Now We Will See The Real Obama
- Posted by Jeff Carter
- on January 11th, 2012
Bill Daley leaving the Obama administration was big news for ten minutes. But as my friend Streetwise Professor and I discussed on Twitter after the news broke, this really signals a big change in direction on how Obama will campaign.
It’s going to get really ugly. How ugly? Think of the election cycle from 1796-1804. It will be that ugly. The culmination of those election cycles was a duel by Alexander Hamilton and Aaron Burr, with Hamilton losing his life after the gun battle.
Both Hamilton and Jefferson manipulated the press of that time to scandalize the other side. Character assassination is a mild phrase to use when describing the vitriol that went back and forth. Look for more in the coming months.
It takes a thick skin to be a politician, but in Chicago, no one ever plays fair. The game is rigged before the ballots are printed. They say backroom politics are dead, but the political bosses in Chicago are alive and well. As Craig correctly points out, what you just saw in the White House was a street fight from Chicago manifesting itself into an internal power struggle in Washington.
Even though they are all Democrats, there are still big political divisions within Chicago. Mayor Daley’s special talent was mitigating the special interests of all the factions. Truly, it is a special skill that should be admired and not chided, even though he accomplished it on the back of the tax payer. Daley would be an excellent CEO of a large company. I have a lot of respect for him. He is an extremely bright and energetic person. He isn’t a political hack.
There are different kinds of Democrats in Chicago. You need to know the species before you jump to conclusions. Nothing happens in a vacuum, and nothing happens without a consensus.
There are the machine Dems that understand you need a really vital business economy to support all the union jobs and other enterprises they make money from. The machine Dems can’t wet their beaks without a continuing flow of both private and government money they can skim from. Culturally, these kinds of Democrats would describe themselves as “fiscally conservative and socially liberal”. They are fiscally conservative until you start cutting spending on government programs, or simply cutting out government programs because they mean jobs and pensions to their constituents. Dan Rostenkowski was the textbook example of this machine Democrat. Blagojevich was a machine guy that jumped ship. He got too big for his britches. If he would have followed orders, he would have been just fine. Instead, he is going to jail. Machine Democrats do play by some rules. Once you negotiate with them and have a deal, you have a deal. At least until the next negotiation where they will try to take a little more from you. But in the ensuing years, you will be great friends.
The next kind of Democrat works the system and plays racial politics all the way. This is where many ethnic politicians play. They make sure they use race to “get their fair share”. They have allies in their mission. In the case of the White House, it’s David Plouffe.
There is a part of Chicago politics that is really well known. However, it’s unspoken because of fear. The fear of being branded a racist when you are merely saying something everyone knows but social constraints make it taboo. The cost of silence is high. Practitioners of racial politics are very tough to negotiate with, and extract a high price for their support. Jesse Jackson is a good example of someone where the issue of race is forefront in the negotiation.
An example of how a person like Jackson was placated was when his family miraculously received the rights to all the distribution of Budweiser at city and county establishments. John Kass of the Chicago Tribune doesn’t call him the King of Beers for nothing.
Advocates of this brand toss around the “racist” brand liberally. Because they are ethnic, there is no way they themselves can be “racist” because they are “standing up for the people”. If the people knew how much money was skimmed off the top they might not be so understanding. These kinds of Democrats are very tough to negotiate with. There are always special cut outs for them, and they never are satisfied. Every issue comes down to one thing, race. They use that topic as a cudgel to get what they want. And unlike the Machine Dems, a deal is not always a deal with them. Not all ethnic politicians reside in this forest of politics, some are much more comfortable being machine Democrats. You have to feel them out to see where they live.
The last kind of Democrat in Chicago are the true believers. They are idealistic and actually think that systems of organizing people like socialism and communism are the best methods. They idealize China. The fact that huge cities can be built at the twitch of a government finger with no concern for property rights is enticing to them. The true believers don’t believe in a single class system like they say. There is a small cadre of hand picked ruling class people, and then the rest of the poor stiffs. Bill Ayers is one person at the idealogical center of a system like this. Ayers had many predecessors in Chicago and this sort of “true believer” Democrat culture runs very deep. The tentacles of the true believer culture reach all over Chicago. Recall, the Haymarket riots were here. Upton Sinclair did his best work here. Studs Terkel was a true believer. There is a DNA that runs very deep in certain parts of the city which exemplifies this sort of system. Barack Obama is a person that came from this part of city politics. There are many others, but for them a large government apparatus that directs all traffic and makes all decisions is the way to run a society. Many of the true believers ally themselves with the practitioners of racial politics because they see that as a means to an endgame.
The other problem with the true believers is they have credentialed themselves and put themselves into positions of respect and authority. Ayers as a university professor was entitled to a platform for his views, and many people allow him to air them in the spirit of public debate. This is exactly what they want, for as soon as they assume a position of respect, their twisted view of society becomes debated. In fact their views should be tossed out with the trash and their title stripped away.
An outsider cannot begin to comprehend the deep level to which machine politics have descended to in Chicago. There is virtually no job in government at any level, city, county and many state positions, where a person owes a person which owes a politician. You just don’t get there from here without paying a lot of dues, both in money and physical labor. By physical labor I mean going out on the streets and knocking on doors, campaigning, cajoling friends to elect certain people. To the untrained eye, one Democrat looks like another when nothing can be further from the truth.
From afar, the machine is a thing of beauty when it springs into action. There is intense coordination. It’s efficient. Opponents are mowed down. Like a band of army ants, it eats everything in its way. Not even the internet and software can stop the political machine. Employees will make sure they don’t adopt software that would cost precious jobs. City reorganization isn’t cutting budgets, it’s simply designating which private sector business will absorb the city jobs that were cut. Then the private sector gets intimately intertwined with the government and the machine spreads to ho hum businesses like florists and caterers. Chicago runs more like Russia or China with an American twist. The only way out is to escape. Chicago has lost population over the last twenty years.
Then there are the Democrats that are the connectors. David Axelrod is a true believer that is a connector. He is good with the turn of a phrase to mask what they truly want and turn it into something saleable to the American public. The Clinton’s had their own machine which some Chicago folks were a part of. But their idea of political combat was a scorched earth policy. Chicago operators are much more pragmatic than that.
Obama’s mission was to ingrain that sort of crony capitalist machine into the fabric of national politics. One look at all the waivers given to his cronies for Obamacare shows you where he is headed. If Obama and his compatriots get there way, every business, man, woman and child will have to bow their head and kiss a ring to get anything done.
Those true believers are dangerous. People like Ayers want the traditional America destroyed. Sometimes they do make mistakes. They believe so deeply in the idealistic nation state they envision, that they lose sight of what is really happening on the ground. I think Daley leaving the White House is one of those times. Valerie Jarrett and the practitioners of her style of politics are running the show. Let’s work hard to inform Americans so they don’t buy what she is selling. Had Daley held sway, we would have seen a different more palatable direction.
And, by the way, many of the Illinois Republicans are no better than the Democrats. That’s why they call it “The Combine”.
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It might behoove me to illustrate how a machine operates. Classic example.
A piece of a terra cotta building falls off and kills a pedestrian on the street. Sad. The news media picks up the story. A pol quietly tells the media that the building in question has a bunch of violations. The media pushes more fire into the story. The city dispatches inspectors. They find all kinds of problems with this one building in the entire city.
The machine quietly tells citizens to telephone their alderman. The alderman have a hearing. They are outraged. In the back room, as soon as the hearing commence, the spoils begin getting divided. This activity is not seen by the media, or the naked eye. Very quiet.
What people see is dramatic. Alderman making impassioned speeches about saving our population from the threat of falling debris off buildings in Chicago. They are televised. (Remember, this happened once in the city’s history, and one person was killed-did they consider the statistical chance it would happen again? No)
In the back room, the action starts. They all agree to pass a city ordinance that says all buildings of a certain height have to be inspected every three years for loose debris. Along with that ordinance are all kinds of rules and regulations about scaffolding, equipment, remedies etc. Those rules and regs aren’t designed to help the populace, but are tailored to fit the private contractors the city will deem eligible to perform the inspections.
They also argue vehemently in the back room about who gets to be a city designated contractor. The machine guys argue for their contractors. The pols interested in race only argue on the basis of race. They try to get a cut out for minority contractors, and they also argue for a quota system. They might also argue that the machine contractors have to hire a certain percentage of minority employees. The true believers monitor the conversation and try and make the law even more far reaching than it already is. They look to try and control more turf. It goes without saying, all the employees are union members.
Finally a bargain is reached. The hearings stop, and the city council votes the ordinance through unanimously. The mayor signs the bill.
What is the outcome? Buildings have to have an inspection from an approved city inspector every three years. It costs the building I live in one million dollars every three years. The contractors always find something wrong, and they have to get paid extra to fix it. There are only certain contractors we can pick to fix the building. Scaffolding is up all over Chicago all year round. All this so Tony the Tuckpointer can have a job. My monthly assessments are adjusted accordingly. Somehow, they never go down even with the collapse of real estate prices.
On the surface, this do gooder law doesn’t cost taxpayers a dime. The costs are borne by the residents, tenants and owners of buildings. But in the long run it does cost taxpayers.
For certain older buildings, inspections can take years and run into the millions of dollars which forces the owner to charge even higher rents. The owner of the building then loses tenants. What’s their option? To go to their alderman and beg for some tax relief. Of course, the alderman plays “Let’s make a deal.”. In return for the tax relief, the building must employ some minorities, employ some machine guys and make some donations to a favored political PAC or fund. They might have to buy insurance from a certain insurance agency. None of this is spoken, but it is quietly steered.
If you don’t play the game, your taxes go up. Inspectors harass you constantly. Your garbage may not be picked up regularly. Your building always seems to have police around it ticketing cars and trucks making deliveries. Operating your business becomes a nightmare and you might sell your business at a loss. Odds are good a connected businessman buys it.
That’s the world that Obama wants to bring to Washington DC.
Thanks for the link Doug Ross.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)
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