Wednesday, November 6, 2019

Democracy Held Hostage: The Case of a Street Name

Claims of systemic racism can also be attacks on democracy itself. In fact, if overdone, such claims may themselves be racist. The situation would then be that of racists holding democracy ransom in the mistaken belief that the whole must be consistent with the interests of one of its parts to be legitimate; otherwise, the democratic principle of majority rule is itself presumed to be invalid. The case of the change of a street's name in Kansas City, Missouri, can serve as a case study.

On November 5, 2019, voters in Kansas City voted overwhelmingly (nearly 70%) in favor of restoring the name of a street to The Paseo (inspired in 1899 by Mexico City’s mayor, Paseo de la Reforma). A mere two months before the vote, the City Council had changed the street name to honor Martin Luther King, Jr, an American civil-rights leader in the turbulent 1960s. Members of the Save the Paseo movement said that their motive was historical preservation rather than racism. According to one member, the Paseo was “historical I people’s memory” rather than just on paper.[1] The members “were upset that the council [had] made the change without input from those who [lived] along the street.”[2] A city statute required such input, according to the members. The mayor admitted that the city had not engaged with “enough different community members.”[3] The key word here is different, for the campaign to change the street’s name to that of the civil-rights leader had been led by black pastors. So the city council made the change based on the advocacy of a segment of the population with a vested interest in the change, rather than reaching out to first ascertain whether the sort of unity that Martin King had preached could be achieved on the measure. In short, the council had put a part ahead of the whole.

For its part, the part, represented by Rev. Vernon Howard, president of the Southern Christian Leadership Conference of Greater Kansas City, claimed that racism was the main motive of the opposition to retaining the King name. “This is a white-led movement that is trying to dictate to black people in the black community who our heroes should be; who we honor; where we honor them and how we honor them,” Howard said. “This is the pathology of white privilege and that is the epitome of systemic structural racism,” he added.[4] In other words, the pathology of white privilege is the epitome of systemic structural racism. Had the reverend sought to provide a religious rather than a psychological account, he might have claimed that certain social structures are evil whereas others are sacred. A Unitarian minister in my hometown had once insisted to me that certain social structures (i.e., egalitarian systems) are sacred. I countered that a human claiming that a human artifact is divine constitutes self-idolatry.[5] He dismissed my counter-claim instantly, as if he presumed that he could not be wrong whereas I must be so. Had he also insisted that societal structures that contain inequality are pathological, I would have pointed to the over-reach of his religious basis onto psychology.

I submit that in dismissing the meaningfulness of The Paseo to people generally in Kansas City, Howard’s reductionism to racism is erroneous. Essentially, he was claiming that cases in which majority rule does not dovetail with his interpretation of black interests, the democratic principle itself is culpable as part of systemic structural racism and thus is pathological in nature. In other words, the particular interests of one segment of the whole must be consistent with the majority for the democratic principle of majority rule to be devoid of the stain of racism and thus valid.

Furthermore, in so closely relating “white privilege” to systemic racism, the reverend overlooked or dismissed outright the racism in the black community. On the morning following the vote, for example, I endured fifteen minutes of racist insults from a black woman on a local bus in Phoenix, Arizona. Her voice could be heard throughout the bus as she claimed that “whites are ugly when they age, whereas black people age good.” Furthermore, whites are red-necks whose “dominance will end someday.” As she declared herself to be a racist, I noticed that the driver, also a black women, was refusing to stop the woman. Such passive aggression can be considered tacit racism. That was not the only instance in which I had observed black racism on a Phoenix bus. Once a driver had decided not to intervene as a black woman shouted insults at a Caucasian man until the woman called the driver a racist for not having kicked the man off the bus! The reputation of the local bus drivers in the phoenix metro, including Tempe, was sordid in terms of their attitudes and bad in terms of their driving, and accountability at least regarding the latter was deliberately obstructed by First Trans, a sub-contractor of Valley Metro. The subcontractor was in denial concerning the role of its pathetic hiring of people with bad attitudes to drive the buses. Such a flawed system enabled black racism (as well as reckless driving, such as in going from 40 or 50 mph to zero in a turn lane). Put another way, systemic structural racism can be due to black privilege (and facilitated or enabled by a corrupt, incompetent organization).

The reverend’s partial account can be taken as confirmation of being a part within a whole not reflecting the whole or its interests. Holding majority rule subject to such a partial perspective is not in itself in the interests of a whole. In Kansas City, the municipal government followed a flawed process (of input) in changing the street to Martin Luther King Jr Blvd. Such a flaw is not racist even if the segment that benefitted from the flaw no longer benefits once the flaw has been corrected by the voters. In fact, for an electorate to correct its delegated government is laudable from a democratic standpoint, as the People, as the popular sovereign, is the basis of a republic. For that basis to somehow be held ransom by a part thereof undermines the foundation of democracy, whether direct or representative.


[2] Ibid.
[3] Ibid.
[4] Ibid.
[5] See the last chapter of my book, God’s Gold, for an elaboration on self-idolatry.

Monday, November 4, 2019

Goldman Sachs' Revolving Door: Regulatory Capture

In July 2012, Andrew Williams, a former spokesman for U.S. Treasury Secretary Timothy Geithner, announced plans to head over to Goldman Sachs at the end of that month.[1] Williams was the second of the Secretary’s spokesmen to head to theWall Street bank. Such moves may reflect a standing policy at the bank to have a revolving door. The previous U.S. Treasury Secretary, Henry Paulson, had been the CEO at Goldman. This suggests that the revolving door was to include populating high offices in government, presumably not out of a sense of civic duty, but, rather, to see that Goldman's interests would be protected and even promoted through public policy. Hence President Obama was said to have had a Wall Street government with respect to positions bearing on Wall Street. I submit that deconstructing such a revolving door would be very difficult. 

From the standpoint of a government official being hired by Goldman, the prospect of becoming wealthy is a large incentive to make the jump. Such an official would typically have scruples about using his contacts in government to pull strings for the bank. Mired in scandal following the financial crisis of 2008, Goldman’s leadership no doubt understood the value in hiring good PR men. Such hires could even put a good face on the cozy relationship between the bank and people still in government.

The “revolving door” dynamic is also difficult to break up because it contributes toward the capture of regulators by the regulated. This is known as regulatory capture. The regulated companies supply information that regulators need in order to devise regulations; the companies can use this reliance to their advantage even just in providing tainted, self-serving data. Moreover, the revolving door can make it easier for the managements of the regulated companies to get even high government officials to put political pressure on the regulatory agencies to go soft on regulating. In the case of Goldman Sachs, it is reasonable to expect that Henry Paulson would have bent to the bank's request for lax regulatory oversight from the SEC, which of course had no idea how many subprime-mortgage-derivative bonds Wall Street had been producing and selling up to the financial crisis of 2008. 
 
The SEC can be soft on Wall Street and point to insufficient staffing as the reason, while the reality is far more sordid in terms of the relationship between the regulators and the powerful regulated. 

Legislated restrictions on former government financial officials going to Wall Street banks could of course be circumvented, given the incentives described above, though prohibiting employment (or financial enrichment, such as by consulting) in the industries related to an official's area for many years seems possible. Even if Goldman Sachs could not hire away Treasury or SEC offiicals, the bank could still count on ex-Goldman folks who occupy key offices in the U.S. Government. 

Generally speaking, the financial and related political power of such huge aggregations of wealth such as a Wall Street bank has (and is) naturally overpower weak governments, by which I mean governments that depend on or do not have the will to resist the allure of money (or threats) from entities subject to the government. A government whose elected officials must rely on large sums of donated money just to get reelected is ripe for succumbing to corporate offers with strings attached. A strong government is insulated, whether by law, will, or power generally from such strings. A government that has many points of access (of influence) is likely to be weak in not only rebuffing pressure to reduce taxes and spend more, but also standing up to large corporations. A government in a pro-business society is likely to be weak with respect to the power of business, other things equal. Even more significant than these variables, however, is the tenuous basis of representative democracy amid Wall Street bewindowed towers. 

1. Bonnie Kavoussi, “Andrew Williams, Ex-Treasury Spokesman,Headed to Goldman Sachs,” The Huffington Post, July 12, 2012.