Louis Proyect: The Unrepentant Marxist

July 23, 2018

The New York City real estate/housing crisis, part 3

Filed under: housing,real estate — louisproyect @ 4:06 pm

An ongoing impromptu demonstration across the street from my high-rise building on Manhattan’s exclusive upper east side reminded me of a series of posts I started on real estate. Kaia, a tiny wine bar that featured mostly appetizers native to South Africa and that was shut down by tax collectors, has prompted its loyal customers to post statements of solidarity on its windows next to the tax collector’s scary looking red sign. In all the years I have been living in Manhattan, I have never seen such a proclamation even though bankruptcy notices are omnipresent.

I am in no position to judge the merits of the actual tax liability incurred by Kaia but I have a feeling that owner Suzaan Hauptfleisch was perhaps delaying tax payments because of the onerous rent she was paying for the tiny space of around 500 square feet, which I estimate to be about $10,000 per month. Wine bars typically are closed until around 5pm so this meant that this would require heavy traffic every night. My wife and I used to stop in at Kaia’s when it opened in 2010 but were forced to become former customers when a glass of wine began to cost at least $15. I have no idea how the regulars there could afford the place but then again one bedroom condos in the neighborhood are going for $850,000.

Hauptfleisch’s background is noteworthy as the Falung Gong free newspaper, of all places, reports.

Hauptfleisch grew up on one of the oldest farms in the Free State. Her family owned it for 250 years.

“We were people from the land,” she said. “I loved walking long distances and singing at the top of my lungs as a child.”

“We had a big farm. … I walked through corn fields to be alone and get away from it all,” she said.

Hauptfleisch grew up during apartheid. She recalled living in perpetual fear of farm killings.

“That was always a problem in the early 1990s,” she said. “People would murder entire families on white farms.”

It was uncommon for white South African farmers to be liberals during that time, but Hauptfleisch’s family was. In 1968, Hauptfleisch’s paternal grandmother Cienie Hauptfleisch founded a school on the farm for black children.

The school had one teacher, who taught at levels from first grade to ninth grade until the family lost the farm in 1993 due to financial troubles.

But during its 25 years of existence, the school produced several students who went on to higher education and became teachers, lawyers, and doctors.

“To this day, I believe we weren’t touched because of my [family’s] name,” Hauptfleisch said.

A couple of days ago, I stopped in front of Kaia’s and struck up a conversation with a woman who was not only a customer but someone who completely understood the real estate crisis in New York that besides forcing people into homelessness makes places like Kaia casualties of greedy landlords. She referred me to a story that appeared on NY One, the city’s cable TV all news network:

 

Artist displays Monopoly-like cards on vacant Manhattan storefronts

By Lindsey Christ  |  July 6, 2018 @10:11 PM

At the legendary corner of Bleecker and MacDougal streets, several storefronts are empty. Pasted on the windows are mysterious posters resembling oversized Monopoly cards.

“It looked like a big game between tenants and landlords and politicians, and nobody wanted to take responsibility for anything, and everybody was just trying to play this big game,” said the artist who created them.

The artist says he has placed them on 80 vacant storefronts in Manhattan over the past three weeks, a one-man protest of how rising rents are forcing many shops and stores to close. He agreed to talk to NY1 only if he appeared in disguise.

“New York as a vibrant city is losing something,” he said. “We gain nothing from storefronts that sit empty. There’s no nightlife, there’s no life there, there’s no merchandise. Nothing’s happening, and it’s a loss for all of us.”

One Monopoly card is posted on 203 Bleecker Street. Carol Walsh’s store, Native Leather, had been here 49 years until October, when she says the landlord made it impossible to stay.

“He wanted to practically double the rent for the next tenant,” she said. “And I mean, I couldn’t do it.”

NY1 recently counted more than 50 empty stores along Bleecker Street, an iconic Greenwich Village address.

Experts say it’s not just rising rents causing the wave of vacancies, but also the shift to e-commerce.

The Monopoly cards also are displayed along Broadway and Lexington Avenue, and around the Lower East Side.

The artist says he would love to make Madison Avenue and Fifth Avenue versions of his Monopoly cards to paste on empty storefronts uptown, but he’s worried that area might be a little too high-profile for his unsanctioned art.

“Lots of security cameras, so maybe in the stealth of night, I’ll visit them,” he said.

He came up with the monthly rent prices on the cards from Real Estate Board of New York reports.

He says the response, online and on the street, has been overwelmingly positive.

“People really seem to fall in love with this, and they’re really understanding and getting the message, which I find fantastic.”

He says he will continue to post his Monopoly cards because in this real life game of real estate, New Yorkers continue to be losers.

I recommend a visit to the NY One website  to see the video interview with the artist that accompanies the article.

I also recommend tracking down the July issue of Harper’s that has an article titled “The Death of a Once Great City: The fall of New York and the urban crisis of affluence” by Kevin Baker that is thankfully not behind its paywall. Baker writes:

Between 2010 and 2014, Lynch writes, the rents in sixteen Manhattan retail corridors tracked by ­CBRE Group, the self-described largest commercial real estate services and investment firm in the world,

skyrocketed by a whopping 89.1 percent while total retail sales for the borough grew by only 31.9 percent, creating what the commercial brokerage firm called “an unsustainable situation for some tenants as rents surpassed what their sales growth could support.”

What’s more, this price gouging continued even as vacancies multiplied, a supposed impossibility under classical capitalist economics. The better business got, the more stores went under and were abandoned. The more storefronts went vacant, the higher rents kept going.

In some of the swankier districts of Manhattan, this can lead to the likes of Gwyneth Paltrow, Kanye West, or Tommy Hilfiger “popping up.” In less glamorous neighborhoods, such as my own, it’s more likely to mean the headquarters of a political campaign, or the ubiquitous Halloween costume stores that open now in mid-September. But wherever and whatever they are, the lesson is the same: everything is temporary. The whole idea of a permanent community is fading away.

For previous articles in this series, go to https://louisproyect.org/category/real-estate/.

 

May 31, 2018

The New York City real estate/housing crisis, part 2

Filed under: housing,real estate — louisproyect @ 8:32 pm

Commercial real estate: a soul-destroying monster

I got my first inkling of how escalating real estate prices were degrading Manhattan culture when the Brecht Forum was forced to close shop as the N.Y. Times reported on April 13, 2014:

For nearly 40 years the Brecht Forum has held classes, lectures, symposiums, musical performances and art exhibitions, all organized around the aim of examining the role of the political left in American society.

But in a twist of irony, the institution, long a center of skepticism against capitalism, is closing, apparently felled by market forces, its board of directors announced Saturday in an email.

“The economic climate, combined with the realities of real estate in New York City, have simply made the provision of space impossible for an organization of our means,” the message said, adding, “It has become clear that in a rapidly gentrifying city, we have been living on borrowed time.”

Traditionally, left groups always had an office in Manhattan but I was surprised to learn from Socialist Alternative member James Hoff about 4 years ago that they simply couldn’t afford one. This meant that it would prevent them from having forums in the way that the SWP used to when I was a member 40 years ago. Like Brecht School forums, it gave people on the left an opportunity to meet each other in flesh and blood, a far cry from the disembodied social media universe.

Around the same time, there was a Turkish-owned grocery store on 91st Street and First Avenue, just two blocks east of my high-rise. Not only did it stock Turkish food, you felt transported by the Turkish pop music that was always playing in the store. You could have been in Istanbul for all practical purposes. In addition to this really wonderful store, there was another Turkish-owned store that only sold turşu (pronounced turshu), or pickled vegetables and various cheeses and meze (appetizers) such as humus and eggplant. Both are gone, victims of soaring real estate prices. So did a high-end Turkish take-out specialty store on 3rd Avenue and 80th street bite the dust. The owner, a wild man named Orhan Yegen, couldn’t afford the $20,000 per month rent for a store that had less square footage than my apartment, had to shut down last year. I am told that the rent went way up after he left.

Years ago, pharmacies were owned by the men and women who staffed them and who often functioned like medical advisers. They are all gone for the most part, replaced by CVS and Walgreens that are taking over the city as voraciously as lampreys have taken over the Great Lakes. They have everything you need but they make you feel as alienated as the clerks who work in them. Besides these chains, you have banks on every block with Chase, HSBC, Santander and Citibank multiplying like the tribbles in Star Trek.

Plus the Banana Republics, Gaps, Starbucks, Pret a Mangers, Dunkin Donuts, Au Bon Pains, and every other franchise that has some private capital group behind it. As rents increase, the chance of an outlier to get off the ground gets more and more difficult.

If it is bad enough to have to deal with a monotonous diet of fast food chains and pretentious wannabe “continental” offerings like Au Bon Pain or Le Pain Quotidien, the number of art cinema houses continues to decrease, the most notable example lately being the loss of Lincoln Plaza Cinema that couldn’t afford the new lease at 61st and Broadway where it has been since 1965. Or jazz clubs. In the 1960s, they were all over lower Manhattan from the Five Spot near Cooper Union to Slugs on East 3rd Street. They have all disappeared, partly because jazz lacks the kind of charismatic figures it once had but much more because they have been priced out of the real estate market. Or book stores. Barnes and Noble have become as ubiquitous as CVS’s but they are in danger of being made obsolete by Amazon.com. Back in the 60s you could go to a place like the St. Marks Bookstore and feel connected in a way you’ll never feel in Barnes and Noble even if the clerks were surly.

Chances are when a cool little Turkish grocery store or a restaurant offering authentic Moroccan food disappears, nothing will fill the gap on a timely basis. Another phenomenon relating to exorbitant rental costs are the willingness of landlords to let something remain empty until they can find a tenant who is willing to come up with the money.

On April 16th, author Susan Shapiro wrote about all this in the Daily News. Basically, the landlords can benefit from a scam that you might expect in a city they dominate. Her accountant told her: “These big real estate companies hold out for higher rents to increase the worth of their properties because value is based on future income stream. They can afford to forego current rental income, waiting for higher-paying tenants because they claim big business losses. Landlords get a tax loss from negative rental income when no rent comes in, which cushions their lack of cash flow.”

When a Barnes and Noble closed down at 396 Avenue of the Americas, she was pained by the loss of a place she used to do readings at. Following up on the insights provided by her accountant, she did some research that revealed the following:

An online search showed that building, 396 Avenue of the Americas, is owned by Friedland Properties, valued at $3 billion dollars. They are leasing the space monthly for $139,533 which, if accurate, means the next tenant would have to pay $1,674,396 a year. No wonder it’s still empty.

“A Retail Space for Lease” sign says the managing agent is Cushman & Wakefield, one of America’s largest commercial real-estate conglomerates, with annual revenues of $6 billion. On their website they claim to be “a leading global real estate services firm that helps clients transform the way people work, shop and live.” These real estate companies should be ashamed of the negative transformation their greed has caused.

Last July, Jeremiah Moss’s “Vanishing New York: How a Great City Lost Its Soul” was published. Moss has been observing and photographing the transformation of New York for a number of years now on his blog Vanishing New York, aptly subtitled The book of lamentations: A bitterly nostalgic look at a city in the process of going extinct.

He mourns the passing of porn shops, mom-and-pop restaurants, bookstores, and even an legendary hotel like the St. Denis in which both Alexander Graham Bell and W.E.B DuBois had rooms at one point or another. Politically, Moss understands the forces that are reshaping the city into a sterile playground for financial analysts, web developers, lawyers, and anybody else who can pay the exorbitant residential rental fees that go hand in hand with the commercial real estate inflationary tsunami. The following is from his blog post prompted by the 1985 documentary Empire City that can be rented on Vimeo for $5.99. A trailer appears above.

In the 1980s, under Koch, City Hall’s goal became to re-create New York, making it friendly to big business, tourists, real estate developers, and upscale professionals. In the process, City Hall turned away from its citizens. CUNY professor and urbanist David Harvey has called this the shift from managerialism to entrepreneurialism, meaning that the city government changed its main priority from providing services and benefits for its own people to competing with other cities for outside human resources and capital. In the new competitive city, attracting tourists, newcomers, and corporations was (and still is) more important than taking care of New Yorkers.

Koch discusses this shift in Empire City, saying that New York is now for “banks, insurance companies, white-collar jobs,” and not manufacturing. During his tenure he gifted developers and corporations with the expansion of three kinds of tax abatement: J-51, giving subsidies to landlords to renovate apartments and increase gentrification; 421a, reducing taxes on luxury buildings to induce their construction in “underused” areas; and individual incentives that gave hundreds of millions to corporations like AT&T to bribe them into doing business in New York. It was an expensive smorgasbord. According to urban anthropologist Roger Sanjek, “Between 1984 and 1989, J-51 and 421a tax losses together cost the city $1.4 billion.”

(In 2016, the Times reported that, over the course of his career, Trump “reaped at least $885 million in tax breaks, grants, and other subsidies for luxury apartments, hotels, and office buildings in New York.”)

For the rest of the city, it was austerity — disinvestment, cut-backs, and layoffs.

Part one: How the poor get screwed.

 

May 23, 2018

The New York City real estate/housing crisis, part 1

Filed under: housing,real estate — louisproyect @ 7:30 pm

How poor people get screwed

This week the NY Times published two articles, each in excess of 7,000 words, about the class war being waged on the working poor. While anybody who has lived in NY for a number of years will be familiar with tales of greedy landlords, the revelations are genuinely horrific.

In the one titled “Behind New York’s Housing Crisis: Weakened Laws and Fragmented Regulation”, we learn about the dirty tricks landlords use to drive weak and easily intimidated Black or Latino tenants from rent-controlled (virtually extinct) or rent-regulated buildings in order to transform them into condos or high-rent buildings for the mostly white college graduates working in high tech, finance or other lucrative fields.

Once such a building gets into the hands of an unscrupulous landlord, the first step is to bribe some tenants to move out with an amount that might seem generous to the recipient but pocket change to the typically secretive real estate firm hiding behind a Limited Liability Corporation (LLC). Once the apartments are vacant, the construction crews flout regulations and make the building unlivable through noise that continues through the night, dust, and odors.

Crown Heights, a Brooklyn neighborhood with a mixture of Black and Hasidic residents, has now become a hotbed of gentrification where thuggish building owners see buildings like the one on 632 Sterling in the same way a shark sees a seal (I suppose that this does not do justice to sharks that are only killing to survive instead of accumulating capital.)

Cynthia Wilkie, right, and her daughter, Wendy, temporarily rented an apartment for $2,110 a month — almost triple what they paid for the Sterling Place apartment they had to leave. Michelle V. Agins/The New York Times

A 62-year old African-American tenant named Cynthia Wilkie sized up Asher Sussman, the new owner: “All he was seeing was dollar signs.” Housing regulations stipulated that  construction would not “create dust, dirt, or other inconveniences.” Sussman started off by paying off a couple of tenants to move but Wilkie was determined to stay. She had lived there for 22 years and paid about $850 a month for a three-bedroom apartment she shared with her brother, daughter and two grandchildren. She had diabetes and had undergone double-bypass heart surgery. Her 33-year old daughter Wendy was blind and wheelchair-bound as a result of childhood brain cancer, while her brother had lost his right leg to diabetes.

By early 2016, the regulation-defying construction kicked in, as well as the elimination of basic provisions such as heating. The Times stated: “The second and third floors were gutted. A staircase was removed. A hole was cut into the roof. Debris was piled in corners, against walls. Dust was everywhere.”

Deemed unsafe, the city moved the Wilkies and other tenants to a Days Inn motel. After about a year, the authorities told her fragile family to move to a homeless shelter, something that was obviously unacceptable to Cynthia Wilkie. They eventually moved to an apartment in Brownsville, a neighborhood still relatively untouched by the gentrification bulldozer. It had a bathroom too small for Wendy’s wheelchair and cost $2,110 per month, almost three times the old rent.

The follow-up article titled “The Eviction Machine Churning Through New York City” reveals how the housing court that was originally intended to defend people like the Wilkies has turned into the landlord’s weapon. Not only do they have to contend with scumbag landlords, they must fend off the shysters they hire to harass them with eviction notices over various infractions that the Times characterizes as baseless in most cases.

After living for more than a half-century in a rent-regulated apartment on West 109th Street, Neri Carranza was targeted for eviction. Ángel Franco for The New York Times

Like the focus on Cynthia Wilkie in the first article, this one chronicles the horrors that a 94-year Puerto Rican woman named Neri Carranza had to put up with when her building on West 109th St. caught in the gentrification net.

After getting a job in a glass factory in 1956, Carranza found a small two-bedroom apartment to her liking on W. 109. Fifty-four years later when she was 87, she learned that the building had been sold to the Orbach Group that promptly served her with an eviction notice. Why? Because it claimed that she was not living there. This was obvious nonsense but since the Orbach Group had paid $76 million for her building and 21 others nearby, they were wealthy and powerful enough to hire lawyers who could overpower any housing attorney working for peanuts.

The Orbach Group was founded by Meyer Orbach, who is a part owner of the Minnesota Timberwolves basketball team. In addition to the usual tactics of illegal construction and baseless eviction notices, he came up with a novel idea of how to make the mostly Latino residents on W. 109 feel unwelcome. He put gates in front of each building that made traditional social interaction by sitting on the stoop more difficult.

People being served with eviction notices like Ms. Carranza face a double jeopardy. If the Kafkaesque Housing Court that is stacked in favor of the landlord rules in his favor, it may be impossible to find a new apartment because your name goes into a black list. Even if evictions are relatively rare, many tenants grown weary of legal battles just throw in the towel and move.

One of her neighbors demonstrates how these buyouts end up to the tenant’s disadvantage:

Fallou Diop, whose family lived a few doors down from Ms. Carranza on 109th Street, was sued twice by Orbach: in 2009 for falling behind on his $1,144-a-month rent, and in 2011 for allegedly subletting rooms in his apartment. He paid his back rent. The “subletters” were relatives who had lived with him for 19 years. But about two years after winning the second case, Mr. Diop agreed to leave.

“I was sick of fighting with them and sick of the harassment,” said Mr. Diop, a retired baker who said he took a $50,000 buyout, a seeming fortune at the time. He then rented an apartment in the Bronx for $2,700 a month.

In June 2016, Orbach advertised Mr. Diop’s old apartment, urging prospective tenants, in capital letters, to “call today to view this beauty.” The monthly rent would be $4,200.

The deal did not work out so well for Mr. Diop. The buyout money ran out. At 65, he sleeps on his ex-girlfriend’s couch.

Grown weary of court battles like Mr. Diop, Carranza finally took a $100,000 buyout and moved to her niece’s house in rural Pennsylvania. The 94-year old woman, who does not speak English, has no church with services in Spanish to go to. Nor is there a grocery catering to Latinos. Nor friends to visit, nor stoops to sit on even behind a gate. There are not even sidewalks.

The Orbach Group saw W. 109th as the ideal location for Columbia students to rent an apartment. A 2015 NY Times article titled “Longtime Tenants in Manhattan See an Effort to Push Them Out” identified my old employer and Meyer Orbach as co-conspirators in a gentrification move against the working class and the poor.

Calling its new properties Columbia South, the Orbach Group began using a logo on its buildings and website that mimicked Columbia’s and offered tenants a free shuttle bus to the campus, only 9 fucking blocks away. Orbach sees the Columbia tie-in as a win-win situation. Not only are students able to pay higher rents, they are transient and thus enable him to raise the rent for the next student. After graduating, the student might get a high-paying job that will make living in an Upper East Side condo possible. In fact, there are buildings all around me that probably house many Columbia graduates now working as lawyers, doctors or investment bankers.

Ms. Carranza, who was energetic in her younger years, even earning a black belt in karate, made a visit to her old neighborhood as the NY Times describes poignantly:

Last fall, Ms. Carranza returned to close her bank account. She stood in front of her building, surrounded by friends, telling them that there were no Latinos in all of Pennsylvania.

“There’s no one to talk to,” she said. “You can talk to the trees.”

Her name was still on the buzzer at 247 West 109th Street. After a tenant invited her inside, Ms. Carranza ran her hand along the hallway as she walked, pointing out her apartment — No. 2 — and her mailbox.

After years of failed requests for the most basic repairs, her apartment had been completely remodeled — illegally, as no building permit was ever filed, buildings department records show. Two Columbia students paid about $3,500 a month to live there.

Ms. Carranza walked through the home she could no longer recognize, running her hand along the new kitchen counter, touching the new sink, remembering where she used to keep her French dining set, where she used to sleep. A stairway had been added, leading to new basement rooms. She gave one tenant a sideways glance.

“Do you think he’ll leave?” Ms. Carranza asked her niece. She paused, thinking. “What if they’d give me my apartment back?”

She would sit on the stoop again, and she would invite people over for dinner again, and she would fry chicken again. What happiness she would have, she said, if only she again had her home.

In my next post in this series, I will take up the CVS-ization of Manhattan.

May 5, 2017

How the High Line benefits High Income New Yorkers

Filed under: New York,real estate — louisproyect @ 6:40 pm

28highline-jumbo

On April 21st I wrote a favorable review of “Citizen Jane”, a documentary about Jane Jacobs who defended NYC neighborhoods from Robert Moses’s invasive attempts to force expressways on the working class residents. I did have problems, however, not so much with the film but the producer’s ties to a project that smacked of Robert Moses’s pro-capitalist agenda:

Although I can recommend this documentary highly, I would be remiss if I did not mention that one of the producers is Robert Hammond, who is executive director of Friends of the High Line that spearheaded the reclamation of a 1.5 mile elevated rail line on New York’s West Side near Chelsea. Working on this project with Joshua David, the two received the Rockefeller Foundation’s Jane Jacobs Medal in 2010. The High Line has become a big tourist attraction and a magnet for restaurants and new apartment building construction on the West Side.

I doubt that Hammond and David would have turned down the award, but I just may have after seeing Rockefeller’s name attached to it. Last year I reviewed a film titled “The Neighborhood that Disappeared” that describes the demolition of a largely Italian working class neighborhood in Albany that Jane Jacobs would have cherished. It was a victim of the master plan to create Nelson Rockefeller’s Empire State Plaza, a monstrosity that left a permanent scar on the capital city even as it expedited automobile traffic. Tying Rockefeller’s name to Jane Jacobs is almost like tying the Koch brothers’ name to an award on environmental activism.

Furthermore, even though the High Line has succeeded in terms that Jane Jacobs might have approved, its obvious charms have not been of universal benefit to people living in Chelsea, not exactly a slum that was ripe for gentrification. By the time that work on the High Line began, it was already vying with Greenwich Village for its own handsome brownstones, adorable ethnic restaurants and gay-friendly vibe.

However, the High Line was key to Chelsea being transformed into one of the city’s most expensive neighborhoods and a home to criminal oligarchs who have bought $15 million condos in the new high-rises that blight the neighborhood. I recommend “Class Divide”, an on-demand HBO documentary that I reviewed last April that identifies the High Line as a beachhead for the invasion of real estate sharks and the Russian, Chinese and Indian gangsters who now call Chelsea home. From the HBO website:

Avenues [a private school that caters to the sons and daughters of the rich] is just one example of the way the neighborhood has been dramatically transformed. The High Line, a once-abandoned elevated railroad track, was reborn and turned into a wildly popular public park in 2009. Attracting five million people a year, The High Line has transformed a once-gritty area into the hottest neighborhood in NYC’s high-end real-estate market. “Every building is trying to outdo each other,” explains Community Board Committee co-chair Joe Restuccia.

However, many buyers in this current wave of gentrification seem to have no desire to integrate into the established lower-income community. Almost 40% of high-end residences have been sold to foreign or anonymous clients, and the average rent for Chelsea apartments has risen almost ten times faster than Manhattan as a whole, ousting many who can’t afford to keep up. “I just don’t understand why the old can’t be with the new,” says Yasmin Rodriguez, a lifelong West Chelsea resident and parent who is rapidly being priced out of her own neighborhood. “I have so much history here.”


In the latest Village Voice, a newspaper that is becoming much more relevant lately because of an infusion of cash by an investor who remembers the old Voice fondly, there’s a fascinating article that discusses the High Line and Robert Hammond’s regrets about the project:

There is no better illustration of gilded, internet-age New York than the High Line.Anchored on the south by the relocated Whitney Museum and on the north by the high-rises of Hudson Yards, the elevated park sits at the center of a real estate frenzy that has uprooted earlier generations of gentrifiers, art galleries, and even the city’s sense of who should control public space.

The story of how we got here, however, has evolved over time. Before it opened with a series of ribbon-cuttings between 2009 and 2014, the High Line spent a decade in gestation, developing as the idea of a group of Chelsea residents, then spreading to the city’s gala-hopping elites, and eventually winning the embrace of the Bloomberg administration. During this era, much of the public discussion about the park was old-fashioned boosterism, gushing about its high-design, post-industrial aesthetic, its magnetic pull on tourists, and its role as lynchpin for the mushrooming art, restaurant, retail, and condominium scene in West Chelsea and the Meatpacking District.

This type of cheerleading is epitomized by New York Post restaurant and real estate writer Steve Cuozzo, who earlier this year called the park a “masterpiece” and “true wonder of our age” that has enabled “limitless popular pleasure.” Anyone who has misgivings about the High Line, he said, implies “that the High Line is somehow a racist creation” and is sympathizing with “reactionary leftists who prefer the crime-and-decay-ridden New York of the 1980s.”

Inconveniently for Cuozzo, one person with second thoughts is Friends of the High Line co-founder Robert Hammond, who now thinks the High Line didn’t pay enough attention to low- and moderate-income New Yorkers, particularly those in public housing next door to the park. “We were from the community. We wanted to do it for the neighborhood,” he told CityLab in February. “Ultimately, we failed.”

Lately, Hammond has been seeking redemption, pushing other high-profile park projects around the country to bake equity into their decision-making processes. Friends of the High Line has also been trying to make up for lost time, launching arts and jobs initiatives with residents of nearby public housing. Danya Sherman, former director of public programs, education, and community engagement for Friends of the High Line, details these efforts in her contribution to Deconstructing the High Line, a series of essays by academics, architects, and those involved in the making of the elevated park.

Equity initiatives are worthwhile, but Hammond’s recent conversion and Sherman’s essay evoke a sinking feeling that these good intentions are simply too little, too late. Before the High Line proffered progressivism through its programming, other contributors to the book note, it cast cold, hard capitalism in concrete.

The Voice article refers to a CityLab article that also reviews Hammond’s misgivings about High Line, also worth reading.

May 29, 2015

Acting for Your Life on LA’s Skid Row

Filed under: Counterpunch,poverty,real estate,theater — louisproyect @ 5:28 pm
Humanizing the Lower Depths

Acting for Your Life on LA’s Skid Row

by LOUIS PROYECT

James McEnteer’s “Acting Like it Matters: John Malpede and the Los Angeles Poverty Department”  is a complex study of an acting company made up mostly of L.A.’s Skid Row residents. With the company serving as the book’s hub, there are spokes radiating outwards to the political and social structures that put this remarkable story into context. If William Blake saw the World in a Grain of Sand, James McEnteer sees the broader problems of gentrification, police state harassment of the poor, CIA complicity with illegal drug trafficking, and the crisis of the health system as topics worthy of dramatizing by those who are its victims, the dwellers of one of the United States’ most infamous “left out” neighborhoods, but a place that despite its sorry appearance was a real estate investor’s dream.

As a New Yorker, I could not help but notice the resonances with my own city where the poor and the homeless confront the same daunting odds. McEnteer mentions in passing that Henrietta Brouwers, the companion and artistic partner of John Malpede, studied under Augusto Boal, the Brazilian director who founded the Theater of the Oppressed. As it turns out, Boal was a permanent fixture of the Brecht Forum in New York until his death. It was there that he operated “a rehearsal theater designed for people who want to learn ways of fighting back against oppression in their daily lives” in the same way that Malpede’s LAPD functioned in Los Angeles. Just six years after Boal’s passing, the Brecht Forum shut down because it could no longer afford to pay the exorbitant rents that the real estate market dictated.

read full article

January 23, 2015

Sheldon Silver, caught with his hands in the cookie jar

Filed under: crime,real estate — louisproyect @ 7:48 pm

Sheldon Silver leaving the United States Court House in Lower Manhattan after being arraigned on corruption charges on Thursday. Credit: Sam Hodgson for The New York Times

Today’s NY Times has extensive coverage on the arrest of Sheldon Silver, a powerful Democratic Party politician who like so many of his ilk going back to the days of Tammany Hall exchanged political favors for big cash bribes. Of particular interest to me was his crooked deals with figures at Columbia University and Bard College, my long time employer and alma mater respectively, two places that like to preen themselves as paragons of democracy, freedom and the American way. Of course, the American way has always been about corruption rather than democracy and freedom.

Basically Silver made millions of dollars for making connections between those in the business world and politics. In other words, he was a high-class pimp. The NY Times put it this way:

Sheldon Silver, the speaker of the New York Assembly, exploited his position as one of the most powerful politicians in the state to obtain millions of dollars in bribes and kickbacks, federal authorities said on Thursday as they announced his arrest on a sweeping series of corruption charges.

For years, Mr. Silver has earned a lucrative income outside government, asserting that he was a simple personal injury lawyer who represented ordinary people. But federal prosecutors said his purported law practice was a fiction, one he created to mask about $4 million in payoffs that he carefully and stealthily engineered for over a decade.

Mr. Silver, a Democrat from the Lower East Side of Manhattan, was accused of steering real estate developers to a law firm that paid him kickbacks. He was also accused of funneling state grants to a doctor who referred asbestos claims to a second law firm that employed Mr. Silver and paid him fees for referring clients.

“For many years, New Yorkers have asked the question: How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to honestly serve his constituents?” Preet Bharara, the United States attorney for the Southern District of New York, asked at a news conference with F.B.I. officials. “Today, we provide the answer: He didn’t.”

The Times identified Robert N. Taub, the director of the Columbia University Mesothelioma Center, as having a mutually beneficial and certainly illegal relationship with Silver.

It seems that Silver was on the payroll of Weitz & Luxenberg, a law firm that advertises its ability to win claims on behalf of mesothelioma victims so many times per hour on cable TV stations that you are practically driven to stick knitting needles into your eardrum for relief.

With his finely honed knack for making ill-gotten gains, Silver racked up $3.9 million in referral fees for cases he steered to Weitz & Luxenberg on behalf of Taub who got $500,000 in state funds in exchange. The Times reports:

Mr. Silver also got the Legislature to issue a resolution honoring the doctor, the complaint says, and helped the doctor’s son Jonathan find a job at a Brooklyn-based social services group that has received state funding with Mr. Silver’s help.

The group, OHEL Children’s Home and Family Services, issued a statement confirming that it had hired Jonathan Taub in 2012, and saying it had “cooperated fully” with prosecutors and been assured that it was “not under investigation and did nothing wrong.”

In another instance, the complaint says, Mr. Silver directed $25,000 in state funding to a nonprofit on which a relative of Dr. Taub’s served on the board of directors. Dr. Taub’s wife, Susan, serves on the board of Shalom Task Force, which promotes healthy marriages. The group received the funding in 2008, records indicate.

Although the Times does not mention Bard College board of trustee Bruce Ratner, the developer responsible for forcing his white elephant Atlantic Yards megaproject down the throats of Brooklynites, it would not surprise me that he ends up under the same kind of spotlight as Dr. Taub and hopefully in the same jail cell.

Silver worked out a deal with another shady law firm run by Jay Arthur Goldberg. Silver steered real estate developers to Goldberg in exchange for a cut of the fees. The Times names Glenwood Management as one of two real estate firms buying Silver’s favors and I’ll bet that Ratner’s Forest City Enterprises will be revealed as the other.

Last March the NY Times reported on the tangled favoritism that connected Ratner to Silver. It seems that an orthodox Jewish charity, just like Mrs. Taub’s Shalom Task Force, was key to greasing the wheels. Silver had a protégé named William Rapfogel who ran the Metropolitan Council on Jewish Poverty, a publicly financed charity whose insurance broker provided $7 million in kickbacks to Rapfogel over the years. Silver funneled millions of dollars to the Met Council and employed Mrs. Rapfogel.

In a move that reeked of Zionist ethnic cleansing of Palestinians, Silver and Rapfogel worked together to keep Puerto Ricans out of an area on the Lower East Side that had undergone “urban removal” in 1967. More than 1,800 mostly Puerto Rican low-income families had been forced to leave their buildings with the understanding that they would be able to return once new public housing had been erected.

Nearly 50 years after the forced removal, the vacant lots remained. It was Silver and Rapfogel’s intention that any new projects would preserve what they called the areas “Jewish identity”, acting through the United Jewish Council of the East Side.

In 1994, Silver and Rapfogel finally figured out the best use for the land. Housing would not even enter the picture. Instead it would be best to house a “big box” store there, like Costco. And who would be brought it in as developer? Bruce Ratner, that’s who.

Once the three men connected over the site’s future commercial possibilities, their bonds strengthened. As was the case with Taub, family favors were the norm. Rapfogel’s eldest son, Michael, a lawyer, went to work for Ratner. The Times summed up the happy coincidence of interests:

In 2006, the Public Authorities Control Board, over which Mr. Silver has significant control, approved Mr. Ratner’s Atlantic Yards project in Brooklyn. Intervention by Mr. Silver and others enabled the project to retain a lucrative tax break, even as that break was actually being phased out.

In 2008, Forest City Ratner, which compared to other developers makes few political contributions, gave $58,420 to the Democratic Assembly Housekeeping Committee, which is controlled by Mr. Silver.

That same year, Mr. Ratner helped raise $1 million for Met Council and was honored at a luncheon given by Mr. Rapfogel and Mr. Silver. “Bruce is responsible for much of the development and growth that’s gone on in Brooklyn and in Manhattan,” Mr. Silver said at the event. “He is a major force in New York City for the good.”

When I read about these corrupt bastards, I can’t help but be reminded of how criminality is embedded in the capitalist system. They keep saying that a true recovery in the USA hinges on a revitalized real estate sector. But it is exactly that sector that led to the 2008 meltdown, just as it did in Spain.

Back in 2011 I read a book titled “Sins of South Beach” that was a memoir written by a former mayor of Miami Beach who went to prison for the same kinds of charges now being made against Sheldon Silver. It was a fascinating account of how an idealistic young politician gets tempted by the devil, in this case not Mephistopheles but real estate developers looking for favors from City Hall.

I had thoughts about writing a book at the time looking at the history of corruption after the fashion of David Graeber’s book on debt. Corruption, like debt, seems to be a permanent feature of class society based on commodity exchange. When the FSLN lost power in Nicaragua, the first thing the formerly dedicated and selfless leaders did was figure out a way to game the system on their way out—the so called Sandinista piñata.

If you want to eliminate corruption, you have to eliminate money. To eliminate money, you have to produce on the basis of use values rather than exchange values. Of course, all of this seems rather utopian at this point, if not trivial in comparison to the other threats to our existence including climate change.

In any case, speaking from a purely reformist perspective, I am tickled pink at the prospects of Sheldon Silver, Dr. Robert Taub and Bruce Ratner going to prison. I hope they put them in cells next to Bernie Madoff as a reminder that connections made through a Jewish old boy’s network are okay just as long as they don’t victimize people who don’t belong to the club, especially Puerto Ricans on the Lower East Side.

April 27, 2014

Donald Sterling: racist and sexist pig extraordinaire

Filed under: capitalist pig,racism,real estate,sexism,sports — louisproyect @ 8:45 pm

This week there were blatant signs that America was not yet a “postracial” society. First we were treated to the spectacle of Nevada rancher Cliven Bundy, hailed by the libertarian right for his stand against a federal government he deemed non-existent, telling a NY Times reporter that Blacks abort their young children and put their young men in jail “because they never learned how to pick cotton.”

Fast on his heels, Donald Sterling, the 81 year old owner of the Los Angeles Clippers, a basketball team with a Black coach and star guard who also happens to be the president of the players’ union, was caught saying over the phone to his 38 year old girlfriend—of mixed Latino and Black ancestry—that she should stop showing up at his arena with so many Blacks. Quoting Sterling:

It bothers me a lot that you want to broadcast that you’re associating with black people. Do you have to?

You can sleep with [black people]. You can bring them in, you can do whatever you want. The little I ask you is not to promote it on that … and not to bring them to my games.

I’m just saying, in your lousy fucking Instagrams, you don’t have to have yourself with, walking with black people.

…Don’t put him [Magic Johnson] on an Instagram for the world to have to see so they have to call me. And don’t bring him to my games.

This was all on a tape that his girlfriend released to TMZ, a gossip website.

This story has burst through the seams of sports and become a hot topic on television news and the newspapers. In today’s NY Times, William C. Rhoden, a Black sports reporter, wrote:

The more compelling question for the league’s players is whether they will speak out — or act out — against Sterling. And what about the league’s other owners? How will they respond? Will they remain silent? Will they issue a collective statement? Or will individual owners like the usually vocal Mark Cuban, who declined to address the Sterling issue, send their own messages?

Mark Cuban has a reputation for being one of the more progressive-minded owners (his Dallas team, like Sterling’s, is in the playoffs). He also owns Magnolia Pictures, a prime distributor of hard-hitting documentaries including one based on the the March 2006 rape, murder, and burning of 14-year-old Iraqi girl and the murder of her parents and younger sister by U.S. soldiers.

But I am not that surprised he declined to comment on the Sterling affair. Cuban is a diehard libertarian and as such views property rights as sacrosanct, just like the Nevada rancher.

In digging into Sterling’s past, I made the discovery that he was born to Jewish immigrants surnamed Tokowitz. Like many men getting off the boat, his father made a living as a peddler just like my grandmother. Sterling’s father peddled fruit while my grandmother pushed clothing.

Sterling started off in Los Angeles as a divorce lawyer but soon switched to real estate cases. That led in turn to a full-time real estate business that included properties in Black and Latino neighborhoods. This is where his racism first reared its ugly head. Dave Zirin, a radical sportswriter for the Nation Magazine, details his sordid past:

Sterling is also the Slumlord Billionaire, a man who made his fortune by building low-income housing, and then, according to a Justice Department lawsuit, developing his own racial quota system to decide who gets the privilege of renting his properties. In November of 2009, Sterling settled the suit with the US Department of Justice for $2.73 million, the largest ever obtained by the government in a discrimination case involving apartment rentals. Reading the content of the suit makes you want to shower with steel wool. Sterling just said no to rent to non-Koreans in Koreatown and just said hell-no to African-Americans looking for property in plush Beverly Hills. Sterling, who has a Blagojevichian flair for the language, says he did not like to rent to “Hispanics” because “Hispanics smoke, drink and just hang around the building.” He also stated that “black tenants smell and attract vermin.”

One of my earliest memories was visiting “Tante Leya” in New York with my mother—I must have been 10 years old or so. This was most likely my grandmother’s cousin who spoke no English. After spending two of the longest hours in my life as Leya and my mother chatted in Yiddish over tea and cookies, we finally left to go downtown—probably to see the Radio City Christmas show or something like that. In the elevator, my mother turned to me and said,”Leya is a slumlord. She buys buildings and rents the apartments to Negros who complain about rats and broken boilers.” That was the first time in my life I heard the term slumlord.

At 81, Sterling’s values were a lot closer to Tante Leya’s than mine. This was a man who worshipped money not “Jewish values”. When a Satmar Hasidic slumlord was killed a few months ago, I was reminded of Agatha Christie’s “Murder on the Orient Express”, a case in which Inspector Poirot was stymied by the fact that a multitude of people had motives to kill the victim. The Satmar was such a crook and so callous in his dealings with Black tenants that it was impossible to figure out who killed him. If Donald Sterling ever ends up with a knife in the back, the cops will have the same problem.

A Sports Illustrated profile on Sterling from 2000 analyzes his cheapskate behavior as a reaction to childhood poverty. Michael Selsman, his former publicist, told SI: “As a kid, Donald never had enough of anything. With him, acquiring great wealth is a crusade. He’s psychologically predisposed to hoarding.” Not every Jew who lived through the Great Depression ended up in quite that manner. My mother complained bitterly about my father’s reluctance to buy a house in the roaring 1950s but understood it as a reaction to childhood poverty. That being said, my father—like most Depression era men—had no ambition to build an economic empire over hapless victims, particularly Black people.

Perhaps taking the advice of another publicist concerned about his shitty reputation, Sterling got involved in a project to benefit Los Angeles’s enormous homeless population but like everything else the billionaire gets involved with, it was nothing but a scam. The Los Angeles Weekly reported in 2008:

These days, though, Sterling’s vow to help the homeless is looking more like a troubling, ego-inflating gimmick dreamed up by a very rich man with a peculiar public-relations sense: Witness his regular advertisements proclaiming another “humanitarian of the year” award — for himself. From homeless-services operators to local politicians, no one has received specifics for the proposed Sterling Homeless Center. They aren’t the least bit convinced that the project exists.

“He uses every opportunity to have it announced somewhere,” says Alice Callaghan, an Episcopal priest who runs the Skid Row day-care and education center Las Familias del Pueblo. “But it sounds like a phantom project to me.”

Like many other scumbags who made a fortune (George Steinbrenner, Fred Wilpon, James Dolan) in some other type of business, Sterling decided to buy a professional sports team at the top of his game. In 1981, he bought the Los Angeles Clippers, a franchise that was nowhere near as prestigious as the Los Angeles Lakers (Kareem Abdul Jabbar’s team) but a bargain at twice the price. His initial 12.5 million dollar investment is now worth a half-billion.

The SI profile captures a man who would make Scrooge McDuck look like Lucky Jim Fitzsimmons. He suggested to coach Paul Silas that they could save money if he taped the players’ ankles.

Nobody ever bothered to challenge Sterling until the superstar Elgin Baylor became general manager. Baylor was committed to making the team competitive even if it meant demanding that his boss open up his wallet. After 22 years of fighting a losing battle, Baylor was probably relieved to be fired in 2008 but not so much so to prevent him from filing a racial discrimination case against Sterling. The LA Times reported:

In the original lawsuit, Baylor said that Sterling had a “vision of a Southern plantation-type structure” for the Clippers and accused the owner of a “pervasive and ongoing racist attitude” during long-ago contract negotiations with Danny Manning. The lawsuit also quoted Sterling as telling Manning’s agent, “I’m offering you a lot of money for a poor black kid.”

Baylor alleged Sterling said he wanted the Clippers to be “composed of ‘poor black boys from the South’ and a white head coach.”

It should of course come as no surprise that Sterling was a sexist pig as well as a racist. ESPN, a sports magazine similar to Sports Illustrated, Jason Easly recounts his scandalous abuse of women. Christine Jaksy, a former employee, sued Sterling for sexual harassment in 1996. ESPN states:

Jaksy first worked for Sterling in 1993, as a hostess at one of his “white parties,” where guests dressed Gatsby style at his Malibu beach house; she eventually went into property management. Jaksy testified that Sterling offered her clothes and an expense account in return for sexual favors. She also testified that he told her, “You don’t need your lupus support groups I’m your psychiatrist.” Jaksy left her job in December 1995, handing Sterling a memo that read in part, “The reason I have to write this to you is because in a conversation with you I feel pressured against a wall and bullied in an attempt to be overpowered. I’m not about to do battle with you.” She carried a gun because, according to her testimony, she feared retribution.

One of the most shocking revelations about Donald Sterling was the NAACP’s decision to present him with a Lifetime Achievement award this year. (Of course, they also decided to give a Man of the Year award to the snitch Al Sharpton.) Even though they made the decision to present the award before the phone call tape was released to TMZ, they must have been aware of all his other anti-Black words and actions. What prompted them to overlook this was his handing out of from 2 to 3 thousand tickets to Black youth for home games of the LA Clippers. They have since rescinded the award.

Professional sports fascinates me both as a fan and as a critic of American society. What makes it unique is the tension between private ownership and the public’s sense that it is “their team”. Toward the end of the NBA season, New Yorkers planned to stage a protest against owner Jim Dolan in front of Madison Square Garden. They were sick and tired of his meddling in the team’s business, making decisions that undercut the team’s fortunes. Apparently nervous that the protest might lead to more escalated forms of action such as a boycott, Dolan hired Phil Jackson, a basketball legend like Elgin Baylor, to run the team and promised to not interfere.

When you listen to sports fans calling in to WFAN or the ESPN station in New York, they sound more informed about the team than Jim Dolan. Unlike their generally passive acceptance of whatever Chase Manhattan Bank has up its sleeves to screw the working person, the sports fan is ready to take to the barricades in order to win a championship. In the documentary “Manufacturing Consent”, Noam Chomsky states:

Take, say, sports — that’s another crucial example of the indoctrination system, in my view. For one thing because it — you know, it offers people something to pay attention to that’s of no importance. That keeps them from worrying about — keeps them from worrying about things that matter to their lives that they might have some idea of doing something about. And in fact it’s striking to see the intelligence that’s used by ordinary people in (discussions of) sports (as opposed to political and social issues). I mean, you listen to radio stations where people call in — they have the most exotic information and understanding about all kind of arcane issues. And the press undoubtedly does a lot with this.

If and when that passion becomes devoted to challenging the corporate system as a whole, we might finally see the possibility of realizing that old-time vision of a Socialist America.

 

September 25, 2013

Bill de Blasio and the left

Filed under: Counterpunch,New York,parliamentary cretinism,real estate,zionism — louisproyect @ 3:56 pm
Bill de Blasio: talks left, walks right
Counterpunch September 25, 2013
The Big Apple’s Obama?

De Blasio and the Left

by LOUIS PROYECT

On August 16th I wrote an article for my blog titled “A Dossier on Bill de Blasio”  that mentioned in passing his occasional appearance at NY Nicaragua Solidarity steering committee meetings nearly 25 years ago, something I likened to Obama’s overtures to antiwar activists on Chicago’s South Side—an investment that could pay future dividends. As de Blasio escalated up the electoral ramps in New York, he was careful to retain his liberal coloration even though he became an ally of Dov Hikind, a Brooklyn pol who once belonged to Meir Kahane’s terrorist Jewish Defense League.

When Hikind spearheaded a drive to force Brooklyn College to add a speaker reflecting Zionist policies to a meeting on BDS, de Blasio issued the following statement: “The Boycott, Divestment and Sanctions (BDS) movement is inflammatory, dangerous and utterly out of step with the values of New Yorkers. An economic boycott represents a direct threat to the State of Israel–that’s something we need to oppose in all its forms. No one seriously interested in bringing peace, security and tolerance to the Middle East should be taken in by this event.”

Despite his anti-landlord rhetoric, he also endorsed Bruce Ratner’s downtown Brooklyn megaproject that ran roughshod over the local community’s needs. Originally based on a design by superstar architect Frank Gehry, the project so appalled novelist and Brooklynite Jonathan Lethem that he was inspired to write an open letter to Gehry calling the project “a nightmare for Brooklyn, one that, if built, would cause irreparable damage to the quality of our lives.”

There’s lots of excitement among liberals about the prospects of a de Blasio mayoralty. As might have been expected, the Nation Magazine endorsed him in the primary election as “reimagining the city in boldly progressive, egalitarian terms.” Peter Beinart, a New Republic editor who has gained some attention lately for veering slightly from the Zionist consensus, wrote an article for The Daily Beast titled “The Rise of the New New Left” that was even more breathless than the Nation editorial. Alluding to German sociologist Karl Mannheim’s theory of “political generations”, Beinart sees the de Blasio campaign as “an Occupy-inspired challenge to Clintonism.”

Most of Beinart’s article takes up the question of whether de Blasio’s momentum could unleash broader forces that would derail Hillary Clinton’s bid for the Democratic Party presidential nomination in 2016. Perhaps that analysis can only be supported if you ignore the fact that de Blasio was Hillary Clinton’s campaign manager when she ran for senator from New York in 2000. The NY Times reported on October 7, 2000: “At the White House, the president, Mrs. Clinton and her campaign team can often be found in the Map Room or the Family Theater, drilling for her debates, or fine-tuning lines in some speech.” One surmises that Bill de Blasio was there.

read full

June 15, 2008

Bruce Kovner: capitalist pig of the month

Filed under: capitalist pig,real estate — louisproyect @ 6:05 pm

Bruce Kovner

Around 8 years ago I was puzzled to see scaffolding wrap the entire edifice of the International Center for Photography (ICP) on Fifth Avenue and 94th Street, about a five minute walk from my apartment. Was the museum, one of my favorite, being refurbished behind the metal cocoon? Nearly every museum in my neighborhood on the Upper East Side, where I am blessed to live at least for the time being, goes through expansion or remodeling from time to time.

Kovner’s house

I soon learned that the ICP had moved to midtown, something I found inexplicable. When a museum moves out of its long-time headquarters, something seemed deeply wrong, especially when I learned that some unnamed party had bought the building in order to turn it into his private mansion–an act I found barbarian.

In this week’s Nation Magazine, in a very good article on the “wealth gap” in New York by Gabriel Thompson, I finally learned the identity of the barbarian who purchased the ICP building. It was Bruce Kovner, a Jewish-American hedge fund manager who earned $715 million two years ago. Kovner is also one of the major funders of rightwing think tanks and journals in the U.S.A., including the American Enterprise Institute (AEI), the Manhattan Institute and the New York Sun. With such lavish sums at his disposal, Kovner decided to purchase yet another home:

The “upside” of income inequality is best considered from above: for example, with a view from the fifth floor of Kovner’s mansion overlooking Central Park, which he purchased in 1999 from the International Center of Photography for $17.5 million. With the infusion of another $10 million in renovations, the structure–which had contained two floors of gallery space, the museum school and offices–was transformed into his private fortress. In the basement is a rare-book vault, where Kovner presumably keeps copies of an edition of the King James Bible that he financed, with a price tag in excess of $20,000 per volume. Other vantage points from which to assess the benefits of growing income inequality in a clear-eyed fashion might include Kovner’s 200-acre estate in Millbrook, New York, or his twelve acres of linked oceanfront properties in Carpinteria, California, which he purchased last year for $70 million in what the Wall Street Journal called “among the largest U.S. residential real-estate deals.”

According to a profile on Kovner that appeared in New York Magazine (more below), the mansion features a two-story bedroom, a media room, a basement library to house his collection of rare European illustrated books, eighteen bathrooms, and one bidet. Since Kovner is supposed to be single, one wonders why he would feel the need for 18 johns. I guess he is a very shitty person.

Like Ira Rennert, the winner of my last capitalist pig of the month in January who provoked his Long Island neighbors into a rebellion against his garish 78,000 square foot mansion, Kovner also alienated his neighbors on 94th street with his plans for turning the ICP into a 35,000 square foot McMansion, as the N.Y. Times reported on October 5, 2003:

The stately, red-brick structure, once the headquarters of the International Center of Photography, was purchased by the hedge fund financier Bruce Kovner in 1999 for a reported $17 million. Mr. Kovner is converting the Federal-style building back to its original form, an opulent private residence. Neighbors, however, have complained of excessive dust, interrupted phone service and obstructed traffic.

Perhaps most frustrating is the timetable; construction began two years ago and will last until 2005, much to the dismay of residents already fatigued by the 7 a.m. wake-up calls via jackhammer. “It can be a royal pain,” Anna Olafsson, a resident of the block, said of the construction. “We don’t call this 94th Street anymore. We call it Construction Street.”

While these sorts of contradictions among the ruling class are of some interest, it is Kovner’s war on the poor that deserves much more of our attention. Gabriel Thompson fills in the details:

Over at AEI, labor unions are a target of visiting scholar Richard Vedder. In 2002 he co-wrote a report with Lowell Gallaway that concluded, with the help of a number of confusing charts, that between 1947 and 2000 unions cost the US economy more than $50 trillion in lost income and output. As an example of how unions damage our economy with their burdensome demands, the authors link the decline of the coal industry not primarily to a shift in other energy sources like oil and gas but to the militancy of the United Mine Workers. Another way to evaluate the worth of the UMW would be to study the number of lives saved through union-won protections, but such calculations hold little interest for Vedder. Vedder is also an enthusiastic cheerleader for Wal-Mart; he penned a book about the virtues of the company and has argued that Wal-Mart is a “force for good” that is “saving America.”

The living wage as socialist plot, unions as massive drain on the economy and Wal-Mart as corporate savior: this is the sort of scholarship that Kovner subsidizes. Without squinting too hard, the outlines of such a capitalistic dream world–imagined by well-paid fellows and funded by a billionaire–comes into focus: out from under the thumb of Big Labor, workers are free to work long hours for whatever wages a boss feels like paying. If they fall ill, they’re free to visit the emergency room. If they’re really sick, they’re free to declare bankruptcy. With Wal-Mart as the model, all workers become associates, free from the bonds of health coverage and overtime pay.

For a glimpse into the personal background of the publicity-shy Bruce Kovner, just one month younger than me, the best place to turn is a New York Magazine profile by Philip Weiss titled “George Soros’s Right-Wing Twin” that appeared in Jul 24, 2005.

As it turns out, Kovner’s ultraright politics ran counter to those of his grandfather Nathan and his great-uncle Benjamin, who were a couple of revolutionaries fleeing Czarist repression. And it didn’t stop there. Two of Kovner’s father’s cousins were accused by HUAC of being communists in the labor movement in the fifties. Both took the Fifth. Pat Kovner, Bruce’s cousin, recalled, “It was a terrible time of repression and people losing their jobs and being humiliated in public. People were frightened to death.” Around the same time, Kovner’s second cousin, Fay Kovner Mukes, was accused of heading the “Hollywood Communist Club.”

Bruce Kovner’s father, Isidore “Moishe” Kovner, a mechanical engineer who moved the family to California, did not share his relatives’ politics. Weiss reports that he crossed a picket line to work in an aircraft factory during World War II. Fay Kovner Mukes recounts, “He was visiting at [his cousin] Julius’s house, and when Julius found out he was a scab, he threw him out and said, ‘I want nothing to do with you.’”

Kovner entered Harvard College in 1962, where he became a prize student of Edward C. Banfield. Banfield had been in Roosevelt’s New Deal farm administration, but eventually became a reactionary, specializing in hatred of the poor. Kovner became part of Banfield’s intellectual circle alongside Daniel Patrick Moynihan, theorist of “benign neglect” and James Q. Wilson, a professor emeritus at Harvard University who argued on behalf of executing mentally retarded people thusly: “Why should being stupid excuse one from a penalty that is routinely imposed on people who are not stupid?” Where is the Jonathan Swift of our age who might be equipped to deal with the genuine stupidity of a James Q. Wilson?

After an unsuccessful attempt at writing a PhD, Kovner moved to New York where he tried began driving a cab while pursuing a free-lance journalism career. Not long afterwards, Kovner discovered the commodities market and began to make money, eventually going to work for an outfit called Commodities Corp that was absorbed by Goldman-Sachs. He started his own company in 1983 and began his long march to the top of the financial food chain.

Although it is beyond the scope of this post to explain hedge funds, a word or two might be useful. These are basically unregulated private investment corporations trading on behalf of extremely wealthy individuals and institutions. They traditionally “hedge” their investments by techniques such as “selling short”, which involves selling securities that one does not own, in the hopes that they can be repurchased at bargain basement prices when their market price has declined. Needless to say, hedge funds are extremely risky as the LTCM fiasco would illustrate. To show how risky they can be, Kovner’s own fortunes have declined in an increasingly unstable market. Last year he earned a paltry $100 million, hardly enough to keep his 18 bathrooms stocked with Charmin’s finest.

In the course of researching this article, I found myself increasingly and morbidly fascinated by Edward C. Banfield, who comes across as one of the meanest intellectuals ever. Banfield served as head of the Presidential Task Force on Model Cities under President Richard M. Nixon, one of the meanest presidents in our history. His best-known and most controversial work is the 1970 “The Unheavenly City”, an excerpt of which appeared in a N.Y. Times op-ed piece that year:

The tangle of social pathologies that people mainly have in mind when they speak of “the urban crisis” arises principally from the presence in the inner districts of the central cities and of their larger, older suburbs of a small “lower class” the defining feature of which is its inability (or at any rate failure) to take account of the future and to control impulses.

The lower (as opposed to working) class person never sacrifices any present satisfaction for the sake of a larger future one. He lives from moment to moment.

This is to say, he does not discipline himself to acquire an occupational or other skill, to hold down a regular job, to maintain stable family ties, or to stay out of trouble with the law. His bodily needs (especially for sex) and his taste for “action” take precedence over everything else. The slum is his natural habitat. He does not care how dirty, and dilapidated his housing is, and he does not notice or care about the deficiencies of public facilities like schools, parks, and libraries. Indeed, the very qualities that make the slum repellent to others make it attractive to him. He likes the feeling that something violent is about to happen and he likes the opportunities to buy or sell illicit commodities and to find concealment from the police.

When I read this garbage, a feeling of déjà vu comes over me. Where have I read this sort of thing before? And then it dawns on me, it is the same kind of hatred of the poor that you could find in the 19th century.

For example, Charles Loring Brace, the head of New York City’s Children’s Aid Society, argued that the “greatest danger” to America’s future was the “existence of an ignorant, debased, and permanently poor class in the great cities. . . . The members of it come at length to form a separate population. They embody the lowest passions and the most thriftless habits of the community. They corrupt the lowest class of working-poor who are around them. The expenses of police, prisons, of charities and means of relief, arise mainly from them.”

Meanwhile, the draconian British New Poor Law of 1834 was designed to save the poor from themselves:

We must make it evident that in the exercise of moral restraint, and by industry, sobriety, a peaceful demeanour, an economical management of their resources, and a far-sighted provision for the day of calamity from which few are exempt, they may escape the misery into which imprudent marriages, insobriety, irregularity, turbulence, infrugality and improvidence plunge men gifted by nature with every quality necessary to procure happiness.

By the end of the 19th century, the very same social process that had condemned the poor to lives of unremitting misery had allowed the Bruce Kovner’s of that time to live like Kings and Queens. If you stroll around Manhattan’s Upper East Side, you can see what their ill-gotten gains bought them. From the Astors to the Rockefellers, there are mansions dotting the landscape–most of which were turned eventually into consulates or museums.

In keeping with the historical regression we are now enduring, it is fitting that one of these very museums is now owned by somebody like Bruce Kovner, who was taught at Harvard University that it good for the poor to fend for themselves. With people like Kovner aspiring to become the new robber barons, it is only natural that outfits like the American Enterprise Institute are churning out propaganda by the day that seeks nothing less than to turn the clock back to 1890.

As it turns out, the mansion now owned by Kovner was built for somebody originally who embodied the contradictions of that age. Unlike an Edward C. Banfield or a Bruce Kovner, Willard Dickerman Straight–the original owner–did not accept Victorian era values unreservedly. Straight was an investment banker and diplomat who served in the hot spots of the American Empire, from Cuba to China. After an anti-colonial revolt in China forced Straight to high-tail it back to the United States in 1912, he founded a new magazine called The New Republic dedicated to the values of Progressivism, a movement that challenged the excesses of late-19th century capitalism. The first editor was Herbert Croly, the author of “The Promise of American Life”, a book that argued for a planned economy, increased spending on education and the creation of a society based on the “brotherhood of mankind”. Some of the frequent contributors to The New Republic in this period were Walter Weyl, Randolph Bourne, Charles Beard, Amy Lowell, Henry Brailsford and H. G. Wells.

Like the Nation Magazine, the New Republic was never quite able to take the side of the working class since its own middle-class prejudices induced the same kind of fears expressed by Banfield, but not to the same extremes. For example, the Progressives as well as their Fabian cousins in Great Britain looked to eugenics as a way of dealing with society’s underachievers. Wells, for example, once wrote: “It is in the sterilisation of failure, and not in the selection of successes for breeding, that the possibility of an improvement of the human stock lies.” Some critics even believe that the “degenerate” man-creatures portrayed in The Time Machine exemplify Wells’s eugenic beliefs.

The recent stock-market slide and the subprime mortgage/credit crisis have led some Marxists and mainstream journalists to speak in terms of a new Great Depression. That decade looms large in our minds since it sparked a massive radicalization that could have succeeded in the abolition of capitalism in country after country if not for the bankrupt policies of Stalin’s Comintern.

I would suggest that the current crisis will eventually work its way through with the usual amount of pain and dislocation experienced by those who are not fortunate enough to live in 35,000 foot mansions on Fifth Avenue.

Moreover, it would appear that the proper time-frame analogy is not 1929 through 1940 but 1880 to 1900 or so. The fact that hedge fund robber barons are once again ensconced on Fifth Avenue, while Harvard Professors write screeds against the poor should wake us up to the period we are living in.

I think that Doug Henwood understands this completely as evidenced by his article in the Nation that appears side-by-side with Gabriel Thompson’s:

It has become a cliché to say that we live in a new Gilded Age. True enough, up to a point. Money, mostly new money, rules politics and culture. Corporations merge into ever larger corporations. You have to go back to before World War I to match today’s levels of income and wealth inequality.

In some ways, the second Gilded Age is worse than the first. Sure, we live longer now, more of us can read and you don’t have to be a white man to be able to vote. But to prove my point, consider two big parties, thrown 110 years apart.

In February 1897 elite lawyer Bradley Martin and his wife, Cornelia, threw a costume ball at the Waldorf. J.P. Morgan dressed as Molière, John Jacob Astor dressed as Henry of Navarre and brandished a sword covered in jewels, and fifty women dressed as Marie Antoinette. But the hosts were so nervous about “men of socialistic tendencies” that they surrounded the hotel with Pinkertons and had the first-floor windows nailed shut.

Given the similarity between our age and the first Gilded Age, we are invited to think about the possibilities for the rebirth of the kind of mass socialist movement that existed in the time of J.P. Morgan. If there is anything that remains true in politics to this day, it is that the poor and the working class will soon learn where their own class interests lie. As a weak and marginalized movement that is still bearing the brunt of the collapse of the USSR and social democracy in Europe and elsewhere, it will be a difficult job to organize a new movement when so many pundits tell us that our time in history has come and gone. We can only reply that as long as there are scumbags like Bruce Kovner lording it over us, we will find a way to struggle and to win.

May 30, 2008

Crane collapses, corporate greed and the mob

Filed under: capitalist pig,economics,real estate — louisproyect @ 2:42 pm

This morning as I was walking up 3rd Avenue from my high-rise on 91st street to get the crosstown bus on 96th street headed to the west side of Manhattan, I noticed a number of police cars headed east of 3rd Avenue. After I got on the bus and was crossing through the park, a fire engine headed east in the opposite lane. This was an unusual occurrence, so much so that the woman sitting next to me on the bus asked me what was going on. Was there a big fire or something? I said I didn’t know and made no connection to the fire engine and the cop cars and the accident that loomed ahead.

About 9:40 each day, I go to the online edition of the NY Times to see how the stock market is doing. I don’t own any stocks but I am curious to see how the capitalist system is doing. This is what awaited me:

A crane toppled and collapsed onto a high-rise apartment building on East 91st Street on the Upper East Side on Friday morning, tearing off balconies and leaving a swath of damage, in the second Manhattan crane collapse in two months. One person, the operator of the crane’s cab, was killed and at least one other has been pulled from the wreckage, but that person’s condition was not immediately known, a law enforcement official said.

I called my apartment frantically to see if my wife was okay. She rarely walks over to First Avenue, 2 blocks east, unless she is with me en route to a restaurant in the evening but I was still worried. She answered the phone and told me that she was okay. That was a relief.

This has been the second such incident to occur in Manhattan in the last 3 months. In March, a crane collapsed on East 51st street killing four construction workers and injuring a dozen others. It was subsequently revealed that the site had not been inspected properly:

A city crane inspector faces felony criminal charges after he falsely claimed to have inspected a crane 11 days before it collapsed on the East Side, killing seven people and causing a wide swath of destruction, city officials said yesterday.

While the city’s top building official asserted it is “highly unlikely” a real inspection before the collapse would have prevented the tragedy, critics said the allegation was indicative of the Building Department’s lax approach to inspections.

Edward J. Marquette, 46, a crane inspector with the city Department of Buildings, was arrested Wednesday night after “things didn’t add up” with an inspection report he filed on the crane, said Department of Investigation Commissioner Rose Gill Hearn. Marquette had been sent to inspect the crane in response to a complaint that it had not been properly secured.

“According to our investigation, Marquette made false statements on his route sheet, indicating that he had inspected the crane,” Hearn said. “He has admitted to DOI that he did not inspect the crane on March 4th.”

It is related to the construction industry’s greed and a city government that favors the construction industry, even when liberal municipal politicians raise a stink when such accidents occur. Building inspectors are always taking bribes, going back to 1871 when the NY Times filed a report on ”Disgraceful Corruption in the Department of Buildings.” It described a meeting of 25 architects, ”uptown builders” and house owners who released an 11-point petition charging the department with ”tyranny” for habitually taking bribes. One $1,400 check was sent directly to James McGregory, the agency superintendent, to speed construction of a five-story structure.

I started writing this article about an hour ago. An update on the NY Times online edition provides new information:

According to city records, the company that is building the Azure is the Leon D. DeMatteis Construction Corporation of Elmont, on Long Island. A call to the sales office of 1765 First Associates L.L.C., a subsidiary of DeMatteis, was not immediately returned.

City records show that the building has been the subject of several complaints from residents who have called the city’s 311 hot line. On May 20, a caller complained about the crane, saying that its platform extended across the sidewalk and well into traffic. A Buildings Department inspector responded but determined there was no violation.

DeMatteis, it turns out, is my very own landlord. My building was in the Mitchell-Lama program that provided affordable housing to middle-class New Yorkers and tax abatements to the landlord. After the building satisfied its 20 year obligations to Mitchell-Lama, it was privatized. The tenants conducted an intense struggle with DeMatteis to maintain affordable rents that ultimately failed to achieve its goals. The wife and I feel like we are hanging on at the edge of precipice.

As this December 26, 1991 New York Times article indicates, the DeMatteis corporation is exactly the kind that would prosper in the city today.

New York Cancels Builder’s Contract, Citing Reports on Mob Ties

By SELWYN RAAB

New York City has revoked a $1.2 million contract with a major construction company that officials say concealed and altered reports about possible ties to organized-crime figures.

The contract was awarded in July to the Leon D. DeMatteis Construction Company of Elmont, L.I., to supervise the building of a $67 million jail annex on Rikers Island. But in a decision made public this week, the city said the company had withheld “troubling” information about its business associations and had submitted an altered copy of a report concerning its possible ties to reputed organized-crime figures.

Michael C. Rogers, the director of the Mayor’s Office of Contracts, who revoked the contract, said in an interview that the city would also move to disqualify the DeMatteis company from seeking other municipal contracts.

A spokesman for the company, Martin J. Steadman, called the decision to cancel the contract “assassination by innuendo.” He said the company was considering bringing a lawsuit seeking to restore the contract and “to protect and preserve our reputation.”

Mr. Steadman said Mr. Rogers’s findings were based on allegations that had been previously investigated and rejected by Federal prosecutors in New York and the authorities in New Jersey.

In August the New York City Comptroller, Elizabeth Holtzman, urged Mayor David N. Dinkins to cancel the contract, which had been awarded by the Department of General Services to the DeMatteis company to oversee the design and construction of the 500-bed jail annex.

Ms. Holtzman said the company’s chief executive officer, Frederick DeMatteis, had been the principal owner of the Cedar Park Concrete Corporation. Cedar Park, she noted, had been identified in a Federal trial as a company used by Mafia leaders to rig concrete contracts in the early 1980’s.

Mr. DeMatteis has acknowledged being a business partner from 1984 to 1988 in the Metro Concrete Company in New York with the son-in-law of Paul Castellano, the former head of the Gambino crime family who was killed outside an East Side restaurant in December 1985.

In a report, Mr. Rogers said that Mr. DeMatteis has never been accused of criminal wrongdoing. But he said that when the company applied for the contract, it did not disclose in a background questionnaire that it had been the subject of law-enforcement investigations.

Mr. Rogers also said that in response to Ms. Holtzman’s objections, the DeMatteis company submitted an altered copy of a report that had been prepared by the office of the New Jersey Attorney General about Mr. DeMatteis’s business dealings with reputed organized-crime figures.

Officials of the company said that the report was mistakenly revised by a lawyer who had represented the company in New Jersey and that there was no attempt by the company to deceive the city.

“The cases in which information was not disclosed here are just too numerous to be explained away,” Mr. Rogers said in his report. “When the totality of circumstances is considered, the picture that is presented is that the DeMatteis Corporation is not a responsible vendor.”

In the late 1980’s the DeMatteis company built a $28 million jail and a $19 million Sanitation Department garage for the city. It has no other current contracts with the city.

The company, one of the largest residential and commercial builders and developers in the New York region, constructed the Museum Tower, a luxury apartment building above the Museum of Modern Art on West 53d Street, and the Confucius Plaza apartments on Chatham Square in lower Manhattan.

Evidently, DeMatteis was not qualified to build an annex to the Rikers Island jailhouse but qualified enough to erect a high-rise 2 blocks from my home, endangering the lives of workers and local residents. An annex should have been built just to house the DeMatteis family and they should have thrown away the key.

UPDATE:

It turns out that the crane company involved with the East 91st street accident, owned by one James F. Lomma, has some track record.

The New York Times, September 18, 1999
Crane Secured for Storm Falls, Killing a Worker in Chelsea
By JODI WILGOREN with KEVIN FLYNN

A huge crane collapsed at a Chelsea construction site yesterday morning, killing one worker and injuring three others after the crane operator tried to hoist the boom without releasing special restraints intended to prevent an accident once Hurricane Floyd reached the city, officials said.

The 383-foot red steel crane, which had become a fixture in the bustling neighborhood, buckled under the restraints, tumbled backward and crashed at the corner of 24th Street and the Avenue of the Americas just after 7 A.M., crushing a carpenter who was having breakfast on the sidewalk before heading to work at the site.

The man, Kenneth Preiman, 43, suffered severe head injuries and was pronounced dead at the scene, where the crane knocked over a traffic light and a lamppost and left a hole a foot deep in the sidewalk…

A field supervisor for Laquila/Pinnacle said both the crane operator and the victim worked for the company, which is based in Mamaroneck, N.Y. Laquila/Pinacle has been subcontracted to create the concrete superstructure for the 29-story, $75 million apartment building, which is scheduled to open in the spring. The crane belonged to New York Crane, a subsidiary of Lomma Construction.

The New York Times, March 17, 2008
Fall of Six-Ton Support Caused Crane to Topple
By WILLIAM NEUMAN and CHARLES V. BAGLI

The spectacular collapse of a towering crane on the East Side began when a massive piece of steel designed to secure it to a new high-rise building came loose and pancaked on top of a second support nine stories below, shearing it free and creating a fatal imbalance that sent the 22-story crane toppling across a two-block swath of Turtle Bay, officials said on Sunday.

Officials were focusing their investigation in part on the way the steel piece — called a ”collar” — was being installed, including whether a series of hoists and nylon straps used to hold it temporarily in place were strong enough to sustain its weight, said Patricia J. Lancaster, the buildings commissioner. Building officials estimated the weight at 12,000 pounds.

Meanwhile, work crews and rescuers swarmed over the site of the disaster, on 51st Street and 50th Street just east of Second Avenue. They began to remove portions of the broken crane’s white lattice tower, one leaning against a 19-story building on 51st Street and another, which had broken off and tumbled through the air, lying across a demolished four-story town house on 50th Street.

Four construction workers — a crane operator and three riggers who were helping to ”jump” the crane, or increase its height — were killed. Three people were missing. On Sunday, as hope dwindled, firefighters, including a unit that specializes in building collapses, continued to search for signs of life. ”We’re still calling it a search operation, though with each passing hour, things are getting more grim,” said Nicholas Scoppetta, the fire commissioner.

The crane was owned by New York Crane & Equipment Corporation, but it had apparently been leased to one of the contractors involved in the project.

NY Times, May 31, 2008
Investigators Look at Equipment, Not Crane’s Operators
By WILLIAM NEUMAN

Investigators are focusing on a bad weld as the possible cause of an accident on Friday in which the top of a crane snapped off, crashed into a building across the street and killed two construction workers, the city’s acting buildings commissioner said.

Investigators were also trying to determine whether a crucial part of the crane — the rotating plate that connects the cab and boom at the top to the tower — had been removed from a different construction job a year ago after developing a dangerous crack, another city official said.

Questions about the history and condition of the turntable may turn the focus of the investigation to its owner, New York Crane, which was also the company that owned the crane that collapsed on March 15 on East 51st Street.

That accident occurred under very different circumstances, when sections were being added to increase the crane’s height. Investigators believe that the crew making the crane taller may have made mistakes in the way they supported a huge steel collar high up on the crane. The collar fell, knocking out the cranes supports and causing it to collapse onto nearby buildings.

James F. Lomma, the owner of New York Crane and Equipment, did not return calls left at his office in New Jersey or on his cell phone.

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