Potterville

(Editorial note... This commentary was found while searching for completely unrelated documents. The operating system shows it was written on Febrary 23, 2019. It isn't clear what events at that time triggered this thought but the thoughts are even more apropos now than in 2019.)

Virtually everyone has seen the movie It's a Wonderful Life. For most, it's a quaint, now somewhat schmaltzy Christmas movie illustrating how the power of friendship can overcome nearly any difficulty in life.

For me, the scene that resonates with me -- and with events in America over the last two decades -- is the "what would have been" scene when George Bailey and Clarence the Angel stop by Martini's bar, the town's friendly watering hole in real-world Bedford Falls, which has now become something else entirely in alt-world. You recognize it immediately when Nick brushes off the first question about Martini's whereabouts and replies to George, "Look, I'm the boss, you wanna drink or doncha?" George and Clarence sit at the bar for a few more awkward moments, having awkward conversation about ancient wussy drinks which spawns another retort from Nick... "Hey look, mister. We serve hard drinks in here for men who wanna get drunk fast and we don't need any characters around to give the joint atmosphere. Is that clear or do I have to slip you my lip for a convincer?" A few seconds later, Mr. Gower, a man whose livelihood George saved in real-world, staggers into the bar in alt-world out of the snowy night, disheveled and incoherent and is instantly set upon by Nick who then throws out George and Clarence after realizing they know Gower.

At that point, it HAS become clear. The sleepy town of Bedford Falls -- the epitome of a Normal Rockwell-like small town America -- has truly been transformed into Potterville, a crass, cold, uncaring, mean-cuz-it's-fun hellhole that perfectly matches the morals and personality of Henry Potter, the warped, frustrated old man bent on dominating everything in the town.

The essence of this scene -- an entire town filled with miserable, mean people who just want to sit in a bar and drink hard liquor and get drunk fast to avoid the reality of their lives controlled by a man doing everything in his power to rig the town's entire economy to force that dependency -- has many parallels to current America.

• tremendous income and wealth inequality
• large numbers strung out on illicit drugs
• even larger numbers strung out on drugs first obtained by prescription
• millions who would be bankrupt in 6 months if they lost a paycheck but still insist on owning the latest $699 smartphone

As a thought exercise in pop/national psychology, one can probably make a defensible case for tracing much of the above back to one decade -- the 1980s -- and two figures -- Jack Welch and Robin Leach.

How so?

In the 1980s, Jack Welch became a household name in the business community and the larger American psyche as the CEO of General Electric, which began posting an amazing series of quarterly financial reports. Those reports not only reflected success in a complicated conglomerate operating businesses in everything from appliances to television to nuclear reactors but they did so with AMAZING precision. From 1981 to 2000, the firm hit earnings forecasts TO THE PENNY for nearly every quarter. Of course, that's virtually impossible to do for a small company in a single industry. That is absolutely impossible to do for a conglomerate operating in DOZENS of industries across the entire economy whose growth cannot be predicted within 2% for any given YEAR much less individual QUARTERS. Welch did it by manipulating earnings and hundreds of auditors paid handsomely to catch this type of trickery looked away. Welch became a celebrity CEO guru, touting his Six Sigma quality BS and "cull the bottom 10% of losers every year" Human Resources philosophy and polluting much of Corporate America with the same dodgy / criminal practices. Well after Welch retired with an obscene congratulatory golden parachute, GE wound up paying $50 million in fines for decades of financial rigging, a mere pittance compared to the hundreds of billions of fraudulent shareholder value built up then lost when the reality became apparent.

In the 1980s, Robin Leach became a household name hosting a tacky TV show featuring "Lifestyles of the Rich and Famous," filling 30 minutes of airtime reminding the little people in America how the rich rolled and, week after week, subliminally conveying the non-rich watching the show were suckers for holding real jobs and having realistic goals for their families. The show also put what had been a relatively harmless degree of celebrity worship (excepting Elvis and a few other early canaries in the celebrity coalmine) into hyperdrive, pitching anyone obscenely rich as worthy of respect, regardless of how that wealth was earned -- the ultimate perversion of a uniquely American "Prosperity Gospel." If you're successful, God wants you to be successful. If you're not, well, look in the mirror.

By the mid-1990s, those two social phenomena had reinforced each other to the point that the Internet boom created a period of 4-5 years where a much larger pool of people thought they were this --->||<--- close to scoring a jackpot with options at an Internet startup or IPO investments of firms with stock prices growing 10-20 percent every year. Wow, with 20 percent yearly growth, ANYONE can invest in their 401k, never lose money and retire in 10-15 years rather than working 40 years. For a while, no one begrudged Bill Gates or Marc Andreeson or John Chambers... Or Jack Welch or Bernie Ebbers or Ken Lay... as they made billions of dollars cuz many thought they were right behind them on the gravy train, only with $M figures instead of $B figures. Hey, when you're destined for millionaire status, who cares what the billionaires are doing?

In essence, these forces combined to create a rock hard faith in a meritocracy of both corporations and those that run them. Corporations growing by leaps and bounds in market share and revenue are a reflection upon America as a whole and if they succeed, America succeeds. If giant corporations need to pay zero taxes to foster "investment" and pay executives tens of millions for their brilliance at managing such large operations, it must be allowed. The alternative would cripple their success and weaken America.

These tropes fit the goals of those in control of those large corporations but they don't fit reality.

At any point in the history of the industrialized world, there have probably been 8-10 core areas of business that are virtually ASSURED of enormous growth and success based on the science and technology of the day. Human knowledge and creativity only grows so much per year to widen the pool much beyond that. At any given point in time, the people RUNNING and OWNING those businesses are virtually GUARANTEED to make -- well... -- robber baron money. Eventually, the nature of their business becomes more commonplace and "table stakes" in the economy and growth flattens out. At that point, someone else comes up with a bright idea based on advancements in science and a new growth area attracts attention and investors looking for the next three bagger.

The American public doesn't understand these dynamics. America's leaders are controlled lock, stock and barrel by the 0.1 percenters who are intent on insuring public policy continues to go their way. Those factors explain some of the modern day similarities of America to Potterville and why breaking the cycle will be difficult.

But we have problems that go way beyond Potterville. Way beyond tendencies to drug addictions and oblivious attitudes about economics and basic decency.

What about:

• a team doctor sexually abusing HUNDREDS of female gymnasts under his care?
• musicians with decades long histories of sexual abuse of minors?
• producers with decades long histories of sexual assault of DOZENS of women?
• actors with decades long histories of sexual assault of DOZENS of women?
• multiple religions with hundreds of priests with thousands of cases of sexual assault of minors?
• a sports executive worth billions patronizing prostitutes at seedy massage parlors who couldn't speak English and were trafficked from China?
• a business executive who attempted to extort cities for tax breaks for his firm that makes billions and pays little state/federal taxes winding up getting extorted with lewd photos involving him and his mistress?

What lessons have we absorbed about the relationships between money, power, fairness and justice that enables these events to become commonplace? Those lessons need to be examined and deconstructed very quickly. The rich aren't orders of magnitude smarter or harder working than the rest of the population. Fame through sports or entertainment isn't so worthwhile to merit silence after being abused by insiders while pursuing it. Giant corporations don't have to control 40+ percent of a market to succeed at delivering goods and services needed by the public. And the public shouldn't feel obligated to give away billions in tax revenue needed for schools, roads, safety and infrastructure in order to attract jobs.

Unless Americans re-think their assumptions about money, power, fairness and justice, we're headed for a future in America that will make us yearn for mere Potterville levels of dysfunction.

WTH

BOOK REVIEW: The Power Broker

The Power Broker - Robert Moses and the Fall of New York - Robert Caro, 1162 pages + notes and index

I received a copy of The Power Broker by Robert Caro as a gift and just finished reading it. The book was given to me under the assumption its analysis of how one person shaped so much of what Americans -- and indeed many westerners in general -- view as not only the way things are but the way things should be would be interesting. That assumption was correct but the larger perspective to be gained from reading the book -- all 1162 pages of it -- is more apropos for the present reality facing America than anyone reading the book -- or even the author who wrote it -- could imagine.

The book wasn't read in "potential blog content" mode so at completion, the book wasn't filled throughout with dozens (hundreds?) of individual Post-It note tags identifying crucial quotes and conclusions to weave into a new critique and narrative. Instead, it was read straight through. The thoughts that follow are what stick out after absorbing the entire narrative without trying to recap it in exhaustive detail. The wisdom of that approach became evident after getting through all 1162 pages for reasons explained shortly.

Quick Takeaways

First, if anyone is going to read this book, I would recommend an e-book edition over the dead-trees edition.

Second, if you insist on reading the dead-trees edition, there are potential orthopedic and cardiovascular issues to consider. There is no comfortable way to hold open a book with 1280 physical pages for the 33+ hours it will take to read it. Tendon damage to the hands, wrists and elbows from holding the book open or shifting positions cannot be ruled out. If you fall asleep reading it, the weight of the book could cut off circulation to a vital limb. Hyperbole, to be sure but it really isn't any fun physically trying to read a book this large.

Third, this book was written by Robert Caro whose career motto was / is "read every page", meaning his modus operandi was / is to exhaustively collect EVERY minor document, memo, letter, newspaper article etc. regarding his topic and come to some internal understanding of what ALL of it meant before writing a single word. This approach is useful for scenarios where the findings in the final book will buck conventional thinking about the topic and that level of detail is required to counteract such doubts and effectively land an alternate perspective. The downside of this exhaustive style is... It can be exhausting to read. This book is 1162 pages long in hardback but the NOTES of the book cover pages 1163 through 1246 and the index covers another 34 pages.

This book was Caro's first book in 1974 and he won a Pulitzer Price for it. But that means the book itself is FIFTY YEARS OLD. And it covers events taking place predominately between about 1918 and 1972. That means much of the exhaustive detail included, especially about people and events between about 1918 and 1950 are not top of mind to any modern reader. Reading those details produces much the same reaction that a story of 1970s politics with references to Spirow Agnew, Ed Koch, Gerry Brown might produce with modern twenty-something voters in 2025. Who?

The few names from that era that DO click in the current consciousness only do so because the topic involves New York City and State, which cast outsized cultural / political shadows across the rest of the country. You might recognize some of the players (LaGuardia, Al Smith, FDR, Rockefeller, Chase Manhattan Bank, etc.) only because those names are still present on infrastructure or in culture and modern business.

Fourth, as I read all 1162 pages (did I mention this was a long book?), it occurred to me there IS a potential use for an Artificial Intelligence application... Scan a book like this and boil out about 40% of the hyper-explicit contextual details and zoom out a bit to focus on the larger picture. The insights in the book are worth a read that might be 500 or 600 pages, maybe even 700. But such exhaustive, fifty year-old details don't click with a current reader and obscure the points being made, rather than cement them.

What are those points?

The book was written as a biography of Robert Moses but essentially functions as an autopsy on fifty years of corrupt political practices that one guy perfected in New York that were revered by locals oblivious to their consequences (in the short term) and were mirrored across the United States. These practices have resulted in a century of self-reinforcing problems stemming from catastrophically flawed urban planning for mass transit versus vehicular transportation and related generational issues of poverty and racism. All of these cumulative failures in turn stemmed from a collective failure on the part of citizens, politicians and judges who all opted for expediency and "getting things done", often for private gain, instead of allowing democratic processes -- messy as they usually are -- to drive public policy.

The Art of Gaining Power - Have It Surrendered

How did Moses acquire all of the power he exercised?

He started in the 1910s as a graduate from Yale, Oxford then Columbia as a government reformer, attempting to land a position in NYC government to modernize its management and accounting practices to thwart the cronyism that had already taken control of the city. For several years, he wrote papers that were ignored by the city politicians until similar concerns were addressed at the state level. He finally got a position of influence when Al Smith won the New York Governorship in 1918. At that time, Moses worked closely with an advisor of Smith's, Belle Moskowitz, a woman who was a Machiavellian level genius at understanding power and influence and reading people instantaneously. It wasn't totally clear from the book what HER motivations were in using her superpowers but, in only about six months of working with her, Moses completely reoriented his approach to his work. Much of his prior fixation upon "good government" practices for ensuring government accurately reflected input from the public and accurately accounted for public spending was replaced with a fixation on simply "getting things done."

Around 1918 to 1920, the State of New York DID undertake a litany of "reform" efforts and enacted dozens of reforms, all of which were written almost exclusively by Robert Moses acting as a political consultant to those in elected office. As a part of those efforts, the Legislature enacted laws creating a special authority to manage parks throughout the state. Ostensibly, that legislation was aimed at putting park policy (funding, placement, design, construction and management) above politics by creating a special park authority that essentially operated beyond the arm of elected officials.

The good thing was that structure put park decisions out of the reach of politicians.

The bad thing was that by putting park decisions beyond the reach of POLITICIANS, it also put park decisions out of the control of VOTERS as well.

Moses WROTE nearly ALL of this legislation and knew it inside and out to the letter. Then, as the whiz kid who wrote such inspired legislation to "help the kids" and "get things done" without political machines, Moses got himself appointed to be the commissioner of this untouchable "authority."

The Power to Ignore Everyone

One he grabbed this power, he was able to begin and complete construction on parks on Long Island, primarily because

• he didn't have to honor any feedback from citizens,
• as an independent authority his costs were not subject to public audit,
• he could ignore normal red tape and bully his way from groundbreaking to opening day,
• park fees were collected by the park authority and remained under its control

Since most citizens could not see how the sausage was being made and he was "getting things done" and surely EVERYONE agreed that "parks were good," this created a (false) feedback cycle of admiration for Moses and the "authority" process he invented to bypass "petty politics." Politicians didn't object because the unhappy citizens getting screwed over by his methodology could be told "it's out of my hands" while joining him on opening day to cut the ribbon and claim credit with the rest of the voters for "getting something done" and "creating jobs." Most voters didn't object because most only enjoyed the public benefit of the resulting park without having been subjected to the local community disruption and ham-handed administrative abuses that "got things done."

Expanding the Mandate for Power

The next public infrastructure problem to hit the city and state was the volume of auto traffic that began skyrocketing after WWI throughout the 1920s and 1930s. Since the "authority" concept worked so well for parks, why not use the same approach for roads? Initially, instead of creating a separate "authority" for roads (and later bridges), Moses simply widened the definition of the scope of his "authority" in charge of parks and declared that such authority included the construction of roads to GET people to the parks. This expansion of his original "parks" mandate into roads was immediately more damaging than anyone noticed at the time for the results spread into other areas of public policy.

The "parkways" Moses began building into his various parks around the state did not merely reflect his physical design preferences but his distorted social and economic philosophies as well. Parks were for the public, but only the good public. Not the poor public. For FIFTY YEARS, he never included mass transit access into any park or bridge he built. But he went further than that. Over the course of his fifty years in control, none of the "parkways" he built included bridges over them that exceeded 11 feet in height. NOT ONE. Why? Because he wanted to ensure no bus transportation company could use the parkways to support routes that would allow the poor to reach his parks via public transportation of any kind. Even if the buses could use the center lanes, they could not use the outer lanes and Moses knew no bus company would attempt to create routes over roads limiting them to one lane. This crippled the development of bus transit not only to the parks themselves but throughout the entire region, further limiting where the poor and working class could go.

Power Through Cashflow

The special legislation that created the initial parks "authority" that Moses controlled included language which gave the authority financial and legal independence in perpetuity. On paper, the legislation politicians THOUGHT they voted for authorized the authority to issue bonds to build infrastructure item W or park X for $Y million dollars to be paid off to bondholders in Z years, after which the object created W or X would revert to city control and the authority would cease to exist. Unfortunately, none of the politicians read the ENTIRE legislation and contemplated its true legal meaning.

What the legislation ALSO included was a clause that said the authority could refinance the bonds in agreement with bondholders at any time and that ONLY when the bonds had been "extinguished" would the authority cease to exist and control of the asset revert to the city. What this meant was that Moses could simply re-finance the bonds, renew the indebtedness and continue the authority without end. This was particularly easy to do with bridge projects because toll revenues were collected by the authority, easily allowed payback over periods typically LESS than the original requested loan interval, and the bondholders loved the re-financing because the existing toll revenue was easily documented and thus new loans carried virtually zero risk and paid attractive rates. Bondholders win. Moses wins. Toll payers lose, continuing to pay tolls far beyond the time needed to payoff the bridge. The city loses, never gaining control of the asset OR its revenues. OR the man running the operation.

This modus operandi was expanded into a parallel authority, the Triborough Bridge Authority (later the Triborough Bridge and Tunnel Authority) and was used to build every bit of NYC infrastructure you've ever heard of:

• Triborough Bridge
• Henry Hudson Bridge
• Bronx-Whitestone Bridge
• Verrazzano-Narrows Bridge
• Tappan-Zee Bridge
• Lincoln Tunnel
• Cross-Bronx Expressway
• Brooklyn-Queens Expressway

All of those bridges collected toll revenues sufficient to pay back their construction in five to eight years yet Moses continued re-financing the bonds rather than paying them off then used the surpluses to capture other project work the city and state could not afford to fund, while keeping control of those projects to himself.

Racism, Poverty and Housing

As early as the 1920s, Moses had used his authority over parks and road construction to purposely limit the ability of the poor and minorities to reach his new parks or obtain any benefit from the miles of parkways he was constructing via public transportation. By 1949, the federal government recognized a monstrous shortage of housing in the post-WWII years that was particularly acute for the poor. Federal legislation referred to as TITLE I was enacted in 1949 to provide federal funding to local communities to "catch up" on housing demand and build subsidized housing for the poor.

Moses had already learned that federal politicians were equally fixated on "getting things done" as local politicians for all of the same reasons... The ability to take credit for local construction jobs and take credit for the resulting improvements. Moses knew that communities arriving in Washington with "shovel ready" plans already rolled up under their arms would get funding nearly immediately while more timid communities would have to wait. Regional powers in New York recognized the opportunity provided by federal funding for TITLE I developments, created a new public housing authority to lead the work and put Moses -- the man who "got things done" -- in charge of it.

By this time, Moses had perfected his administration of these authorities to maximize the cashflow that remained under his control and use that cash flow to dole out dollars via contracts to local firms, local lawyers and local banks for doing very little while collecting IOUs that continued to send more dollars to Moses. In the 1950s, it became apparent that Moses was

• handing no-bid contracts to construction firms with zero experience building housing
• funneling loan business to ONE bank whose owner was under Moses' control
• funneling required insurance policy business to a favored underwriter who was collecting premiums while covering zero risk
• the selected firms were NOT actually building new TITLE I housing
• the selected firms were actually continuing to collect rent from existing slum tenants while halting all sustaining maintenance, doubling down on their role as slum lords

Despite the discovery of this multi-million dollar fraud spanning 5-6 years, coverage of the fraud was only pushed by two of the smaller papers in the city and all of it was tagged to "the city" as the primary actor when in fact TITLE I housing was completely under Moses' control. None of that was mentioned so his public persona as "Mr Public Integrity" remained intact.

It Takes Power to Thwart Power

One key from the book is that aside from age (death, actually) which would have eventually eliminated Moses from power, the only factor that WAS able to remove him from power was conflict with Governor Nelson Rockefeller, a man from a family so wealthy that Nelson owed no favors to anyone. But the real reason Rockefeller was able to chase Moses out of his unappointed, unaccountable positions was that the Rockefeller family controlled Chase Manhattan bank which was led by his brother David Rockefeller. Chase Manhattan happened to be the trustee controlling the vast majority of bonds outstanding from the Triborough Bridge and Tunnel Authority. Besides the language that allowed the authority to operate in perpetuity as long as Moses (its sole negotiator) and the bondholders agreed to keep re-financing the bonds, the language governing the authority protected the authority from being merged with any other entity or authority, giving the bondholders veto rights over such re-orgs. However, Nelson and David knew that individual bond holders were unlikely to spend the time legally fighting reorganizations so if the TRUSTEE of those bonds, Chase Manhattan Bank, did not object in its role as trustee, a re-organization could be initiated and survive.

After fifty years of power, that language proved to be the crucial chink in the armor providing financial and political invincibility to Moses. GOVERNOR Nelson Rockefeller devised a merger between the Triborough authority led by Moses and another authority with several voting seats. GOVERNOR Nelson confirmed with BROTHER David that Chase Manhattan, acting as trustee for the Triborough authorities bonds, would NOT object to the change in structure, allowing a new combined authority with board seats not controlled by Moses to be formed. By this point in the latter 1960s, Moses was at the point where he was willing to let some of his positions go and he thought he had an agreement with Nelson Rockefeller to keep the positions he wanted so he didn't object either. The merger happened, the voting rights changed, then Nelson Rockefeller iced Moses out of all his prior positions and left him with a meaningless "consulting" job with no control of any subordinates or money.

Looking Back Over a Century

Moses' track record of bullying citizens dated back to 1920 on Long Island. His record of failure for solving any actual traffic problems with more road construction dated from the 1930s. His failure of solving any traffic problems with new bridges was often evident within WEEKS of a new bridge opening, as traffic adapted to the new available path then overwhelmed it. The corruption in his management of public housing was crystal clear by the mid 1950s. Yet the press and politicians were all willing to ignore the reality in front of them because he had perfected an entire system of reinforcing financial and political rewards amid a legal vacuum of his own design that kept enough of the powerful happy to be willing to screw over the twelve million living in his concrete dystopia.

His fixation on roads versus public transportation spread across the entire US after 1945, crippling US investment in trains and mass transit and creating the urban sprawl crippling the economy and ecology today. The combination of his fixation on cars versus mass transit combined with public housing ACCELERATED the destruction of neighborhoods into slums in NYC and, again, because those practices were followed in nearly every major city in the US, created the same reinforcing problems across the entire country.

After reading this history, it is easy to see that the same techniques to spread money around to grease the required palms to undertake massive projects that are NOT serving the majority of the public's needs are used throughout the country. It is also evident how deeply the hole has been dug using these techniques of public corruption in both public transit and the larger issues of racism and wealth inequality. No matter how enlightened one might try to be about history, economics and racism, the actual history and feedback loop is far worse and far more intentional than one could previously imagine.

WTH