[Marxism] How Obama and Valerie Jarrett Helped Launch Their Political Careers in an Outrageous 'Urban Renewal' Scheme
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Sun Feb 24 11:43:49 MST 2013
How Obama and Valerie Jarrett Helped Launch Their Political Careers in
an Outrageous 'Urban Renewal' Scheme
January 25, 2013
As President Obama's second term begins, and inequality, especially for
black Americans, is worse than it was when Obama first took office, it's
worth revisiting progressives' and Obama supporters' impression of the
president as somebody who might actually care about equality and helping
the most unfortunate in society. And a big centerpiece of that
impression, which endures despite evidence that he's at best ambivalent,
is his early days in Chicago. The narrative that Obama is a
salt-of-the-earth community organizer has been spoon-fed to the American
populace since Obama first began campaigning. In reality, there's a big
piece of the president's past that has gone under-reported that will
help us to understand Obama and his closest adviser Valerie Jarrett a
bit better: Obama and Jarrett built the nexus of political support that
took him to the presidency by participating in one of the most appalling
examples of neoliberal-corrupted City Hall-"urban renewal projects" in
recent history that enriched developers and investors and destroyed the
lives of thousands of Chicago's poorest black residents, in some cases
using his community organizer job as camouflage.
We have the opportunity to revisit our impression of Obama thanks to a
speech by Robert Fitch , a radical journalist and activist who
chronicled the destruction of public housing in his 1996 book, The
Assassination of New York, in which he detailed the changing landscape
of the city at the hands of bankers and developers. New York's poorest
were left to the mercy of the extremely rich, who used their power and
money to gentrify, gut and obliterate public housing. Fitch's accounts
of the plunder of New York and Obama's efforts in Chicago offer a
different narrative than we're often accustomed to hearing -- they
weren't the "fault of Republicans," but rather examples of the most
frequent attack on democracy and the general welfare: how politicians
"of all stripes" served the interests of the richest and most powerful
in the society. In the case of NY and Chicago, the powerful took the
form of a collection of interests that Fitch called FIRE: finance,
insurance and real estate.
During a speech delivered at the Harlem Tenants Associations in November
2008, directly after Obama's presidential win, Fitch explained how the
new president and other middle-class blacks, including Valerie Jarrett
and Obama's wife Michelle, climbed the power ladder in Chicago at the
expense of poor African Americans by aligning themselves with "friendly
...[A]s Obama knows very well, for most of the last two decades in
Chicago there’s been in place a very specific economic development plan.
The plan was to make the South Side like the North Side. Which is the
same kind of project as making the land north of Central Park like the
land south of Central Park. The North Side is the area north of the
Loop—Chicago’s midtown central business district—where rich white people
live; they root for the Cubs. They’re neighborhood is called the Gold Coast.
For almost a hundred years in Chicago blacks have lived on the
South Side close to Chicago’s factories and slaughter houses. And
Cellular Field, home of the White Sox. The area where they lived was
called the Black Belt or Bronzeville—and it’s the largest concentration
of African American people in the U.S.—nearly 600,000 people—about twice
the size of Harlem.
In the 1950s, big swaths of urban renewal were ripped through the
black belt, demolishing private housing on the south east side. The
argument then was that the old low rise private housing was old and
unsuitable. Black people needed to be housed in new, high-rise public
housing which the city built just east of the Dan Ryan Expressway. The
Administration of the Chicago Housing Authority was widely acclaimed as
the most corrupt, racist and incompetent in America. Gradually only the
poorest of the poor lived there. And in the 1980s, the argument began to
be made that the public housing needed to be demolished and the people
moved back into private housing. …
If we examine more carefully the interests that Obama represents;
if we look at his core financial supporters; as well as his inmost
circle of advisors, we’ll see that they represent the primary activists
in the demolition movement and the primary real estate beneficiaries of
this transformation of public housing projects into condos and
townhouses: the profitable creep of the Central Business District and
elite residential neighborhoods southward; and the shifting of the pile
of human misery about three miles further into the South Side and the
Obama’s political base comes primarily from Chicago FIRE—the
finance, insurance and real estate industry. And the wealthiest
families—the Pritzkers, the Crowns and the Levins. But it’s more than
just Chicago FIRE. Also within Obama’s inner core of support are allies
from the non-profit sector: the liberal foundations, the elite
universities, the non-profit community developers and the real estate
reverends who produce market rate housing with tax breaks from the city
and who have been known to shout from the pulpit“ give us this day our
Daley, Richard Daley bread.”
Aggregate them and what emerges is a constellation of interests
around Obama that I call “Friendly FIRE.” Fire power disguised by the
camouflage of community uplift; augmented by the authority of academia;
greased by billions in foundation grants; and wired to conventional FIRE
by the terms of the Community Reinvestment Act of 1995. And yet friendly
FIRE is just as deadly as the conventional FIRE that comes from bankers
and developers that we’re used to ducking from. It’s the whole
condominium of interests whose advancement depends on the elimination of
poor blacks from the community and their replacement by white people
and—at least temporarily—by the black middle-class—who’ve gotten
subprime mortgages—in a kind of redlining in reverse.
Evidence of the public-private partnerships’ failures emerged almost
The public housing included in Senator Obama's transformation plans,
such as the 504 apartments in the squat brick buildings of Grove Parc
Plaza, quickly fell into disrepair. Reports emerged of uninhabitable
units  with collapsed roofs, fire damage, mice infestations, and
sewage backups. In 2006, federal inspectors graded the condition of the
complex an 11 on a 100-point scale, a score so bad the buildings were
demolished in 2011 .
A Boston Globe review  found that thousands of apartments across
Chicago that had been built with local, state and federal subsidies --
including several hundred in Obama's former district -- deteriorated so
completely they were no longer habitable. Grove Parc, a project that
was, along with several other prominent failures, developed and managed
by Obama's close friends and political supporters, became a symbol of
the broader failures of handing over public subsidies to FIRE cronies,
private companies to build and manage affordable housing, an approach
lauded by Obama as the best, sometimes only, replacement for public housing.
At the time, Jarrett was the chief executive of Habitat Co., which
managed Grove Parc Plaza from 2001 until the winter of 2008 and
co-managed an even larger subsidized complex in Chicago that was seized
by the federal government in 2006 after city inspectors found widespread
problems. Jarrett had earlier served as Commissioner of the Department
of Planning and Development from 1992 through 1995. When questioned by
the Globe, Jarrett defended Obama's position that public-private
partnerships are superior to public housing.
"Government is just not as good at owning and managing as the
private sector because the incentives are not there," said Jarrett,
whose company manages more than 23,000 apartments. "I would argue that
someone living in a poor neighborhood that isn't 100 percent public
housing is by definition better off."
But as theGlobe pointed out , Daley's plans to privatize Chicago
public housing quickly drew criticism:
[Chicagoans] asked why the government should pay developers to
perform a basic public service -- one successfully performed by
governments in other cities. And they noted that privately managed
projects had a history of deteriorating because guaranteed government
rent subsidies left companies with little incentive to spend money on
Most of all, they alleged that Chicago was interested primarily in
redeveloping projects close to the Loop, the downtown area that was
seeing a surge of private development activity, shunting poor families
to neighborhoods farther from the city center. Only about one in three
residents was able to return to the redeveloped projects.
"They are rapidly displacing poor people, and these companies are
profiting from this displacement," said Matt Ginsberg-Jaeckle of
Southside Together Organizing for Power, a community group that seeks to
help tenants stay in the same neighborhoods.
"The same exact people who ran these places into the ground," the
private companies paid to build and manage the city's affordable
housing, "now are profiting by redeveloping them."
Obama believes deeply that privatization works. He once told theChicago
Tribune that he had briefly considered becoming a developer of
affordable housing, but after graduating from Harvard Law School in
1991, he turned down a job with Tony Rezko's development company,
Rezmar, to instead work at the civil rights law firm Davis, Miner,
Barnhill & Galland. The firm represented a number of nonprofit companies
that were partnering with private developers to build affordable housing
with government subsidies.
The Globe reported that shortly after becoming a state senator in 1997,
Obama told theChicago Daily Law Bulletinthat his experience working with
the development industry had reinforced his belief in subsidizing
private developers of affordable housing. "That's an example of a smart
policy," the paper quoted Obama as saying. "The developers were thinking
in market terms and operating under the rules of the marketplace; but at
the same time, we had government supporting and subsidizing those efforts."
What Obama is describing is corporate welfare: the government subsidizes
private companies which then lack incentive to provide services to
tenants because the government i.e. taxpayers will continue funding them
regardless, and then the same private companies win new contracts down
the road when they demolish and rebuild apartments as part of a
Oftentimes, Obama's community organizer veneer served to camouflage his
FIRE roots. For example, Grove Parc Plaza opened in 1990 as a
redevelopment of an older housing complex, and the new owner was a local
nonprofit company called Woodlawn Preservation and Investment Corp, led
by two of the neighborhoods' most powerful ministers, Arthur Brazier and
Leon Finney. All of this sounded like grassroots in action. However,
Woodlawn Preservation hired a private management firm, William Moorehead
and Associates, to oversee the complex. The company then lost that
contract and a contract to manage several public housing projects for
allegedly failing to do its job, and was subsequently convicted of
embezzling almost $1 million in management feeds theGlobe reported.
Woodlawn Preservation then hired a new property manager, Habitat Co.,
where Valerie Jarrett served as executive vice president. Residents told
the Globe that the complex deteriorated under Moorehead's management and
the decline continued after Habitat took over. A maintenance worker at
the complex told the Globe that money often wasn't available for steel
wool to plug rat holes, but regardless federal inspectors rated Grove
Parc an 82 out of 100 as late as 2003.
In their extensive report on Obama's private-public partnership
failings, theGlobe profiles one of the largest recipients of government
subsidies: Rezmar Corp, founded in 1989 by Tony Rezko, who between 1999
and 2008 used more than $87 million in government grants, loans, and tax
credits to renovate about 1,000 apartments in 30 Chicago buildings.
Companies run by the partners also managed many of the buildings,
collecting government rent subsidies. Neither Rezko, nor his partner
Daniel Mahru, had any development experience :
Rezmar collected millions in development fees but fell behind on
mortgage payments almost immediately. On its first project, the city
government agreed to reduce the company's monthly payments from almost
$3,000 to less than $500.
By the time Obama entered the state senate in 1997, the buildings
were beginning to deteriorate. In January 1997, the city sued Rezmar for
failing to provide adequate heat in a South Side building in the middle
of an unusually cold winter. It was one of more than two dozen
housing-complaint suits filed by the city against Rezmar for violations
at its properties.
People who lived in some of the Rezmar buildings say trash was not
picked up and maintenance problems were ignored. Roofs leaked, windows
whistled, insects moved in.
"In the winter I can feel the cold air coming through the walls and
the sockets," said Anthony Frizzell, 57, who has lived for almost two
decades in a Rezmar building on South Greenwood Avenue. "They didn't
insulate it or nothing."
"Affordable housing run by private companies just doesn't work," Mahru
told the Globe. "It's difficult, if not impossible, for a private
company to maintain affordable housing for low-income tenants."
Most of Rezko and Mahru's buildings have since been foreclosed upon,
forcing the tenants to find new housing.
When Obama opened his campaign for state senate in 1995, Rezko's
companies gave $2,000 on the first day of fundraising, and as the
Globepoints out, essentially "seeded the start of Obama's political career."
While Obama eventually distanced himself from Rezko, he maintained close
ties to other developers. Jarrett became a close adviser, and Obama
chose Martin Nesbitt, chairman of the Chicago Housing Authority, as his
campaign treasurer. Nesbitt was one of the key overseers of the shift
toward private management and development. And Obama kept the rich
families around him.
From the Globe story :
As a result, some people in Chicago's poorest neighborhoods are
torn between a natural inclination to support Obama and a concern about
his relationships with the developers they hold responsible for
Chicago's affordable housing failures. Some housing advocates worry that
Obama has not learned from those failures.
"I'm not against Barack Obama," said Willie J.R. Fleming, an
organizer with the Coalition to Protect Public Housing and a former
public housing resident. "What I am against is some of the people around
Jamie Kalven, a longtime Chicago housing activist, put it this way:
"I hope there is not much predictive value in his history and in his
involvement with that community."
In a 2012 Harpersmagazinearticle, Ben Austen  writes that the area
around Cabrini-Green no longer resembles the neighborhood he remembered
from his years growing up in Chicago in the '70s and '80s.
Down the street from 1230 N. Burling stood a mixed-income
development of orange-bricked condos and townhomes called Parkside of
Old Town. Its squat buildings were outfitted with balconies and adorned
with purple ornamentation and decorative pillars. There was a new
school, a new police station, a renovated park, and a shopping center
with a Dominick’s supermarket and a Starbucks. A Target was expected on
the site the last tower would soon vacate. Later, I would warm up two
blocks south in @Spot Café, where employees from Groupon’s nearby
corporate headquarters streamed in to pay full price for lattes and panini.
Today, what seems harder to fathom than the erasure of entire
high-rise neighborhoods is that they were ever erected in the first
place. For years the projects had stood as monuments to a bygone effort
to provide affordable housing for the poor and working-class, the
reflection of a belief in a deeper social contract.
Shortly before the demolition of 1230 N. Burling in 2012, Austen
attended a Chicago Housing Authority meeting during which residents
protested the board in response to the city forcing poor people off
prime real estate. Activists included residents and supporters of a
housing project called Lathrop Homes, a development in a well-off
section of the North Side that was next in line to be demolished.
“The residents didn’t want to be forced into the private market or into
temporary housing, especially since they doubted they’d be able to
return to whatever replaced Lathrop; nor did they agree that market-rate
apartments were needed in the redeveloped community, as the surrounding
area was already full of market-rate condos,” Austen wrote.
Chicago’s $1.6 billion “Plan for Transformation ” envisioned a mix of
public-housing residents with market-rate condos and subsidized rentals
or homes, with one-third of each in these new communities.
In late 2012, NPR detailed how after more than a decade in the works,
one of the country’s most closely watched public housing experiments was
badly failing, partly due to the flailing economy.
NPR profiled Lathrop resident Mary Thomas :
Thomas has lived here for eight years with her husband and
7-year-old son. Lathrop sits on what many now consider prime land, next
to the Chicago River. A busy street splits the development into a north
and south section.
The north side is completely shuttered, cordoned off by gates, a
ghost town of boarded-up buildings. Thomas lives in the open southern
section, where steam from the old heating system wafts into the street.
About 170 of the 900-plus units are occupied.
Thomas says all three of the concepts for Lathrop should be dumped
and there should be more input from residents. She says there's little
affordable housing in the area and there's no need for market-rate units
Far from adopting a reflective attitude in the wake of Chicago’s failed
experiment in public-private housing partnerships, Obama has now taken
his love of public-private codependence to a national level, touting
public-private partnerships in everything from creating jobs to
education to tackling insurance fraud to collaborations involving
foreign nations , which you can bet means the wealthiest
multinational conglomerates teaming up to increase their profits at the
expense of the 99 percent.
The First Lady played her own part in the Chicago racket of profiting
off the poor. Michelle Obama worked at the University of Chicago Medical
Center "redirecting" low-income patients to community hospitals in order
to use its own beds for rich patients. Nick Jouriles, president of the
American College of Emergency Physicians, released a statement 
saying the practice comes "dangerously close to patient dumping," a
practice made illegal by the Emergency Medical Labor and Treatment Act
(EMTALA), and reflected an effort to "cherry pick" wealthy patients over
"This is a dangerous precedent that could have catastrophic effects
in poor neighborhoods across the country. Congress needs to hold
hearings about the problems facing emergency patients. If other
community, non-profit hospitals follow this example and shift the lion’s
share of resources to its high-revenue elective patients and procedures,
it will leave many emergency patients virtually out in the cold. The
University of Chicago Medical Center is located in a poor neighborhood
whose residents have few, if any, other options for emergency care."
The media barely paid any attention to Michelle Obama's role in all
of this, though the Chicago Sun-Times reported in 2008 that her
$317,000-a-year role as Vice-President of the hospital helped create the
Quoted in a related Washington Post  article, Quentin Young, a South
Side physician, remarks the scheme is nothing more than an "attempt to
ensure that the hospital retains only affluent patients with insurance."
"If you put enough money into it, you could save a whole bunch of
community health centers," Young said. "But to date, they haven't."
Edward Novak, president of Chicago's Sacred Heart Hospital,
declined to discuss the center's initiative in particular but dismissed
as "bull" attempts to justify such programs as good for patients. "What
they're really saying is, 'Don't use our emergency room because it will
cost us money, and we don't want the public-aid population,' " Novak said.
At the end of January this year, community residents launched a protest
outside the University of Chicago Medical Center, angry that the
hospital ignored their needs , especially for "victims of gun
violence," according to a news report: "One woman said her son, shot
just blocks away from the university, died on the way to a hospital ten
miles away." Four were arrested at the protest.
Robert Fitch’s words hold true: the poor remain at the mercy of the
rich, who are seeking profits on everything possible, including their
homes, but also their water, healthcare and education.
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