Tuesday, August 18, 2015

Income Inequality in the United States

By Matthew Dunn
                The popular and critically acclaimed television series “Mad Men” on AMC, brought viewers into the world of the advertising industry in the 1960s.  The protagonist of the series, Don Draper, is a successful executive who is well known for his brilliant advertising messages.  Although Draper is often presented as discontent with his personal life, he does have all the genuine markers of wealth that classify someone in the 1% of wealthiest Americans.  When the show begins in 1960, he is living with his beautiful wife and two children in the wealthy suburb of Ossining which is Westchester, New York.  Don lives in a very large house, has two cars, sends his children to excellent schools, has a full time nanny (even though his wife does not work), and even pays for his wife’s equestrian hobby.  In Don’ business life he frequently goes to the finest restaurants and travels the nation.  He manages to do all of this while having an alcohol dependency and several mistresses. 
                The fictional Don Draper lived through what is called by some as “The Golden Age of Capitalism”.  That is that business thrived, unemployment was low, people had money to spend, and economic crises seemed a thing of the past.  With all the new wealth that was created during this time, the United States government decided that it was best that those with the most would pay a very large share of their earnings in income taxes.  Between 1960 and 1970 the marginal tax rate for the highest incomes was between 70% and 90%.[i]  So even with 90% of his earnings going to taxes, Don Draper still had the ability to live quite the lifestyle. 
                However, in the 21st century, income tax rates have gone down significantly.  During the 1980’s marginal tax rates declined significantly for the wealthiest Americans.  Between 1980-1988, the marginal tax rate declined from 70% to 28%.  Since then the highest marginal tax rate that wealthy Americans have paid has been 40%.[ii]  This has been part of a major income redistribution.  That redistribution has favored the wealthiest members of our society.  In fact for many of these wealthy Americans they earn their fortunes through capital gains and they pay a mere 15% on much of their wealth.   Warren Buffett, one of the wealthiest men in the world, once commented that “his tax rate was lower than his secretary’s”. 
                Republicans would like us to believe that business will be decimated by high taxes.  This is completely false.  In fact American business reigned supreme during the post-war years.  During the 1950s and 1960s General Motors was the largest company in the world.  GM’s President, Alfred Sloan, was so wealthy he was able to start a huge foundation bearing his name, and generously donate much of his fortune to causes such as treating cancer and education (Memorial Sloan-Kettering Cancer Center bears the name of him and his head of research at GM, Charles Kettering).  Today, GM is mostly known for its 2009 bankruptcy.  There are many reasons for this of course, such as increased competition, and bad business practices by GM, however, it cannot be argued that GM performed better under lower government taxes. 
                So, wealthy Americans need not worry about high taxes.  Perhaps it is time that the wealthy only have two homes instead of five.  One boat instead of three.  A Mercedes instead of a Ferrari.  The tax policies which have been instituted since 1980, have only helped the wealthiest Americans, while everyone else has been struggling to stay afloat.  High taxes allowed governments to build tremendous infrastructure.  It allowed Americans to go to public colleges for free.  It even allowed people to buy a tremendous amount of consumer goods, without having to use credit cards.  It is time for the wealthy to pay their fair share. 






[i] Piketty, Thomas.  Capital in the 21st Century.  Cambridge, Massachusetts: The Belknap Press of Harvard University Press.  2014.  Graph on page 499.  
[ii] Ibid, pg 499-500

Monday, July 20, 2015

Ice Cream and Employment

By Matthew Dunn
On a warm summer evening where is one to go in order to fulfill that craving for something cool; to the ice cream parlor of course!  This past Sunday was National Ice Cream Day, and ice cream stores around the nation, created promotions designed to get people to buy ice cream.  When arriving at a local Carvel that evening, my wife and I had to wait in a considerable line because Carvel was offering a two for one deal.  Waiting in line is never a pleasant experience, but we shouldered through it because, I mean it was two for one. 
                Behind us, I could hear a woman who was dissatisfied with the service.  The main cause of the line was the fact that there were only two employees handling all of the business of the store.  She observed this and she said “Shame on the owner, for only having two people work today”.  However, as a frequent customer at this establishment, I don’t think that I have ever seen more than two or three people working there.  In fact I don’t think I’ve ever seen more than two or three people working at any Carvel, or any other ice cream establishment.  As a person who briefly worked the ice cream counter at Friendly’s, it can become a fairly stressful experience for employees, especially when customers get agitated. 
                So why not have more people working?  Simple: Labor costs.  Labor is a large business cost, and it is one that is most easy to control.  Businesses have little effect on the overall cost of supplies needed like electricity, fuel, or food, but they can control labor costs.  So businesses generally try to do their best on saving on labor costs.  One can imagine that the two employees of Carvel were probably making close to minimum wage.  So judging by the fact that an ice cream cone is at least five dollars, the owner could pay their hourly salaries with the sale of four ice cream cones.  So it seems that this owner is probably doing very well. 
So who is the owner?  Carvel stores are independently owned franchises but  the Carvel brand is a subsidiary of Focus Brands, which is in turn an affiliate of The Roark Capital Group.  Roark Capital, is a private equity firm which specializes in buying businesses such as Carvel.  They also have ownership of restaurants such as Carl’s Jr., Hardee’s, Arby’s, Cinnabon, and Auntie Anne’s.  Because they have ownership of restaurants that sell mostly high fat, high sugar food, they balance that portfolio with diet and fitness products like Atkins Nutritionals and Anytime Fitness.  Besides these and other food service restaurants, they own supermarkets, pet stores, professional sports leagues, car service companies, and private schools.  Overall according to their website they have over $6 billion in assets under management. 
Now on this company’s website they list the members of their team.  By my personal count there were 54 people listed.  In fact those seem to be the only direct employees of Roark Capital.  There are 27 people listed under the investment professionals section, some of whom have the title of summer intern.  From the fact that they are in charge of such large brands and so much capital, it seems that they can do a lot with what they have.[i]  So if a $6 billion company has only 54 people listed as part of the team, why would we expect an ice cream parlor to have more than one or two? 
The simple fact is, is that there are too many people for the jobs that are available in the United States.  Walmart is the largest private employer in the world and the only two entities that employ more are The United States Department of Defense and the People’s Liberation Army of China.[ii] Now, Walmart is considered by many to be a terrible place to work.  Almost anything you can associate with a bad job, Walmart has it, and it has become well known.  So even with the things that people know about Walmart, The Washington Post reported that when a Walmart opened in the Washington D.C. area, 23,000 people applied for 600 jobs.[iii]  Just think of that statistic the next time you think, “man that person should get a job.” 
The fact is that the private sector is not in the business of employing people.  They are in the business of making profit.  If hiring people helps them make a profit, then they will hire.  If not, then they will not hire.  If they can have one person do several jobs, like at the ice cream store they will.  If they can replace an employee with a machine, they will.  At a time, when so many are desperate for employment, the business owners will not save us.  In fact the more we rely on business owners, we will continue to see great numbers of people who are unemployed, under-employed, or employed at positions which pay them a less than satisfactory wage. 
The government needs to step in and take charge in these situations.  When Franklin D. Roosevelt was president, many government jobs programs were created.  There are countless opportunities that can be created in any number of industries.  It is time that this period of our history was repeated. 



[i] Information retrieved from the Roark Capital Group Website. http://www.roarkcapital.com/. Retrived 7/19/2015.  If there are any errors in the calculations they are the error of the author. 
[iii] Ingraham, Christopher.  The Washington Post, 3/28/14 http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/28/wal-mart-has-a-lower-acceptance-rate-than-harvard/. Retrieved 7/19/2015. 

Friday, July 3, 2015

Bernie Sanders for President!

By Matthew Dunn

                Last month the news of Puerto Rico’s impending default on its national debts made headlines.  Puerto Rico owes over $70 billion in debts and they simply cannot pay it.  So why is Puerto Rico so in debt?  Part of the reason owes to new policies it has carried out involving taxes and wealthy residents.  Under this tax law, new residents of Puerto Rico would pay no local or federal taxes on capital gains (profits made on trading securities such as stocks and bonds).   This was clearly a move to try and get wealthy residents to move to the island.[i] 
                One of the big supporters of this idea was John Paulson, a wealthy hedge fund operator.  Paulson is an investor who made one of his biggest profits betting against the sub-prime mortgage crisis.  Paulson invested heavily in Puerto Rico and also campaigned for wealthy individuals to move there.  So because Puerto Rico would not charge any taxes on capital gains (this is how many wealthy individuals make much of their money) they had to borrow in order to finance their government.  So who was one of the most prominent lenders to Puerto Rico?  You guessed it, John Paulson.  So after being convinced by wealthy individuals to eliminate taxes on capital gains, they then lend money to the distressed government.  With Puerto Rico now defaulting on its bonds, the bondholders will determine the government’s actions for some time.  Meanwhile the people who suffer are the ordinary people of Puerto Rico who have an official unemployment rate of 12%, well higher than any U.S. state.[ii]  It appears that the old trickle-down theory of economics, is more like flooding up economics.
                Now, this is just a symptom of a system gone terribly out of control.  The economic system of the United States has become so based on speculation and finance that speculators are basically free to do whatever they want.  There were almost no consequences for those responsible for the Great Recession.  Unless bankers committed outright fraud, none did any jailtime.  Meanwhile Wall Street continues to profit off of ordinary Americans, and right wing politicians and pundits keep clamoring on for de-regulation and lower taxes on the wealthy. 
                Bernie Sanders is a politician who is against all of this.  He is the only Presidential candidate who is prepared to take on Wall Street interests.  He wants to tax Wall Street.  He wants to create a federal jobs program to put Americans to work.  He wants America to be a more equitable place, and not just an opportunity for investment for the wealthy few.  And although he is running in the Democratic Primary, he has been a proud independent member of Congress for decades.  He is not beholden to any large financial powers. 
                Bernie Sanders will not be politics as usual.  Mr. Sanders talks about issues that other politicians ignore and does not give puff piece interviews.  He is the kind of president that we need.  We don’t need another Bush or Clinton in the White House. 
Vote Bernie Sanders in 2016!






[i] Burton, Katherine, BloombergBusiness, “Paulson as Cheerleader for Puerto Rico Sees Rich Influx”. http://www.bloomberg.com/news/articles/2014-04-25/paulson-as-cheerleader-for-puerto-rico-sees-rich-influx. Retrieved July 3, 2015. 
[ii] Gonzalez, Juan, Common Dreams, “Puerto Rico-Like Greece- Will Default on its Debts, As the U.S. has Ignored the Island’s Financial Problems for Decades”. http://www.commondreams.org/views/2015/07/01/puerto-rico-greece-will-default-its-debts-us-has-ignored-islands-financial-problems. Retrieved July 3, 2015.  

Monday, March 23, 2015

The Backbone of the School Choice Movement

By Matthew Dunn
                “You wake up every morning knowing that 46,000 kids are counting on you right now, and that most of them are getting a pretty crappy education right now.”- Michelle Rhee, Waiting for Superman, 2010. 
                Michelle Rhee could be described as something of a lightning rod for the school choice movement.  During her tenure as the Washington D.C. Public Schools superintendent, she earned a reputation for a no-nonsense approach to pushing her policies through.  Her tenure at this position was marked by firings of teachers and principals based on school results.  She was hailed as the tough person who could turn around the public schools of Washington D.C. During her years at the head of the schools the students of D.C., showed great improvements on standardized tests.  However, she made many enemies throughout her time at this position and she contributed to the defeat of Mayor Adrian Fenty who appointed her.  In the wake of her tenure, many of her claims of improving student test results have been called into question, and claims of cheating have appeared.
                However, she’s a go getter.  She started a non-profit called Students First in the wake of her short term as D.C.’s Superintendent.  This non-profit devotes itself to school choice efforts and changes in public education.  They rate states based on their educational policies, they attempt to create more school choice for parents, and they confront what they see as the powerful influence of teachers’ unions. 
                Rhee has made a name for herself with an aggressive public persona.  She has been shown firing staff on camera, and has made quite a name for herself.  She has appeared on many talk shows and in publications demonstrating her beliefs about the problems with public schools, and how organizations like hers are working to fix them.  Her organization has become an influential voice in the school reform movement, and is a very effective lobbying organization.  So how did Students First become so influential in only a couple of years?  In order to do that, we have to look beyond Rhee and take a look at some of the biggest supporters of her organization. 
John Arnold
The Laura and John Arnold Foundation has been one of the biggest donors to Rhee’s organization, Students First.[i]   They have pledged millions to Students First for lobbying and operating costs.  John Arnold is a former futures trader and hedge fund manager.  Arnold became a billionaire in the energy derivatives business (selling contracts based on the future costs of energy).  Arnold was so successful he was able to retire before the age of 40, with a net worth of $2.8 billion.  Arnold now devotes most of his energy with his wife to philanthropy, through their foundation The Laura and John Arnold Foundation.      
So how did Arnold become so wealthy at such a young age?  Arnold got his start in the business in the 1990’s at the now defunct Enron.  Arnold made a killing at Enron earning millions.  When Enron’s ponzi scheme came crashing down in 2002, Arnold went into business for himself founding his own energy derivatives hedge fund called Centaurus. 
                Arnold made his money largely through trading derivatives on natural gas.  While at Enron, one of his colleagues referred to him as the “king of natural gas.”[ii] His new hedge fund continued to make millions, so much so that he was able to do what many Americans dream of doing, retiring before the age of 40.  He and his wife started their foundation with their profits. 
                Now, Arnold appears to truly fit the mold of an unscrupulous businessman.  Enron was notorious for defrauding investors and employees, and the two major executives Jeffrey Skilling and Kenneth Lay, were sentenced to long prison sentences.  Natural gas has also become a controversial issue because one of the main ways of obtaining it is through a geological practice known as Hydraulic Fracturing, or fracking.  What this process entails is drilling into the Earth’s shale layer and causing disruptions which cause natural gas to become available. 
                However, fracking has become controversial for a number of reasons.  One is that fracking is known to release a well known carcinogen, benzene, into the water supply.  Benzene has been documented by medical scientists as one of the carcinogens which can lead to leukemia, a cancer of the white blood cells.  Leukemia, is well known as the most common childhood cancer, and while treatable can still be fatal.
                Now, Arnold is someone who profits greatly off of natural gas extraction.  His operations lead to benzene being pumped into the water supply, and causing a great risk factor for childhood leukemia.  Children, who are diagnosed with leukemia, will definitely not be able to attend any school for long periods of time.  As important as education is to children, it is not as important as their health. 

Betsy and Dick Devos
                Betsy Devos, has been a strong campaigner for conservative causes and school reform in recent years.  She has worked with Students First to promote school vouchers as a form of school choice.  School vouchers are a controversial idea, in which parents are given money by the state government and then they can use that money to send their children to any school of their choosing.  This idea is controversial because it can been seen as a state subsidy to religious private schools.  Betsy has been very involved in this campaign along with her husband Dick DeVos Jr.
Betsy and Dick are throwbacks to the good old days when you could accuse a woman of being a witch and burn them at the stake.  As highly religious people, they put their faith into not only Jesus Christ but free unregulated capitalism.  Besty is a member of the prestigious Prince family of Michigan.  The Prince family became wealthy by owning an auto-parts supply manufacturing business.  Betsy’s brother Erik, became famous for serving in the Navy Seals and then founding the private security firm (which is code for mercenaries )Blackwater.  Blackwater has served all over the world as private soldiers, and has been implicated for their roles in war related crimes.    Dick, the son of Dick Sr. Devos, is heir to the Amway Corporation, as well as the Orlando Magic basketball team. 
Betsy and Dick spend much of their private time involved in a number of conservative causes.  Dick Jr. ran for governor of Michigan in 2006, running on a platform that included opposition to the teaching of evolution, opposition to abortion in all instances, and the promotion of religious charter schools.  Dick and his father, Dick Sr., have also donated large amounts of funds to the Dominionist Project which seeks to reclaim America for Christ.  They campaign largely against what they see as activist judges, and want to put LGBT (lesbian,gay,bisexual,transgender) people in prison along with women who seek abortions.[iii]
                Betsy and Dick have worked hard to push not only for more school choice but for school vouchers which would allow parents to send their children to religious schools with state funds.  DeVos has given a great deal of time and energy to school privatization efforts and has worked with Rhee’s organization on several occasions.[iv]
                Now refusing to teach evolution in schools, while openly professing hatred for LGBT people does not seem like a recipe for creating good schools.  LGBT children have a significantly higher suicide rate than the rest of the population, and it seems that people who wish to deny them their civil rights, are hardly the kind of people we should take advice from on putting “students first”. 
Paul Tudor Jones
                Paul Tudor Jones is the founder of The Excellence Boys Charter School and he has been a financier and Board member of Students First NY.[v]
 Paul Tudor Jones is another financial power player, known for his aggressive style.  Working again in high finance he has become well known for a type “take no prisoners” style of financial trading.  Jones is kind of a carpetbagger in reverse, who was raised in a prominent southern family in Tennessee, and then moved to New York to make it big in finance.  Jones was profiled in a piece several years ago on 60 Minutes in 2013, where he talked about his philanthropy efforts at The Robin Hood Foundation which he founded.  Jones also founded his own charter school, The Excellence Boys Charter Schools, and he sits on the board of Students First NY.[vi]
                Now Jones was profiled about his so called business philanthropy efforts on 60 Minutes, but they did not talk about his background.  Jones’ family has great connections to the cotton business in the Southern states.  Jones’ cousin William Dunavant was the leader of Dunavant Enterprises which was one of the leading cotton transporters in the world.  Dunavant Enterprises goes all the way back to the post-civil war days.  Dunavant’s grandfather Colonel William Dunavant founded the company with Nathan Bedford Forrest after the Civil War as a railroad transport for cotton.[vii]
                For those who are not familiar with the name Nathan Bedford Forrest, he is probably someone that a company would try to disassociate themselves from.  Forrest was a general for the Confederate States of America during the Civil War.  Known as a brilliant tactician, he fought the Union army strongly in several battles.  During this time, he also gained a reputation for massive brutality.  At the Battle of Fort Pillow, Forrest’s troops gunned down black soldiers and refused to take any prisoners.  Some of the black soldiers were burned alive.[viii] This became known as the Fort Pillow Massacre, and became a rallying cry for black Union troops in the battles that came after.  After the war, Forrest became a successful railroad executive.  In his spare time, he helped to found the Ku Klux Klan, and became its first honorary Grand Wizard.  The Klan’s reported goal at this time was “to keep the niggers in their place.”[ix] The Ku Klux Klan would then carry out acts of terror on blacks and their political allies in the Reconstruction years.  Colonel William Dunavant proudly went into business with Forrest after the war.  Southerners largely were able to keep blacks in a state of slavery after emancipation by creating the sharecropping system, which lead to blacks remaining in a state of poverty.
                Now if Jones talked about his family’s role in all of this, he would probably become a sympathetic figure.   However, his family connections have led to his wealth, so a family history of involvement with terrorists would not be mentioned.  It further complicates things because of the charter school that he helped found.  Jones’ charter school Excellence Boys Academy serves 690 boys in the Bedford-Stuyvesant neighborhood of Brooklyn according to their website.  They proudly talk about the accomplishments of the proficiency levels of the students at their school.  If one looks closer at their school report card one can find other interesting statistics. 
                It seems as though the Excellence Boys Academy as well as being segregated by sex, is also segregated by race.  According the New York State Report Card 95% of the students at the school are African American.  There are no white students at the school.  During the famous Brown v. Board of Education Supreme Court Case evidence was presented about the psychological harm of segregation.  Psychologist Dr. Kenneth Clark’s famous doll study concluded that segregation negatively affected the self-esteem and psyche of African American children.  These findings helped convince the court to desegregate public schools in the United States.[x] By the fact that his school is completely segregated Jones and the staff of this school would seem to be denying these studies.
                Also it is revealed with the New York State Report Card that Excellence Academy has a very high suspension rate for students.  In 2010-2011, the school reported a 35% suspension rate, signaling that the school has a strong discipline policy.  This is much higher than nearby Boys and Girls High School, a public school in Bedford-Stuyvesant, which reported a suspension rate of 13% the same year.  One can imagine that students who face suspension and punishment, can probably be removed from the school easily as well.  It almost seems that Jones’ believes in hard work and discipline for black students, almost putting his staff at the school in the position of overseers.
                Jones, Arnold, and the DeVos family are some of the major power players behind the school choice movement.  They claim that public schools are failing American children and parents need to be given more school choice in order to improve American children’s education.  This message can have great appeal and seems to promote a positive message.  However, there is a darker side to this.  These people have shown that while they publicly speak of putting students first, they do not always have children’s best interests at heart.  Mr. Paul Tudor Jones, promotes racial segregation in his school, while the DeVos family helps to encourage negative attitudes towards marginalized members of our population.  Mr. Arnold has major ties to an industry which has been documented to be harmful to our environment and public health.  There is no doubt that American public schools have some problems, but are these the individuals we want to address them? 




[i] Students First Information, http://en.wikipedia.org/wiki/StudentsFirst#Funding. Retrived 3/22/15.
[iii] Zirin, Dave.  Bad Sports: How Owners are Ruining the Games We Love.  New York; Scribner. 2010. 
[iv] Clawson, Laura.  “Rhee’s Students First hires Republican Lobbyist to Push Pennsylvania School Privatization Bill”. http://www.dailykos.com/story/2011/10/10/1024762/-Rhee-s-StudentsFirst-hires-Republican-lobbyist-to-push-Pennsylvania-school-privatization-nbsp-bill#, Retrived 3/22/15.
[vii] Dunavant Enterprises, History.  http://www.dunavantenterprises.com/about-us/dunavant-history/. Retrived 3/22/15. 
[viii] DuBois, W.E.B. Black Reconstruction.  New York; Russell and Russell, 1935. 
[ix] Roediger, David.  How Race Survived U.S. History. London; Verson, 2008. 
[x][x] Teaching with Documents: Order of Argument in the Case, Brown v. Board of Education. http://www.archives.gov/education/lessons/brown-case-order/. Retrived 3/22/15.  

Saturday, March 7, 2015

Charter Schools and New Orleans

By Matthew Dunn

                In 2010, American Express released a commercial featuring Harlem Children’s Zone CEO Geoffrey Canada.  In this commercial Canada explained some of his efforts at using his charter school to transform the uptown Manhattan neighborhood of Harlem.  The commercial presents Canada as kind of a savior for a neighborhood which was desperate for someone to take action to combat poverty, crime, and squalor.  He then states that the Harlem Children’s Zone will help students graduate from college, and block by block they will improve their neighborhood.  This commercial truly presents a charter school that could be a stepping stone for real social transformation.[i]
                This commercial truly aimed to tug at people’s heart strings.  However, one must remember that this was a commercial designed to get people to sign up for American Express Cards.  Perhaps Canada should have started this commercial with a disclaimer that this was a commercial for a credit card which allows people to accumulate debt.  High levels of debt and punishment for not paying debts have consistently been one of the major problems that African Americans have faced.  It’s an advertisement though, so one should not expect any criticism of the company.  There is no doubt though, that one watching this commercial would feel that charter schools definitely offer a promising alternative for poor African American youth.  So let’s travel south to a region even more influenced by African American culture, New Orleans, to see how an experiment with charter schools has done.
                As New Orleans was and is a major port city, it was the one of the capitals of the slave trade before the Civil War.  African Americans today compose a large majority of the population of the city.  The public schools of New Orleans had been said to be an almost total failure in the early 21st Century.  In addition to this, New Orleans was constantly ravaged by crime and violence.  In 2005, after Hurricane Katrina ravaged the city of New Orleans, the managers of the city tried an ambitious new experiment.  After the hurricane, the city government approved a plan to turn all of the existing public schools into charter schools.  This was done without any approval from the residents and done in a time of huge suffering when people were concerned with just surviving day by day.  While residents had left the city in large numbers, the teacher’s union contracts were cancelled, public schools were closed, and privately run charters were put in their place.[ii]  This move was overseen by Paul Vallas, who had previously served as CEO of Chicago and Philadelphia’s public schools.  Vallas in his time at those positions also had promoted rapid development of charter schools.  Eventually under his tenure only four public schools remained in New Orleans. 
                So, New Orleans has had almost ten years of charter schools at this point.  They must have completely transformed the city, lowering crime and making the city a much better place to live right?  I mean if American Express advertises for it, it must be true?  In fact, New Orleans was and continues to be probably one of the worst places in the nation to live.  New Orleans has one of the 50th highest murder rates in the world, currently placing 28th, right behind Ciudad Juarez in Mexico.  Ciudad Juarez is one of the notorious border cities near the United States, where drug wars have murdered thousands in recent years, and the military was brought in to deal with the high levels of violence.[iii] It’s not exactly somewhere you would like to have any comparable statistics to.
                Now this is not to blame charter schools for the high levels of violence in the city.  It is just to point out that charter schools are not the miracle cure all that they have been said to be.  There are no easy fixes to longstanding poverty and violence that has been in certain areas of the United States since its founding.  To advertise easy solutions to this through charter schools is arrogant and deceiving.  The fact that schools in New Orleans were failing is no surprise.  They were concentrated in an area which has been dominated by poverty and racism since the first European settlement.  In addition to this, giving public property to private managers in a time of crisis hardly seems to be a democratic idea.  We fight wars supposedly to bring democracy to people of other nations, so they can make decisions for themselves.  Maybe we need to start bringing more democracy to our own cities, rather than promoting quick fixes.



[i] American Express Members Project TV Spot. https://www.youtube.com/watch?v=_ZxS-rnjOGQ. Retrived 3/2/2015.  This and other Harlem Children’s Zone ads can be seen as well, documenting their efforts to transform education in Harlem. 
[ii] Klein, Naomi.  The Shock Doctrine: The Rise of Disaster Capitalism.  New York; Picador, 2007. 
[iii] List of Countries by Murder Rate. http://en.wikipedia.org/wiki/List_of_cities_by_murder_rate. Retrived 3/7/2015. 

Saturday, January 17, 2015

Monopolies?

By Matthew Dunn

                During Andrew Cuomo’s re-election campaign, he said that public schools were one of the remaining few public monopolies.  Since being re-elected he has made it clear that he intends to reorganize the public schools in New York State for this reason.  These recent statements make it clear that Governor Cuomo believes that things that in private hands are run better than those run by the public sector.  I propose that Governor Cuomo test his hypothesis by having one of his largest campaign donors, run a school: James Dolan. 
                For those who have been fans of the Knicks for the last fifteen years or so, the name James Dolan might send shivers down your spine.  James Dolan is the CEO of Cablevision, a large cable and internet provider in the tri-state area, and also is Executive Chairman of the Madison Square Garden Company, which not only owns the teams that play in Madison Square Garden (the Knicks and Rangers) but also a host of other entertainment venues in New York City, including the famous Radio City Music Hall.  Dolan’s company Cablevision was one of Cuomo’s largest campaign donors in the 2014 election, donating a sum of $354,097 to the state Democratic Committee during the last election cycle.  Dolan’s companies are very profitable, so perhaps Governor Cuomo would like to have this titan of industry show the public school monopolies how to run things.  So let’s take a look at the great results of Dolan’s business practices.
                As Chairman of the Madison Square Garden Company, Dolan has been the primary owner of the New York Knicks.  In the last 15 years, the New York Knicks have largely been the laughing stock of the NBA.  They have consistently had among the highest payrolls in the NBA, and have produced some of the worst results.  This current season, may turn out to be the most embarrassing for the Knicks as they are currently are the worst team in the NBA, and have lost 16 games in a row at the time of this writing.  In addition to this, the Knicks have become infamous with high ticket prices while putting out a terrible product.   We will also have to overlook the management structure at the Knicks which a few years back under Dolan and Isaiah Thomas, created an environment so hostile to women, that former Knicks vice president Anucah Browne Sanders was able to win $11.6 million in damages in a sexual harassment lawsuit against the organization.  With this information as well as Dolan’s history of substance abuse, we can gather that he probably isn’t the best person to work for. 
                Alright, well that’s just his sports team.  Surely that’s not the only aspect of Dolan’s business abilities.  Cablevision, is a billion dollar cable and internet provider that is surely a better example of the wonders of Dolan’s management.  On an online survey site entitled consumeraffairs.com, Cablevision was received a rating of 1.5 stars out of a possible 5.  As you read through the website at the customer comments you see that the complaints usually are about the costs and the poor service that Cablevision offers, which is the complaint that most people have about their cable and internet providers.  So why if the service they provide is considered poor at best, are they able to be so successful?  Simple, Cablevision is a near monopoly on the cable market in the places that it operates.
                Cable companies operate largely by acting like drug cartels.  Generally, they take over a territory and are able to take over exclusive rights to serve an area.  On Long Island, Cablevision is one of the two main internet and cable providers.  In Nassau and Suffolk, other big players in the cable market such as companies like Time Warner and Comcast, do not operate.  In return, Cablevision does not try to gain a foothold in New York City, which it leaves to these other companies.  Therefore, anyone wishing to use the internet or watch cable television in the Long Island market has the choice to use either Cablevision or its only competitor, Verizon, hardly a choice involving any form of small business.
                In addition to cable and internet service, Cablevision owns Newsday and News 12 on Long Island.  These media outlets are considered the main print and tv sources of news for people living on Long Island.  With the exception of local town papers, and Verizon’s local news station, there really is no other source of news on Long Island.  So if you couple the fact that Cablevision owns most of the provision of cable and internet service on Long Island, with the fact that they own the majority of the information that is released, coupled with their interests in sports and entertainment through the Madison Square Garden Company, you see quite a media empire.  One might even go so far as to call it a, dare I say it, a monopoly. 
                James Dolan of Cablevision and Governor Andrew Cuomo are truly kindred spirits.  They both had very successful fathers, and it seems that both of them are now trying to live up to the expectations of their dads.  Governor Cuomo also seems as though he would like to open up what he calls a public monopoly, and turn it into more of a private monopoly like James Dolan has with Cablevision.  As James Dolan’s companies have shown, he is a master of creating a profit by offering a very terrible product.  As much as people like Governor Cuomo, complain about the mismanagement of schools, having a businessman like James Dolan run schools, would hardly be any better.  But maybe giving Dolan a chance to run schools will defy expectations. However, if Cuomo engaged in this kind of experiment it would probably make the parents and teachers at schools feel just like Knick fans, consistently disappointed.


-          If you are more interested in James Dolan, and other horrible owners of sports teams, read Dave Zirin’s excellent book Bad Sports: How Owners Are Ruining the Games We Love.  In this book he gives a detailed explanation of Dolan’s practices as owner of the Knicks, as well as discussing some of the other worst owners in professional sports.