The War at Home

THERE WAS NOTHING ROUTINE ABOUT SEPTEMBER 11, when, out of a cloudless sky, it rained people.

Not in the way the suicide assault was carried out. Not with high-school kids a block from the Twin Towers stepping around the human remains of jumpers, or with office workers moving en masse and without panic to midtown trains, across the Brooklyn bridge by foot or south to evacuation by ferry. No, the predictable, the calculated came later, as the media and public officials beat the jingo drum nonstop, and flags flew everywhere -- most poignantly on taxi limousines driven by new immigrants. The incumbent, increasingly unpopular mayor, became an icon overnight, while newcomers in the Arab and South Asian sections of Brooklyn and Queens felt under siege. A Yemeni-American professional I interviewed in October said she feared for her safety and for the many other women and girls wearing the traditional hijab, or head-and-shoulder scarf, which marked them as targets.

Also predictable: a more or less balanced City College teach-in was misreported by the New York Post as "CCNY Bashes America," and other campus critics were branded by Republican operative Lynne Cheney as no less than opponents of Western civilization for asking hard questions about the U.S. role in the world.

Many oppositional voices have sounded predictable, too. Almost from the day of the attacks on the twin towers and the Pentagon, too many responded as if they were sleepwalkers, if not actors, reciting canned anti-war lines and declaring that the U.S. is chiefly responsible for the carnage. The newly formed New York Coalition for Peace and Justice was slow to condemn the killers, name the attack a mass murder or demand punishment from any authority, even as it branded U.S. war moves in Afghanistan "racist." Robin Blackburn, in a mostly balanced, thoughtful and exhaustive essay, "Terror and Empire" (www.counterpoint.com), focused on the real dangers of U.S. unilateralism and a U.S. "national messianism" that allows this country to constitute itself as "the arbiter of global terror"; yet he, too, writes as if the U.S. were principally to blame for the rise of clerical fascism, Levantine style.

This is a movement that eats its old. When Carl Davidson of the Committees of Correspondence called for "tak[ing] a clear stand for the destruction of Al Qaeda's terrorist network," while making clear the need "to project a progressive voice and vision, a strategy and tactics, for the other America, in order to defeat the threat posed to us by reactionaries at home and abroad," he was denounced by one commentator for the quaint crime of "Kautskyism."

When a movement cannot express righteous anger at an attack on our hometown, or speak as passionately for justice as it does for peace, then we have a problem. The same groups that claim that the concept of "terrorism" is ahistorical and subjective have no trouble weighing in against "globalism" or "empire," which are equally out of focus, while their collective tongues freeze up on mouthing the word "imperialism" as a viable concept explaining how the world works. The moniker, "Our grief is not a cry for war" is no substitute for an analysis of recent events and offers no hint of how we move forward. No, the peace movement is still too much of a shining city on a hill, pure and distant, all witnessing and no marketing, unable to appeal broadly, popularly and immediately. It still cannot, as Sean O'Casey once wrote, "talk to a shepherd about sheep."

IT'S NOT NEWS TO New Politics readers that U.S. policy, supported by administrations from both major parties, abets some of the world's premier villains. We know that the Al Qaeda militia network was a beneficiary of State Department largesse, if not its actual client. We know that the CIA backed Afghan drug lords even as a succession of American presidents ratcheted up drug-use and drug-sale penalties at home. We know that the extermination of secular and progressive movements during the cold war left a vacuum in the Middle East that only fundamentalist mullahs could fill. Secretary of State Colin Powell himself said in October that "one man's terrorist is another man's freedom fighter," meaning of course that the only standard the U.S. uses is a self-serving one. But we already knew that, too. Calling Powell a hypocrite and finger-wagging won't help right now. Neither will a literary dogfight on the nature of Al Qaeda, kicked off so famously by Christopher Hitchens in The Nation and The Atlantic. Hitchens said that no accounting of predatory U.S. policies in the Middle East could explain or justify the attack on the Twin Towers -- and bravo, he is right. But so what? Rhetorically delectable as a Hitchens/Noam Chomsky brawl is, gaining a fuller understanding of the Islamist mind, a task on which Hitchens's argument depends, is background. Defining the nature of a possible enemy and the scope of a threat is critical only if joined at the hip with an argument that national and local priorities must not be perverted by war preparations. Hitchens credibly argues that bin Laden is a phenomenon like no other, which I take to mean that traditional socialist and anti-militarist assumptions are problematic now. If true, that is all the more reason to insist that what needs clarity is not just our bright, shining line on bin Laden, but our line on who benefits by and who directs the recovery from the economic and social damage he likely masterminded.

Here's the nub of the problem: The financial damage to the financial, investment, and real estate (FIRE) sector was enormous. Somebody -- but not the FIRE sector -- is going to pay for it. Focusing on the war powers mobilization to the exclusion of these other domestic consequences is a mistake the Left cannot afford. The war, which appears to be winding down at this writing, will only strengthen the hand of capital if we let it. The enemy is always at home.

THE AIR ASSAULT ON THE WORLD TRADE CENTER, which ended some 3,000 lives, is expected to cost the city and the state more than 150,000 jobs. The liquidation of a portion of the financial, insurance and real estate sector is turning the national drift toward recession into a forced march. The collapse in city and state revenues caused by the wipeout of a big piece of the FIRE sector puts every municipal contract at risk. Every effort to improve the pay and working conditions of the uniformed services -- the "heroes" of September 11, along with the teachers, who were briefly called the "quiet heroes," then forgotten -- may have been mooted by the assault.

For all of corporate America's new headaches, it has the whip hand. That newly- won power threatens the anti-globalism movement in a way that right-wing propaganda and police action never could. It turns unions into beggars and environmentalists into irritants. Business failures and security collapses at airports are already signaling an end to free-market cant and a more interventionist federal role in securing and guaranteeing profits. In a suggestive headline, the Wall Street Journal announced that "Now, Public Works Seems Too Precious for the Free Market." Dozens of major banks and investment houses located in or near the Twin Towers, including Bank of America, Bank of Taiwan, Lehman Brothers Holdings, Morgan Stanley Dean Witter, Thomson Financial, Credit Suisse, First Boston, Merrill Lynch and -- most visibly from the haunting posters scattered throughout the city in the days and weeks following the attack -- Cantor Fitzgerald -- all lost billions in assets and valuable personnel. Lloyd's of London, one of the world's largest re-insurers, announced losses of more than $2 billion in late November, doubling earlier estimates. Meanwhile the New York Stock Exchange announced it had prepared a fully equipped second trading floor "somewhere in New York City" in the event another attack leveled the Exchange. It also announced its long-sought, heavily publicly underwritten $1.1 billion headquarters rebuild is proceeding, but mercifully without its centerpiece, a 51 story tower -- this at a time when electronic trading could do the same job better. And within a day of the attack, Larry Silverstein, the World Trade Center leaseholder, floated a plan to rebuild the Twin Towers, since scaled back to four 50-story skyscrapers. His is just one of many scenarios for replacing the 12 million square feet -- 44 percent of all modern office space downtown and 7 percent citywide -- lost or damaged in the assault.

The revised city budget, highly dependent on corporate taxes, projects a $1.3 billion shortfall for the current fiscal year, including a 20 percent decline in personal income taxes and more than 30 percent fall-off in hotel and real estate transfer taxes. Others peg losses at close to $4 billion over the next two years. Added costs for additional police overtime, downtown cleanup, and other services will soar into the billions. And city contracts expire at the end of June, while the last round of teachers and police pacts has not even been included. The mayor called for cuts of 15 percent in city agencies (2.5 percent in police, fire and education) to make up for the losses. City services will suffer. Retirement of the capital debt, some $40.8 billion in bonds that finance construction for schools, jails, housing and infrastructure, is a permanent and inescapable feature of city spending that eats up 8 percent of the municipal budget and 16 percent of city tax revenues. Debt service has grown by half in eight years under Giuliani to where it is now four times the allocation for transportation and housing and the highest per capita of any major American city

In trying to gin up dollars, Governor Pataki and then-Mayor Giuliani, never chums, approached hat-in-hand in an ad urging the public to spend freely in New York. The effort makes some sense, because lowered retail activity means slumping sales tax revenues, while sluggish tourism means declines in hotel tax revenues. In the first weeks after the attack, suspended alternate side of the street parking itself meant no traffic tickets were issued, pulling out another plum from the anticipated city revenue pie.

Given the ideological climate, progressive real estate taxes are not an option, though sacrifices by unions are always in vogue. Doing their bit to help, the city's five employee retirement funds pledged to pump $800 million into discrete building and transportation projects.

City rebuilding efforts will be in the hands of a government growing more permanent every day. The promised $40 billion in federal recovery aid -- reduced to $17 billion for talking purposes, still not in hand, and likely to be doled out in increments if at all -- will be spent by a newly christened autonomous body on projects that few elected officials or accountable democratic institutions will oversee. That body, the Lower Manhattan Redevelopment Corporation is a subsidiary of the Empire State Development Corporation, the state's economic stimulus arm and a notorious enemy of neighborhoods, manufacturing, and well-paid, low-skilled jobs. Interestingly, it is also not beloved by free marketers, who score the economic development body for a history of collusion with favored realtors and mob-influenced contractors to the detriment of market forces.

The Redevelopment Corporation, established by the governor in late November, has an overwhelming FIRE slant. It is chaired by John C. Whitehead, the former Goldman Sachs chair, who comes with impeccable permanent government credentials as the grandest of the city's grand panjandrums. A director of the New York Stock Exchange and Chairman of the Securities Industry Association, Whitehead was Deputy Secretary of State under Ronald Reagan, is board chair of the Federal Reserve Bank of New York, and is a fast Pataki family friend. In 1996, Mother Jones magazine ranked him 30th on its list of the nation's 400 largest political contributors, listed two ahead of Democrat Felix Rohatyn but well behind 16th place finisher and Bill Clinton pal Denise Rich. The authority also includes Frank G. Zarb, the former Nasdaq head; Richard Grasso, chair of the New York Stock Exchange and a close Rudolph Giuliani ally who before 9/11 was a fixture on business news reports as he exuberantly gaveled each trading session to a close; and Deborah Wright, an African-American woman and Empire State Development Corporation director who once served as Giuliani's Housing commissioner and is now chief executive of Carver Federal Savings Bank in Harlem.

Also on board is union official Ed Malloy, president of the Building and Construction Trades Council of Greater New York and a notorious friend of developer Donald Trump; Howard Wilson, the chairman of the much-maligned School Construction Authority; and Roland Betts, lead owner of Chelsea Piers and the former lead owner of George Bush's Texas Rangers baseball team. All but one of the remaining members are present or former Giuliani aides. The new entity can condemn and acquire land while overriding local zoning and environmental regulations. The local neighborhood is represented solely by the chair of the area community board, an advisory body appointed by the Manhattan Borough President who herself holds an increasingly ceremonial job.

Meanwhile, a lower Manhattan federal bailout plan sponsored by Senators Schumer and Clinton that aimed to attract new business and keep companies from leaving the area looks more like a boondoggle for financial firms with no real plans to abandon the financial center. Smartertimes.com, the neo-con Web site specializing in niggling corrections to The New York Times, and once got it right when it spotlighted such benefices in the Democrats' plan as "tax credits of up to $4,800 per employee per year, at a total cost to the federal budget estimated at $2 billion over five years" to help Merrill Lynch, Lehman Brothers, Deutsche Bank, and Goldman Sachs, among others (Dec.5). These are all led by executives who are big Democratic Party funders and whose companies were not leaving. The conservative site says that a more appropriate and ostensibly less partisan tax cut would "focus more heavily on incentives for investment. Better yet, let the market determine which businesses can make it downtown."

IT ISN'T JUST DEMOCRATS WHO ARE FEEDING ON THE PUBLIC TAB. After weeks of praising local (or at least New York-centric) contractors and crews for their hard work, the mayor rewarded them with a thumb in the eye by moving to put the San Francisco-based and Republican-connected Bechtel Group in charge of the $1 billion cleanup. Had the move gone through -- it was publicly opposed by the Civil Service Technical Guild, a union of city engineers and designers that regularly opposes outsourcing -- the world's largest general contractor would have received fees running to 3 percent of the total for managing a job with a non-union workforce that four cooperating contractors with labor agreements have been doing since 9/11.

The mayor's effort tells a lot about the "know-who" involved in city operations. Bechtel's Republican Party connections include Reagan Defense Secretary Caspar Weinberger, who found a hidey-hole there after leaving government service, and former Secretary of State George Shultz, who sits among its directors. Working with New York design firm Parsons Brinkerhoff, it serves as the private management consultant on Boston's $14.5 billion, hideously over-budget "Big Dig," the two-decades long effort to replace Boston's decaying harbor expressway with a central artery tunnel and bridge system.

Unlike the Technical Guild, few unions are pushing envelopes in planning New York's future. Despite a noble fund-raising effort for victims' families and affected workers and an aggressive emergency employment clearinghouse project coordinated by the Central Labor Council to aid cashiered workers, there is no firm or consistent trade union position on what should be done now or who should control the rebuild.

While Hospital Workers Local 1199/SEIU joined health industry leaders and the governor in lobbying for $1 billion in increased Medicaid payments to fund raises and plug a more than $350 million hole the attack cost facilities statewide, the benefits will affect mostly hospital workers themselves (and, of course, low-income families), a worthwhile if necessarily narrow goal. Win or lose, the union will be indebted to the Republican governor, who is up for re-election next year. The lack of union vigor is sadly reminiscent of labor's go-along position during the last city fiscal crisis. Back then, teachers union president Albert Shanker was alone among union tops in labeling the effort to enshrine a fiscal monitor (even as unions were allowing pension funds to bail out the city) a "bankers coup," though some say that labor's central role in shepherding investments by the city's pension system today in and of itself guarantees it a seat at the table when the big decisions get made.

Companies failing because of events independent of the attack are impacting on the city, too. Enron, the bankrupt energy trader, laid off more than 5,000 workers -- 4,000 in Houston alone, and its collapse is already causing blow-back. Crain's New York Business (12/3) reports that the state retirement fund lost as much as $60 million after selling its 4.6 million shares in Enron at 45 « cents a share. The stock sold at $80 a share in January. The city's five pension funds hold 2.9 million shares of the now worthless stock, losing $109 million on investments they are suing to recoup. Local gas and electric buyers must now purchase supplies in the deregulated market at higher spot prices. Commercial-property insurers, worrying that New York will continue to be singled out by terrorists, are boosting quoted rates for building owners in Manhattan by about 100 percent. That is far higher than raises in other cities.

Yet even as the Left is mute on the domestic consequences of the 9/11 attack, the right is getting its ideas out. Steve Malanga, former Crain's New York Business editor and now a Manhattan Institute fellow, argued in City Magazine (Fall 2001), The New York Post and other friendly venues that every free-market nostrum he espoused before the attack could cure what ails the city now. By green lighting projects held up by those pesky zoning hearings and restricting any federal role to clean-up and infrastructure repair while committing local government to "preparing the way for private developers to build whatever the market wants at the site as expeditiously as possible" and insisting on productivity agreements in all city contracts, the right is securing the foundation for an ideological rebuild as well.

The Economist and others are also predicting fights over productivity deals with municipal unions, saying winning these are a sure way to bring down spending.

Flagrant free-marketer George Gilder weighs in, too (American Spectator 11/12/01), noting that, as economic growth derives from technological advance, war preparation could signal a new technological boom if only Washington develops more capital-accumulation friendly policies -- specifically those policies directed to end deflation and "crippling antitrust and telecom regulation." He and co-author Bret Swanson fear that 9-11 will serve as an "enabler" allowing government to hide its misdeeds.

CRANK STUFF? OF COURSE. As Columbia University sociologist and privatization critic Elliot Sclar put it at a recent Center on the Urban Future forum, "When manufacturing fails, it's called the market. When real estate can't make the money it wants, it's called government's fault."

Granted that adopting laissez-faire solutions would be a first, after more than 60 years of concerted city and state planning in guiding development of a wholly artificial downtown, the conservatives now offer elements of a coherent plan put forward to guide or shame policy makers.* Where is our plan, the plan of a Left? And what counterarguments and counterplanning are we making on a national level, where, measured by payroll, the city's less than 3 percent of the national workforce accounts for 37 percent of its securities industry, 20 percent of its advertising, and 18 percent of its book publishing? A recession in these New York-based industries will be felt nationwide.

What demands are being raised about unemployment, where job losses this fall totaled nearly 800,000, the most since the Reagan recession of the early 1980s? Labor Department figures show November's unemployment rate at a six-year high, with transportation hardest hit and corporate mendicants lining up to get their share of a $24 billion airline bailout. Federal largesse did not extend to cashiered air industry workers, whose job cuts total 70,000 so far.

In Britain, where British Air and other big carriers are crying poor mouth, Michael O'Leary, CEO of no-frills Irish carrier Ryanair, rightly complained to the London Guardian that his larger rivals were already losing money and were planning large job losses long before the attacks. In the U.S., too, some of the wailing is an old- fashioned attempt by badly run firms to feed off the public trough. Like transportation, the tourism industry went south. Las Vegas reports visits have plunged, and convention cancellations were widespread everywhere. In New York, taxi limousine companies are hurting, with business down almost 70 percent. The number of tourists visiting New York dropped by 20 percent. Other cities are also hard hit. A National League of Cities survey shows expected revenues decreasing by 4 percent, this exclusive of losses in New York and Washington, while public safety costs are up, due in part to the Anthrax scare. States and school districts are seeing decreased revenues and are deferring purchases, and textbook manufacturers expect spending for their products will go down (Education Week, 11/21/01).

At isolated moments, the Bush Administration seems to understand it has a commanding role to play in the economy, and not just one rewarding the boys at the yacht club. In a certain light and if you squint, you could confuse the Bush Administration for the executive committee of a ruling class Marxists expect it to be. At other times, the president and his congressional allies seem less the embodiment of the state and more like the small-town board of trade nabobs they are.

Michael Tomasky reported in New York magazine (10/1/01) the bungled effort by Republican Senators Phil Gramm, Don Nickles and John McCain to scuttle the city bailout on the grounds that the appropriation would create a "slush fund." Nickles even whined that his own Oklahoma City never got this level of support from the Clinton Administration after the Murrah federal building attack. Tomasky credits Senators Clinton and Schumer with saving the day with Bush. But if the two operated in October in their capacity as Wall Street nuncios -- roles the administration at that moment recognized and respected -- jump ahead three months and, surprise, no money has yet been passed to the city or state. Adroit bipartisanship could not keep the package on track. True, the governor made a ham-handed $54 billion request that was larded with pork (as well as useful if nonessential projects) and was dead on arrival. And mixed signals from the mayor and state congressional delegation didn't help. But if it isn't easy getting green from D.C., just what is the administration willing to commit to maintain the capital of capital?

AS SOON AS THE PLANES HIT, POLITICS GROUND TO A HALT. Only the Bay Area's Congressmember Barbara Lee opposed the hurriedly prepared blank war-powers check to Bush. "There are no partisans today, just patriots," DNC Chair Terry McAuliffe told Roll Call magazine. And the mayor's threats to stay in office were just the most visible sign that the public might accept a man on horseback. Certainly Giuliani's actions were neither stellar nor singular. But Giuliani's scary re-election trial balloons -- he was term limited and needed Albany legislation to continue in office -- were shot down by the state's highly partisan Assembly Speaker, Sheldon Silver, the only man in New York with the determination to put politics first.

In other areas, we do know what to expect.

On environmental matters, it's open season to drill in the arctic wilderness while checks on hazardous mining operations were cut back.

In civil liberties, the administration's anti-terrorism proposals were called "almost McCarthyesque" by Shari Steele of the Electronic Frontier Foundation. These were largely enacted as the USA Patriot Act (for Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism) a windy title that sounds like parody but is not. The Patriot Act reduces judicial oversight on phone taps, tracing e-mail, retrieving voice mail and even tracking Web surfing. It expands FBI access to business and other private records, keeps government searches of citizens' homes secret, and permits release of grand jury information. It also allows easier detention and deportation of legal and illegal aliens, giving the Immigration & Naturalization Service authority to hold them for seven days without a hearing, and potentially indefinitely (in certain cases) thereafter. By Thanksgiving, some 1,200 aliens were detained, just 10 to 15 suspected as Al Qaeda sympathizers. The others include those The New York Times (11/25/01) described as having "résumés suspiciously like those of the 19 hijackers, and others who have spent days, weeks and now months in prison for immigration violations that before September 11 would probably have been ignored or resolved with paperwork."

The law is all the more remarkable in that its provisions to lower the threshold for wiretaps and search orders for all cases, not just those involving terrorism, were opposed by both civil libertarians and by the gun lobby -- a combination that would make any legislation inert in normal times. The act encountered some opposition in the House but passed with just one negative vote in the Senate: that from maverick Wisconsin Democrat Russ Feingold, who said in classic Robert LaFollette language that "if we lived in a police state, it would be easier to catch terrorists," but that such a nation "would not be America." (In a demonstration that "maverick" does not mean "dissident," the Badger State's junior senator went on to be the sole Democrat to vote against omnibus legislation fast-tracking dollars to New York.)

Press liberties are no more secure. Reporters covering the Afghan fighting complained of restrictions more extreme than those imposed during the Gulf war. Editor and Publisher magazine reported how "several photographers were jailed for trespassing while covering the aftermath of the September 11 terrorist attacks. At least four were arrested in New York near the site of the World Trade Center disaster, while two others were detained in western Pennsylvania at the site of the United Airlines flight 93 crash." The mayor used access to Ground Zero as a perk to foreign visitors and favored friends, while New Yorkers photographing or even trying to retrieve items from their homes were manhandled.

The move toward authoritarianism and corporate domination is unmistakable, and some people are even starting to make appropriate noises. The September 25 Get Out The Vote letter from the Working Families Party's Dan Cantor, while limited to electoral issues and supporting some pretty sorry candidates, hit most of the right notes:

Lots of decisions are going to be made in the wake of the WTC attack. It would be better if those decisions were made by elected officials genuinely committed to the needs of working-class, middle-class and poor people across the state. As the recession deepens and choices in the rebuilding and budgetary process are made, it will be important that non-corporate voices also get heard, also get bailed out.

We don't want those voices just to be heard. We want them to predominate. But the sentiment is right. It is what the Left can -- and should -- uniquely contribute now.

September 11 can still put paid to the argument that untrammeled competition is a good thing. With the need for government-run security at airports trumping private operations and with an end to the noise about privatizing Amtrak and the U.S. Postal Service, there is a different ideological climate that can make demands on government effective again. A heightened interest in security over profit margins at water, gas and electric utilities joined with the collapse of Enron coming on the heels of California's electricity blackouts last summer could form the vehicle for "talking truth to power" and shifting war critics' attentions from grand gestures to contesting corporate America on grounds where it can lose.

It's a start.

Contents of No. 32

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