Theft at the Public Till - TEXT

THEFT AT THE PUBLIC TILL

MICHAEL LISSACK

All rights reserved. No part of this book may be reproduced, stored, or transmitted by any means—whether auditory, graphic, mechanical, or electronic—without written permission of both publisher and author, except in the case of brief excerpts used in critical articles and reviews. Unauthorized reproduction of any part of this work is illegal and is punishable by law.

“They called me mad, and I called them mad, and damn them they outvoted me.”

The author acknowledges the decision made by Jamie Dimon, Steven Black, and James Boshart to prevent me from having this book published in 1994 while I was still a managing director at Citi. Perhaps if it had been no one would have thought to re-read it 2025. My former colleagues and compet- itors in the world of municipal finance opened my eyes to the many issues written about herein. Conceptually I am thus grateful for their rampant venality. Please note when I rescued this text from my mother’s basement I was not able to locate the pages with either the references or the footnotes. I have done my best to replicate the references list and take full responsibility if I missed one or two. (Thanks to ChatGPT, Claude.ai and Grok for provide assistance with the references recreation task.)

CONTENTS

Forward�� vii Why the examples may seem “old.”��xiii

PART ONE

The Rip-off��1 Our Government No Longer Works��14 Unintended Redistribution Is An Abuse Of Trust��27 Our World Has Changed, Our Government Hasn't��40 Theft By Policy - Our Government At Work��49

PART TWO

We Have Problems��61 Government Is Not The Answer��74 Theft By Government��87 Waste Is Also Theft��102 Who Governs��120

PART THREE

Aren’t All Thefts Tax-Exempt?��131

PART FOUR

What Is Going On Here?��165 Dangerous Filters��184 Role of the Media��189 Our Sense of Community Has Changed��201 Money Isn't Everything��211

PART SIX

A Different Framework Architecture as Metaphor��223

PART SEVEN

Stopping the Theft��251 Social Welfare�� 269 Thinking�� 275 Finding Hope��281 Afterword: The Theft Continues — Systemic Blindness in 2025��283 References for “Theft at the Public Till”��291 Recommended Readings��297

FORWARD

Thirty years ago, when I first wrote Theft at the Public Till , I was motivated by a profound sense of frustration—frustration with a political and eco- nomic system that seemed incapable of aligning its outcomes with the public good, and with a public culture increasingly unable (or unwilling) to discern that misalignment. What I argued then was simple but uncomfortable: our government—through policy drift, institutional inertia, and systemic mis- alignment—had become a mechanism not of collective uplift, but of quiet theft. Not theft in the tabloid sense of criminal scandal or corrupt officials pocketing bribes, but in the more insidious form of missed opportunities, skewed incentives, and hidden redistributions of wealth and power. These were thefts of time, trust, resources, and hope. And they were executed not by villains in back rooms, but by systems we all built—and continue to participate in. It would be easy to dismiss such an argument as dated, the rantings of a post–Cold War cynic trying to puncture the illusions of 1990s technocracy. But history has taken a cruel turn. The central thesis of this book has not been invalidated by the passage of time—it has been tragically confirmed. We live in an era where the legitimacy of institutions is in freefall, where faith in government has been supplanted by grievance and conspiracy, and where a new populism—raw, angry, and increasingly anti-democratic—is reshap- ing the political landscape in the United States and across the globe. The shock of Donald Trump’s 2016 election and his enduring grip on millions of Americans is not an aberration. It is a symptom. A symptom of a political

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economy that continues to treat the average citizen as a transactional after- thought—extracted from, pandered to, but never truly empowered. The subtitle of this reissued edition might well be “What We Still Refuse to Learn.” Because despite three decades of empirical evidence, high-profile crises, and policy failures, the same structural flaws I documented in Theft at the Public Till continue to shape the daily experience of American life— and to shape the popular anger that animates so much of contemporary pol- itics. The theft continues, now turbocharged by technologies of distraction, misinformation, and financial abstraction that make it harder than ever to identify who benefits, who pays, and who gets left behind. Let’s begin where the book begins—with unintended redistribution. Back in the 1990s, I highlighted the quiet, almost invisible ways in which public policy facilitated the transfer of resources from the many to the few, often under the guise of public interest. This was not simply a story of tax breaks for the wealthy or subsidies for entrenched industries. It was about how complexity and opacity—whether in municipal bond markets, healthcare pricing, infrastructure procurement, or zoning—allowed money, attention, and opportunity to be skimmed away from where it was most needed. The Denver airport saga, the subsidized sports stadiums, the rigged procurement processes—these were just symptoms of a larger design fail- ure: our government had no shared goal, no normative anchor, no agreed- upon metric of what a good outcome looks like. As a result, power flowed to those who could game the rules, write the rules, or simply wait out the chaos. Today, that dynamic is not only still present—it is more dangerous. In the 2020s, wealth inequality in America has reached levels not seen since the Gilded Age. While policymakers debate inflation, climate change, and artificial intelligence, the underlying story is one of structural alienation. Housing policy continues to reward speculation over shelter. Healthcare remains a labyrinth of insurance codes and profit extraction. Tax policy— even under reform-minded administrations—remains riddled with loop- holes, carve-outs, and complexity that only the rich can afford to navigate. And digital platforms, which promised democratized access to information

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and opportunity, have become accelerants of division, misinformation, and surveillance capitalism. And the cost of this systemic theft is no longer just economic—it is emo- tional and existential. What many now call “populism” is, in reality, the po- litical expression of long-festering distrust. When government is perceived as a tool of elites, when voters believe the deck is permanently stacked, when daily life is filled with small humiliations—from Kafkaesque bureaucracy to algorithmic unfairness—the ground is fertile for demagogues. The success of Donald Trump, and the broader red-state surge, is not primarily about charisma or ideology. It is about resonance. Trump and his political imita- tors may not articulate coherent policy visions, but they tap into a collective intuition: something is broken, and no one in power seems to care. This is not just anger—it is recognition. What I tried to explain in Theft at the Public Till is that this brokenness is not a glitch. It is the logical consequence of a system that lost its moral center. Without a guiding vision—like improving quality of life for all, or investing in intergenerational well-being—public policy becomes an arena of compet- ing transactions, shaped by those who can afford access and defended by those who mistake complexity for virtue. Even programs nominally aimed at helping the vulnerable become entangled in rent-seeking, inefficiency, and patronage. Bureaucracy metastasizes, public goods become privatized, and accountability disappears. The 1990s offered us a window to course-correct. We missed it. And now we’re living in the backlash. The great irony, of course, is that many of the same people most harmed by this system—rural voters abandoned by economic globalization, working-class families squeezed by housing and healthcare costs, young people drowning in debt—are now its most vocal defenders, provided it speaks their language of resentment. This is the paradox of contemporary American politics: the theft continues, but the narrative has shifted. No longer is the enemy “the system” in the abstract. Now, it is “them”—liberals, immigrants, academics, journalists, and anyone who seems to benefit from the new knowledge economy without earning it “the hard way.”

This misdirection is no accident. In the absence of a shared public vo- cabulary for identifying systemic failure, scapegoating becomes seductive. And the real theft—of opportunity, of voice, of agency—gets obscured behind culture war theatrics. What would it mean to stop the theft today? It would mean rebuilding government around the principle of quality of life—not GDP growth, not market efficiency, not investor confidence. It would mean using policy to foster trust, autonomy, and shared purpose—not just to balance spreadsheets or tweak incentives. It would mean re-anchoring governance in the moral responsibility of stewardship—toward future gen- erations, toward the environment, and toward those left behind. But perhaps most critically, it would require a new honesty—a cultural reckoning with the fact that we are all implicated in the system we now decry. The comfortable liberal technocrat, the disillusioned rural voter, the activist entrepreneur, the apathetic centrist—we are all participants. And unless we commit to seeing beyond our own immediate grievances, to ask- ing what kind of society we wish to co-create, the theft will continue—quiet, efficient, and devastating. When I wrote this book, I hoped to provoke a different kind of conver- sation—one that refused to accept complexity as an excuse, that held elites to account but also called on the public to take responsibility. I hoped that by naming the theft, we might stop it. That hope remains. But time is running out. The populist surge, for all its dangers, offers a kind of clarity. It forces us to confront what happens when people stop believing in the legitimacy of the system altogether. The choice before us is not between left and right, nor even between reform and revolution. It is between meaning and ma- nipulation. Between a democracy that serves its citizens, and a kleptocracy that serves itself. In rereading Theft at the Public Till , I am struck not by how dated it feels, but by how little has changed. The mechanisms are more sophisticated now. The actors have evolved. But the core problem remains: a failure to align our governance with our values.

If this book can still serve, it is by reminding us that change begins with seeing clearly. And by insisting that theft—no matter how bureaucratically disguised—is still theft. We deserve better. We always have. But only if we’re willing to name the problem—and demand its end.

— Michael Lissack May 2025 Boston, MA

WHY THE EXAMPLES MAY SEEM “OLD.”

Throughout this book the examples will be mostly drawn from the late 1980’s and early 1990’s. When I rewrote the book in 2002, the choice of these earlier examples was deliberate. With contemporary examples the principal players involved often feel compelled to defend the specifics of the actions and incidents. What matters for our purposes is the mindset behind those examples - the way of thinking which their participants embodied. To keep the debate focused on mindset it is less controversial to make use of examples from years earlier than today. I have chosen not to revise the examples nor to make the book more “current.” The potency of the argument presented is enhanced by the sim- ple fact that despite thirty years of so-called “progress” the fundamental systemic issues I wrote about in 1994 remain. We deserve better.

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PART ONE

THE RIP-OFF

Y ou are getting ripped off. I’m getting ripped off too. There isn’t a whole lot we can do about it. “It” is built into “the system.” And that is what this book is about. The ripoff that I am going to describe is not in the form of a scandal, it does not involve “evil” people who spend their time plotting how to best steal from each and every one of us, and it is not the pulp which is so able to sell papers and keep TV programs going. Instead, this theft is far more perfidious. It is the work of all of us. Take the headlines of Summer 2002. Worldcom, Anderson, Merrill Lynch, Enron, Martha Stewart.... The list goes on and on. American confi- dence in our largest corporations is at an all time low. Media pundits speak of the lack of ethics and the lack of standards. But, there is a source of ethics and standards common to all these cases - Business Schools, suppliers of the MBA. What kind of standards were Jeff Skilling and the Wall Street analysts taught while getting their MBA? What kind of ethics? That money was the measure of success. That it is standard to focus on maximizing shareholder wealth. That present value matters more than long-term anything including responsibility. That you “are a team of one” so focus on self (and maximize those stock options). That responsibility is the “market’s” not ours - and, anyhow, no one “like us” ever goes to jail. Harvard claims it provides “a transforming experience that gave [its alumni] the tools and life lessons they needed to chart their own future.”

Michael Lissack This was done through courses that, for example, teach “financial engineer- ing used to support marketing and production programs, signal information, structure incentives, tap different investor clienteles, minimize bankruptcy costs, and address tax and accounting concerns.” As of today nowhere in the published content of such courses do we find discussions of how far is too far, what is the public’s interest, where is the line and how to avoid grey areas etc. Will this now change? It is not enough to merely add “new” cases to the ethics course. The problematic mindset is created within such course as “corporate financial engineering.” Will HBS and other business school faculty take any time from their vacations (or lucrative consulting assign- ments) this summer to revise their courses so as to take responsibility for the actions of their students? Martha and Bernie may not have MBAs but they are surrounded by them. The people at Merrill, Anderson, Tyco and Enron are mostly MBA’s themselves. If these were schoolchildren their teachers would be wondering what went wrong. Will MBA faculty have the same concerns? Or will they take cold comfort that “these are adults making their own decisions?” True professions take responsibility for their teachings. It is time for business school faculty to do the same. Business schools in America have endowments in excess of $2 billion. Gifts to business schools are considered charity. And how the needy have been served. Thousands thrown out of work, trust in leadership destroyed, and confidence - the very engine of our economy - shattered. Despite the events of 2002 our business schools will teach accounting, finance, and management principles as if none these scandals ever happened except as examples of excess and of getting caught. Our MBA programs provided the common mindset behind the current corporate crisis. Without reform of climate and curriculum the next generation of MBA’s is doomed to repeat these scandals. Ethics in business needs to be taught as a way of life not as a required course. The notion of community responsibility before self needs to be instilled before MBAs are entitled to be part of a “profession” known as management. The massive resources available to business schools need to be deployed with a focus on giving something to America rather than

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on gathering assets for self. Harvard business school alone has resources enough to provide a free education to thousands annually (but charges $30,500 per student). The current corporate crisis cannot be “blamed” on the business schools. Selfish individuals acted in furtherance of greed. But the climate that both produced and tolerated such behavior starts with the business schools. If business school has some effect on its students then the climate and mindset dealt with at business schools needs to be re-examined in light of the current spate of corporate scandals. Professors cannot be sure that just doing what they have done before is right. Something is rotten in the state of MBA land and it is the schools’ responsibility - at a minimum -- to ensure that they are not merely helping the ethically challenged acquire a sharper toolset with which to assault an unprepared public. As with corporate America so too with government. The media may be focused on Wall Street and corporate executives but the scandalous mindset of rip-offs and abrogation of responsibility to the public does not lie with corporations alone. Government is responsible for more than its fair share of theft, waste, and negligence. Let’s go back a decade. 1 The Boston Globe headlines a series of articles detailing how one of the most powerful financial minds in Massachusetts confused advising his public sector clients with his own interests. The chief of staff of the Governor of New Jersey is forced to resign in answer to alle- gations that his associates used his office to gain business financing public sector projects. A noted black investment banker is found dead in his hotel room of a drug overdose, and the next day the papers are filled with stories about financial scandals involving New York and the banker’s firm. A noted brokerage firm is questioned about giving a piano to the Governor of Kentucky. The SEC feels it necessary to abolish the connec- tion between political contributions and the municipal bond business. The press notes that the new policy applies only to bankers and not to lawyers or consultants. Internal Revenue Service regulations regarding whether a state or local bond is exempt from Federal taxation have a lengthy section dealing with “fees” diverted to interested parties.

Michael Lissack Voters in Broward County, Florida are asked to choose between paying debt service on a facility that opponents claim should be closed and shutting the facility down. Major New York financial institutions fund the resulting political campaigns. An entire industry springs into existence as each new Federal tax revision creates “arbitrage” opportunities for state and local governments or their friends. Proponents of high speed rail systems fail to launch anything but pilot programs because needed tax-exempt bonding authority is denied by Congress. At the same time, Congress approves the use of tax-exempt bonds for building baseball stadiums and convention centers throughout the United States. Puerto Rico lobbies Congress to preserve a tax-exemption for its industry -- industry that would otherwise be located somewhere in the fifty states. Minnesota lawmakers give a $100 million plus bailout to a stricken airline. Seven states compete for the right to offer more than $50 million of subsidies to a German car maker. Wealthy charitable institutions operate multi-million dollar businesses and hide from the IRS under the guise of “non-profit.” Their executives take home hundred thousand dollar plus sal- aries, housing allowances, and cars. The business profits go untaxed. The Summer of 2002 sees government talking about subsidies for Amtrak (trains that serve few passengers at a cost greater than renting each of them a limo), the Postal Service, dairy farmers, and embattled trade union industries. The dates are a decade later and the names of the entities slightly different but the theft and waste remain. What is going on here? How did all this skimming of the public interest begin to take place? Where will it lead? If you are thinking “expose and scandal,” well, yes, but the perpetrators are us. This is not the story of greedy politicians and bureaucrats who are literally stealing from the public to line their pockets. This is a far more insidious tale. It is a tale about public officials making decisions that cost you and me -- decisions we don’t want them to make for us -- decisions we would not make for ourselves. The costs that we bear: money, missed opportunities, and more, as the result of these decisions are no different than if a robber had

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said “fork over your wallet.” When the robber does it, we are aware. When the public officialdom does it, we are seldom aware. The ripoff is not that public officials are stealing. I have no doubt that such acts occur, but they are not the subject of this exercise. The ripoff is more subtle but far more pervasive. Because our system is so focused on who gets what, on redistributing the pie, on creating speculation gains for winners and on creating a pot of spoils to be shared, we have lost focus on those needs in our society which more than a majority want to see taken care of, somehow, someway -- removing the homeless from our streets; providing a set of opportunities for our children greater than those we face ourselves; knowing that we have the potential for security in old age; knowing we can find a job. Our public officials are hamstrung by an inappropriate set of in- centives. Thus, to attempt to do the right thing is a common goal - but our understanding, and theirs, of what is the “right” thing has been perverted. The problem is one of complexity. Our world is composed of too much information, too much drivel and too much data. We have lost our filters on what is important. In efforts to master the complex, what is truly import- ant disappears, replaced by symbols and easy ways out.” How do I define complexity? As the opposite of simple, predictable, and easy to understand. To quote Murray Gell-Mann, “There are no surprises in simple systems; simple systems give rise to behaviors that are easy to deduce if we know the inputs (decisions) acting upon the system and the environment. If we drop a stone, it falls; if we stretch a spring and let it go, it oscillates in a fixed pattern; if we put money into a fixed-interest bank account, it grows to a predictable sum in accordance with an easily understood and computable rule. Such predictable and intuitively well-understood behavior is one of the principal characteristics of simple systems. Complex processes, on the other hand, generate counterintuitive, seemingly accusal behavior that’s full of surprises. Lower taxes and interest rates lead to higher unemployment, low- cost housing projects give rise to slums worse than those the ‘better’ housing replaced: the construction of new freeways results in unprecedented traffic jams and increased commuting times. For many people, such unpredictable, seemingly capricious, behavior is the defining feature of a complex system.”

Michael Lissack Today almost any observation or its opposite-can be taken as a pithy en- capsulation of everyday, garden-variety common sense. Why for example do the seats seem to get smaller as the airplanes get larger? And why does voice mail seem to double the time it takes to complete a telephone call? Perhaps the answer is what has been called the “revenge effect.” the process by which an indifferent nature seems to get even with us lowly humans by twisting our cleverness back against us. While facing unintended consequences from our mucking about as we try to make things better is hardly a new phenomenon, technology has magnified the effect to the point where we now have to weigh the potential consequences of our actions more carefully than ever before. Common sense can lead us to conclusions that are at variance with the way we think the world should work-ways based on beliefs we create from a life- time’s worth of observations and experience. The problem is that there is often a Grand Canyon-sized chasm between what we think and what is real. The text which follows begins by trying to highlight some of the inter- esting features in that chasm. The instances of theft are numerous. That they are everywhere in the public sector is the “gestalt” (or sense of the whole) I wish the reader to come away with. From this base I move on to propose another way of looking at the world -- an effort to reduce the complexity by means of an over-riding goal, a focus on improving the quality of life. Creating that focus will require new ways of thought and new tools. Our present method of dealing with that arcane arena known as public policy simply does not work. Public school teachers and service personnel, for example, have per- suaded legislatures everywhere that seniority rights, credential require- ments, and restrictive work rules are more important than guaranteeing that our children are prepared for their futures. We can’t even make them feel safe in the place where we expect their learning to occur. How often does a mother fear her child is afraid to go to school because “They have guns and knives at school”? One in four in ten graduates of public high schools can’t read at grade level. Students are stabbed and principals threatened. How many of our urban children will go live with relatives in other neigh- borhoods or states, or even try to flunk eighth grade, to avoid the terror of

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the public high schools? The wealthy can flee dysfunctional and dangerous public schools, and have been doing so for years. The poor are left behind to take their chances, all in the name of “saving the public schools” -- meaning, saving the jobs of the people who run them. The public-school interest groups - teachers’ unions, principals’ associa- tions, school boards’ groups -- argue that their claim on taxpayers’ money is in the national interest. But, like so many monopoly franchises, this one serves its holders better than its captives. It also resembles other monopolies in its black-hole-like ability to suck in money without noticeably improv- ing performance. Over the entire period since World War II, spending per public-school student, after adjusting for inflation, has increased about 40 percent a decade, doubling every twenty years. Average class sizes have fallen; more teachers hold masters’ degrees, but the quality of education has dropped. Almost half of the money that New York City spends in its public school system is consumed in costs other than direct instruction -guidance and attendance counselors, maintenance workers, security guards, and- other personnel as well as transportation and security. Does anyone truly believe these administrative costs serve to enhance the quality of education? Or are they just an excuse to provide thousands of high-paying jobs? If you were told that an ambitious politician wanted to create a project that would have a half billion-dollar cost overrun, fewer facilities than the project it was replacing, located further from the town it serves than an existing facility, and likely to be a drain on the community’s resources for the next twenty years, would you be surprised? Would you vote for it? If your tax dollars were involved would you want the opportunity to vote for it? Or against it? Such was the non-choice faced by Coloradoans in the early 1990’s. Welcome to the Denver International Airport, a much heralded facility which was designed to make Denver the gateway to the Rockies. (I had always thought Denver was the gateway to the Rockies - I guess I had foreshadowings of this airport thirty years before its time.) The airport opened more than one year behind schedule, was more than $500 million more expensive than planned, and featured new technology that simply didn’t work (you really did not want those checked bags back now did you?).

Michael Lissack Of course, a decade later, the ultimate costs of this airport are still not known. The proposed building of the airport led to the proposed building of a highway. But, while the airport was to be financially supported by airline customers who would be given no choice (Denver International was to be the only airport in Denver), the new road was to have its financial burden covered by actual users who lived in the vicinity and who had a choice. Well the road finally does exist, but for years after the airport opened it was a road to nowhere. Without the road, how did you get to the new airport? With difficulty. Once the airport opened, where were the hotels? Why back at the old airport. How many gates did the new airport have? Why fewer than at the old Stapleton. How many flights does the new airport have each day? Again fewer than Stapleton. How many connections? Why fewer than Stapleton. Don’t people fly to Denver to ski? Well, the new airport adds at least a half- hour to the journey to the slopes. And cost? Well, the new airport featured some of the highest landing and user fees in the USA. The worst part of all this is that you and I have had to pay for it. The cost of landing and providing service to Denver is so high that no airline can afford to isolate the costs only for those passengers flying through. So we all pay. In the form of higher ticket prices, in pass-through costs that reflect higher cargo rates, and ultimately -- if a Federal bailout of this project is required - in Federal tax dollars. I use strong language. This project was and is a ripoff. What was gained? A great looking symbol for Denver.(Mountains were not enough.) Jobs in the local Denver economy. Funny, I forget having voted to give some of my money to create jobs in Denver.(I live in Florida, if I had voted on where my money should go to create jobs it would be in Florida, not Denver.) An airline with a strong local presence (Continental) was forced to cut way back due to costs. Such was their reward for being the first airline to strongly back the project. Most travellers using the airport gain additional commuting time and poorer though more modern facilities. But, the politics, well... At least in Denver, much of what has happened was forecast by the proj- ect’s opponents. There was a modicum of public debate. Some noted experts

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went down in flames saying the project was ahead of its time and could not work unless the airlines voluntarily said they wanted it. The political forces did not like that approach. The airport was to be built no matter what, and if the airlines wanted the “privilege” of flying to Denver, well they had better get on board. They did and we are all paying. In fact we are paying for many such things. Each time we pay for some pedestrian good or service we are also paying for a host of government bene- fits for all sorts of people. Some of these benefits we might choose to pay for, some we might not. But, we are not given that choice to make. For example, a policy of amiable tolerance toward smoking, despite widespread reports of its harmfulness, was until quite recently the norm. Our laissez-faire moral- ity dictated the nonabrasive attitude that it was, after all, the smoker’s life. Eventually, we came to understand that smokers not only jeopardize their own health, but also the health of everyone else. For many years we not only tolerated smoking, but we subsidized it. Even today, tobacco growers get money from every taxpayer. We subsidize a noxious and expensive habit. Smokers pollute indoor air, making it unpleasant and, I believe, hazardous for nonsmokers; smokers increase Medicare and Medicaid costs; smokers use scarce hospital beds when treated for smoking-related diseases; and smokers often die young, leaving dependents for the rest of us to support. In short, smokers shift their smoking-related costs to the rest of us whether we want them or not. Over the past decade we have been buying things like higher unem- ployment compensation benefits, greater health coverage, bigger workers’ compensation awards, four-lane highways, better school buildings, and even bigger jury awards in product liability and automobile accident suits without anyone ever asking if we wanted them -never mind if we wanted to pay for them. Does it make sense for you and I to pay good money in higher gasoline and oil prices so that 34,000 Alaskans can benefit to the tune of $150,000 each in punitive damages for the Exxon Valdez oil spill? Keep in mind this $150,000 is extra money over and above full compensation for losses. And just think, a few law firms also got hundreds of millions. For what? And at our expense. Every oil company now adds to its costs the funding of a reserve

Michael Lissack in case this happens to them. So too with tobacco, asbestos, prescription drugs, hospitals.... The list goes on and on. At our expense. These valuable goods and services are entirely unrelated to the suit of clothes, car, or steak that we are consciously purchasing. If we were given the choice, we might make different decisions. If faced with a choice between funding medical tragedies like auto accident victims and funding behavior caused problems, such as a pregnant fourteen-year-old, in our world of lim- ited resources might not there be a difference in which we choose to pay for and how much? And if the opposite choice is made for us, is this not a form of theft? Many of our most costly government programs are designed to subsi- dize business, either through direct grants and services, as in agriculture, or indirectly through lucrative contracts, as in the defense industry. The private world profitability feeds from the public trough. In cities throughout the nation, working-class neighborhoods have been razed to make way for shopping malls, industrial parks, sports arenas, and convention centers, all built with public funds. While business benefits from such ventures, the public monies invested are seldom recovered, and the projects often become continual drains on municipal budgets. When the New York Yankees threat- ened to leave town unless their stadium was refurbished, the city expended $28 million on the job and granted the Yankees a lease on very favorable terms. More than two decades later the city is still servicing a multi-million dollar debt and the Yankees were enjoying handsome profits. Since then nearly every city with a major league sports franchise has be exhorted to fund new stadiums. These kinds of arrangements are at the heart of both the urban fiscal crisis in America and the distrust of the political system by the average citizen. Our transportation system provides another example of how private profit has been allowed to take precedence over public need. Earlier in this century the transporting of passengers and goods was done mostly by elec- tric ear and railroad. One mass-transit railway ear can do the work of fifty au- tomobiles, and railroads consume one-sixth the energy of trucks to transport goods. But these very efficiencies are what make railroads so undesirable to

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the oil and auto industries. For over a half-century the corporate response has been to undermine the nation’s rail and electric-bus systems. Consider the fate of Los Angeles. In 1935 a once beautiful Los Angeles was served by one of the largest interurban railway systems in the world, covering a 75-mile radius with 3,000 quiet, pollution-free electric trains that carried 80 million people a year. But General Motors and Standard Oil of California, using dummy corporations as fronts, purchased the system, scrapped its electric transit cars, tore down its power transmission lines, and placed GM diesel buses fueled by Standard Oil on Los Angeles’s streets. By 1955, 88 percent of the nation’s electric-streetcar network had been eliminated by collaborators like GM, Standard Oil, Greyhound, and Firestone. In short time, they cut back city and suburban bus services, forc- ing people to rely increasingly on private cars. In 1949, General Motors was found guilty of conspiracy in these activities and fined the devastating sum of $5,000. Given the absence of alternative modes of transportation, people become dependent on the automobile as a way of life so that their need for cars is often as real as their need for jobs. And Los Angeles was not alone. Almost all the places we have built – the environments we have created within which to live our lives – reflect the ubiquity of the automobile. Today, we have a total separation of uses in our man-made landscape. Our houses are all in their respective income pods, our shopping places are miles away from the houses, and our schools are separate from both the shopping and the dwellings. Work takes place in the office park, the word “park” being a semantic gimmick to persuade zoning boards that a bunch of concrete and glass boxes set among parking lots amounts to a rewarding environment, and manufacturing takes place in the industrial park. This compartmentalization has some interesting, and rather grave, ramifications. The amount of driving necessary to exist within this system is stupendous, and fantastically expensive. The time squandered by commuters is time that they cannot spend with their children, or going to the library, or play- ing the clarinet, or getting exercise, or doing anything else more spiritually nourishing than sifting alone in a steel compartment on Highway 101 with

Michael Lissack 40,000 other stalled commuters. Anyone who commutes an hour a day in each direction spends seven weeks of the year sitting in his car. The social costs of the automobile are staggering. About 45,000 people are killed on the highways each year and hundreds of thousands are injured and maimed. More than 60 percent of the land of most U.S. cities is taken up by the movement, storage, and servicing of vehicles. Whole neighborhoods are razed to make way for highways. In most suburban communities at least 40 percent of police work is directly related to automobiles, as is a good portion of ambulance and hospital service. The costs of all this driving in terms of pollution, which includes everything from increased lung diseases all the way up to global warming, are beyond calculation. The cost to society in terms of money spent building and maintaining roads and paying for traffic police, courts, accidents, insurance, is also titanic. The least understood cost, al- though probably the most keenly felt, has been the sacrifice of a sense of place: the idea that people and things exist in some sort of continuity, that we belong to the world physically and chronologically, and that we know where we are. The automobile requires communities to spread out, causing prema- ture obsolescence of streetcar neighborhoods whose compactness cannot accommodate cars; higher food transportation costs as farms on the met- ropolitan fringe are displaced by suburban sprawl; higher costs for sewage construction, road maintenance, and other thinly spread services. At the same time mass transit, perhaps the most efficient, cleanest, and safest form of transporting goods and people, falls into further decay. The government’s role has been to subsidize the auto industry with multi-billion-dollar high- way programs while slashing rail services. Highways and automobiles have become integral to our lives at the exclusion of alternatives. Today, when those alternatives beckon with a promise of a better tomorrow, established interests fight to preserve their exclusivity. And the quality of our lives suf- fers without discussion and without debate. Our lack of choice reflects our lack of understanding. Back in the 1980’s, because capital is perceived as perhaps the most complex of subjects, the good citizens of West Virginia were denied even the most feeble of discus- sions for one of their worst ripoffs. When the word “finance” is mentioned

Theft at the Public Till

most citizens and even watchdogs roll their eyes and adopt a glazed look. That approach is dangerous. West Virginia municipalities trusted their cash balances (the money on hand between the time they collect taxes and when they spend the cash) to an investment pool run by the State. This seems reasonable - indeed, the theory was that the State would have greater effi- ciencies by pooling all of the localities’ cash. The theory is a good one, but implementation was weak. Financial management techniques evolve for both the public and private sectors, yet with the public sector hemmed in by civil service laws and a reluctance to pay market wages for those professional skills which command large salaries, the pace of evolution has been barely a crawl. The State officials involved did not understand that the investments they were making -- which seemed to be producing returns significantly above the market - involved interest rate risks. The market turned. The “above market” returns from prior months had been distributed as income. But in reality there were no “above market” returns. What had come in was the State’s own cash -- cash that had already been distributed to municipal- ities for spending. Peter had been robbed to pay Paul. Paul had spent the money not knowing it was ill gotten gains. “So what?”, you say. Not a “so what” to the West Virginia taxpayers who had to make up the difference. Not a “so what” to the citizens of the towns which got extra cash. Not a “so what” to the patients of the hospital that didn’t got built or the school that was not to be. The West Virginia story has since then been repeated in state after state and town after town. Remember Orange County California went from AAA rated to bankrupt in the blink of an eye. Unintended redistribution. This is no different from Denver. Who intended that you and I should be paying for that airport? Unintended redistribution. Money taken from you and given to some one else without your permission. Opportunities taken from you and/or your children without your knowledge or consent. Others obtaining benefits that we pay for but never acquiesced to. Theft.

OUR GOVERNMENT NO LONGER WORKS T he mechanisms by which we have been governed and govern ourselves are losing their responsiveness to the problems of our time. Our new world is complex and overloaded with information. Excess information demands choices. In response to the overwhelming range of choice which is set before us, the response is paralysis and a growing decline in the quality of life. The American people, more or less aware of this loss, are grasping for a solution to what is clearly a larger, deeper prob- lem -- a problem for which opinion molders cannot agree on a definition. The naive perceive nothing more than gridlock, an ineffectiveness that is merely superficial, in which the mechanisms and processes of government can be unlocked with the right lubrication and the right leadership. But it is difficult for politicians to develop the needed debate over what no longer works for a nation. There are no revealing historical pathways for clues to appropriate reme- dies, for our founding fathers deliberately designed a system in which change was difficult. Their concern was protecting “established” interests from the rabble. Our concerns are with not being trapped by what was “established” as we grow toward the future. Our future is well beyond what could have ever been imagined by the designers of our political system. Their world was one of farms and a strong

Theft at the Public Till

sense of place. People defined themselves by where they lived. By contrast, perhaps the most significant, enduring accomplishment thus far of the in- formation age is to have fostered the creation of an ethereal reality, which exercises increasing influence over embodied, spatially bound varieties of social life. Here decisions are made and actions taken in ways that eliminate the need for physical presence in any particular place. Knowing where a person, building neighborhood, town, or city is located no longer provides a reliable guide to understanding human relationships and institutions. For within the digital city, key organizational entities have been reconstituted to resemble motherships floating in electronic hyperspace. Occasionally they descend, landing long enough to invest capital, deposit a high-rise building, fund a university research project, close a factory, or launch a clever public-relations campaign. Then, just as quickly, they beam up, dis- appearing into the vapor. Confronted with this potent force, it is difficult for traditional land-based peoples, communities, and even nations to identify exactly where and how the crucial choices are being made. Because power is most effective when least seen, this may be the most insidious political capacity yet devised, one that threatens to turn all the world into a colony. But the colonized are not, as in earlier times, subjects of a particular country or regional economic empire. What governs now has neither boundaries nor surfaces nor mass. It is a phenomenon about which standard social theories and familiar categories of everyday experience have little to say. Indeed, we may soon have to dis- card place-oriented theories and sensibilities altogether because they have become obsolete. In its dazzling complexity, the digital-electronic edifice is something Rube Goldberg could easily admire, a rapidly expanding struc- ture generating new branches, chambers, and passageways in a never-ending process of self-elaboration. Outsiders who seek to penetrate its mysteries are greeted with a maze that is at once formidable and incorporeal, an architec- ture of countless baffling features -- dummy institutions, glossy advertising surfaces, mass media spectacles, channels of participation leading nowhere -- forms that mask the true order of things and prevent anyone from dis- covering the locus of control. While the structure also includes concrete,

Michael Lissack material features, its central core exists only as a pattern of signals mirroring the ebb and flow of capital. Alvin Toffler, in his Powershift phrased it, “The growing complexity and speed of change make it difficult to govern in the old way. It’s like a com- puter blowing fuses. Our existing political decision making structures are now recognized to be obsolete.” We have an eighteenth century government struggling with a twenty-first century reality. One might think of ours as a dual political system. First, there is the symbolic political system centering around electoral and representative activities including campaign conflicts, voter turnout, political personal- ities, public pronouncements, official role-playing, and certain ambiguous presentations of some of the public issues that bestir presidents, governors, mayors, and their respective legislatures. Then there is the substantive po- litical system, involving multi-billion-dollar contracts, tax writeoffs, pro- tections, rebates, grants, loss compensations, subsidies, leases, giveaways, and the whole vast process of budgeting, legislating, advising, regulating, protecting, and servicing major producer interests, now bending or ignoring the law on behalf of the powerful, now applying it with full punitive vigor against heretics and “troublemakers.” The symbolic system is highly visible, taught in the schools, dissected by academicians, gossiped about by news commentators. The substantive political system is seldom heard of or accounted for. Interest-group poli- tics is tiered according to the power of the contenders. Big interests, like the oil, banking, and defense industries, operate in the most important arena, extracting hundreds of billions of dollars from the labor of others and from the public treasure, affecting the well being of whole commu- nities and regions, and exercising control over the most important units of the government. In contrast, consumer groups and individuals move in a more limited space, registering their complaints against some of the worst, or more visible, symptoms of the interest group-system and occa- sionally winning a new law or regulation. Finally, the weakest interests, like welfare mothers and slum dwellers, are shunted to the margins of political life, where they remind us of their existence with an occasional

Theft at the Public Till

demonstration in front of city hall as they attempt to make a claim on the human-services budget.*** The failings of the symbolic system are legion. Typical are quotes such as these taken from the New York Times. “I’m sick of the whole system,” said Mr. Oliver Dinsmore, whose job involves dismantling machines in a shut- tered General Motors plant in Framingham, Massachusetts. In the view of many voters the problems of governance seem to have become rooted in our institutions of governing - from politicians whose convictions shift with the latest polls, to lobbyists, whose contributions are the lifeblood of campaigns and to the news media, which thrive on conflict. “I feel like my opinion doesn’t count,” said Bob Carrie, a machine shop supervisor in Franklin Park, Illinois, “The common person just doesn’t have a voice.” Television news is the average person’s main source of information and analysis about politics and public policy. The professional crowd increas- ingly is made up of policy specialists who develop expert information and policy analysis and of sophisticated users of their products. Much like televi- sion, data and statistics are now so commonplace that little thought is given to how the plethora of information is developed and analyzed or how it is verified for accuracy or for soundness of interpretation. And that is a crucial problem. The information explosion has outrun the nation’s competence to make sense of the deluge of data in forms ranging from the offerings of the mass media to the esoteric products of universities and think tanks. On one hand, problems, opportunities, and the environments in which they appear are becoming more complex. On the other hand, to survive this explosion of complexity, people cultivate specialties. They want to be experts at something. Organizations increasingly hire and train experts to deal with the daily plethora of problems and opportunities. In society, ac- ademia, the sciences, and business, the age of complexity confronts the era of specialization. But specialists too often miss the forest for the trees. Our problems tend to be global or individual and not within the purview of one specialist alone. The new reality is that it will take the collaborative efforts of people with different skills to create innovative solutions and innovative products. Complex situations put a real premium on group processes, a

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