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The CME Group, Rahm, and TIFs: Correcting the Record

Another day, another article claiming that (for better or worse) Rahm Emanuel is bringing a new form of government to Chicago, casting off its patronage legacy and bringing the city into the 21st century of civic governance. It’s a lot more complicated than that.

Rahm Emanuel

 

In Rolling Stone, Rick Perlstein attempts to offer a corrective to the national narrative on Rahm Emanuel. There does seem to be a new set of cliches developing: the old patronage of Da Mare or Al Capone or Oprah or whoever to the tidy public-private neoliberalism of the Missile. Recently it’s Chicago native Jonathan Alter in The Atlantic (an article that does have some intriguing stuff, like the fact that Garry McCarthy says he’s influenced by Chicago-turned-Harvard law prof Tracy Meares), whom Perlstein is in particular responding to. But a slip Perlstein makes is instructive in the way it complicates the narrative.

And he offered his second biggest campaign contributor, the Chicago Mercantile Exchange, already a very profitable corporation, a TIF grant of $15 million for office renovations, including a luxury bathroom. (The CME turned the grant down.)

Welcome to the new machine: cuts to schools, libraries, and mental health; cash to corporations. And should you have the insolence to protest it – well, you’d better be able to afford a damned good lawyer.

First, no. Emanuel didn’t offer the CME the TIF money. That was a product of the Daley administration; it originated when CME was looking to pick up the Chicago Board of Trade and got into a bidding war:

It’s not surprising that Daley’s heart was with the Merc over ICE. The Merc’s officials are local guys, who have known the mayor and contributed to his war chest for years. Earlier in 2007, the Merc had contributed roughly $107,000 to Daley’s reelection campaign. The Board of Trade donated $101,000. ICE donated nada.

After Healey’s letter was publicized, Daley told reporters he’d made the offer to keep the Merc in town. “I will do anything possible to make sure they are staying here, make sure they expand—anything they need,” Daley said. “We will be talking to them—whatever they need—but it is very important keeping them here.”

Emanuel didn’t rescind the TIF offer; Ben Joravsky described Emanuel as “practically begging” them to take it. But it was a promise made under the previous administration, so even if he’d wanted to pull the plug on it he would have been put in a tough situation. In the end, CME got a much larger tax break from the state—which was arguably not so much a “break” or incentive as redressing a problem with dated tax schemes—and declined the taxpayers’ beneficence.

Then there’s this:

The manager of Emanuel’s 2002 congressional campaign consults for the company that will supply the [speed] cameras, Redlex Traffic Systems of Australia. His name is Greg Goldner, and he currently runs For a Better Chicago, an Emanuel-aligned political action committee that raised nearly a million dollars in secret cash to funnel to Rahm-friendly candidates for alderman. He also runs something called the “Traffic Safety Commission,” which is funded by… Redflex Traffic Systems.

All true enough, as was reported in the Tribune last month. But it elides the fact that Goldner was also Daley’s campaign manager, and that the existing red-light cameras, a program of the Daley administration, are a Redflex product.

Which are a couple reasons I can’t buy this conclusion:

What Rahm seems to be doing is building a new machine for our age of union busting and austerity.

The machine that Perlstein describes already exists. It’s been building for years. Almost exactly 22 years ago—when I was eight—David Moberg wrote a piece for the Reader entitled “The Fuel of a New Machine.” The subhead? “Who’s financing the Daley campaign? What do they want in return? The old one ran on patronage and graft. This new model runs on pure money.”

Compare Perlstein in 2012:

Meanwhile, Emanuel had hardly met with community groups, social service organizations, or neighborhood activists at all. His predecessor Mayor Daley, hardly known as a paragon of small-d democracy, met with such people all the time.

To Moberg in 1989:

The old machine, corrupt as it was, could at least make a claim that the average citizen was an important part of politics, even if he or she had no real voice. The emerging system threatens to produce more direct control by a rich elite. Even if their motives were purest altruism, there would still be reason to worry about this subversion of democracy.

Daley may have been more active than Emanuel in meeting with jus’ folks, but the momentum was already there.

Or Chicago’s own David Bernstein in 2008:

Over the years, Daley II has shrunk the size of city government by privatizing some of its functions—an approach his father, the patronage king, would probably find unimaginable. Daley II started small, first with basic city services, such as towing, building management, and janitorial work. But by 2005 he had leased the Chicago Skyway to an Australian-Spanish consortium for $1.8 billion.

And it’s not as if Emanuel is alone in this; he was preceded in this approach to civic governance not only by Daley, but New York’s Michael Bloomberg, Indianapolis’s Stephen Goldsmith (who would later go on to work for Bloomberg), and Milwaukee’s John Norquist, in different respects. And that’s ultimately my point: as much as I admire Perlstein as a writer and historian, I think he’s falling into a bit of a familiar trap. Emanuel might be building a “new machine,” but he’s only one of its builders, and not the first. His force-of-nature personality can obscure the fact that he’s as much a product of history as a creator of it, not just a Daley protégé but one of many New Democrat/Third Way/etc. mayors who have redefined civic politics in the past couple decades. (And let’s not forget the British experience with privatization and austerity, which beat us to the punch by decades.) The Missile’s following the arc of history.

 

Photograph: Esther Kang

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