Flint water crisis reveals limits of running a state as a business

[Octafish]

The Flint water crisis, for which Gov. Rick Snyder apologized Tuesday during his State of the State address, highlights deeper issues tied to the way governments run states.

By Jessica Mendoza, Staff writer
Christian Science Monitor, JANUARY 20, 2016

EXCERPT...

Indeed, the situation in Flint – coupled with Michigan’s other financial woes – points to deeper issues tied to the way governments run states, particularly in times of financial distress, political experts say. And in Michigan – where rocky relations between a GOP-controlled state and often Democratic local agencies compound tensions between the governor’s office and the more hard-line Legislature – such issues are thrown into sharp relief, they add.

The water crisis underscores the limitations of an entrepreneurial method of governance in a way that could resonate beyond Michigan, says Thad Kousser, a political science professor at the University of California in San Diego.

“What this crisis points out is one of the limits in running a government as a business,” says Professor Kousser, whose research focuses on state politics. He notes that since the Great Recession, other states have attempted to apply business principles in an effort to avoid tax hikes: In 2009, then-California Gov. Arnold Schwarzenegger put forward a contested proposal to sell off state landmarks to erase a $24 million budget deficit.

SNIP...

In Flint’s case, Kousser says, the problem stemmed from what appears to have been a trade-off between cost-cutting measures and public health.

“The private marketplace works because of competition, but governments often have monopoly,” he notes. “When Volkswagen screws up, you can buy a Ford. But when lead starts coming out of your tap, you can’t just turn on another tap.

“I don’t think it proves a general point that governments can’t be run like a business,” Kousser adds. “But it shows some of the things you risk when you do.”

CONTINUED...

http://www.csmonitor.com/USA/Politics/2016/0120/Flint-water-crisis-reveals-limits-of-running-a-state-as-a-business-video

[TexasProgresive]

1. It is the government that tries to regulate business so it doesn't run roughshod over us.

When the government is run like a business there is nothing to guard against disaster.

[Octafish]

3. ''The business of government is business.'' -- Calvin Coolidge and Ronald Reagan

Great for those who can afford to buy government. Disaster for those who work for a living.

In 1981, even stalwart liberal Democrats went along with Reaganomics because the economy was so far in the dumps.

I remember those days. These are even worse.

[TexasProgresive]

7. Let's not forget what "Engine" Charlie Wilson, Ike's Sec of Defense said in his confirmation hearing

"because for years I thought what was good for our country was good for General Motors, and vice versa".

[Octafish]

15. Manufacturing's out in Michigan. We now embrace Andy Dillon and Pyramid Schemes.

Part of Rove's Machine.

Meet the New Kochs: The DeVos Clan's Plan to Defund the Left

They beat Big Labor in its own backyard. Next up: your state?

—By Andy Kroll
Mother Jones | January/February 2014

EXCERPT...

The pressure came largely from one man present at that fundraiser: Richard "Dick" DeVos Jr. The 58-year-old scion of the Amway Corporation, DeVos had arm-twisted Richardville repeatedly to support right-to-work. After six years of biding their time, DeVos and his allies believed the 2012 lame duck was the time to strike. They had formulated a single, all-encompassing strategy: They had a fusillade of TV, radio, and internet ads in the works. They'd crafted 15 pages of talking points to circulate to Republican lawmakers. They had even reserved the lawn around the state capitol for a month to keep protesters at bay.

A week after Richardville's early morning call to Jackson, it was all over. With a stroke of his pen on December 11, Gov. Rick Snyder—who'd previously said right-to-work was not a priority of his—now made Michigan the 24th state to enact it. The governor marked the occasion by reciting, nearly verbatim, talking points that DeVos and his allies had distributed. "Freedom-to-work," he said, is "pro-worker and pro-Michigan."

THE DEVOSES sit alongside the Kochs, the Bradleys, and the Coorses as founding families of the modern conservative movement. Since 1970, DeVos family members have invested at least $200 million in a host of right-wing causes—think tanks, media outlets, political committees, evangelical outfits, and a string of advocacy groups. They have helped fund nearly every prominent Republican running for national office and underwritten a laundry list of conservative campaigns on issues ranging from charter schools and vouchers to anti-gay-marriage and anti-tax ballot measures. "There's not a Republican president or presidential candidate in the last 50 years who hasn't known the DeVoses," says Saul Anuzis, a former chairman of the Michigan Republican Party.

Nowhere has the family made its presence felt as it has in Michigan, where it has given more than $44 million to the state party, GOP legislative committees, and Republican candidates since 1997. "It's been a generational commitment," Anuzis notes. "I can't start to even think of who would've filled the void without the DeVoses there."

The family fortune flows from 87-year-old Richard DeVos Sr. The son of poor Dutch immigrants, he cofounded the multilevel-marketing giant Amway with Jay Van Andel, a high school pal, in 1959. Five decades later, the company now sells $11 billion a year worth of cosmetics, vitamin supplements, kitchenware, air fresheners, and other household products. Amway has earned DeVos Sr. at least $6 billion; in 1991, he expanded his empire by buying the NBA's Orlando Magic. The Koch brothers can usually expect Richard and his wife, Helen, to attend their biannual donor meetings. He is a lifelong Christian conservative and crusader for free markets and small government, values he passed down to his four children.

CONTINUED...

http://www.motherjones.com/politics/2014/01/devos-michigan-labor-politics-gop

They really do do a lot to the community, like pyramid schemes.

In researching a reply, I found this gem from the emails Rick Snyder released last night:

“I can’t figure out why the state is responsible”

Sept. 25, 2015

Muchmore told Snyder that Flint’s water issue “continues to be a challenging topic” and said the switch to use the city’s river water has “spurred most of the controversy and contention.” He went on to talk about how “some in Flint” are turning the situation into a “political football” to try to “shift responsibility to the state.” “I can’t figure out why the state is responsible except that Dillon (then state treasurer Andy Dillon, according to the Detroit Free Press) did make the ultimate decision so we’re not able to avoid the subject,” Muchmore wrote.

SOURCE w/links: http://time.com/4187842/flint-water-crisis-michigan-governor-emails-rick-snyder/

Dillon lost out on the nomination for the Democratic nominee for Governor in 2010. So, instead of helping the eventual nominee, Lansing Mayor Virg Bernero, he laid low. After Rick "Gateway Pinkslip" Snyder won the job, Dillon joined the Republican administration as Michigan State Treasurer, a reat job for a vulture capitalist -- think "Boardwalk Empire" and Nucky Thompson with UMC features. Dillon recently left public service to return, again, to the pirate sector.

A who’s who of the conspirators behind the Detroit bankruptcy

By Thomas Gaist
13 November 2013

EXCERPT...

Michigan State Treasurer Andy Dillon

Andrew or “Andy” Dillon is a leading Democratic politician in the state of Michigan, who was speaker of the Michigan House of Representatives before being appointed state treasurer by Snyder. Dillon was elected to the House in 2004, and ran for the Democratic nomination for governor unsuccessfully in 2010, at which point he hitched his chariot to Snyder’s campaign. He was rewarded with the second most powerful post in the state.

Dillon earned his fortune as a venture capitalist, serving as vice president of commercial finance for General Electric Capital Corporation. He become president of Detroit Steel Company in 1996, and later was managing director of the Chicago-based private equity firm Wynnchurch Capital.

Dillon has been a chief conspirator in the plans for the “restructuring” of Detroit. He worked with Jones Day attorneys to draft the April 2012 consent agreement, which forced major concessions on municipal workers, and has overseen restructuring operations against municipalities and school districts throughout the state using powers of the authoritarian emergency manager law.

An email sent by Dillon on July 10, 2013 to Orr on the wording he should use to justify the bankruptcy filing exposed the conspiratorial character of the operation. Dillon told Orr he didn’t think, “we are making the case why we are giving up so soon to reach an out of court settlement. Looks premeditated.” He advised Orr to “say facts got worse as we dug into the numbers… We don’t even say they rejected the city’s proposal. I think we may want a take it or leave it demand before we pull this trigger. I agree with the recommendation but I don’t think we made the case. After the letter is revised, let’s work on the Gov’s response.”

Dillon resigned his post as state treasurer on November 1—the day after giving a deposition for the bankruptcy trial—saying publicity over his acrimonious divorce was becoming a distraction. Snyder, stating regret, immediately heaped praise on the state Democrat.

“He has been instrumental in many of the comprehensive reforms that are contributing to Michigan’s comeback. He has worked tirelessly on behalf of the people of Michigan, and we’re a stronger state because of his dedication, expertise and leadership.” Dillon’s “partnership with Detroit to assist in the city’s turnaround,” Snyder wrote, “is just one example of Andy’s positive impact on Michigan.”

SOURCE: https://www.wsws.org/en/articles/2013/11/13/whow-n13.html

Like in Wall Street on the Potomac, the rot in Michigan is Buy Partisan.

PS: I still salute IKE for his warning us about the Military Industrial Complex. I sure wish he'd kept the "Congressional" part of the axis in there.

[malaise]

2. The Shock Doctrine

Neo-liberalism on steroids - divest (to the cronies), deregulate, then loot.
Remember now government must fit into a bathtub filled with Flint water.

[Octafish]

4. Rick's just the man for the piratization shock job.

From the Christian Science Monitor article in OP:

Snyder, a Republican, is a former tax accountant and venture capitalist who in 2010 campaigned on the promise that he would use business principles to pull Michigan out of financial difficulty. The approach has seen some successes, most notably the 2014 deal that helped haul Detroit out of the largest municipal bankruptcy filing in US history.

The "Emergency Manager" he appointed head Flint during the switch from Detroit water system now is the "Emergency Manager" running Detroit Public Schools, Darnell Earley.

[malaise]

5. Octafish the 'business schools'

have done more to fuck up democracy than most places. You cannot run government like a business - just wait for another global public health disaster.

[Octafish]

8. The Chicago Boys created the Chilean Piratization Model

Last edited Thu Jun 2, 2016, 09:01 PM - Edit history (1)

The author helped implement the privatization scam for Nixon, Pinochet, CIA and the globalist crowd. They want to do it here, of course:

President Clinton and the Chilean Model.

By José Piñera

Midnight at the House of Good and Evil

"It is 12:30 at night, and Bill Clinton asks me and Dottie: 'What do you know about the Chilean social-security system?'” recounted Richard Lamm, the three-term former governor of Colorado. It was March 1995, and Lamm and his wife were staying that weekend in the Lincoln Bedroom of the White House.

I read about this surprising midnight conversation in an article by Jonathan Alter (Newsweek, May 13, 1996), as I was waiting at Dulles International Airport for a flight to Europe. The article also said that early the next morning, before he left to go jogging, President Bill Clinton arranged for a special report about the Chilean reform produced by his staff to be slipped under Lamm's door.

That news piqued my interest, so as soon as I came back to the United States, I went to visit Richard Lamm. I wanted to know the exact circumstances in which the president of the world’s superpower engages a fellow former governor in a Saturday night exchange about the system I had implemented 15 years earlier.

Lamn and I shared a coffee on the terrace of his house in Denver. He not only was the most genial host to this curious Chilean, but he also proved to be deeply motivated by the issues surrounding aging and the future of America. So we had an engaging conversation. At the conclusion, I ventured to ask him for a copy of the report that Clinton had given him. He agreed to give it to me on the condition that I do not make it public while Clinton was president. He also gave me a copy of the handwritten note on White House stationery, dated 3-21-95, which accompanied the report slipped under his door. It read:

[font color="green"]Dick,

Sorry I missed you this morning.
It was great to have you and Dottie here.
Here's the stuff on Chile I mentioned.

Best,

Bill.[/font color]

Three months before that Clinton-Lamm conversation about the Chilean system, I had a long lunch in Santiago with journalist Joe Klein of Newsweek magazine. A few weeks afterwards, he wrote a compelling article entitled,[font color="green"] "If Chile can do it...couldn´t North America privatize its social-security system?" [/font color]He concluded by stating that "the Chilean system is perhaps the first significant social-policy idea to emanate from the Southern Hemisphere." (Newsweek, December 12, 1994).

I have reasons to think that probably this piece got Clinton’s attention and, given his passion for policy issues, he became a quasi expert on Chile’s Social Security reform. Clinton was familiar with Klein, as the journalist covered the 1992 presidential race and went on anonymously to write the bestseller Primary Colors, a thinly-veiled account of Clinton’s campaign.

“The mother of all reforms”

While studying for a Masters and a Ph.D. in economics at Harvard University, I became enamored with America’s unique experiment in liberty and limited government. In 1835 Alexis de Tocqueville wrote the first volume of Democracy in America hoping that many of the salutary aspects of American society might be exported to his native France. I dreamed with exporting them to my native Chile.

So, upon finishing my Ph.D. in 1974 and while fully enjoying my position as a Teaching Fellow at Harvard University and a professor at Boston University, I took on the most difficult decision in my life: to go back to help my country rebuild its destroyed economy and democracy along the lines of the principles and institutions created in America by the Founding Fathers. Soon after I became Secretary of Labor and Social Security, and in 1980 I was able to create a fully funded system of personal retirement accounts. Historian Niall Ferguson has stated that this reform was “the most profound challenge to the welfare state in a generation. Thatcher and Reagan came later. The backlash against welfare started in Chile.”

But while de Tocqueville’s 1835 treatment contained largely effusive praise of American government, the second volume of Democracy in America, published five years later, strikes a more cautionary tone. He warned that “the American Republic will endure, until politicians realize they can bribe the people with their own money.” In fact at some point during the 20th century, the culture of self reliance and individual responsibility that had made America a great and free nation was diluted by the creation of [font color="green"] “an Entitlement State,”[/font color] reminiscent of the increasingly failed European welfare state. What America needed was a return to basics, to the founding tenets of limited government and personal responsibility.

[font color="green"]In a way, the principles America helped export so successfully to Chile through a group of free market economists needed to be reaffirmed through an emblematic reform. I felt that the Chilean solution to the impending Social Security crisis could be applied in the USA.[/font color]

CONTINUED...

http://www.josepinera.org/articles/articles_clinton_chilean_model.htm

Democratic solutions work because they are Democratic, not capitalist.

[malaise]

11. I've lived it

and studied it - adios society

[Octafish]

13. Think about what you said every day. Shorthand: Murder and Austerity.

Operating on behalf of Nixon and Wall Street, the CIA and Milton Friedman & Friends perfected the art of turning the screws through austerity in Chile.

"The Chicago Boys in Chile: Economic Freedom's Awful Toll"

Orlando Letelier
August 28, 1976

EXCERPT...

The Economic Prescription and Chile's Reality

SNIP...

These are the basic principles of the economic model offered by Friedman and his followers and adopted by the Chilean junta: that the only possible framework for economic development is one within which the private sector can freely operate; that private enterprise is the most efficient form of economic organization and that, therefore, the private sector should be the predominant factor in the economy. Prices should fluctuate freely in accordance with the laws of competition. Inflation, the worst enemy of economic progress, is the direct result of monetary expansion and can be eliminated only by a drastic reduction of government spending.

Except in present-day Chile, no government in the world gives private enterprise an absolutely free hand. That is so because every economist (except Friedman and his followers) has known for decades that, in the real life of capitalism, there is no such thing as the perfect competition described by classical liberal economists. In March 1975, in Santiago, a newsman dared suggest to Friedman that even in more advanced capitalist countries, as for example the United States, the government applies various types of controls on the economy. Mr. Friedman answered: I have always been against it, I don't approve of them. I believe we should not apply them. I am against economic intervention by the government, in my own country, as well as in Chile or anywhere else (Que Pasa, Chilean weekly, April 3, 1975).

SNIP...

A Rationale tor Power

SNIP...

Until September 11, 1973, the date of the coup, Chilean society had been characterized by the increasing participation of the working class and its political parties in economic and social decision making. Since about 1900, employing the mechanisms of representative democracy, workers had steadily gained new economic, social and political power. The election of Salvador Allende as President of Chile was the culmination of this process. For the first time in history a society attempted to build socialism by peaceful means. During Allende's time in office, there was a marked improvement in the conditions of employment, health, housing, land tenure and education of the masses. And as this occurred, the privileged domestic groups and the dominant foreign interests perceived themselves to be seriously threatened.

Despite strong financial and political pressure from abroad and efforts to manipulate the attitudes of the middle class by propaganda, popular support for the Allende government increased significantly between 1970 and 1973. In March 1973, only five months before the military coup, there were Congressional elections in Chile. The political parties of the Popular Unity increased their share of the votes by more than 7 percentage points over their totals in the Presidential election of 1970. This was the first time in Chilean history that the political parties supporting the administration in power gained votes during a midterm election. The trend convinced the national bourgeoisie and its foreign supporters that they would be unable to recoup their privileges through the democratic process. That is why they resolved to destroy the democratic system and the institutions of the state, and, through an alliance with the military, to seize power by force.

In such a context, concentration of wealth is no accident, but a rule; it is not the marginal outcome of a difficult situation -- as they would like the world to believe -- but the base for a social project; it is not an economic liability but a temporary political success. Their real failure is not their apparent inability to redistribute wealth or to generate a more even path of development (these are not their priorities) but their inability to convince the majority of Chileans that their policies are reasonable and necessary. In short, they have failed to destroy the consciousness of the Chilean people. The economic plan has had to be enforced, and in the Chilean context that could be done only by the killing of thousands, the establishment of concentration camps all over the country, the jailing of more than 100,000 persons in three years, the closing of trade unions and neighbourhood organizations, and the prohibition of all political activities and all forms of free expression.

While the Chicago boys have provided an appearance of technical respectability to the laissez-faire dreams and political greed of the old landowning oligarchy and upper bourgeoisie of monopolists and financial speculators, the military has applied the brutal force required to achieve those goals. Repression for the majorities and economic freedom for small privileged groups are in Chile two sides of the same coin.

CONTINUED...

http://www.ditext.com/letelier/chicago.html

Three weeks after this was published in The Nation (Aug. 28, 1976), Orlando Letelier was assassinated by a car bomb in Washington, D.C.

[exboyfil]

6. So who should pay to ensure safe potable water?

If the answer is the government, then how about all those who live on farms and acreages without a public source of water? Those homeowners currently are required to drill and maintain their own wells as well as any treatment that the water requires.

I bring this up because the protests included two demands. One that the water be safe and two that the water rates be reduced.

[Octafish]

9. Taxpayers. Same people who pay for government in Flint and in Michigan and in the USA.

You'd think that the government would actually have some integrity and do what they're supposed to do -- provide safe drinking water.

Due to the economy and the shaft from Lansing and Wall Street, the city is now cast-strapped.

Flint's government was APPOINTED by the Michigan governor. His appointee chose the cheap route.

BTW: The EPA knew about Flint's leaded water at least as early as April 2015 and didn't do anything.

EPA water expert, Miguel Del Toral, identified potential contamination problems with Flint’s drinking water last February and confirmed the suspicions in April. He authored an internal memo about the problem in June, according to documents obtained by Virginia Tech.

http://dailycaller.com/2016/01/14/epa-knew-about-michigan-water-contamination-for-months-without-telling-the-public/

[Nitram]

10. Something conservatives don't understand.

The government exists to help people, not to provide failed businessmen with jobs in government.

[malaise]

12. Well said

[Octafish]

14. To a T.

The Nation, from 2012:

Everyone agrees that something must be done to “fix” Michigan’s struggling urban centers and school districts, although news of a $457 million surplus in early February prompted the state budget director to declare, “Things have turned.” But at what cost? In 2011 Governor Snyder stripped roughly $1 billion from statewide K-12 school funding and drastically reduced revenue sharing to municipalities. Combined with poor and sometimes corrupt leadership and frequently dysfunctional governments, these elements have brought Michigan cities to the brink of bankruptcy. Residents of the hardest-hit places have fled if they are able.

http://www.thenation.com/article/scandal-michigans-emergency-managers/

Then came Detroit's bankruptcy, which now serves as a federal blueprint for tearing up contracts with Labor.