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"He's just terrific," gushed JPMorgan Chase CEO James Dimon. "I wish every city had an executive like him."
—"The CEO Of City Hall," BusinessWeek, 11/9/07

Daley has already raked in a combined $2.4 billion by privatizing the Chicago Skyway and downtown parking garages. He's exploring the possibility of doing the same for Chicago parking meters.
—"Southwest on board for Midway lease deal." Chicago Sun-Times. 11/15/07

His Elective Majesty, the Mayor of Chicago Richard M. Daley, is not a difficult man to understand. Neither is he a difficult man to love. For those of us who remember Chicago in the 1980s and early 1990s, he has an aura, a protective glow that blunts our efforts to skewer him. As industry abandoned the city and movement conservatism under the guise of Reaganomics bankrupted it, Daley emerged as the head down, plow forward manager-style executive. After the Council War years of vitriol and gridlock, he eschewed party labels, taking his first opportunity to move the city to a non-partisan primary. He removed himself from the official Illinois Democratic Party hierarchy, insulating himself from intraparty squabbles and saving himself the headaches his father faced due to his association with and power within the national Democratic Party. He made some Chicagoans proud when he took control of the abysmal public schools. I mean, plenty of people thought the "conquering" of Meigs Field in the thick of the night was pretty cool. He deftly managed Chicago's turn from an industrial city to a services city. Forget for a minute the character "Mayor Daley," the omnipotent, power-hungry patronage boss who lives, breathes, eats and sleeps for power — his Elective Majesty — and think about the actual man, and the actual balance of his positive and negative accomplishments.

The enlightened despot, for the meager cost of our democracy, had guided us away from Detroit-hood.

The mayor's critics point out that the economic boom times of the '90s, coinciding with the end of Reaganomics, had more to do with the city's resurgence than Mayor Daley. They point to policies, such as the wiping out of housing projects, that simply pushed the poor into the south and west suburbs, thus creating the illusion of economic recovery. And, of course, there is the gentrification. His defenders rightly reply that the CHA needed to be completely revamped, that the massive projects could not be abided both for the city in general and the residents subjected to inhumane living conditions; and further, although the economic boom of the '90s was a national phenomena, nothing says that Chicago had to improve as much as it did in the '90s, both in median income and crime rates. And, they may add, gentrification is a part of the natural lifecycle of a big city.

Besides, for much of the '90s and the early '00s, we seemed to be moving in a more or less positive direction. The city was cleaner and safer, incomes were up, unemployment down. The takeover of CPS was fairly recent, having occurred in 1995, and the Plan for Transformation was experiencing growing pains. We could be patient.

Some of the good, some of the bad. Mayor Daley has been the most outspoken and energetic anti-gun proliferation mayor in the country. But he also focuses on trivialities (the interminable complaints about tree-planting and flower pots). Then again, the city is safer. And so on. The big city, like the human body, is in a constant state of decay. No matter how vigilant and active a person you are, physical decay accrues. You cannot blame your doctor for your ailments — as he experiments with remedies and dosages, you have to manage your expectations.

In other words, we could abide the mayor so long as he obeyed the maxim doctors take as their oath: First, do no harm. The swift and easy (by non-relative standards) passing of his 2008 budget demonstrated that we simply can't be sure Mayor Daley will do no harm any longer. The problem with the budget isn't just spending priorities; it's the regressive sources of taxation that prop them up.

After the impressive showing of Aldermanic challengers in the 2007 municipal elections, the prospect of a semi-independent Council actually made the mayor more appealing: his strength would balance the potential chaos of a split legislature, while the legislature's diversity of opinion would balance his increasingly irresponsible anti-neighborhood tax and privatization policies (see also "system of checks and balances, the"). The Council simply could not muster a force to really fight the mayor on this highly problematic budget, despite the brave Nay votes of 13 aldermen. Granted, 21 voted against the actual tax levy, a real potential bloc; but this was mostly face-saving. Having voted for the budget, they could risk some mayoral displeasure by voting against the safely passing tax levy. Approving spending priorities then rejecting the proposed revenue sources is a pretty silly thing for a legislator to do. If you want spending cut, reject the budget, too; if taxes are too high, you implicitly also want spending cut.

The mayor's plans for the future of our city seem to be to sell it off piece by piece, or tax us regressively. While he is being praised in BusinessWeek for doling out tax breaks, he covers budget shortfalls by handing publicly-owned assets to private interests to be operated not for our benefit but for private profit. Forget the many small public services — Hired Truck, anybody? — we the public have lost down the sinkhole of privatization. The mayor has moved on to giving them important elements of our commonly owned infrastructure. The Skyway, parking garages, potentially Midway Airport and the parking meters.

Consider the Skyway. The consortium that owns the Skyway will double the tolls in the next 10 years. After that, they could increase more sharply, but in any case they will definitely increase. Who's to say how far things can go? Could tolls increase to a degree that the Skyway is de facto no longer a public road? Once-public assets and services like the Skyway could eventually "price out" a large chunk of citizens from using them, creating parallel systems of society: one for people who can afford to pay, and one for people who cannot. One municipal financial advisor noted that if the Holland Tunnel had been opened under such a lease in 1927, the current toll would be $185.00 (it is $6). I understand a private university being better than a public one; but private roads, neighborhoods, parks, mass transit, libraries and emergency services sound awful scary.

These are systems and assets paid for in large part by regressive taxes!

Because of gentrification and runaway valuations, the property tax, while not regressive, is not really progressive, either. You can end up with a huge tax bill despite a meager actual income. Property taxes were conceived at a time when your property and income had a more or less direct relationship; the nature of the real estate market has altered this relationship significantly. All the rest of the tax increases in the mayor's budget were more or less regressive: taxes on alcohol, the 911 surcharge, lease transactions, bottled water, vehicle fuel and on and on.

The impulse to sell off what does not belong to him may be more troubling.

Arguments about supposed "efficiency" of privatizing everything, besides being wrong, miss the greater point. The process of privatization is a corrupt one, inviting private interests to curry favor with politicians. Once a service or asset is privatized, the rent-seeking continues: private interests have to maintain their relationships with our civil servants in order to make sure their service remains privatized; to get rate increases; to justify the cutting back of services, which inevitably happens as privatizers' favorite path to "efficiency" is firing the people who provide the services. Corruption is not government intrusion into market efficiencies in the form of regulations; Corruption is the intrusion of the profit motive into publicly owned services.

We lose transparency; public services and property will no longer reflect public goals and values, removed as they are from the political process. Waste occurs in the form of resources devoted to constantly lobbying the government, excessive executive compensation (as opposed to spending on actually providing the service), and the siphoning off of potential capital funding to other private pursuits of profit.

The mixed reaction to the auctioning of the Skyway has emboldened the mayor, who seems to think that selling things you and I own is the best way to guarantee a city that works for you and me. Who knows how much the mayor is willing to prostitute the public trust? Who knows when our legislators will realize that the myth of privatization efficiency is just that, and stand up for us when the mayor tries to auction off our property?

Privatization is often nothing more than granting monopolies. Entities compete not in a market, but for a contract — they compete in government. Access to decision makers, not proficiency and efficiency, determines success. Monopolies are not subject to market competition; a lack of market competition takes away the incentive for efficiency and both technological and organizational innovation. All you can do is maximize profit by cutting real services, typically by demanding more productivity from workers while cutting staff and wages (and, conveniently, a privatized service is one that can more easily violate workers' rights to collective bargaining).

So long as the public owns something, we can fix it when it breaks. We can institute civil service reforms to eliminate patronage. We can pass legislation that creates standards for hiring and job performances. Public sector unions can be bargained with in good faith. Once sold, a service falls out of our collective control — the waste, corruption and patronage can continue, only now without remedy.

We see a pension obligation and grouse about fattened city workers, forgetting that servicing bond debt is a similarly crushing cost. Pensions will, one day, be paid to Chicagoans who served other Chicagoans — who lived and likely still live in Chicago, who spent money in Chicago, and paid taxes in Chicago. Debt service and corporate tax breaks often have only secondary benefits to the city.

It makes no sense to bleed revenue by granting constant and unnecessary tax breaks (many in the form of Tax Increment Financing districts) while saddling future Chicagoans with debt in the form of bond obligations. Much of the Skyway deal money, for example, went to servicing debt. Those future Chicagoans will not remember, and probably won't care, about the precarious and volatile situation His Elective Majesty guided us through in the early '90s. They'll look around one day and see a Chicago colonized and balkanized. Do we want to leave behind a City That Works For Them, Not Us?

This is coming from a guy who used to have Daley campaign posters up on his wall. His bedroom wall. Simply stated, regressive taxes and public property firesales are more than a different approach to government: they are a dangerous approach to government.

From the same BusinessWeek article quoted above: "Business people ... see the undeniable pluses of Daley's mayoralty in the bustling Loop and on crowded Michigan Avenue. Certainly, all Chicagoans can wander around Millennium Park. And if companies plaster their names on walls throughout the park, that's just fine with business leaders." Undoubtedly. I wonder just how far from Michigan Avenue and Millennium Park this reporter bothered to "wander" himself.

We the People seem to have lost Mayor Daley to a bankrupt philosophy of government, and unless he corrects this trajectory, it is our responsibility to make this term his final term, and fill it with obstruction of reckless policies. Potential 2011 mayoral contenders have an opportunity to provide leadership here, if aldermen don't step their game up soon.

And hopefully, we'll be able remember His Elective Majesty fondly for the good he's done and try to forgive the later madness of King Richie.

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Comments

Carter / December 5, 2007 2:26 PM

How on earth did you write a piece this long and detailed without once mentioning the TIF debacle?

get educated:

http://www.chicagoreader.com/tifarchive/

Andrew / December 5, 2007 2:56 PM

Carter: See here.

Ramsin / December 5, 2007 3:19 PM

Carter:

I folded TIFs into my general discussion of tax breaks; it does say this in the column:

It makes no sense to bleed revenue by granting constant and unnecessary tax breaks (many in the form of Tax Increment Financing districts) while saddling future Chicagoans with debt in the form of bond obligations.

So, I did mention TIFs in there. TIFs are a complicated issue (if you read my previous column on them, you'll note I made several errors due to my incomplete understanding of the issue) and trying to put an explanation of them into an already long column (believe it or not, this got hacked down by 1,250 words) would have just diverted attention from the main point.

C-Note / December 5, 2007 7:12 PM

I'll always remember Daley for standing by and doing jack shit while the police were torturing black men and locking them up on the basis of tortured confessions. That was during your His Elected Majesty days, was it not? What a guy.

Ramsin / December 5, 2007 11:39 PM

The Mayor's role in the police torture scandal (and his current inability to satisfactorily reform the department) will, once he's out of office, likely end up unraveling whatever tacit approval he has earned from many Chicagoans.

C-Note / December 6, 2007 2:04 PM

I say his role in the police torture (no "scandal" necessary; police torture's bad enough) makes him difficult to love RIGHT NOW. If he'd had his way, Burge would more than likely be police superintendent.

As far as I'm concerned, all Daley's accomplished is bike lanes, and that ain't nothing but some road paint we probably paid too much for.

Ramsin / December 6, 2007 3:05 PM

That's fair enough. Although remember he was state's attorney at the time; I was thinking in particular about his record as mayor, looking at what he has accomplished (and failed to accomplish) in that office.

Looking at his life in total will be up to his biographers.

anthony / December 6, 2007 8:29 PM

"The Mayor's role in the police torture scandal (and his current inability to satisfactorily reform the department) will, once he's out of office, likely end up unraveling whatever tacit approval he has earned from many Chicagoans." This sounds like a platform for a terribly juvenile campaign.

ramsin / December 7, 2007 2:04 AM

"This sounds like a platform for a terribly juvenile campaign."

huh? you realize that while he was state's attorney, Richard Daley may well have known about CPD torturing a bunch of innocent human beings, right? Is it "juvenile" to point out how this could potentially harm his legacy? Or is torture just so passe to you?

Mateus / December 7, 2007 5:12 AM

I don't think you have really researched the theoretical underpinnings of privatization very thoroughly, or the examples of when it has been successful. Privatization usually fails because of inadequate regulation, as privatized assets tend to be those of a monopoly of some sort, and a politically-enencumbered and well-funded regulatory body is needed to prevent abuse. Further, the fact that some people might get fired when an asset is privatized is not such a bad thing. We complain constantly about ghost pay rollers and others who are hired as political patronage, in addition to the generally unhelpful, worthless nature of so many government workers who are members of some Department of Redundancy Department. Privatization can trim this fat. Further, you seem to be implying to a certain extent that the public is not compensated at all or adequately for these assets. The Skyway deal was worth US$2B. I am not sure the net present value of the Skyway under Chicago management, which was likely poorly managed, was so high. The fact is that governmetns do not always know how to manage the endeavors in whcih they get involved, and they often create underfunded and unsustainable projects which are not designed with an eye to the future. Just look at how inadequately our highway and public transportation systems serve us. Anyone who has ever taken a ride in subway systems in Mexico City, Santiago de Chile or Sao Paulo, for example, will see that a privatized monopoly such as those, adequately regualted, can provide both excelent service and reasonable prices. Further, if prices must increse it is often to cover the costs of woefully neglected maintenance and a lack of forward planning by the previous public owner.

Ramsin / December 11, 2007 12:18 PM

I wasn't sure how to respond to this, since it really seems like you just heard about a column somewhere that was critical of privatization, and then you traveled to it to post Rand talking points.

>"Privatization usually fails because of inadequate regulation, as privatized assets tend to be those of a monopoly of some sort, and a politically-enencumbered and well-funded regulatory body is needed to prevent abuse."

So we're supposed to pay to regulate and babysit the profiteers who keep all the profit they generate?

>"Further, the fact that some people might get fired when an asset is privatized is not such a bad thing. We complain constantly about ghost pay rollers and others who are hired as political patronage, in addition to the generally unhelpful, worthless nature of so many government workers who are members of some Department of Redundancy Department."

Talking point talking point; talking point. Talking point talking point.

Sound familiar? Who "complains constantly" about ghost payrollers? Do you imagine that in Chicago in particular, "ghost payrolling" doesn't happen in the privatized firms? Wasn't the entire Hired Truck Scandal basically a ghost-payrolling (no work) scandal? Weren't those private firms? Oh and did you invent that expression about redundancy? never heard it before.

>"Further, you seem to be implying to a certain extent that the public is not compensated at all or adequately for these assets. "

Further, no I didn't. I just pointed out we got ripped off.

>"The Skyway deal was worth US$2B. "

$1.2b.

>"The fact is that governmetns do not always know how to manage the endeavors in whcih they get involved, and they often create underfunded and unsustainable projects which are not designed with an eye to the future."

Then eradicate the programs. Are you advocating handing inefficient, unsustainable programs over to private interests for personal profit? That sounds like a good idea to you?

>"Anyone who has ever taken a ride in subway systems in Mexico City, Santiago de Chile or Sao Paulo, for example, will see that a privatized monopoly such as those, adequately regualted, can provide both excelent service and reasonable prices."

And there are dozens of counter-examples from all over the States and Europe and Asia of publicly owned mass transit that works marvelously.

>"Further, if prices must increse it is often to cover the costs of woefully neglected maintenance and a lack of forward planning by the previous public owner."

Right. They raise the cost for all those things PLUS the huge profits that a handful of individuals keep. Why are we paying for that again?

 

About the Author(s)

Ramsin Canon studies and works in politics in Chicago. If you have a tip, a borderline illegal leak, or a story that needs to be told, contact him at rc@gapersblock.com.

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