that have never been vetted by the public and never subjected to any prior discussion often wind up before the voters. Sometimes that means the measures are poorly written and have unintended consequences.

But this really isn’t a good-government measure; it’s a move by the Chamber of Commerce and downtown to reduce the power of the district-elected supervisors.

The 1932 City Charter gave the supervisors the power to place items before the voters as a check on corruption. In San Francisco it’s been used as a check on downtown power. In 1986, for example, activists gathered enough voter signatures to place Proposition M, a landmark measure controlling downtown development, on the ballot. But then–city attorney Louise Renne, acting on behalf of downtown developers, used a ridiculous technicality to invalidate it. At the last minute, the activists were able to get four supervisors to sign on — and Prop. M, one of the most important pieces of progressive planning legislation in the history of San Francisco, ultimately won voter approval. Under Prop. C, that couldn’t have happened.

In theory, most of the time, anything that goes on the ballot should be subject to public hearings. Sometimes, as in the case of Prop. M, that’s not possible.

We recognize the frustration some groups (particularly small businesses) feel when legislation gets passed without any meaningful input from the people directly affected. But it doesn’t require a strict ballot measure like Prop. C to solve the problem. The supervisors should adopt rules mandating public hearings on propositions, but with a more flexible deadline and exemptions for emergencies. Meanwhile, vote no on Prop. C.

Proposition D (library preservation fund)

YES


In the 1980s and early 1990s, San Francisco mayors loved to cut the budget of the public library. Every time money was short — and money was chronically short — the library took a hit. It was an easy target. If you cut other departments (say, police or fire or Muni or public health), people would howl and say lives were in danger. Reducing the hours at a few neighborhood branch libraries didn’t seem nearly as dire.

So activists who argued that libraries were an essential public service put a measure on the ballot in 1994 that guaranteed at least a modest level of library funding. The improvements have been dramatic: branch library hours have increased more than 50 percent, library use is way up, there are more librarians around in the afternoons to help kids with their homework…. In that sense, the Library Preservation Fund has been a great success. The program is scheduled to sunset next year; Proposition D would extend it another 15 years.

If the current management of the public library system were a bit more trustworthy, this would be a no-brainer. Unfortunately, the library commission and staff have been resisting accountability; ironically, the library — a font of public information — makes it difficult to get basic records about library operations. The library is terrible about sunshine; in fact, activists have had to sue this year to get the library to respond to a simple public-records request (for nonconfidential information on repetitive stress injuries among library staff). And we’re not thrilled that a significant part of the library’s operating budget is raised (and controlled) by a private group, Friends of the San Francisco Public Library, which decides, with no oversight by an elected official, how as much as 10 percent of library money is spent.

But libraries are too valuable and too easy a budget target to allow the Library Preservation Fund to expire. And the way to fend off creeping privatization is hardly by starving a public institution for funds. So we’ll support Prop. D.

Proposition E (mayoral attendance at Board of Supervisors meetings)

YES, YES, YES


If it feels as though you’ve already voted on this, you have: last November, by a strong majority, San Franciscans approved a policy statement calling on the mayor to attend at least one Board of Supervisors meeting each month to answer questions and discuss policy. It’s a great idea, modeled on the very successful Question Time in the United Kingdom, under which the British prime minister appears before Parliament regularly and submits to questions from all political parties. Proposition E would force the mayor to comply. Newsom, despite his constant statements about respecting the will of the voters, has never once complied with the existing policy statement. Instead, he’s set up a series of phony neighborhood meetings at which he controls the agenda and personally selects which questions he’s going to answer.

We recognize that some supervisors would use the occasion of the mayor’s appearance to grandstand — but the mayor does that almost every day. Appearing before the board once a month isn’t an undue burden; in fact, it would probably help Newsom in the long run. If he’s going to seek higher office, he’s going to have to get used to tough questioning and learn to deal with critics in a forum he doesn’t control.

Beyond all the politics, this idea is good for the city. The mayor claims he already meets regularly with members of the board, but those meetings are private, behind closed doors. Hearing the mayor and the board argue about policy in public would be informative and educational and help frame serious policy debates. Besides, as Sup. Chris Daly says, with Newsom a lock for reelection, this is the only thing on the ballot that would help hold him accountable. Vote yes on Prop. E.

Proposition F (police pensions)

YES


We really didn’t want to endorse this measure. We’re sick and tired of the San Francisco Police Officers Association — which opposed violence-prevention funding, opposed foot patrols, opposes every new revenue measure, and bitterly, often viciously, opposes police accountability — coming around, tin cup in hand, every single election and asking progressives to vote to give the cops more money. San Francisco police officers deserve decent pay — it’s a tough, dangerous job — but the starting salary for a rookie cop in this town exceeds $60,000, the benefits are extraordinarily generous, and the San Francisco Police Department is well on its way to setting a record as the highest-paid police force in the country.

Now it wants more.

But in fact, Proposition F is pretty minor — it would affect only about 60 officers who were airport cops before the airport police were merged into the SFPD in 1997. Those cops have a different retirement system, which isn’t quite as good as what they would get with full SFPD benefits. We’re talking about $30,000 a year; in the end, it’s a simple labor issue, and we hate to blame a small group of officers in one division for the serious sins of their union and its leadership. So we’ll endorse Prop. F. But we have a message for the SFPOA’s president: if you want to beat up the progressives, reject new tax plans, promote secrecy, and fight accountability, don’t come down here again asking for big, expensive benefit improvements.

Proposition G (Golden Gate Park stables)

YES


This is an odd one: Proposition G, sponsored by Sup. Jake McGoldrick, would create a special fund for the renovation of the historic (and dilapidated) horse stables in Golden Gate Park. The city would match every $3 in private donations with $1 in public money, up to a total of $750,000. The city would leverage that money with $1.2 million in state funds available for the project and fix up the stables.

Supporters, including most of the progressive supervisors, say that the stables are a historic gem and that horseback riding in the park would provide "after-school, summer and weekend activities for families and youth." That might be a bit of a stretch — keeping horses is expensive, and riding almost certainly won’t be a free activity for anyone. But the stables have been the target of privatization efforts in the past and, under Newsom, almost certainly would be again in the future; this is exactly the sort of operation that the mayor would like to turn over to a private contractor. So for a modest $750,000, Prop. G would keep the stables in public hands. Sounds like a good deal to us. Vote yes.

Proposition H (reguutf8g parking spaces)

NO, NO, NO


It’s hard to overstate just how bad this measure is or to condemn strongly enough the sleazy and deceptive tactics that led Don Fisher, Webcor, and other downtown power brokers to buy the signatures that placed what they call "Parking for the Neighborhoods" on the ballot. That’s why Proposition H has been almost universally condemned, even by downtown’s allies in City Hall, and why Proposition A includes a provision that would negate Proposition H if both are approved.

Basically, this measure would wipe out three decades’ worth of environmentally sound planning policies in favor of giving every developer and homeowner the absolute right to build a parking space for every housing unit (or two spaces for every three units in the downtown core). While that basic idea might have some appeal to drivers with parking frustrations, even they should consider the disastrous implications of this greedy and shortsighted power grab.

The city has very little leverage to force developers to offer community benefits like open space or more affordable housing, or to design buildings that are attractive and environmentally friendly. But parking spots make housing more valuable (and expensive), so developers will help the city meet its needs in order to get them. That would end with this measure, just as the absolute right to parking would eliminate things like Muni stops and street trees while creating more driveways, which are dangerous to bicyclists and pedestrians. It would flip the equation to place developers’ desires over the public interest.

Worst of all, it would reverse the city’s transit-first policies in a way that ultimately would hurt drivers and property owners, the very people it is appealing to. If we don’t limit the number of parking spots that can be built with the 10,000 housing units slated for the downtown core, it will result in traffic gridlock that will lower property values and kill any chance of creating a world-class transit system.

But by then, the developers will be off counting our money, leaving us to clean up their mess. Don’t be fooled. Vote no.

Proposition I (Office of Small Business)

YES


Proposition I got on the ballot after small-business leaders tried unsuccessfully to get the supervisors to fund a modest program to create staff for the Small Business Commission and create a one-stop shop for small-business assistance and permitting. We don’t typically support this sort of after-the-fact ballot-box budgeting request, but we’re making an exception here.

San Francisco demands a lot from small businesses. It’s an expensive place to set up shop, and city taxes discriminate against them. We supported the new rules mandating that even small operations give paid days off and in many cases pay for health insurance, but we recognize that they put a burden on small businesses. And in the end, the little operators don’t get a whole lot back from City Hall.

This is a pretty minor request: it would allocate $750,000 to set up an Office of Small Business under the Small Business Commission. The funding would be for the first year only; after that the advocates would have to convince the supervisors that it was worth continuing. Small businesses are the economic and job-generation engines of San Francisco, and this one-time request for money that amounts to less than 1/10th of 1 percent of the city budget is worthy of support. Vote yes on Prop. I.

Proposition J (wireless Internet network)

NO


It’s going to be hard to convince people to vote against this measure; as one blogger put it, the mayor of San Francisco is offering free ice cream. Anyone want to decline?

Well, yes — decline is exactly what the voters should do. Because Proposition J’s promise of free and universal wireless Internet service is simply a fraud. And the way it’s worded would ensure that our local Internet infrastructure is handed over to a private company — a terrible idea.

For starters, San Francisco has already been down this road. Newsom worked out a deal a year ago with EarthLink and Google to provide free wi-fi. But the contract had all sorts of problems: the free access would have been too slow for a lot of uses, faster access wouldn’t have been free, there weren’t good privacy protections, and the network wouldn’t have been anything close to universal. Wi-fi signals don’t penetrate walls very well, and the signals in this plan wouldn’t have reached much above the second floor of a building — so anyone who lived in an interior space above the second floor (and that’s a lot of people) wouldn’t have gotten access at all.

So the supervisors asked a few questions and slowed things down — and it’s good they did, because EarthLink suddenly had a change in its business strategy and pulled out of citywide wi-fi altogether. That’s one of the problems with using a private partner for this sort of project: the city is subject to the marketing whims of tech companies that are constantly changing their strategies as the economic and technical issues of wi-fi evolve.

San Francisco needs a municipal Internet system; it ought to be part of the city’s public infrastructure, just like the streets, the buses, and the water and sewer lines. It shouldn’t rely just on a fickle technology like wi-fi either; it should be based on fiber-optic cables. Creating that network wouldn’t be all that expensive; EarthLink was going to do it for $10 million.

Prop. J is just a policy statement and would have no immediate impact. Still, it’s annoying and wrongheaded for the mayor to try to get San Franciscans to give a vote of confidence to a project that has already crashed and burned, and Sup. Aaron Peskin, the cosponsor, should never have put his name on it. Vote no.

Proposition K (ads on street furniture)

YES


San Francisco is awash in commercialism. With all of the billboards and ads, the city is starting to feel like a giant NASCAR racer. And a lot of them come from Clear Channel Communications, the giant, monopolistic broadcast outfit that controls radio stations, billboards, and now the contract to build new bus shelters in the city with even more ads on them.

Proposition K is a policy statement, sponsored by Sup. Jake McGoldrick, that seeks to bar any further expansion of street-furniture advertising in the city. That would mean no more deals with the likes of Clear Channel to allow more lighted kiosks with ads on them — and no more new bus shelter ads. That’s got Clear Channel agitated — the company just won the 15-year bid to rebuild the city’s existing 1,200 Muni shelters, and now it wants to add 380 more. Clear Channel argues that the city would get badly needed revenue for Muni from the expanded shelters; actually, the contract already guarantees Muni a large chunk of additional funding. And nothing in Prop. K would block Clear Channel from upgrading the existing shelters and plastering ads all over them.

On a basic philosophical level, we don’t support the idea of funding Muni by selling ads on the street, any more than we would support the idea of funding the Recreation and Park Department by selling the naming rights to the Hall of Flowers or the Japanese Tea Garden or the golf courses. On a practical level, the Clear Channel deal is dubious anyway: the company, which runs 10 mostly lousy radio stations in town and gives almost nothing of value to the community, refuses to provide the public with any information on its projected profits and losses, so there’s no way to tell if the income the city would get from the expanded shelters would be a fair share of the overall revenue.

Vote yes on K.

Our three-point plan to save San Francisco

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› news@sfbg.com

Curtis Aaron leaves his house at 9 a.m. and drives to work as a recreation center director for the San Francisco Recreation and Park Department. He tries to leave enough time for the trip; he’s expected on the job at noon.

Aaron lives in Stockton. He moved there with his wife and two kids three years ago because “there was no way I could buy a place in San Francisco, not even close.” His commute takes three hours one way when traffic is bad. He drives by himself in a Honda Accord and spends $400 a month on gas.

Peter works for the city as a programmer and lives in Suisun City, where he moved to buy a house and start a family. Born and raised in San Francisco, he is now single again, with grown-up children and a commute that takes a little more than an hour on a good day.

“I’d love to move back. I love city life, but I want to be a homeowner, and I can’t afford that in the city,” Peter, who asked us not to use his last name, explained. “I work two blocks from where I grew up and my mom’s place, which she sold 20 years ago. Her house is nothing fancy, but it’s going for $1.2 million. There’s no way in hell I could buy that.”

Aaron and Peter aren’t paupers; they have good, unionized city jobs. They’re people who by any normal standard would be considered middle-class — except that they simply can’t afford to live in the city where they work. So they drive long distances every day, burning fossil fuels and wasting thousands of productive hours each year.

Their stories are hardly unique or new; they represent part of the core of the city’s most pressing problem: a lack of affordable housing.

Just about everyone on all sides of the political debate agrees that people like Aaron and Peter ought to be able to live in San Francisco. Keeping people who work here close to their jobs is good for the environment, good for the community, and good for the workers.

“A lack of affordable housing is one of the city’s greatest challenges,” Mayor Gavin Newsom acknowledged in his 2007–08 draft budget.

The mayor’s answer — which at times has the support of environmentalists — is in part to allow private developers to build dense, high-rise condominiums, sold at whatever price the market will bear, with a small percentage set aside for people who are slightly less well-off.

The idea is that downtown housing will appeal to people who work in town, keeping them out of their cars and fighting sprawl. And it assumes that if enough market-rate housing is built, eventually the price will come down. In the meantime, demanding that developers make somewhere around 15 percent of their units available at below-market rates should help people like Aaron and Peter — as well as the people who make far less money, who can never buy even a moderately priced unit, and who are being displaced from this city at an alarming rate. And a modest amount of public money, combined with existing state and federal funding, will make affordable housing available to people at all income levels.

But the facts are clear: this strategy isn’t working — and it never will. If San Francisco has any hope of remaining a city with economic diversity, a city that has artists and writers and families and blue-collar workers and young people and students and so many of those who have made this one of the world’s great cities, we need to completely change how we approach the housing issue.

 

HOMELESS OR $100,000

The housing plans coming out of the Mayor’s Office right now are aimed primarily at two populations: the homeless people who have lost all of their discretionary income due to Newsom’s Care Not Cash initiative, and people earning in the neighborhood of $100,000 a year who can’t afford to buy homes. For some time now, the mayor has been diverting affordable-housing money to cover the unfunded costs of making Care Not Cash functional; at least that money is going to the truly needy.

Now Newsom’s housing director, Matt Franklin, is talking about what he recently told the Planning Commission is a “gaping hole” in the city’s housing market: condominiums that would allow people on the higher end of middle income to become homeowners.

At a hearing Sept. 17, Doug Shoemaker of the Mayor’s Office of Housing told a Board of Supervisors committee that the mayor wants to see more condos in the $400,000 to $600,000 range — which, according to figures presented by Service Employees International Union Local 1021, would be out of the reach of, say, a bus driver, a teacher, or a licensed vocational nurse.

Newsom has put $43 million in affordable-housing money into subsidies for new home buyers in the past year. The Planning Department is looking at the eastern neighborhoods as ground zero for a huge new boom in condos for people who, in government parlance, make between 120 and 150 percent of the region’s median income (which is about $90,000 a year for a family of four).

In total, the eastern neighborhoods proposal would allow about 7,500 to 10,000 new housing units to be added over the next 20 years. Downtown residential development at Rincon Hill and the Transbay Terminal is expected to add 10,000 units to the housing mix, and several thousand more units are planned for Visitacion Valley.

The way (somewhat) affordable housing will be built in the eastern part of town, the theory goes, is by creating incentives to get developers to build lower-cost housing. That means, for example, allowing increases in density — changing zoning codes to let buildings go higher, for example, or eliminating parking requirements to allow more units to be crammed into an available lot. The more units a developer can build on a piece of land, the theory goes, the cheaper those units can be.

But there’s absolutely no empirical evidence that this has ever worked or will ever work, and here’s why: the San Francisco housing market is unlike any other market for anything, anywhere. Demand is essentially insatiable, so there’s no competitive pressure to hold prices down.

“There’s this naive notion that if you reduce costs to the market-rate developers, you’ll reduce the costs of the unit,” Calvin Welch, an affordable-housing activist with more than three decades of experience in housing politics, told the Guardian. “But where has that ever happened?”

In other words, there’s nothing to keep those new condos at rates that even unionized city employees — much less service-industry workers, nonprofit employees, and those living on much lower incomes — can afford.

In the meantime, there’s very little discussion of the impact of increasing density in the nation’s second-densest city. Building housing for tens of thousands of new people means spending hundreds of millions of dollars on parks, recreation centers, schools, police stations, fire stations, and Muni lines for the new neighborhoods — and that’s not even on the Planning Department’s radar. Who’s going to pay for all that? Nothing — nothing — in what the mayor and the planners are discussing in development fees will come close to generating the kind of cash it will take to make the newly dense areas livable.

“The solution we are striving for has not been achieved,” said Chris Durazo, chair of the South of Market Community Action Network, an organizing group. “Should we be looking at the cost to developers to build affordable housing or the cost to the neighborhood to be healthy? We’re looking at the cumulative impacts of policy, ballot measures, and planning and saying it doesn’t add up.”

In fact, Shoemaker testified before the supervisors’ committee that the city is $1.14 billion short of the cash it needs to build the level of affordable housing and community amenities in the eastern neighborhoods that are necessary to meet the city’s own goals.

This is, to put it mildly, a gigantic problem.

 

THE REST OF US

Very little of what is on the mayor’s drawing board is rental housing — and even less is housing available for people whose incomes are well below the regional median, people who earn less than $60,000 a year. That’s a large percentage of San Franciscans.

The situation is dire. Last year the Mayor’s Office of Community Development reported that 16 percent of renters spend more than half of their income on housing costs. And a recent report from the National Low Income Housing Coalition notes that a minimum-wage earner would have to work 120 hours a week, 52 weeks a year, to afford the $1,551 rent on a two-bedroom apartment if they spent the recommended 30 percent of their income on housing.

Ted Gullickson of the San Francisco Tenants Union told us that Ellis Act evictions have decreased in the wake of 2006 Board of Supervisors legislation that bars landlords from converting their property from rentals to condos if they evict senior or disabled tenants.

But the condo market is so profitable that landlords are now offering to buy out their tenants — and are taking affordable, rent-controlled housing off the market at the rate of a couple of hundred units a month.

City studies also confirm that white San Franciscans earn more than twice as much as their Latino and African American counterparts. So it’s hardly surprising that the Bayview–Hunters Point African American community is worried that it will be displaced by the city’s massive redevelopment plan for that area. These fears were reinforced last year, when Lennar Corp., which is developing 1,500 new units at Hunters Point Shipyard, announced it will only build for-sale condos at the site rather than promised rental units. Very few African American residents of Bayview–Hunters Point will ever be able to buy those condos.

Tony Kelly of the Potrero Hill Boosters believes the industrial-zoned land in that area is the city’s last chance to address its affordable-housing crisis. “It’s the biggest single rezoning that the city has ever tried to do. It’s a really huge thing. But it’s also where a lot of development pressure is being put on the city, because the first sale on this land, once it’s rezoned, will be the most profitable.”

Land use attorney Sue Hestor sees the eastern neighborhoods as a test of San Francisco’s real political soul.

“There is no way it can meet housing goals unless a large chunk of land goes for affordable housing, or we’ll export all of our low-income workers,” Hestor said. “We’re not talking about people on welfare, but hotel workers, the tourist industry, even newspaper reporters.

“Is it environmentally sound to export all your workforce so that they face commute patterns that take up to three and four hours a day, then turn around and sell condos to people who commute to San Jose and Santa Clara?”

 

A THREE-POINT PLAN

It’s time to rethink — completely rethink — the way San Francisco addresses the housing crisis. That involves challenging some basic assumptions that have driven housing policy for years — and in some quarters of town, it’s starting to happen.

There are three elements of a new housing strategy emerging, not all from the same people or organizations. It’s still a bit amorphous, but in community meetings, public hearings, blog postings, and private discussions, a program is starting to take shape that might actually alter the political landscape and make it possible for people who aren’t millionaires to rent apartments and even buy homes in this town.

Some of these ideas are ours; most of them come from community leaders. We’ll do our best to give credit where it’s due, but there are dozens of activists who have been participating in these discussions, and what follows is an amalgam, a three-point plan for a new housing policy in San Francisco.

1. Preserve what we have. This is nothing new or terribly radical, but it’s a cornerstone of any effective policy. As Welch points out repeatedly, in a housing crisis the cheapest and most valuable affordable housing is the stuff that already exists.

Every time a landlord or real estate speculator tries to make a fast buck by evicting a tenant from a rent-controlled apartment and turning that apartment into a tenancy in common or a condo, the city’s affordable-housing stock diminishes. And it’s far cheaper to look for ways to prevent that eviction and that conversion than it is to build a new affordable-rental apartment to replace the one the city has lost.

The Tenants Union has been talking about this for years. Quintin Mecke, a community organizer who is running for mayor, is making it a key part of his platform: More city-funded eviction defense. More restrictions on what landlords can do with buildings emptied under the Ellis Act. And ultimately, a statewide strategy to get that law — which allows landlords to clear a building of tenants, then sell it as condos — repealed.

Preserving existing housing also means fighting the kind of displacement that happens when high-end condos are squeezed into low-income neighborhoods (which is happening more and more in the Mission, for example, with the recent approval of a market-rate project at 3400 César Chávez).

And — equally important — it means preserving land.

Part of the battle over the eastern neighborhoods is a struggle for limited parcels of undeveloped or underdeveloped real estate. The market-rate developers have their eyes (and in many cases, their claws) on dozens of sites — and every time one of them is turned over for million-dollar condos, it’s lost as a possible place to construct affordable housing (or to preserve blue-collar jobs).

“Areas that have been bombarded by condos are already lost — their industrial buildings and land are already gone,” Oscar Grande of People Organizing to Demand Environmental and Economic Rights told us.

So when activists (and some members of the Board of Supervisors) talk about slowing down or even stopping the construction of new market-rate housing in the eastern neighborhoods area, it’s not just about preventing the displacement of industry and blue-collar jobs; it’s also about saving existing, very limited, and very valuable space for future affordable housing.

And that means putting much of the eastern neighborhoods land off limits to market-rate housing of any kind.

The city can’t exactly use zoning laws to mandate low rents and low housing prices. But it can place such high demands on developers — for example, a requirement that any new market-rate housing include 50 percent very-low-income affordable units — that the builders of the million-dollar condos will walk away and leave the land for the kind of housing the city actually needs.

2. Find a new, reliable, consistent way to fund affordable housing. Just about everyone, including Newsom, supports the notion of inclusionary housing — that is, requiring developers to make a certain number of units available at lower-than-market rates. In San Francisco right now, that typically runs at around 15 percent, depending on the size of the project; some activists have argued that the number ought to go higher, up to 20 or even 25 percent.

But while inclusionary housing laws are a good thing as far as they go, there’s a fundamental flaw in the theory: if San Francisco is funding affordable housing by taking a small cut of what market-rate developers are building, the end result will be a city where the very rich far outnumber everyone else. Remember, if 15 percent of the units in a new luxury condo tower are going at something resembling an affordable rate, that means 85 percent aren’t — and ultimately, that leads to a population that’s 85 percent millionaire.

The other problem is how you measure and define affordable. That’s typically based on a percentage of the area’s median income — and since San Francisco is lumped in with San Mateo and Marin counties for income statistics, the median is pretty high. For a family of four in San Francisco today, city planning figures show, the median income is close to $90,000 a year.

And since many of these below-market-rate projects are priced to be affordable to people making 80 to 100 percent of the median income, the typical city employee or service-industry worker is left out.

In fact, much of the below-market-rate housing built as part of these projects isn’t exactly affordable to the San Franciscans most desperately in need of housing. Of 1,088 below-market-rate units built in the past few years in the city, Planning Department figures show, just 169 were available to people whose incomes were below half of the median (that is, below $45,000 a year for a family of four or $30,000 a year for a single person).

“A unit can be below market rate and still not affordable to 99 percent of San Franciscans,” Welch noted.

This approach clearly isn’t working.

So activists have been meeting during the past few months to hammer out a different approach, a way to sever affordable-housing funding from the construction of market-rate housing — and to ensure that there’s enough money in the pot to make an actual difference.

It’s a big number. “If we have a billion dollars for affordable housing over the next 15 years, we have a fighting chance,” Sup. Chris Daly told us. “But that’s the kind of money we have to talk about to make any real impact.”

In theory, the mayor and the supervisors can just allocate money from the General Fund for housing — but under Newsom, it’s not happening. In fact, the mayor cut $30 million of affordable-housing money this year.

The centerpiece of what Daly, cosponsoring Sup. Tom Ammiano, and the housing activists are talking about is a charter amendment that would earmark a portion of the city’s annual property-tax collections — somewhere around $30 million — for affordable housing. Most of that would go for what’s known as low- and very-low-income housing — units affordable to people who earn less than half of the median income. The measure would also require that current housing expenditures not be cut — to “lock in everything we’re doing now,” as Daly put it — so that that city would have a baseline of perhaps $60 million a year.

Since the federal government makes matching funds available for many affordable-housing projects, that money could be leveraged into more than $1 billion.

Of course, setting aside $30 million for affordable housing means less money for other city programs, so activists are also looking at ways to pay for it. One obvious option is to rewrite the city’s business-tax laws, replacing some or all of the current payroll tax money with a tax on gross receipts. That tax would exempt all companies with less than $2 million a year in revenue — the vast majority of the small businesses in town — and would be skewed to tax the bigger businesses at a higher rate.

Daly’s measure is likely headed for the November 2008 ballot.

The other funding option that’s being discussed in some circles — including the Mayor’s Office of Housing — is complicated but makes a tremendous amount of sense. Redevelopment agencies now have the legal right to sell revenue bonds and to collect income based on so-called tax increments — that is, the increased property-tax collections that come from a newly developed area. With a modest change in state law, the city should be able to do that too — to in effect capture the increased property taxes from new development in, say, the Mission and use that money entirely to build affordable housing in the neighborhood.

That, again, is a big pot of cash — potentially tens of millions of dollars a year. Assemblymember Mark Leno (D–San Francisco) told us he’s been researching the issue and is prepared to author state legislation if necessary to give the city the right to use tax-increment financing anywhere in town. “With a steady revenue stream, you can issue revenue bonds and get housing money up front,” he said.

That’s something redevelopment agencies can do, and it’s a powerful tool: revenue bonds don’t have to go to the voters and are an easy way to raise money for big projects — like an ambitious affordable-housing development program.

Somewhere, between all of these different approaches, the city needs to find a regular, steady source for a large sum of money to build housing for people who currently work in San Francisco. If we want a healthy, diverse, functioning city, it’s not a choice any more; it’s a mandate.

3. A Proposition M for housing. One of the most interesting and far-reaching ideas we’ve heard in the past year comes from Marc Salomon, a Green Party activist and policy wonk who has done extensive research into the local housing market. It may be the key to the city’s future.

In March, Salomon did something that the Planning Department should have done years ago: he took a list of all of the housing developments that had opened in the South of Market area in the past 10 years and compared it to the Department of Elections’ master voter files for 2002 and 2006. His conclusion: fully two-thirds of the people moving into the new housing were from out of town. The numbers, he said, “indicate that the city is pursuing the exact opposite priorities and policies of what the Housing Element of the General Plan calls for in planning for new residential construction.”

That confirms what we found more than a year earlier when we knocked on doors and interviewed residents of the new condo complexes (“A Streetcar Named Displacement,” 10/19/05). The people for whom San Francisco is building housing are overwhelmingly young, rich, white commuters who work in Silicon Valley. Or they’re older, rich empty nesters who are moving back to the city from the suburbs. They aren’t people who work in San Francisco, and they certainly aren’t representative of the diversity of the city’s population and workforce.

Welch calls it “socially psychotic” planning.

Twenty-five years ago, the city was doing equally psychotic planning for commercial development, allowing the construction of millions of square feet of high-rise office space that was overburdening city services, costing taxpayers a fortune, creating congestion, driving up residential rents, and turning downtown streets into dark corridors. Progressives put a measure on the November 1986 ballot — Proposition M — that turned the high-rise boom on its head: from then on, developers had to prove that their buildings would meet a real need in the city. It also set a strict cap on new development and forced project sponsors to compete in a “beauty contest” — and only the projects that offered something worthwhile to San Francisco could be approved.

That, Salomon argues, is exactly how the city needs to approach housing in 2007.

He’s been circuutf8g a proposal that would set clear priority policies for new housing. It starts with a finding that is entirely consistent with economic reality: “Housing prices [in San Francisco] cannot be lowered by expanding the supply of market-rate housing.”

It continues, “San Francisco values must guide housing policy. The vast majority of housing produced must be affordable to the vast majority of current residents. New housing must be economically compatible with the neighborhood. The most needy — homeless, very low income people, disabled people, people with AIDS, seniors, and families — must be prioritized in housing production. … [and] market-rate housing can be produced only as the required number of affordable units are produced.”

The proposal would limit the height of all new housing to about six stories and would “encourage limited-equity, permanently affordable homeownership opportunities.”

Salomon suggests that San Francisco limit the amount of new market-rate housing to 250,000 square feet a year — probably about 200 to 400 units — and that the developers “must produce aggressive, competitive community benefit packages that must be used by the Planning Commission as a beauty contest, with mandatory approval by the Board of Supervisors.” (You can read his entire proposal at www.sfbg.com/newpropm.doc.)

There are all kinds of details that need to be worked out, but at base this is a brilliant idea; it could be combined with the new financing plans to shift the production of housing away from the very rich and toward a mix that will preserve San Francisco as a city of artists, writers, working-class people, creative thinkers, and refugees from narrow-minded communities all over, people who want to live and work and make friends and make art and raise families and be part of a community that has always been one of a kind, a rare place in the world.

There is still a way to save San Francisco — but we’re running out of time. And we can’t afford to pursue moderate, incremental plans. This city needs a massive new effort to change the way housing is built, rented, and sold — and we have to start now, today.* To see what the Planning Department has in the pipeline, visit www.sfgov.org/site/planning_index.asp?id=58508. To see what is planned for the eastern neighborhoods, check out www.sfgov.org/site/planning_index.asp?id=67762.

A Prop. M for housing

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EDITORIAL Big buildings are all the rage in San Francisco these days, and even the environmentalists often go along.

As many as 23 new complexes of 250 units or more, soaring from five or six stories to more than 1,000 feet, are on the drawing board, working their way through the city planning system, and more are almost certainly on their way. And yet there’s very little of the sort of outcry that we saw in the 1980s, when skyscrapers were turning downtown San Francisco into a wall of glass and steel cut by deep, dark, crowded canyons of streets.

This time around the high-rises aren’t, for the most part, office buildings. They’re condominiums — housing. And if you ask many of the major urban environmental groups, what you’ll hear is that density — more housing packed into existing urban areas — is good. Density fights sprawl. Housing near workplaces encourages walking and biking. Housing along transit corridors encourages people to get out of their cars. Urban density is the future: tightly packed cities full of people who don’t commute in private cars are our only hope to fight sprawl, congestion, and global warming. It’s called the new urbanism, and in San Francisco it goes like this: the only way to handle the influx of jobs and population growth is to build another 60,000 or so housing units, on every bit of available land.

But there’s a fundamental flaw in that argument.

Leave aside for the moment the fact that San Francisco is already the second-densest city in the United States. Leave aside the fact that density will come back to haunt us unless San Francisco is capable of creating real neighborhoods, with parks and open spaces, schools, new bus lines, police stations, and all of the other public goods that provide safety and quality of life — and that there’s nothing in any current planning document that shows how the massive, massive price tag for that sort of infrastructure will ever be paid. In a state where property taxes are strictly limited and civic infrastructure is already way overwhelmed and drastically underfunded, it would take extraordinary development fees on every new housing unit just to catch up, much less move ahead.

But let’s just suppose we could eliminate that problem. Would this sort of density be a good thing? No — not if the housing that gets built is mostly sold at prices set by the open market.

The density argument has to go beyond environmental theory and planning policy — because the issue in San Francisco isn’t how tall the buildings are or whether they’re along transit corridors. It’s about who gets to live there. And programs that offer some so-called inclusionary units, which mandate that 15 percent of the new housing be a little cheaper than the rest, aren’t going to cut it.

The facts are clear: the new housing that’s been built in San Francisco over the past 10 years — the downtown-centered, environmentally sound, dense housing — hasn’t helped eliminate commutes or fight global warming. The exact opposite has been happening: the people moving into these expensive, mostly small (and therefore non-family-friendly) units are world travelers who want a perch in San Francisco, retired empty nesters who aren’t going to work anyway, or reverse commuters who work in the tech industry in Silicon Valley. In many cases these new condos are creating more car trips: people who work out of town are buying them — and people who work in San Francisco are so badly priced out of the market that they’re moving farther and farther away.

We showed this two years ago when we went door-to-door in the new buildings to see who lived there and where they worked. Marc Salomon, a green policy wonk, has done a persuasive study using voter registration data that comes to a similar conclusion (see "Our Three-Point Plan to Save San Francisco," page 16). People who work in this city have to leave town to find housing they can afford; a lot of people who are moving into new housing here don’t work in town. It’s environmental psychosis.

There’s only one way to change that — the environmentalists and the housing activists and the progressive policy makers have to acknowledge an incontrovertible fact: sound environmental policy in an urban setting like San Francisco has to start with sound social and economic policy, and in San Francisco that means abandoning developer-driven housing and starting over. It means testing all new projects not on the basis of how close they are to jobs or bus lines or how many cars they will allow underneath or what their density is, but on the basis of how much the housing will cost and who will be able to rent or buy it.

And by those standards, none of the new high-rise buildings in the planning pipeline is even close to a good idea.

In this week’s cover story we describe an alternative approach to housing policy. It’s a three-part program, and the first two elements — preserving existing rental housing and finding a new funding mechanism for affordable-housing construction — are either already on the progressive agenda or rapidly moving forward. The third element is something new — but it deserves serious discussion.

It’s the idea, first put forward by Salomon, of adopting a comprehensive, citywide housing policy that would resemble the 1986 ballot measure known as Proposition M. Prop. M was designed to limit the impact of runaway commercial office development, and it set specific priority policies for all new projects, including the preservation of neighborhood character. It also strictly limited the amount of new office space that could be built in any one year and mandated that developers compete for the right to build. The projects that best suited the city’s needs (not the developers’ needs) would get the go-ahead; the others wouldn’t make the cut.

Imagine how that would work for housing. Say the voters passed a measure that limited new for-profit, market-rate housing to 500 units per year. The developers who wanted to win that lottery would have to come to the table with good offers — plenty of affordable set-asides, green buildings, structures that weren’t out of synch with the area, money for parks, schools, and other neighborhood services…. What could possibly be wrong with that?

San Francisco needs a cap on new housing for the rich and a mandate that all housing meet community needs. A well-crafted Prop. M–<\d>style ballot measure might energize the neighborhoods, force elected officials to talk seriously about housing … and save San Francisco. That ought to be on everyone’s agenda.*

Leno, Migden and Sacramento madness

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Migden, Leno: Who’s killing the bills?

By Tim Redmond
It’s been a wild few days in Sacramento.

On Thursday afternoon, the state Senate narrowly passed a terrible campaign finance bill that could strictly limit the ability of local governments to control political money. Although Common Cause and the League of Women Voters opposed it (as did San Francisco’s Ethics Commission director, John St. Croix) it had the support of the Democratic Party and had sailed through the Assembly, 77-0. On the Senate floor, Carole Midgen and Sheila Keuhl both made strong speeches against it – and almost, almost convinced enough of their colleagues to vote it down. Instead, it squeaked through 27-9 (needing two-thirds).

Migden at least tried. Good for her. Leland Yee voted the right way. But the arm-twisting by the party was too much.

And frankly, the opponents of the bill weren’t exactly on their game: There was no opposition when the bill went through the Assembly, and when it came to the Senate floor, the good guys were noticably absent.

Meanwhile, Randy Shaw reports on BeyondChron that Migden is making sure some of Assemblymember Mark Leno’s key bills never get a vote on the Senate floor. The reason: Migden (and her ally, state Senate President Don Perata) don’t want Leno to have any legislative success to brag about next spring when he challenges Migden in the Democratic primary.

See, one of Migden’s central arguments is that she’s an effective legislator. Sure, she cuts deals, she compromises – but in the end, she gets things done. And pointing out that none of Leno’s bills for 2007 actually became law would be a powerful campaign theme.

Among the Leno bills held hostage: A measure that would limit toxic chemicals in household furniture (AB 709) and AB 1590, which would allow San Franciscans to vote to raise local car taxes to provide revenue for city services.

Migden’s office insists that Shaw has it wrong: Tracy Fairchild, communications director, told me: “The root cause of Assemblyman Leno’s problems lies not with Senator Migden but rather with the entire Senate, whose bills met with unusually harsh treatment last week in the Assembly Appropriations Committee which he chairs. Rather than tell that truth, Mr. Leno has chosen to disparage Sen. Migden’s reputation by blaming all his problems on her and that is simply not the case.”

But Leno has another take: “Eight of the nine bills by Carole Migden that came to my committee [Appropriations] made it out, and I will make sure that every one of her Senate bills will leave the Assembly floor.” Only five of Leno’s 13 bills went forward, even though the ones that were bottled up had little real opposition.
The one Midgen bill that Leno didn’t let out of committee, interestingly, was SB 11, which would have extended domestic partnership rights to unmarried opposite-sex couples. Leno says the $33 million price tag doomed it, but I think the real problem was that, while I supported the bill and think it’s a fine idea, there wasn’t any real visible upwelling of support for it.

Overall, the Assembly Appropriations Committee let 74 percent of Senate bills out; only 63 percent of Assembly bills made it out of the corresponding Senate committee.

Part of what’s going on here may be the natural tension between the houses, but I think that Perata is sending a message to Leno and his colleagues: Don’t you dare take on an incumbent senator, or your bills will be held hostage.

I suspect that if Migden doesn’t like this message (and she shouldn’t) she could tell Perata to back off, and Leno’s bills would move forward.

Censored!

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>>Project Censored’s 15 missed-story runners up

>>Big local stories that never made mainstream headlines

>>The story behind a censored story that was killed by The Nation

amanda@sfbg.com

There are a handful of freedoms that have almost always been a part of American democracy. Even when they didn’t exactly apply to everyone or weren’t always protected by the people in charge, a few simple but significant rights have been patently clear in the Constitution: You can’t be nabbed by the cops and tossed behind bars without a reason. If you are imprisoned, you can’t be incarcerated indefinitely; you have the right to a speedy trial with a judge and jury. When that court date rolls around, you’ll be able to see the evidence against you.

The president can’t suspend elections, spy without warrants, or dispatch federal troops to trump local cops or quell protests. Nor can the commander in chief commence a witch hunt, deem individuals "enemy combatants," or shunt them into special tribunals outside the purview of our 218-year-old judicial system.

Until now. This year’s Project Censored presents a chilling portrait of a newly empowered executive branch signing away civil liberties for the sake of an endless and amorphous war on terror. And for the most part, the major news media weren’t paying attention.

"This year it seemed like civil rights just rose to the top," said Peter Phillips, the director of Project Censored, the annual media survey conducted by Sonoma State University researchers and students who spend the year patrolling obscure publications, national and international Web sites, and mainstream news outlets to compile the 25 most significant stories that were inadequately reported or essentially ignored.

While the project usually turns up a range of underreported issues, this year’s stories all fall somewhat neatly into two categories — the increase of privatization and the decrease of human rights. Some of the stories qualify as both.

"I think they indicate a very real concern about where our democracy is heading," writer and veteran judge Michael Parenti said.

For 31 years Project Censored has been compiling a list of the major stories that the nation’s news media have ignored, misreported, or poorly covered.

The Oxford American Dictionary defines censorship as "the practice of officially examining books, movies, etc., and suppressing unacceptable parts," which Phillips said is also a fine description of what happens under a dictatorship. When it comes to democracy, the black marker is a bit more nuanced. "We need to broaden our understanding of censorship," he said. After 11 years at the helm of Project Censored, Phillips thinks the most bowdlerizing force is the fourth estate itself: "The corporate media is complicit. There’s no excuse for the major media giants to be missing major news stories like this."

As the stories cited in this year’s Project Censored selections point out, the federal government continues to provide major news networks with stock footage, which is dutifully broadcast as news. The George W. Bush administration has spent more federal money than any other presidency on public relations. Without a doubt, Parenti said, the government invests in shaping our beliefs. "Every day they’re checking out what we think," he said. "The erosion of civil liberties is not happening in one fell swoop but in increments. Very consciously, this administration has been heading toward a general autocracy."

Carl Jensen, who founded Project Censored in 1976 after witnessing the landslide reelection of Richard Nixon in 1972 in spite of mounting evidence of the Watergate scandal, agreed that this year’s censored stories amount to an accumulated threat to democracy. "I’m waiting for one of our great liberal writers to put together the big picture of what’s going on here," he said.

1. GOOD-BYE, HABEAS CORPUS


The Military Commissions Act, passed in September 2006 as a last gasp of the Republican-controlled Congress and signed into law by Bush that Oct. 17, made significant changes to the nation’s judicial system.

The law allows the president to designate any person an "alien unlawful enemy combatant," shunting that individual into an alternative court system in which the writ of habeas corpus no longer applies, the right to a speedy trial is gone, and justice is meted out by a military tribunal that can admit evidence obtained through coercion and presented without the accused in the courtroom, all under the guise of preserving national security.

Habeas corpus, a constitutional right cribbed from the Magna Carta, protects against arbitrary imprisonment. Alexander Hamilton, writing in the Federalist Papers, called it the greatest defense against "the favorite and most formidable instruments of tyranny."

The Military Commissions Act has been seen mostly as a method for dealing with Guantánamo Bay detainees, and most journalists have reported that it doesn’t have any impact on Americans. On Oct. 19, 2006, editors at the New York Times wrote, in quite definitive language, "this law does not apply to American citizens."

Investigative journalist Robert Parry disagrees. The right of habeas corpus no longer exists for any of us, he wrote in the online journal Consortium. Deep down in the lower sections of the act, the language shifts from the very specific "alien unlawful enemy combatant" to the vague "any person subject to this chapter."

"Why does it contain language referring to ‘any person’ and then adding in an adjacent context a reference to people acting ‘in breach of allegiance or duty to the United States’?" Parry wrote. "Who has ‘an allegiance or duty to the United States’ if not an American citizen?"

Reached by phone, Parry told the Guardian that "this loose phraseology could be interpreted very narrowly or very broadly." He said he’s consulted with lawyers who are experienced in drafting federal security legislation, and they agreed that the "any person" terminology is troubling. "It could be fixed very simply, but the Bush administration put through this very vaguely worded law, and now there are a lot of differences of opinion on how it could be interpreted," Parry said.

Though US Sens. Patrick Leahy (D-Vt.) and Arlen Specter (R-Pa.) moved quickly to remedy the situation with the Habeas Corpus Restoration Act, that legislation has yet to pass Congress, which some suspect is because too many Democrats don’t want to seem soft on terrorism. Until tested by time, exactly how much the language of the Military Commissions Act may be manipulated will remain to be seen.

Sources: "Repeal the Military Commissions Act and Restore the Most American Human Right," Thom Hartmann, Common Dreams Web site, www.commondreams.org/views07/0212-24.htm, Feb. 12, 2007; "Still No Habeas Rights for You," Robert Parry, Consortium (online journal of investigative reporting), consortiumnews.com/2007/020307.html, Feb. 3, 2007; "Who Is ‘Any Person’ in Tribunal Law?" Robert Parry, Consortium, consortiumnews.com/2006/101906.html, Oct. 19, 2006

2. MARTIAL LAW: COMING TO A TOWN NEAR YOU


The Military Commissions Act was part of a one-two punch to civil liberties. While the first blow to habeas corpus received some attention, there was almost no media coverage of a private Oval Office ceremony held the same day the military act was signed at which Bush signed the John Warner Defense Authorization Act, a $532 billion catchall bill for defense spending.

Tucked away in the deeper recesses of that act, section 1076 allows the president to declare a public emergency and dispatch federal troops to take over National Guard units and local police if he determines them unfit for maintaining order. This is essentially a revival of the Insurrection Act, which was repealed by Congress in 1878, when it passed the Posse Comitatus Act in response to Northern troops overstaying their welcome in the reconstructed South. That act wiped out a potentially tyrannical amount of power by reinforcing the idea that the federal government should patrol the nation’s borders and let the states take care of their own territories.

The Warner act defines a public emergency as a "natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any state or possession of the United States" and extends its provisions to any place where "the president determines that domestic violence has occurred to such an extent that the constituted authorities of the state or possession are incapable of maintaining public order." On top of that, federal troops can be dispatched to "suppress, in a state, any insurrection, domestic violence, unlawful combination, or conspiracy."

So everything from a West Nile virus outbreak to a political protest could fall into the president’s personal definition of mayhem. That’s right — put your picket signs away.

The Warner act passed with 90 percent of the votes in the House and cleared the Senate unanimously. Months after its passage, Leahy was the only elected official to have publicly expressed concern about section 1076, warning his peers Sept. 19, 2006, that "we certainly do not need to make it easier for presidents to declare martial law. Invoking the Insurrection Act and using the military for law enforcement activities goes against some of the central tenets of our democracy. One can easily envision governors and mayors in charge of an emergency having to constantly look over their shoulders while someone who has never visited their communities gives the orders." In February, Leahy introduced Senate Bill 513 to repeal section 1076. It’s currently in the Armed Services Committee.

Sources: "Two Acts of Tyranny on the Same Day!" Daneen G. Peterson, Stop the North America Union Web site, www.stopthenorthamericanunion.com/articles/Fear.html, Jan. 20, 2007; "Bush Moves toward Martial Law," Frank Morales, Uruknet.info (Web site that publishes "information from occupied Iraq"), www.uruknet.info/?p=27769, Oct. 26, 2006

3. AFRICOM


President Jimmy Carter was the first to draw a clear line between America’s foreign policy and its concurrent "vital interest" in oil. During his 1980 State of the Union address, he said, "An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force."

Under what became the Carter Doctrine, an outpost of the Pentagon, called the United States Central Command, or CENTCOM, was established to ensure the uninterrupted flow of that slick "vital interest."

The United States is now constructing a similar permanent base in Africa, an area traditionally patrolled by more remote commands in Europe and the Pacific. No details have been released about exactly what AFRICOM’s operations and responsibilities will be or where troops will be located, though government spokespeople have vaguely stated that the mission is to establish order and keep peace for volatile governments — that just happen to be in oil-rich areas.

Though the official objective may be peace, some say the real desire is crude. "A new cold war is under way in Africa, and AFRICOM will be at the dark heart of it," Bryan Hunt wrote on the Moon of Alabama blog, which covers politics, economics, and philosophy. Most US oil imports come from African countries — in particular, Nigeria. According to the 2007 Congressional Budget Justification for Foreign Operations, "disruption of supply from Nigeria would represent a major blow to US oil-security strategy."

Though details of the AFRICOM strategy remain secret, Hunt has surveyed past governmental statements and reports by other independent journalists to draw parallels between AFRICOM and CENTCOM, making the case that the United States sees Africa as another "vital interest."

Source: "Understanding AFRICOM," parts 1–3, b real, Moon of Alabama, www.moonofalabama.org/2007/02/understanding_a_1.html, Feb. 21, 2007

4. SECRET TRADE AGREEMENTS


As disappointing as the World Trade Organization has been, it has provided something of an open forum in which smaller countries can work together to demand concessions from larger, developed nations when brokering multilateral agreements.

At least in theory. The 2006 negotiations crumbled when the United States, the European Union, and Australia refused to heed India’s and Brazil’s demands for fair farm tariffs.

In the wake of that disaster, bilateral agreements have become the tactic of choice. These one-on-one negotiations, designed by the US and the EU, are cut like backroom deals, with the larger country bullying the smaller into agreements that couldn’t be reached through the WTO.

Bush administration officials, always quick with a charming moniker, are calling these free-trade agreements "competitive liberalization," and the EU considers them essential to negotiating future multilateral agreements.

But critics see them as fast tracks to increased foreign control of local resources in poor communities. "The overall effect of these changes in the rules is to progressively undermine economic governance, transferring power from governments to largely unaccountable multinational firms, robbing developing countries of the tools they need to develop their economies and gain a favorable foothold in global markets," states a report by Oxfam International, the antipoverty activist group.

Sources: "Free Trade Enslaving Poor Countries" Sanjay Suri, Inter Press Service (global news service), ipsnews.org/news.asp?idnews=37008, March 20, 2007; "Signing Away the Future" Emily Jones, Oxfam Web site, www.oxfam.org/en/policy/briefingpapers/bp101_regional_trade_agreements_0703, March 2007

5. SHANGHAIED SLAVES CONSTRUCT US EMBASSY IN IRAQ


Part of the permanent infrastructure the United States is erecting in Iraq includes the world’s largest embassy, built on Green Zone acreage equal to that of Vatican City. The $592 million job was awarded in 2005 to First Kuwaiti Trading and Contracting. Though much of the project’s management is staffed by Americans, most of the workers are from small or developing countries like the Philippines, India, and Pakistan and, according to David Phinney of CorpWatch — a Bay Area organization that investigates and exposes corporate environmental crimes, fraud, corruption, and violations of human rights — are recruited under false pretenses. At the airport, their boarding passes read Dubai. Their passports are stamped Dubai. But when they get off the plane, they’re in Baghdad.

Once on site, they’re often beaten and paid as little as $10 to $30 a day, CorpWatch concludes. Injured workers are dosed with heavy-duty painkillers and sent back on the job. Lodging is crowded, and food is substandard. One ex-foreman, who’s worked on five other US embassies around the world, said, "I’ve never seen a project more fucked up. Every US labor law was broken."

These workers have often been banned by their home countries from working in Baghdad because of unsafe conditions and flagging support for the war, but once they’re on Iraqi soil, protections are few. First, Kuwaiti managers take their passports, which is a violation of US labor laws. "If you don’t have a passport or an embassy to go to, what do you do to get out of a bad situation?" asked Rory Mayberry, a former medic for one of First Kuwaiti’s subcontractors, who blew the whistle on the squalid living conditions, medical malpractice, and general abuse he witnessed at the site.

The Pentagon has been investigating the slavelike conditions but has not released the names of any vioutf8g contractors or announced penalties. In the meantime, billions of dollars in contracts continue to be awarded to First Kuwaiti and other companies at which little accountability exists. As Phinney reported, "No journalist has ever been allowed access to the sprawling 104-acre site."

Source: "A U.S. Fortress Rises in Baghdad: Asian Workers Trafficked to Build World’s Largest Embassy," David Phinney, CorpWatch Web site, www.corpwatch.org/article.php?id=14173, Oct. 17, 2006

6. FALCON’S TALONS


Operation FALCON, or Federal and Local Cops Organized Nationally, is, in many ways, the manifestation of martial law forewarned by Frank Morales (see story 2). In an unprecedented partnership, more than 960 federal, state, and local police agencies teamed up in 2005 and 2006 to conduct the largest dragnet raids in US history. Armed with fistfuls of arrest warrants, they ran three separate raids around the country that netted 30,110 criminal arrests.

The Justice Department claimed the agents were targeting the "worst of the worst" criminals, and Attorney General Alberto Gonzales said, "Operation FALCON is an excellent example of President Bush’s direction and the Justice Department’s dedication to deal both with the terrorist threat and traditional violent crime."

However, as writer Mike Whitney points out on Uruknet.info, none of the suspects has been charged with anything related to terrorism. Additionally, while 30,110 individuals were arrested, only 586 firearms were found. That doesn’t sound very violent either.

Though the US Marshals Service has been quick to tally the offenses, Whitney says the numbers just don’t add up. For example, FALCON in 2006 captured 462 violent sex-crime suspects, 1,094 registered sex offenders, and 9,037 fugitives.

What about the other 7,481 people? "Who are they, and have they been charged with a crime?" Whitney asked.

The Marshals Service remains silent about these arrests. Whitney suggests those detainees may have been illegal immigrants and may be bound for border prisons currently being constructed by Halliburton (see last year’s Project Censored).

As an added bonus of complicity, the Justice Department supplied local news outlets with stock footage of the raids, which some TV stations ran accompanied by stories sourced from the Department of Justice’s news releases without any critical coverage of who exactly was swept up in the dragnets and where they are now.

Sources: "Operation Falcon and the Looming Police State," Mike Whitney, Uruknet.info, uruknet.info/?p=m30971&s1=h1, Feb. 26, 2007; "Operation Falcon," SourceWatch (project of the Center for Media and Democracy), www.sourcewatch.org/index.php?title=Operation_FALCON, Nov. 18, 2006

7. BLACKWATER


The outsourcing of war has served two purposes for the Bush administration, which has given powerful corporations and private companies lucrative contracts supplying goods and services to American military operations overseas and quietly achieved an escalation of troops beyond what the public has been told or understands. Without actually deploying more military forces, the federal government instead contracts with private security firms like Blackwater to provide heavily armed details for US diplomats in Iraq, Afghanistan, and other countries where the nation is currently engaged in conflicts.

Blackwater is one of the more successful and well connected of the private companies profiting from the business of war. Started in 1996 by an ex–Navy Seal named Erik Prince, the North Carolina company employs 20,000 hired guns, training them on the world’s largest private military base.

"It’s become nothing short of the Praetorian Guard for the Bush administration’s so-called global war on terror," author Jeremy Scahill said on the Jan. 26 broadcast of the TV and radio news program Democracy Now! Scahill’s Blackwater: The Rise of the World’s Most Powerful Mercenary Army was published this year by Nation Books.

Source: "Our Mercenaries in Iraq," Jeremy Scahill, Democracy Now!, www.democracynow.org/article.pl?sid=07/01/26/1559232, Jan. 26, 2007

8. KIA: THE NEOLIBERAL INVASION OF INDIA


A March 2006 pact under which the United States agreed to supply nuclear fuel to India for the production of electric power also included a less-publicized corollary — the Knowledge Initiative on Agriculture. While it’s purportedly a deal to assist Indian farmers and liberalize trade (see story 4), critics say the initiative is destroying India’s local agrarian economy by encouraging the use of genetically modified seeds, which in turn is creating a new market for pesticides and driving up the overall cost of producing crops.

The deal provides a captive customer base for genetically modified seed maker Monsanto and a market for cheap goods to supply Wal-Mart, whose plans for 500 stores in the country could wipe out the livelihoods of 14 million small vendors.

Monsanto’s hybrid Bt cotton has already edged out local strains, and India is currently suffering an infestation of mealy bugs, which have proven immune to the pesticides the chemical companies have made available. Additionally, the sowing of crops has shifted from the traditional to the trade friendly. Farmers accustomed to cultivating mustard, a sacred local crop, are now producing soy, a plant foreign to India.

Though many farmers are seeing the folly of these deals, it’s often too late. Suicide has become a popular final act of opposition to what’s occurring in their country.

Vandana Shiva, who for 10 years has been studying the effects of bad trade deals on India, has published a report titled Seeds of Suicide, which recounts the deaths of more than 28,000 farmers who killed themselves in despair over the debts brought on them by binding agreements ultimately favoring corporations.

Hope comes in the form of a growing cadre of farmers hip to the flawed deals. They’ve organized into local sanghams, 72 of which now exist as small community networks that save and share seeds, skills, and assistance during the good times of harvest and the hard times of crop failure.

Sources: "Vandana Shiva on Farmer Suicides, the U.S.-India Nuclear Deal, Wal-Mart in India," Democracy Now!, www.democracynow.org/article.pl?sid=06/12/13/1451229, Dec. 13, 2006; "Genetically Modified Seeds: Women in India take on Monsanto," Arun Shrivastava, Global Research (Web site of Montreal’s Center for Global Research), www.globalresearch.ca/index.php?context=viewArticle&code=ARU20061009&articleId=3427, Oct. 9, 2006

9. THE PRIVATIZATION OF AMERICA’S INFRASTRUCTURE


In 1956, President Dwight D. Eisenhower ushered through legislation for the greatest public works project in human history — the interstate highway system, 41,000 miles of roads funded almost entirely by the federal government.

Fifty years later many of those roads are in need of repair or replacement, but the federal government has not exactly risen to the challenge. Instead, more than 20 states have set up financial deals leasing the roads to private companies in exchange for repairs. These public-private partnerships are being lauded by politicians as the only credible financial solution to providing the public with improved services.

But opponents of all political stripes are criticizing the deals as theft of public property. They point out that the bulk of benefits is actually going to the private side of the equation — in many cases, to foreign companies with considerable experience building private roads in developing countries. In the United States these companies are entering into long-term leases of infrastructure like roads and bridges, for a low amount. They work out tax breaks to finance the repairs, raise tolls to cover the costs, and start realizing profits for their shareholders in as little as 10 years.

As Daniel Schulman and James Ridgeway reported in Mother Jones, "the Federal Highway Administration estimates that it will cost $50 billion a year above current levels of federal, state, and local highway funding to rehab existing bridges and roads over the next 16 years. Where to get that money, without raising taxes? Privatization promises a quick fix — and a way to outsource difficult decisions, like raising tolls, to entities that don’t have to worry about getting reelected."

The Indiana Toll Road, the Chicago Skyway, Virginia’s Pocahontas Parkway, and many other stretches of the nation’s public pavement have succumbed to these private deals.

Cheerleaders for privatization are deeply embedded in the Bush administration (see story 7), where they’ve been secretly fostering plans for a North American Free Trade Agreement superhighway, a 10-lane route set to run through the heart of the country and connect the Mexican and Canadian borders. It’s specifically designed to plug into the Mexican port of Lázaro Cárdenas, taking advantage of cheap labor by avoiding the International Longshore and Warehouse Union, whose members are traditionally tasked with unloading cargo, and the International Brotherhood of Teamsters, whose members transport that cargo that around the country.

Sources: "The Highwaymen" Daniel Schulman with James Ridgeway, Mother Jones, www.motherjones.com/news/feature/2007/01/highwaymen.html, Feb. 2007; "Bush Administration Quietly Plans NAFTA Super Highway," Jerome R. Corsi, Human Events, www.humanevents.com/article.php?id=15497, June 12, 2006

10. VULTURE FUNDS: DEVOURING THE DESPERATE


Named for a bird that picks offal from a carcass, this financial scheme couldn’t be more aptly described. Well-endowed companies swoop in and purchase the debt owed by a third world country, then turn around and sue the country for the full amount — plus interest. In most courts, they win. Recently, Donegal International spent $3 million for $40 million worth of debt Zambia owed Romania, then sued for $55 million. In February an English court ruled that Zambia had to pay $15 million.

Often these countries are on the brink of having their debt relieved by the lenders in exchange for putting the owed money toward necessary goods and services for their citizens. But the vultures effectively initiate another round of deprivation for the impoverished countries by demanding full payment, and a loophole makes it legal.

Investigative reporter Greg Palast broke the story for the BBC’s Newsnight, saying that "the vultures have already sucked up about $1 billion in aid meant for the poorest nations, according to the World Bank in Washington."

With the exception of the BBC and Democracy Now!, no major news source has touched the story, though it’s incensed several members of Britain’s Parliament as well as the new prime minister, Gordon Brown. US Reps. John Conyers (D-Mich.) and Donald Payne (D-N.J.) lobbied Bush to take action as well, but political will may be elsewhere. Debt Advisory International, an investment consulting firm that’s been involved in several vulture funds that have generated millions in profits, is run by Paul Singer — the largest fundraiser for the Republican Party in the state of New York. He’s donated $1.7 million to Bush’s campaigns.

Source: "Vulture Fund Threat to Third World," Newsnight, www.gregpalast.com/vulture-fund-threat-to-third-world, Feb. 14, 2007

>>More: The story of U.S. Senator Diane Feinstein’s conflict of interest

Newsom’s tin cup

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EDITORIAL We’re glad that Mayor Gavin Newsom is angry at the conditions in the city’s public housing projects. Denouncing the head of the Housing Authority as well as the federal Department of Housing and Urban Development made for good press, and it’s possible that Newsom will actually follow up and try to improve some of the third world conditions at places like Sunnyvale and Hunters View.

But his notion that the way to solve the problem is to bring rich people on a tour and hope they will donate money is embarrassingly wrong. It’s the sort of idea that sounds like it came out of the darkest recesses of the Bush White House — the notion that the wealthy will just come to the aid of the poor, volunteering to do what’s right, as soon as they recognize the need.

Let’s us be clear here: public housing has been a horrible mess for years now. If Newsom is suddenly upset about the conditions, it’s only because he hasn’t been paying much attention. As we reported back in October 2005 (see "A Place Called Despair," 10/19/05), the city’s housing projects have been an unimaginable mess: raw sewage flowing through the yards, toilets backing up into kitchen sinks, toxic mold, people living in apartments that are legally and morally uninhabitable, terrifying violence … the list goes on and on. And we haven’t heard a whole lot out of the Mayor’s Office until this sudden burst of righteous anger.

Let us also be clear: a few donations from a few of the many, many multimillionaires in San Francisco aren’t going to solve the problem. It’s pathetic to see the mayor of one of the world’s great cities begging for alms from the same people who have helped create the economic conditions that make it so difficult for the city to provide for its residents’ basic human needs.

There are exceptions, but for the most part, the wealthy and powerful of San Francisco — with the acquiescence of Newsom — have put their considerable resources to bear over the years pushing for low taxes, cuts in city services, and reductions in the money that goes to the poorest residents of this town. Care Not Cash, Newsom’s signature policy measure, was a cruel attack on welfare recipients. His budgets have put hefty raises for police officers above the needs of public housing residents. And now he acts like a little charity, a few crumbs from the swells, will turn things around.

If Newsom really wants to take his rich pals on tours of the city’s public housing wasteland, we can suggest a different educational monologue. Rather than trying to summon up some patrician pity, Newsom ought to say:

This is what the antitax policies that have fattened all your wallets have created. This is what happens when the city lets market-rate developers determine housing policy. This, frankly, is what you get when you rely on the private sector to set public policy.

And if he really wants to address the public housing problem, he should tell the powerful interests who support him that he wants their backing for some serious new revenue measures — say, a hefty increase in the real estate transfer tax — to fund affordable housing in San Francisco.

Editor’s Notes

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› tredmond@sfbg.com

It’s all unofficial at this point, but I’m hearing that Mayor Gavin Newsom is (finally) getting ready to appoint a new city planning director, a fact that sounds like an uninteresting bit of bureaucratic business but is actually one of the most important decisions he’ll ever make. And it will impact everyone who lives in the city, for years to come.

The director of city planning holds an immensely powerful job in this town. You wonder why there are too many cars on the streets and too many tall office buildings downtown, why there’s not enough affordable housing and not enough open space, why Muni is overcrowded and doesn’t run on time? I can trace all of those problems back to decisions made by the city’s planning directors over the past several decades.

In theory, the director reports to the Planning Commission, which sets policy on things like desirable types of development, where offices should go, where blue-collar jobs should be protected, and how many new people can be crammed into a geographic area without overwhelming the capacity of the streets and the transit systems. The way city planning textbooks talk about the job, planners develop visions of urban space, looking at what patterns of land use and development will improve the quality of life in a community, then set zoning rules to foster those visions.

In reality, here’s what’s been happening under the incumbent, Dean Macris, in San Francisco:

A developer who wants to make a lot of money building a project — these days, probably a high-rise full of expensive condos — hires a fancy architect and comes to the planning director with a proposal. The fancy architect talks about (to use the sort of language you actually hear inside the Planning Department) "a tall, slender shaft rising between the mounds of the downtown skyline" — no, I didn’t make that up — and next thing you know, Macris is in love. Oooh, he wants that tower — so he and his staff devise planning rules and guidelines to make it possible for the developer to build it.

(Of course, the way the Planning Department budget works only encourages that sort of behavior. Much of the money to run Macris’s fiefdom comes from developer fees. No developers, no fees.)

Then the activists come along and demand that the developer kick something back to the community. So the developer — who stands to make an absolute killing on the project — throws a few dollars around for a little bit of affordable housing and a few community amenities. And next thing you know, there’s an enormous high-rise under construction.

Developer-driven planning is, by definition, terrible. It was under Macris’s prior reign, in the 1980s, that something like 30 million square feet of high-rise office space was built downtown, driving up housing prices, attracting more traffic, overburdening Muni, and, since high-rise offices cost more to serve than they pay in taxes, hammering the city budget.

And now the city is poised to make some absolutely critical decisions about the future. We need a real planning director who isn’t a developer toady.

The search is down to two or maybe three candidates, at least one of them truly awful. And I hear from good sources that Newsom is listening to Macris’s advice on the choice. I fear for my city.<\!s>*

Supes should run redevelopment

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EDITORIAL Mayor Gavin Newsom, scrambling to blunt community criticism of the Redevelopment Agency’s activities in Bayview–Hunters Point, has appointed a new agency director, Fred Blackwell. But the problem was not with the top of the agency (the outgoing director, Marcia Rosen, was neither corrupt nor incompetent) but rather with the entire direction that redevelopment has taken in San Francisco under several generations of mayors. It’s time to take seriously the suggestion of Sup. Ross Mirkarimi — that the agency be taken out of the mayor’s control and given to the district-elected supervisors.

Redevelopment is a powerful tool that has been terribly misused all over the nation, and the scars in San Francisco are real and lasting. A rapacious Redevelopment Agency determined to wipe out low-income housing devastated huge swaths of the Western Addition and South of Market in the 1960s, and the communities still haven’t fully recovered. Some people argue that the entire program should be abolished — that redevelopment should be consigned to the dustbin of bad urban history.

But at a time when it’s terribly hard for cities like San Francisco to raise money for affordable housing, basic infrastructure (see accompanying editorial), and ambitious programs like public power, the legal advantages of redevelopment are too good to give up. A state-chartered redevelopment agency sells bonds and raises money with nothing to back up the bonds except the projected increase in property taxes expected from improving a blighted area. The city can’t do that on its own; if it could, then raising, say, a billion dollars for affordable housing would be relatively simple.

In theory, the redevelopment agency could also fund municipal wi-fi, public power, and all sorts of other major projects.

The problem, of course, is that a lot of people in low-income neighborhoods don’t trust redevelopment — and given the history, it’s hard to blame them. But part of the essential problem with the Redevelopment Agency in past years has been its utter lack of accountability; the Western Addition and SoMa plans were drawn up in secret and executed with little regard for community input.

As long as San Francisco supervisors are elected by district, they will be, by definition, more accountable, closer to the neighborhoods, and less corrupted by money than any citywide elected official. Giving the board control over redevelopment is a far better model.

Plenty of cities allow their legislature to run redevelopment. The city councils of both Oakland and Berkeley also function as the directors of those cities’ redevelopment agencies. It’s time to move San Francisco into that column. *

Editor’s Notes

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› tredmond@sfbg.com

I’ve looked at all the grand designs for the tower that will pay for the new Transbay Terminal, and I’ve read the architectural critiques, and frankly, I’m sick of it all. The plans are all ugly, and they’re way out of scale for this city — but what really gets me is that this is how we’ve chosen to finance our civic infrastructure.

Why do we have to live with a giant high-rise office tower near the Transbay Terminal? Because if we don’t, there won’t be any money to build what should be the central transit link for the Bay Area, a landmark bus and train station on the scale (we’re told) of Grand Central in New York.

I’m not entirely in agreement with every decision that’s been made about the new terminal, but I do agree that it ought to be an essential part of the city’s future. As we shift away from the car and the freeway as the basic units of transportation in California — and we have no choice, we simply have to — a downtown center where trains and buses stop and people come and go will become what the Ferry Building was long, long ago. It will be the way people arrive in San Francisco. We need to make it work.

But the project will cost a lot of money, almost $1 billion — and nobody wants to pay higher taxes to fund this sort of thing. In fact, nobody in California wants to pay higher taxes for anything. So the folks at City Hall have decided that the only way we can have a new transit terminal is if we hock a piece of our city and our skyline to fund it. So we take some of the land on the terminal site and let a developer build a monstrosity of a high-rise on it — and that will bring in the money that we can’t get any other way.

It’s the same reason we have that god-awful Rincon Tower sticking its ugly head into the sky: the developer offered to pay for a fair amount of affordable housing and other community amenities that the taxpayers won’t fund because local government can’t raise taxes in California without reaching extraordinary lengths that are almost politically impossible. So here’s the deal: You want affordable housing? Give a big developer the rights to do something awful, and in exchange, we’ll get a few dollops of cash for civic needs.

Imagine for a moment what the state might look like if we’d had to cut this kind of deal to build the University of California system. You want nice colleges, with higher education available to every state resident who qualifies? OK — sell off the coast and let it become a giant Miami Beach. Or sell the Klamath, the Tuolumne, and a few other rivers to Disney for water parks. Or sell Muir Woods for condos. You don’t want to do that? Too bad — no world-class university system for your kids.

This is the devil’s bargain we have agreed to settle for in 2007. This is how we create public space, public facilities, public amenities. We save the Presidio by giving it to George Lucas. We create a wi-fi system by giving the broadband infrastructure to Google and EarthLink. We can’t do anything ourselves, as a community; all we can do is grab for the scraps the private sector will toss us.

My friends, this sucks. *

Is Bruce Brugmann alive, or is he spinning in his grave?

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By Bruce B. Brugmann

Several folks pointed out to me that the San Francisco Chronicle carried a premature comment on my death, in its Aug. 9th feature “What people say about the designs (of our new towering highrise buildings).”

It quoted Michael S. McGill, the former executive director of the San Francisco Urban Planning & Research Association and former executive director of the Bay Area Forum, 64, now living in Washington, D.C.

Said Gill, “Having left SF at the end of the two-decade war over high-rises, in the early ’90s, I am astonished at the apparent public support for ‘the tallest high-rise on the West Coast.’ How things have changed! Is (San Francisco Bay Guardian publisher) Bruce Brugmann still alive, or is he spinning in his grave?”

Hey, Mike, good to hear from you. Your report of my death is premature and I am happy to report that the Guardian
is still firmly on top of the highrise issue, which I like to call pellmell Manhattanization. We stopped the first highrise boom with Proposition M, the limited growth initiative on commercial highrises and the downtown highrise boom.
But now the issue is highrises with million-dollar condos, ugly, much too high and out of proportion for a compact city and its compact neighborhoods, built not for residents but for people working outside the city and driving out our lower income and middle classes.

You can rest assured, Mike, that we are on the story and fighting them every way we can. And soon you may see the equivalent of a Prop M for highrise condos. Can we count on you to come back and join the battle?

Postscript: “The Devil’s Bargain at the Transbay Terminal,” a blog by Guardian Executive Editor Tim Redmond, eloquently summarizes the key political point behind the new highrise boom. “Nobody in California wants to pay higher taxes for anything. So the folks at City Hall have decided that the only way we can have a new transit terminal is if we hock a piece of our city and our skyline to fund it. So we take some of the land on the terminal site and let a developer build monstrosity of a highrise on it–and that will bring in the money that we can’t get any other way.”

The devil’s bargain at the Transbay Terminal

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ba_transbay0701.jpg

By Tim Redmond

If you don’t like the notion of a 1,200-foot tower scarring San Francisco’s skyline — and I don’t — then maybe you ought to read this fascinating piece on Calitics, and stop for a minute to think about what this city, and this state, is doing.

Why do we have to live with a giant highrise office tower near the Transbay Terminal? Because if we don’t, there won’t be any money to build what should be the central transit link for the Bay Area, a landmark bus and train station on the scale (we’re told) of Grand Central in New York. It’s an essential part of the city’s future.

But the project costs a lot of money, almost a billion dollars — and nobody wants to pay higher taxes to fund this sort of thing. In fact, nobody in California wants to pay higher taxes for anything. So the folks at City Hall have decided that the only way we can have a new transit terminal is if we hock a piece of our city and our skyline to fund it. So we take some of the land on the terminal site and let a developer build a monstrosity of a highrise on it — and that will bring in the money that we can’t get any other way.

It ‘s the same reason we have that god-awful RIncon Tower sticking its ugly head into the sky: The developer offered to pay for a fair amount of affordable housing and other community amenities that the taxayers won’t fund because local government can’t raise taxes in California without reaching extraordinary lengths that are almost politically impossible. So here’s the deal: You want affordable housing? Give a big developer the rights to do something awful, and in exchange, we’ll get a few dollops of cash for civic needs.

Imagine, for a moment, what the state might look like if we’d had to cut this kind of deal to build the University of California system. You want nice colleges? Okay — sell off the coast and let it become a giant Miami Beach. You don’t want to do that? Too bad — no world-class university system for your kids.

This is the devil’s bargain we have agreed to settle for in 2007, and it sucks.

The Chris Daly show

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By Tim Redmond

Oh, it’s so easy to make fun of Chris Daly. You can even make fun of his beard.

Or you can watch his much-derided speech at the Board of Supervisors, and recognize that: 1. He’s not a crazed nut; his points are cogent, well argued and entirely credible, and; 2. He’s right.

Daly is right: We should spend more money on affordable housing than on new roads. We should delay hiring more cops so we can save public health nurses. (Actually, we should raise taxes hire both cops and nurses, but that’s not in the cards right now.) The fact it, the mayor’s budget priorities are all screwed up.

Yes, budgets are always a compromise, and this district-elected board has done better, consistently, than any at-large board at keeping the mayor’s budgets relatively humane. I agree that Daly does himself no favors — and more than that, I fear that he does some harm to the cause of district elections. He says he cares nothing about his own political career, that he’s not a politician (which is one of the most charming and wonderful things about him), but he’s also part of a movement, and district elections is absolutely, utterly critical to the future of progressive politics in this city, and his fits of temper make the whole board look bad, and that helps the mayor’s candidates for supervisor and the people who would like to get rid of district elections altogether.

I think Daly needs to stop giving his enemies so much ammunition. There’s a lot more at stake here than one budget or one person’s future.

Still, I keep watching that speech, and I keep saying:

Shit, on the issues, the guy is right.

Importing injustice

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› news@sfbg.com

More than 100 tractor trailers were lined up at 6:30 a.m., inching toward the Port of Oakland’s Terminal 7, waiting for their next load. Against the backdrop of the San Francisco skyline, a mammoth freight ship emblazoned with the name Hyundai glided toward the port, pregnant with multicolor shipping containers.

A driver told the Guardian that he expected to be in line for at least two hours waiting to drop off the empty container attached to his big rig. His 1989 truck lacks air-conditioning, so the windows were rolled down, allowing diesel exhaust to pollute the air he was breathing.

It’s the same scene at many of the port’s other terminals: long lines of ancient trucks slowly snaking toward their destinations, their primarily immigrant drivers performing the essential and thankless task of transporting cheap clothes from Asia to the nation’s big-box retailers or helping to export California’s agricultural goods to Hawaii.

The fourth-busiest container port in the nation, the Port of Oakland is the economic engine of the region, providing thousands of jobs and more than $1 billion in revenue. But activists say that the port system has also led to sweatshoplike conditions for truckers and created a health crisis for the surrounding community.

On their poverty-level wages, truckers are usually able to buy only the oldest, most polluting trucks. Their diesel pollution is a major factor driving asthma rates through the roof in the neighboring, primarily African American neighborhood of West Oakland, where, the American Lung Association says, one in every five kids has asthma.

A new national coalition of labor, environmental, and community activists has advanced a proposal that would make all drivers employees with benefits, radically changing the way work is done on the waterfront and possibly heralding the return of the Teamsters to the ports for the first time in more than 20 years. In the process, the proposal would make the port’s biggest customers responsible for its environmental problems.

The coalition places the blame for the current situation squarely on giant retail shippers such as Wal-Mart and Target and is calling for them to be held accountable for the full environmental and labor costs of the cheap goods they sell — a call the corporations are strenuously resisting. The American Trucking Association, whose members contract directly with the corporation, has threatened a lawsuit if the change is adopted. But port officials have voiced a willingness to seriously consider implementing the proposal.

Having long claimed that the trucking industry is outside its control, the Port of Oakland could embrace the proposal as a means of satisfying community, environmental, political, and business concerns. With impending directives to clean the air coming from Sacramento, trade planned to almost double by 2020, two new Port Commission appointees representing labor and environmental concerns, and a federal antiterrorism tracking plan slated for this fall, the port is poised to play a leadership role that could reverberate up and down the West Coast and across the country.

THE TRUCKER’S LIFE


The Port of Oakland’s estimated 1,500 to 2,500 drivers are a far cry from the middle-class, long-haul Teamsters and the Smokey and the Bandit–<\d>style freewheeling rebels who have long been engrained in the American imagination. Instead, they are at the bottom of the port’s food chain and are the most exploited trucking sector in the country, consisting primarily of recent immigrants struggling to make ends meet.

Dawit Fre, 39, immigrated to Oakland from the small nation of Eritrea two years ago. "I wanted to see a better life," he told us. Fre was a driver in Africa and went to work for the Port of Oakland after his cousin told him people start their trucking careers there. He said he works up to 60 hours a week for one company, making the equivalent of about $8 an hour after expenses.

Fre arrives at work every day no later than 6:30 a.m., waits for dispatches from his company, and spends a minimum of two hours in line for each container he picks up or drops off. He is paid $42 for each load by the company. He doesn’t know how much the trucking companies make but has heard that some get $200 per load. He returns home around 6:30 at night.

"The whole time I’m at the port, I’m thinking about my family," he said. "I got children. The only thing I’m thinking inside the terminal is, how many moves am I going to do? Am I going to do four or five or three or two?"

On a good day he can get four, on a bad day as few as one, depending on the length of the lines and the generosity of the dispatcher. Then there are his expenses. As an independent operator, Fre is solely responsible for a tankful of diesel that costs him up to $250 a pop. DMV registration is $178 a month, and 12 percent of his weekly earnings goes to his boss for insurance on his truck, not to mention annual federal income tax.

He receives no benefits, no overtime pay, and no health care coverage at a time when his wife, a diabetic, is suffering from severe stomach complications. "I’m taking her to Highland Hospital," he told us. "If it’s easy for them to fix, they can do it. But if she has a big problem, they can’t do it."

Fre has his own health problems. "Most of the drivers, we have old trucks," he said. "You don’t have AC, your windows are down, and you get sick in the truck" from the diesel. Fre’s remedy for his persistent coughing and the burning in his throat is several glasses of milk after each day of work.

A 1998 study published in the Journal of Independent Medicine found that truck drivers face a risk of cancer 10 times greater than Occupational Safety and Health Administration–acceptable levels, and a 1990 study published in the American Journal of Public Health showed that truckers face nearly double the average lifetime lung cancer risk.

Fre has little money to invest in his truck, a ragged 1987 model that he said needs $5,000 in repairs. He doesn’t trust it on the freeway, so he’s asked his dispatcher to send him only from pier to pier, not outside the port, further dipping into his earnings. "I came here to see a better life," he said. "When I got here, I found it is different. Here we don’t get paid for the overtime. We don’t get benefits. When I get into the terminal, there is no respect."

His experience is typical of those of port truckers across the country. A study by the East Bay Alliance for a Sustainable Economy, a labor-affiliated think tank, found that the average Port of Oakland trucker makes as little as $8 an hour after expenses, works 11 hours a day, and spends two and a half hours in line per load. Almost none of the truckers reported receiving benefits on the job, and 66 percent don’t have health insurance.

This is consistent with data from a 2004 survey of port truckers in Los Angeles and Long Beach, conducted by a professor of economics at California State University Long Beach. That report found they had a median income of $25,000 a year after expenses and an average workday of 11.2 hours, with up to 33 percent of their time spent waiting in line.

Port truckers generally drive only the oldest, most polluting trucks because that’s all they can afford. An industry adage is that ports are "the place trucks go to die," a reality that has dire impacts on the surrounding communities.

POLLUTING THE COMMUNITY


West Oakland has long been a dumping ground for the Bay Area’s toxic waste. The community has one of the five highest asthma hospitalization rates in California, with an estimated 20 percent of its K–<\d>12 students suffering from the disorder, according to the ALA. Researchers at the University of Southern California have found that children living within a few hundred meters of freeways leading out of ports not only are more likely to suffer from asthma but also actually develop smaller lungs.

Margaret Gordon, a 60-year-old community health activist who has lived just blocks from the Port of Oakland for 15 years, told us that she and four of her grandchildren living with her all suffer from asthma. When one grandchild was born with severe asthma and her own asthma worsened after she moved to West Oakland, Gordon, then a housekeeper, started reading about the causes of asthma and made the connection to the port. Like many in the low-income neighborhood, she cannot afford to move elsewhere in the Bay Area.

Gordon has been fighting for clean air for more than a decade, and in April she was inducted into the Alameda County Women’s Hall of Fame for her work. In 2001, Gordon formed the West Oakland Environmental Indicators Project, which she now cochairs. The project has released more than half a dozen studies related to air quality. A 2003 report showed that trucks traveling through West Oakland in one day produce the same amount of toxic soot as 127,677 cars, leading to indoor air in some neighborhood homes that is five times more toxic than that in other parts of the city.

Still, Gordon told us that port officials are "only starting paying attention." Last year the California Air Resources Board passed a resolution related to air quality at ports and announced that it was developing a regulatory mechanism. A 2006 CARB report found that truck diesel exhaust accounts for the majority of the estimated 2,400 deaths related to freight transport each year and 70 percent of the state’s air pollution–<\d>related cancer risk. Freight transport will cost California residents $200 billion in health costs over the next 15 years. Most of this is borne by low-income communities of color near freight transport hubs.

The combination of state mandates and local community concerns is starting to spark a change. "They would sit down and talk with us before that, but there was not anything concrete done," Gordon told us. The port is now in the early planning stages of an air-quality-improvement program, working with Gordon and other activists.

That movement is getting vigorous new support from the Coalition for Clean and Safe Ports, a national partnership of labor, environmental, and community activists organizing at the country’s major container ports: Los Angeles, Long Beach, Miami, Oakland, New York–New Jersey, and Seattle.

"Every one of those ports has the same environmental and labor problems we have in Oakland," Doug Bloch, the coordinator for the coalition in Oakland, told us during a tour of the port’s heavy industrial landscape. Virtually all of its 900 maritime acres are covered by concrete and asphalt, monster cranes that inspired Star Wars‘ Imperial Walkers, and 20-foot steel containers stacked up like Legos behind chain-link fences.

The Port of Oakland has no direct relationship with its truckers at the present. Shippers take price bids from among roughly 100 trucking companies at the port, then contract the work to the independent-contractor truckers. The CCSP says bidding wars lead to poverty wages for truckers, older trucks and more pollution, and a chaotic port full of inefficiencies like long pickup waits.

Under the proposed system, ports would call on their ability as landlords to set standards for the trucking and shipping companies. They would require trucking companies to hire drivers as employees, shifting maintenance costs from the drivers to the companies, which would retrofit or replace all port trucks with more environmentally friendly rigs. The ports would allow only new, cleaner trucks to enter. The companies could then, in theory, pass the costs on to shippers and end users.

If drivers were paid as employees by the hour instead of by the trip, the coalition expects the market would reduce inefficient truck wait times and air pollution.

"When you rent an apartment you sign a lease," Bloch told us. "If you trash the place, you get evicted. Corporations are trashing this community, but they’re not being evicted."

A test case could soon be under way at the ports of Los Angeles and Long Beach, the two largest in the United States, and the situation is being closely watched by ports and industries across the country. Port commissioners there had hoped by the end of this month to approve the coalition’s program, which they expect to reduce diesel truck emissions by as much as 80 percent over the next five years. But growing opposition and the threat of lawsuits by groups like the California Trucking Association, which represents the owners of truck companies, and the Waterfront Coalition, a consortium of major retailers, led the ports to delay their decision. The commissioners now expect to vote in September after completing an economic impact survey.

At the center of the storm is the fact that as employees, truckers would be able to organize and form a union. As independent contractors, they are barred from doing so because of antitrust laws originally created to oppose vast enterprises that dominated industries. (A further irony is that giant retail steamship companies have experienced incredible consolidation and enjoy a limited antitrust immunity.)

If passed by LA port officials, the plan would be implemented there starting Jan. 1, 2008, and could result in a domino effect at the other, smaller ports across the country. "The industry is fighting like hell in LA," Bloch told us. "They know that if they’re going to have to pay, the party’s over."

Meanwhile, Bloch told us that more than 1,000 truckers have signed a petition asking the Port of Oakland to pass a version of the coalition’s proposal, and it will be presented to the Port Commission, the seven-member body that would eventually vote on the proposal. Spokesperson Libby Schaff told us that the port "agrees with the coalition that the port can and should have a more direct relationship with its truckers" and is "very seriously considering the coalition’s proposal."

Because the proposal "constitutes a major overhaul of the way trucking is done today," Schaff said the port is currently holding stakeholder meetings with residents, truckers, terminal operators, elected officials, the business community, and labor to consider it in the context of a more comprehensive port plan. Schaff said a comprehensive plan could be crafted in less than a year.

The port has not taken a position on granting truckers employee status. It is also looking into other funding mechanisms for a clean-truck program, including money from a pending state bill that would impose a $30 fee on every 20-foot-equivalent unit passing through the Los Angeles, Long Beach, and Oakland port complexes, to be used for improvements in road and rail infrastructure and for clean-air programs.

The legislation, Senate Bill 974, by Alan Lowenthal (D–Long Beach), would generate more than $525 million annually. But it faces tough opposition from some very powerful interests.

RESISTING CHANGE


Bill Aboudi, president of Oakland’s AB Trucking and a member of the CTA, told us truckers are "treated like second-class citizens," and he believes long lines and trucker asthma are serious problems. But he strongly opposes the coalition’s proposal. Instead, he told us, state regulations like those forthcoming from CARB and other piecemeal reforms are the answer.

"The coalition’s main goal is to unionize the drivers," Aboudi said. He was wearing a baseball cap emblazoned with two American flags and the words "Oakland Trucker." An immigrant from Israel, he has been at the Port of Oakland since 1992. "If these guys choose to be owner-operators, why are you rocking the boat? You can’t be playing with my livelihood just because you want to get union dues," Aboudi said. "Truckers want to own a piece of the American dream. They want to own their own truck."

It’s an appealing image to many. Kevin Leonard, an owner-operator trucker who contracts with Aboudi and others, told us he doesn’t want to give up his independent status. "I have the freedom to work when I want," he said. "I don’t see how the Teamsters can represent me better than I can."

The trucking industry as a whole says the coalition plan will force away trade and drive out small trucking companies, which will have to maintain the trucks and start paying benefits such as health insurance and workers’ compensation.

Yet Assemblymember Sandré Swanson (D–Oakland) brushed aside those arguments. "I’ve been involved in Bay Area politics for more than 30 years," he told us. "I’ve seen these same claims made against farmworkers as they were organizing for better conditions. I’ve seen these arguments made when we were raising the minimum wage. I think the opposite is true. If you have a workforce with a livable wage, it’s a more productive workforce, and I think everyone benefits. Truckers deserve more, and we’re going to do what we can to help them."

Oakland City Council president Ignacio de la Fuente, who drafted and helped pass a minimum-wage law for port employees, told us he supports the right of truckers to unionize but labor and environmental concerns must be balanced with economic growth. "You can’t ignore the fact that you have the port of Oakland competing with other ports," he said. "I support the fact that the Teamsters are going to bargain collectively on a national level. This port competes with other ports, and you cannot be put at a disadvantage."

Bloch says the coalition’s target is the shipping companies, not the trucking companies. "The shippers are hiding behind the trucking companies," he told us. "On the one side there are the giant shipping companies, like Wal-Mart and Target, huge global companies that demand low prices from trucking companies. On the other side are tiny trucking companies, immigrant truckers, and communities of color. Wal-Mart’s slogan is ‘always low prices,’ but ‘always low prices’ means one out of five children in West Oakland with asthma and drivers making $8 an hour who can’t support their families."

Oakland mayor Ron Dellums may be signaling his support for reform with two new appointees to the Port Commission. Even before he took office, Dellums was working to influence the Port Commission; as mayor-elect, he requested that outgoing mayor Jerry Brown hold off on appointing a new nominee so Dellums could appoint someone working on environmental and community impacts. He lost this battle when a majority of the city council voted to appoint Mark McClure, the director of marketing at a business technology company focused on security.

Dellums’s latest appointees, announced earlier this month, are a marked contrast to the business-oriented appointees of the Brown era: Victor Uno, a financial secretary with the International Brotherhood of Electrical Workers, and Gordon, the longtime resident and environmental activist in West Oakland.

"The port’s policy has been all about business and not about the people," Gordon told us. "The mayor really wants someone there to talk about health issues. I have never known a mayor to put someone on the commission and one of their engagements is to talk about health." She would also like to see a public participatory-process policy built into the port. "This is about sharing the power," Gordon said. "I don’t think West Oakland residents know they have power." She has "no problem" with truckers unionizing but also wants to find a way for drivers to remain independent contractors if they prefer.

Uno told the Guardian that he is highly supportive of the proposal. "I think that if the whole commission takes the lead of Mayor Dellums that this proposal will be very seriously considered," he said. "I’m very optimistic." Asked if he thought a proposal could succeed without requiring trucking companies to hire truckers as employees, he said, "I do not see how that is possible, given the lack of regulations in the trucking industry. It’s a dog-eat-dog world among independent truckers."

DEREGULATION HISTORY


The ports were not always structured as they are now. Before the 1980s the Interstate Commerce Commission regulated trucking, and most truckers at California ports were members of the Teamsters. They had health care, pensions, and workers’ compensation insurance and were paid a middle-class wage.

As part of a national push toward deregulation in the late 1970s, Congress, spurred by President Jimmy Carter, deregulated the trucking industry in 1980. In the following few years, a flood of new trucking companies entered the ports, with shippers choosing between a growing number of companies for each job. As small trucking companies undercut one another in bidding wars, the falling rates translated into declining driver pay, the bankruptcy of Teamster-organized companies, and increasing reliance on independent contractors whom companies could hire without spending money on payroll taxes, health care costs, or other benefits that unions might try to extract.

Trucking expert Michael Belzer, an economics professor at Wayne State University, has shown that long-haul truckers now earn less than half of prederegulation wages and work an average of more than 60 hours a week, while retailers like Wal-Mart have thrived. "The low rates paid to truckers in this global-trade game acts as a subsidy for increasing the amount of trade," Belzer told us. "Pollution and safety hazards are the negative externalities." If all ports on the West Coast required employee drivers, he said, "the market result would be that cost and safety would go up, and pollution would go down."

There have been a handful of Teamsters-related or trucker-led rallies and work stoppages at the Port of Oakland since deregulation, including a technically illegal strike in 2004 protesting the soaring price of diesel fuel, which virtually shut down the port for eight days. Many of the same complaints of today’s port truckers were aired at that time — long waits in lines, poor pay, long hours, and no benefits.

"This business is like the Mafia," Lorenzo Fernandez, 36, said, standing in front of two metal taco trucks glinting in the noon sun, along with about a half dozen other truckers on their lunch break. "They’re doing whatever they want with us, between the [truck companies] and the shippers. There is so much competition between the companies, and they know that we need the job. They know that our kids will go hungry."

Muhammad Khan, 33, said he’s sometimes forced to make up for long wait times by driving dangerously fast on the freeways. "We have our families. We have to take care of them. We all risk our lives because we have to. We don’t make enough money if we don’t make a load," Khan told us.

"We’re all immigrants here," Fernandez said. "We make it possible for the economy to grow up, but they’re stepping on our faces…. We have to work together. Otherwise we are going to be slaves for life."

A sign on a chain-link fence near the taco trucks reads, "Got an old truck? The Port of Oakland can help! Replace your old truck today!" Call the number at the bottom of the sign, and a recorded message issues an invitation to an informational barbecue that took place four months ago. The message explains that the port will provide qualifying owners with up to $40,000 to replace trucks dating from 1993 or before with a 1999-model truck. But Schaff told us, "Due to overwhelming demand, new applicants are currently not being accepted."

Money for the program came from a $9 million settlement of a lawsuit West Oakland residents filed against the Port of Oakland in 1998, alleging that their health was being harmed by port operations. The port says it will replace a total of 80 of the estimated 2,500 port trucks with those funds. When asked if the port had a responsibility to truckers, Schaff said it was "consistent with the port’s commitment to social responsibility…. We’ve done a lot, and we’re going to do more."

But the only specific programs the port could point to were the truck replacement program, a trucker access committee and working group started after the 2004 strike, and new GPS cell phone technology that is being touted as a solution for bottlenecks. Chuck Mack, the Teamsters’ Western Region vice president, isn’t impressed. "They’re a joke," he said of the programs. "Very few independent contractors have utilized them."

The recent purchase of the GPS system particularly irritates Mack. "Here is a quasi-governmental agency supplying services to the trucking companies," he told us. "It’s bizarre that we’re using taxpayer money for this. Any other industry would buy the devices themselves."

"We don’t disagree with using this money" for truck replacement, Mack said, "but what you’re doing is blowing $2 million in taxpayer money. Years down the road they’re going to need a new truck and another million in taxpayer money. For Wal-Mart and Target it’s great because they can have the taxpayer pick up the bill. Without changing the model, it’s just a short-term fix at the expense of the taxpayer."

EMPLOYEE BENEFITS


Beyond the environmental and economic benefits of making truckers employees of the companies, the change also might improve port security. The federal Transportation Worker Identification Credential program, expected to be implemented in the fall, will check the identities of the nation’s 750,000 port employees, 110,000 of whom work as truckers. Under the present system, there is no way to track the independent port truckers.

Employees are easier to track, and they are also better for port security in other ways. Among low-paid port truckers, turnover rate is extremely high, according to the ATA. "We all know that having a stable, well-trained, reliable workforce only leads to more security," Bloch said. "If they’re trained, they can be the eyes and ears of the port."

Well-paid truckers also would lead to safer ports. In a 2005 report, Belzer showed that "a substantial fraction" of independent operators actually loses money each year, resulting in "a high risk of unsafe operations among those earning the least money." The low compensation also "presents a national security risk," his report read, "since those who desperately work to break even might be at risk to engage in activities that put the nation at risk, whether intentionally or unintentionally, just trying to find a way from not going under."

Driving past another long line of trucks idling outside a gate after lunch break, Bloch pointed out one truck. A placard on the back of the rig read, "End sweatshops on wheels."

The current port system "just heaps abuse and abuse on these truck drivers and this community," Bloch told us. "The big businesses like Wal-Mart don’t pay the cost of polluting Oakland. It’s the truck drivers and the community that pay the cost. People pay with their lives."

"You can’t fix the environmental problems without fixing the problems of the driver," he said. "And now you have labor and the community coming together, and that’s powerful."*

Needed: a campaign against privatization

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EDITORIAL Of all the cities in the United States, San Francisco ought to be most aware of the perils of privatization. Much of the city burned down in 1906 in part because the private Spring Valley Water Co. hadn’t kept up its lines and thus was unable to provide enough water for firefighting. A few years later, in one of the greatest privatization scandals in American history, Pacific Gas and Electric Co. stole what was supposed to be the city’s publicly owned electricity, costing the local coffers untold hundreds of millions over the past 80 years.

This is a city that votes 80 percent Democratic and has always opposed the Ronald Reagan–George H.W. Bush–George W. Bush agenda. A large part of the local economy depends on public employment (the city, the state, the federal government, and the University of California are by far the largest employers in town, dwarfing any of the biggest private-sector companies).

And yet Mayor Gavin Newsom, who likes to say he’s a progressive, is pushing an astonishing package of privatization measures that would shift public property, resources, and infrastructure into the hands of for-profit businesses. He’s talking about privatizing the golf courses, some city parks, and even Camp Mather. He’s promoting a tidal-energy deal that would give PG&E control of the power generated in a public waterway. He hasn’t lifted a finger to stop the ongoing PG&E–Raker Act scandal. And he’s determined to hand over a key part of the city’s future infrastructure to Google and EarthLink (see Editor’s Notes, p. 1).

This nonsense has to stop.

It’s hard to fight privatization battle by battle. Every single effort is a tough campaign in itself; the companies that want to make money off San Francisco’s public assets typically have plenty of cash to throw around. They’re slick and sophisticated, hire good lobbyists, and generally get excellent press from the local dailies. And it works: even board president Aaron Peskin, who generally knows better, is now talking about accepting the private wi-fi deal.

So what this city needs is a unified, organized campaign against privatization.

When Reagan arrived in the White House in 1981, the single biggest item on the agenda of his political backers was an attack on the public sector. The way the right-wingers saw it, government took money from the rich and gave it to the less well-off. Government regulated business activity, costing major corporations a lot of money. Government — "the beast," they called it — had to be beaten back, demonized, and starved.

So the Reaganites used their top-rate public relations machine to make the public sector appear riddled with waste and fraud. They cut taxes, ran up record (for the time) deficits, and forced Congress to eliminate a lot of social programs. More and more of what the government once did was turned over to the private sector — the way the radical right liked it.

That political agenda still rules Washington, D.C., where even a fair amount of the war in Iraq has been privatized, turned over to contractors who are making huge profits while Iraqi and American kids die.

The attack on government has worked so well that even a very modest plan by Bill Clinton to create a national health care system was killed by the insurance industry.

But privatization doesn’t work. Private-sector companies and even nonprofits don’t have to comply with open-records laws and can spend money (including taxpayers’) with only limited accountability. Most private companies are about making money first and serving the public second; that means when private operators take over public services, the prices go up, worker pay goes down (and unions are often booted out), and the quality of the delivery tanks. Look at the real estate development nightmare that has become the privatized Presidio. Look at the disgrace and disaster that the privatized Edison School brought to the San Francisco Unified School District. Look at the glitzy café and the pricey parking lot that have replaced good animal care at the privatized San Francisco Zoo. Look at what has happened around the world when Bechtel Corp. has taken over public water systems — rates have gone up so high that some people can’t afford this basic life necessity.

Look what’s happened to the American health system. Look what’s happened in Iraq.

Government isn’t perfect, and the public sector has lot of management, efficiency, and accountability issues. But at least the public has some hope of correcting those problems. San Francisco ought to be a place where a major movement to take back the public sector is born and thrives.

Almost everyone in town ought to have an interest. Labor, obviously, opposes privatization. So should neighborhood advocates (who care about public parks and open space), environmentalists (because the entire notion of environmentalism depends on a healthy public sector), progressive community groups, and politicians. Even more conservative groups like the cops and firefighters ought to see the need to prevent their jobs from being outsourced to a private vendor.

A campaign against privatization could link wi-fi, PG&E, tidal power, and the golf courses. The campaign could force anyone running for office to address a no-privatization pledge. It could appear any time one of these rotten schemes pops up in town — and send a message that San Francisco doesn’t accept the economic agenda of the radical right.

Who’s going to call the first meeting? 2

Editor’s Notes

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› tredmond@sfbg.com

I don’t think anyone except Gavin Newsom’s inner circle and the folks who run Google and EarthLink really likes the mayor’s wi-fi contract, but it now appears at least possible that the Board of Supervisors will approve some version of it.

Board president Aaron Peskin wants the service improved a bit and is demanding some written guarantees that it will actually work the way it’s supposed to. Some opponents of the deal are arguing that it ought to be treated as a franchise, not a simple contract, and they want more legal hurdles. The serious techies say it’s the wrong technology anyway and will be outmoded and worthless in just a few years.

But there’s something bigger going on here.

A high-speed broadband system for San Francisco isn’t a hot dog stand and boat-rental shop in Golden Gate Park. It isn’t a restaurant lease on port property. It isn’t the naming rights for Candlestick Park or a permit to operate a taxicab or deliver cable TV.

Those are contracts and franchises. This is a piece of municipal infrastructure; it’s more like the roads that cars and Muni buses use to carry people around town or the pipes that bring water to our houses or the public schools that educate our kids or the emergency communications system that takes the call when we dial 911.

This is part of the city’s future, part of its economic development, part of how its citizens will participate in the political debate, part of how we will all learn and think and talk to each other. This is the new public square, the new commons.

Why in the world would we want to give it to a private company?

I don’t care if EarthLink and Google are offering 300 kilobauds per second of download time or 500 or 1,000. I don’t care if they promise to give free laptops to anyone who can stand on their head and shout "search engine." I don’t care if they promise to paint every light pole in the city green. They are private outfits set up to make a profit for investors. They have no business owning what will soon be the city’s primary communication system.

San Francisco has kept private operators from controlling its drinking water. This water is considered a basic part of life, and it’s available at low cost: San Franciscans pay less than one one-thousandth the price of bottled water for the stuff that comes out of the tap, and it’s almost certainly better. Same with roads and bridges, police and fire protection, and basic education (although that’s still a struggle).

I don’t get why broadband is any different.

I don’t think this would ever have been an issue 50 years ago. The generation that survived the Depression (with massive public-sector investment and ownership) and World War II (with huge excess-profits taxes on big corporations) and built things like the interstate highway system and the University of California didn’t see government as evil and inherently dysfunctional. The public paid to invest in public services.

It was Ronald Reagan and his ilk who took a generation disillusioned by Vietnam and Watergate and turned it against the public sector (see "Needed: A Campaign Against Privatization," page 5). Now we’ve even got a privatized war (and look how well that’s going).

The supervisors should get beyond the wi-fi deal’s little details and think about what it really means. This is San Francisco. We know better.<\!s>*

Ed Jew: “I don’t spend my money this way and I’ll bet you don’t either.”

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By Sarah Phelan

Cannot get enough of the Sunset Beacon!
In a recent “Update on District Affairs” column for the neighborhood paper, Jew writes about why he and Sups. Michela Alioto Pier, Sean Elsbernd and Geraldo Sandoval, opposed Sup. Chris Daly’s $28 million supplemental appropriation for a variety of affordable housing programs.
Since we were kinda wondering about that vote (unlike Jew we don’t own 13 properties in and around San Francisco and therefore we could seriously use some more affordable housing), we read on.
“Some supervisors [that would be seven out of eleven supervisors, Ed] believe this money needs to go to affordable housing because the taxpayers have twice, in recent years, turned down the opportunity to pay more property taxes intended for housing.”
“Of course we need affordable housing, but a last-minute budget raid is not the way to get it, “continues Jew, who claims he was “particularly puzzled” that the $28 million request contained $5 million for the Housing Authority, “an agency,” writes Jew that spends money so badly that former Mayor Art Agnos has just been named it court-appointed receiver for the purpose of forcing the agency to pay its bills. There are no strings attached to the $5 million–it is basically a blank check. I don’t spend my money this way and I’ll bet you don’t either.”
Actually, Ed, now that you’ve mentioned it, we’ve been wanting to ask you about the $40,000 cash in your office safe, and how you were planning to spend it. See you at the Board meeting, tomorrow.

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