Thursday, December 8, 2016

Donald Trump (Whose Son-In-Law Was In on Donnell Library Sale) Puts Library-Selling Stephen Schwarzman In Charge of Economic Policy

It’s like those Frankenstein meets the Wolfman horror movie mash ups that came out of the Universal Studios in the days of yore: Donald Trump, the self-styled `real estate mogul’ whose son-in-law was a principal financial beneficiary of the sudden and secretive sale of the Donnell Library for a pittance meets up with library-destroying Stephen A. Schwarzman, head of Blackstone, the world’s largest real estate investment firm (among other things), the NYPL trustee who helped push the Donnell real estate deal out the door to Mr. Trump’s son-in-law and was even rumored to be personally involved in the deal through his own companies beforehand.

CNBC has reported that president-elect Trump has announced who he will be meeting with frequently as president.   Blackstone CEO Schwarzman (of all people) is to chair a strategic and policy forum for Trump that will be comprised of “heads of some of the largest financial, industrial and media companies in the United States,” selected by Schwarzman.  See: MSNBC- Trump to meet 'frequently' with Blackstone's Schwarzman, other business titans to discuss policy, by Jacob Pramuk, Friday, 2 Dec 2016.
One can understand why appointing Schwarzman to such a position and meeting with him frequently would seem juicy in terms of opportunity to Trump given that, as just mentioned,  Schwarzman is the head of the world’s largest real estate investment company.  Think how resplendent and limitless that makes the business possibilities, although that’s not why Trump is supposed to be meeting with people as president.

The fact that Schwarzamn is involved in all or nearly all of the following seven lines of business should have significant attractions to Trump from a business point of view:
    •    private equity
    •    hedge fund
    •    real estate
    •    a large credit business that does highly leveraged credit,
    •    a mergers and acquisition group
    •    a troubled company restructuring business
    •    Raising money for other people in the alternative asset classes from institutional investors
When has the situation even been so ripe for turning a position in government into a money-making profit center?
There is a theory everyone is talking about concerning how we are not supposed to be “normalizing” all of the Trump excesses and the current far-ranging departures from precedent and what was previously viewed as good behavior and proper lawful comportment.  So you have to wonder when the New York Times, looking ahead to the Trump administration, writes an article finding possible precedent for what they foresee in the mega-conflict-of-interest scandals of the eight years that businessman Silvio Berlusconi was prime minister of Italy. . . And, it’s not just business; in the case of each man there have been legal proceedings to deal with charges of their illegally having sex with underage women.  (See: Trump's Potential Conflicts Have a Precedent: Berlusconi's Italy, by James B. Stewart, December 1, 2016.)

In what is possibly a somewhat “normalizing” comparison, the Times article says that Mr. Berlusconi's conflicts were “more blatant than Mr. Trump's potential conflicts, because he owned so much of the Italian media,” while neglecting to point out that there has already been talk about Trump starting his own television network.  Are we sure that’s no longer being thought about, because it’s certainly something that Trump’s campaign advisor, Roger Ailes, exiled from Fox News for sexual harassment, and Trump’s chief White House strategist, Steve Bannon, out of Breitbart News, would probably both love.  (Ailes and Trump were both in the news simultaneously for respective reports of sexual harassment, even as they worked together on the campaign.)

Unfortunately, a great deal of the “precedent” the Times challenged itself to go abroad to find in Italy with Mr. Berlusconi had already had groundbreaking precedent laid for Mr. Trump by Michael Bloomberg as mayor in New York City.  Some years ago Noticing New York wrote about the similarities between Bloomberg and Berlusconi, including the fact that they had neighboring homes in Bermuda.  Both Bloomberg and Berlusconi significantly repositioned where they stood on the charts of financial recognition while they held political office, racking up significant extra billions to inflate their wealth.  Bloomberg, like Berlusconi also had some media muscle to flex, including Bloomberg News, Bloomberg Radio on a local radio station he acquired, and Bloomberg cable television (even as the New York City was regulating cable companies).

The Donnell and other library-shrinking sell-offs were initiated in New York City under Bloomberg as mayor (although de Blasio, breaching the promises of his campaign, has continued pursuing them.)

During the campaign, several variations of a gimmick used by Trump emerged.  It cropped up with Trump’s side-stepping of federal income tax payments and his quid-pro-quo payments of elected officials (“When you give, they do whatever the hell you want them to do”): He asserted that because he had participated so heavily and successfully in a “rigged system” he was the one who knew best and was the best choice to “fix it,” including telling potential voters that  "Our campaign is about breaking up the special interest monopoly.”

There is actually some precedent in the way we recount history that might make such promises sound less absurd: When Franklin Delano Roosevelt appointed Joseph Kennedy as the first head of the Securities and Exchange Commission in 1934 there were gasps about the fox guarding the henhouse, as Kennedy was known for sharp deals taking advantage of insider trading and market manipulation.  Kennedy knew all the fraudulent, questionable backroom ways of stuffing the pockets of finance’s fattest fat cats.”  Nevertheless, it is generally credited that Kennedy, because he knew so well how the system could be abused, knew how best to root out its problems and reform it and actually did exactly that.

There is hardly any reason to now believe that is where we are headed with Trump. Where is Trump headed? . .

. .   Because Trump, routinely self-contradictory and perpetually caught in lies, can’t be depended on to actually tell us where he is headed, we are supposed to now cultivate a talent for listening through his “cacophony of lies. . [and] nonsense” to hear what he is actually, bigger picture, saying, which according to Masha Gessen, among other things involves the message that he is powerful enough to lie without consequence, something our previous politicians pushing the envelope of false political promise have never before been so immoderate about.

Firmer ground to fall back to is the “pay attention to what I do, not what I say” rule, but that inevitably leaves one playing catch-up.

While it may be that rooting problems out of the system could involve at least a certain amount of stealth (to avoid being too obvious about too soon?), it doesn’t look from any of Trump’s appointments that he is surrounding himself with any allies who would assist in pursuing any kind of reform.

Trump may once have spoken about “draining the swamp” when he was elected while excoriating Goldman Sachs (and Hillary’s Goldman $peechs), but now people perceive that he’s actually `filling the swamp with alligators,’ including multiple Goldman appointments, even to the extent that it might even start causing succession problems back at Goldman.

Trump biographer Pulitzer Prize-wining David Cay Johnston is something of a self-proclaimed expert on Trump, having reported about Trump since the early 1980s.  If you believe Johnston, Trump’s specialty is ensuring he makes a personal profit no matter what does (even making money just campaigning for president) and very typically leaving other people worse off, short-changed as he exits, for instance through bankruptcy.  According to Johnston (better audio if you go to WBAI):
what Donald is a master at is finding a way to extract money from something, make a deal, get an enterprise, pull all the money he can out of it.  This is not a man who creates wealth.  This is not a man with a long-term viewpoint.  He is simply someone who, like a leach, sucks the lifeblood out of a business for himself, and then moves on.
With a huge dossier of back-up files, Johnston says that Donald “has for his entire life embraced con artists, swindlers, violent felons” with the very troublesome involvement of organized crime figures to boot.   David Cay Johnston has been writing for a while about increasing wealth inequality with books like “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)” (2008) and says that government policy now (and this was before it was known that Trump was headed to the White House) is to take from the many to further enrich the few.”

Ergo, with what the corporations have been doing to us, extracting from the many to further enrich the few, it is perfect that Trump is teaming up with Stephen Schwarzman to chair a group of business leaders to set national policy that can proliferate such approaches throughout the economy.  That is Stephen Schwarzman, who, with Trump’s son-in-law Jared Kushner participating, extracted value from the many for the few with the sale of the Donnell Library.  It is already worried by those looking ahead at these things that when it comes to all the publicly-owned assets of the nation’s infrastructure Trump’s plans will be a full-on privatization assault,” a “privatization fire sale” ensuring “that private, not common, interests determine where funding is focused.”

The whole situation is rife with possibilities for crony capitalism: Before even assuming office Trump and Vice-President Elect Mike Pence just gave tons of tax-payer money and exemptions from regulatory protections for the public to Carrier, a company that is moving 1,300 jobs from Indiana to Mexico (while, supposedly in return for that government `generosity' keeping just 800 jobs here- another 300 jobs weren't ever possibly going to be moved), while, at the same time, other companies all around Carrier are also moving jobs to Mexico.

No, the signs are terrible.  The fossil fuel extraction industry that profits when it destroys the environment that the rest of us depend on to live will have a climate change denier presiding at the head of Trump’s Environmental Protection Agency.  And since climate change destroys the entire planet there is no place to move.

In fact, another reason we need to stay here in this country to fix things, deal with these devils we are getting to know here, is that similar things are happening around the world.

Just as the invaluable Donnell Library was plundered in a shrink-and-sink sale so that a luxury hotel and condominium tower could be built on its site (with Trump’s son-in-law a principal financial beneficiary), so too is the Sheffield Library in England threatened with sale so it can be turned into a luxury “five-star hotel.”   The luxury hotel at the site of the former Donnell was sold to Chinese investors for a record-setting amount (none of this money ever went NYC libraries).  The Sheffield Library is similarly proposed to be sold to Chinese investors.

One floor of the building now housing the Sheffield Library houses the Graves art gallery, an art museum opened by wealthy businessman man John George Graves in 1934 dedicated to ‘the service of knowledge and art.’  While the library would be moved away, the Graves art museum would remain in the building with the luxury hotel presumably enhancing the hotelier’s business prospects.  That sounds rather like what happened with Donnell which was, before it was banished, in a valuable location for a cultural library, across the street from the Museum of Modern Art.   Now it’s the patrons of the luxury Baccarat Hotel that benefit from such convenient access to the museum.
Coverage from the Guardian and the Sheffield Star

Sale of the Sheffield library is vehemently being opposed, by, among others, actor Michael Palin, of Monty Python’s Flying Circus fame, who “has described the proposals as an embarrassment for the city of his birth.”

In a letter to the Sheffield Star Palin wrote:
The Sheffield Central Library embodies the very best aspects of civic pride. It's a fine building, built to give education and literacy a prominent place at the very heart of the city.

That a building, seeking to improve the lot of all Sheffielders, should end up as a hotel for the rich and privileged, seems a sad reflection on how little the city cares for its public service legacy.
There is a quote from Palin on display on the first floor in the library:
There is no institution I value more in this country than libraries.
In its day, Monty Python with Mr. Palin contributing brilliantly, brought us far-fetched laughable conceptions such as the government’s “Ministry of Silly Walks.”  Unfortunately, we are succumbing to much more far-fetched tragedies.  It looks like under Trump we will, in essence, have a new department of the government, headed up by Mr. Schwarzman: “The Ministry of Silly Ideas To Sell off Valuable Public Properties.”

Disclosure: I am a co-founder of Citizens Defending Libraries and on the board of the Committee to Save the New York Public Library.

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