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The Political Economy of Oakland

October 24, 2011

[I worked on the Don Perata for Mayor campaign in 2010.  Nonetheless, I am not writing a polemic (except maybe the parts about Robert Gammon and his tabloid).  I am trying to give an honest analysis of why Oakland keeps getting sub-optimal political outcomes in the long-term, regardless of the 2010 election.]

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Some guy named Karl Scheffler once said about Berlin:

Berlin ist eine Stadt, verdammt dazu, ewig zu werden, niemals zu sein.

Berlin is a city, damned to become forever, and never to be. (my translation)

Sheffler meant that Berlin was constantly reinventing and rebuilding itself.  When he wrote this in 1910, Berlin had been in turn a village, a market town, a provincial capital, the capital city of the Prussian kingdom, an industrial center, and finally the imperial capital of a united Germany.  His claim in 1910 was of course tragically confirmed by the horrible events of the 20th century, many of which were planned from Berlin itself.

In another reading, however, this quote reminds me of Oakland.  Instead of a city that is constantly reinventing itself, in Oakland we have a city that will never quite live up to its potential.  A city condemned to “becoming” Oakland forever, without actually reaching its intended destination.  At least this is how I feel about my hometown, especially since the last mayoral election.

We are constantly told that Oakland has the potential to be a model city, the Brooklyn of the West.  To those of us who grew up in Oakland, and who have spent considerable time and energy and money trying to improve our fair city, Oakland’s “potential” is far past cliché.  Oakland seems to be a city condemned to have potential, and only potential.  I want to examine why this is the case– that is, what gets in the way of Oakland reaching its intended destination.

Obviously Oakland is blessed with incredible resources: a bustling sea and air port; ridiculously high human capital; proximity to San Francisco, Silicon Valley, UC Berkeley, and the National Laboratories; a rich history of progressive social movements; national, linguistic, racial, and ethnic diversity; significant greenspace; a central location on several major transportation networks.  Anyone who writes on Oakland is familiar with this litany.

The problems are also obvious: high crime, bad (but recently improving) public schools, highly concentrated poverty in East and West Oakland, crumbling infrastructure.  Also, the Oakland Raiders.

The nagging question, as an Oaklander and a political-scientist-in-training: why is the political system unable to rise to the challenge?  Why can’t we move from a high-crime, bad-education, low-investment equilibrium onto an upward trending path?  Why can’t we emulate the recent successes of cities of similar size, or even Brooklyn itself?

I think the answer lies in its troubled politics, rather than any social, cultural, or even economic explanations.

Below, I’m going to offer my political explanations.  At some point in the future, I want to back up those explanations with data, rather than just my lifetime of experience.

First, however, let’s list some alternative political hypotheses:

  1. Oakland voter behavior:  Oakland gets what its voters want.  The majority of voters (and majorities in several council districts) are super-lefty, impractical, NIMBYs.  They view City Hall as a forum to advance their ideological issues, rather than the institution that is supposed to make sure that public services are running properly and efficiently.  Oakland voters vote for Ron Dellums, Jean Quan, Nancy Nadel, and other incompetents, rather than competent managers and chief executives; the city cannot transcend the wounds self-inflicted by its voters.
  2. The State context/State institutions:  The State of California is a basket case in general; the state puts all sorts of ridiculous constraints in local governments (including but not limited to Prop. 13), and frequently ‘steals’ as much money as possible from them.  The most vulnerable municipalities, like Oakland, are going to be hurt most by this systemic dysfunction.
  3. Local institutions:  For various historical reasons, Oakland is saddled with a bad City Charter.  For instance, we have a hybrid strong mayor-city administrator system, in that the city administrator has the responsibility, but not the authority, to run the city effectively.  The mayor and the city council constantly meddle with the administrator and the rest of the bureaucracy.  Special pleading becomes endemic, and as a result, the folks that should have the long-term interest of the city (as a whole) in mind (professional technocrats in the bureaucracy), are unable to do so.  In particular, the mayor can blame the city administrator when it’s convenient (as Ron Dellums did repeatedly) even when the mayor is himself/herself the problem.  Various other issues (like a district-system for the city council that promotes parochialism) just compound these problems.
  4. Public Employee Unions:  They’re too powerful, and they make unreasonable demands on the public fisc.  Efforts to reform city finances pound up against an immovable wall of union opposition.

While each of these hypotheses has some explanatory merit, I think the underlying explanation (and the causa causans of 1. and 3. above, and potentially 4.) has to do with the distribution of power across the political system in Oakland. Specifically, it has to do with the unique constellation of economic interests in the city, and their effect on the political system.

Oakland’s dysfunction sits at the intersection of two political economic realities: the city’s private sector is dominated by large firms (through no fault of their own), and the city’s civil sector (in Oakland, called Community Based Organizations; everywhere else, called NGOs) is significantly dependent on an entrenched patronage network that emanates from City Hall.  These two groupings are powerful because they are able to deliver political resources to officials in the form of votes, campaign volunteers, free publicity, and campaign contributions.  In turn, the political and administrative systems in Oakland tend to serve the needs of these two groupings, rather than the wider municipal interests.

Large Firms

As a (formerly) major industrial hub, Oakland has a private sector historically dominated by a relatively small number of large firms.  Henry Kaiser, of course, started this trend during World War II.  Along with Kaiser’s legacy, the Port of Oakland; APL and other shipping lines; Clorox; Dryers, Mother’s Cookies, and other food producers; Safeway; and other large firms continued or continue it in the post-war era.  Along with the remaining large firms, large real estate developers currently have much influence on the political system, including the firms that developed Uptown, the Jack London Square area, and Leona Quarry.

Fine.

I have nothing against big firms and their preferences.  In fact, I think their influence on Oakland has been on net positive for a long time.  I hope they continue to pursue their interests vigorously.

The preferences of large firms, however, tend to be to expedite large projects, and to secure favorable terms on taxes or regulations.  Again, nothing wrong with that; more power to them.  The whole urban planning approval process in Oakland is a goddamned shitshow.  But, Oakland ends up stuck in a Catch-22: only large firms can expend the resources necessary to get approval for projects in Oakland; and with this avenue open to them, large firms don’t need to push for general administrative reform.

Ideally, there would be a well-organized small- to medium-sized business lobby in Oakland that would be pushing for policies that helped them.  Small businesses, for instance, are more concerned with the general speed of permit approval (large firms can lobby for expedited consideration from the city council); or with policies that combat blight and crime; or with street cleaning, road repair, or sane parking policies.  As institutions, Clorox or the Port, for all the taxes that they pay and the jobs that they provide, aren’t really concerned with Oakland’s crime rate or other quality of life indicators.  Their workers commute into downtown Oakland, or they work in highrises.  Individuals that work for such firms, care about quality of life issues, of course, and they do make their voices heard.  But crime, or other quality of life issues, have little effect on the day-to-day affairs of large firms, relative to, say, a newly-openend restaurant or nail salon.

This is no fault of Clorox or the other large firms in Oakland.  It just means that, because large firms have historically dominated the private sector in Oakland, the needs of large firms are overrepresented in the political system, versus more “bread-and-butter” small business needs.  There aren’t powerful private sector voices for increased investment in policing, blight abatement, basic infrastructure repairs, or in general efficient provision of public goods like permitting.

The very new and very admirable Oakland Builders Alliance might be the only politically relevant organization to represent small- and medium-sized business interests.  I’m sure I’m forgetting some group, but I can think of no other politically-relevant, city-wide small business association.  (There are several neighborhood merchant associations of varying quality.)  Either way, there are too few and they are too weak.

Oakland still lacks an organization like SPUR.  (If there were one organization I could create for Oakland, it would be something like SPUR.)  The relative political weakness and lack of organization of the small and medium-sized business community means that quality of life issues and administrative reform fall by the wayside.  Again, individuals concerned with these issues form groups like Make Oakland Better Now, but small businesses remain largely unorganized.  (Larry Tramutola, maybe organize this???)

Here’s an interesting counter-factual:  Imagine that the amount of political time and energy spent fighting over/approving the Uptown development or Leona Quarry was instead spent on streamlining the permit/development approval process for all of Oakland.

The Patronage Network

In the last mayoral election, low-information voters and pundits accused Don Perata of being the ‘machine politician’ or the ‘patronage’ candidate.  The people who made these claims tended to be new transplants to our city, young urban hipsters, or white “progressives” in the Hills.  Taking their cue from Robert Gammon at the East Bay Express, they viewed Don as the second coming of Tammany Hall.  These folks– neophytes to Oakland’s politics– perhaps didn’t realize that Bob Gammon has been slandering Don and his associates since I was 14 years old (that’s almost 20 years!), even before he ‘left’ the Oakland Tribune.

(I call Bob Gammon the Captain Ahab of the East Bay.  Given his support for Jean Quan, Gammon’s lack of political judgment is clear.  Having read his ‘work’ for decades now, it is unclear to me if he has any political beliefs at all; if he cared about the community, he wouldn’t mislead his readers so relentlessly.  My best guess is that he is a political nihilist.  I don’t know why he thinks Oakland can afford the luxury of misinformation in the service of incompetents like Jean Quan.)

In fact, these voices were protesting too much.  A patronage system exists in Oakland, but it doesn’t orbit Don Perata.  It comes from the incestuous relationship between City Hall and many of the non-governmental organizations in Oakland.  These NGOs are the other major power center in Oakland politics.  They provide elected officials with endorsements, ‘lefty-cred’, young campaign volunteers, and financing in the form of targeted mailers to their membership.

For the most part, they too do not care about supposedly ‘conservative’ city-wide quality of life policies like increased police, blight abatement, faster permitting, or improved public works.  Rather, they care foremost about securing (or maintaining) a funding stream for their particular, parochial interests: privately provided social services, social programs, citizen ‘education’ drives, and so forth.  A non-profit gravy train.

This is different from private donations to candidates influencing politician behavior.  This is also different from public employee unions advocating for their interests.

When I refer to patronage, I am being very specific:  I am referring to a system in which taxpayer money goes to private organizations that then turn around and support their elected patrons in the next election.

Here is one example of how patronage works in Oakland:

In the year leading up to the November 2010 mayoral election, folks were understandably concerned with the lack of public knowledge of the new voting system, Ranked Choice Voting.  The city decided to spend some money educating voters. Among other organizations, this money went to Oakland Rising, so they could canvass the flatlands of Oakland, and inform residents of this new voting system.  At the time, I understood that Jean Quan’s adult daughter served on Oakland Rising’s board of directors (or an affiliated NGO’s board), though I am now having trouble confirming this online.

Oakland Rising recruits underprivileged youths to work on various progressive causes (see the mission description below).  To inform the public about Ranked Choice Voting, Oakland Rising presumably built a volunteer database, hired workers, became familiar with the neighborhoods, trained canvassers, and so forth.  (At least, that’s how I’ve done it as an experienced field organizer.)

Fast forward to election season:  having spent city resources training youths on how to canvass in vote-rich, heavily African-American sections of Oakland, Oakland Rising’s sister organization deployed its new skill set on behalf of Jean Quan’s mayoral campaign.

I have no information as to whether they used the same volunteer database, canvassers, precinct maps, etc. for both operations.  Maybe they can clear that up for us.

What is Oakland Rising’s mission?  Let’s let Oakland Rising speak for itself:

Oakland Rising emerged in 2006 out of the vision of several social justice Executive Directors of color.  They recognized that, we, the progressive community in Oakland, are at a crossroads. For years, we have been locked out of City Hall [GFW: a truly bizarre claim]– the efforts of base building organizations and advocates have been reduced to actions and demonstrations in the City Center, 2 minute testimonies at city council hearings, delegation meetings seen by elected officials as obligatory rather than opportunities to co-strategize. With one fight after the other, community members, leaders, and advocates show up in the hundreds at city hall, only to find out that deals have been cut months and weeks before on key issues that impact their families, neighborhoods and communities.

It was clear to them that in order to advance a social justice policy agenda, the social justice community needed on-going electoral infrastructure to garner the attention and respect of elected officials and build the support and participation of low-income communities of color to win at the ballot box. There needed to be an element of electoral organizing in order to shift political power and ensure lasting victories in our city’s government.  While many social justice organizations have sophisticated electoral organizing programs and experience, the lack of coordination and long-term collective vision has often led to last-minute collaboration on tactical electoral campaigns that didn’t reach a scale of significance.

These Executive Directors envisioned an alliance of organizations collectively working on electoral organizing, aligning their organizational work through ongoing civic participation and strengthening Oakland’s social justice movement by working towards a broader vision of a better Oakland. The founders believed that Oakland needed a place-based, long-term political strategy and organization to unite and energize the base-building organizations’ membership and policy/advocacy organizational networks and lead the movement to political victory.

Which is all fine and good– EXCEPT WHEN YOUR ORGANIZATIONS ARE RECEIVING FUNDING FROM THE CITY ITSELF.  If they are, then it’s a classic patronage system:  An organization drives electoral outcomes; elected officials send taxpayer resources to that organization; the organization supports these patrons.

Reread the mission statement.  To me, this sounds like they have set up an organization to influence politics to obtain funding from the taxpayer for their organization and other similar ones.  Um…

I do not imply that this behavior is illegal.  Oakland Rising ensured the legality of this by establishing a sister 501(c)(4) organization which was the organization working for Quan.  And in fact, patronage networks the world over are typically fully legal.  (On the other hand, corruption, like an actual quid pro quo, is illegal.)  And lots of organizations use 501(c)(4)s to advance their partisan interests; though the allied 501(c)(3)s aren’t normally accepting taxpayer money simultaneously (even if it is legal to do so).

Oakland Rising’s statement on their position in the patronage network is here.  The ambiguity of this situation is only compounded by the fact that both the 501(c)(3) and 501(c)(4) seem to use the same website and are issuing single press releases for both organizations.

For Quan, of course, this was a smart political move: Quan’s support in African-American parts of Oakland was always weak; she was endorsed by very, very few African-American leaders and institutions in Oakland; her few events in African-American majority areas were poorly attended (we went to them); and she had far fewer volunteers and field operatives than Perata’s campaign, and before election weekend, had no ground game in East or West Oakland.  (Despite what her boosters in the blogosphere think, she did not go “block by block” in these parts of Oakland.  How do I know?  We were there every day.  We never saw any other campaign at any time over months.)  Using Oakland Rising was a good way to deploy a “ground game” in the last few days of the election.

(Shockingly, no news organization would follow up on this particular example of patronage during the campaign, despite how often we raised it with them.  Perhaps a testament to how common this is.)

And it is common in Oakland to send city resources to organizations that, in one way or another, with various parallel organizations, assist in the campaigns of elected officials.  While this type of petty patronage is common in many political systems, I believe that it is particularly bad in Oakland, where well-organized activist pressure groups (in this case, supposedly progressive organizations looking for funding from the city to run their various social programs) have captured city government.  The progressive inclinations of the electorate (which I share) lead the electorate give the benefit of the doubt to these organizations.

Let me be clear– campaigns usually reach out to like-minded civil society organizations to help find volunteers and other political resources.  What’s different about the above scenarios is that they involve TAXPAYER MONEY.

Go to a city council meeting and see how many organizations are pleading LOUDLY for funding; these groups put the fear of god into the council members since these organizations can revoke political benefits (votes, volunteers, endorsements, mailers, so forth).  Council candidates labeled “anti-community” or “anti-progressive” will not get very far.  Rather, council members compete to shower benefits onto these organizations, perhaps even believing that they have an impact on the community.

And maybe they are great organizations providing very needed public services! Hard, econometric data on such effectiveness, which would allow for true cost-benefit analyses, are notoriously hard to produce, and is completely lacking for Oakland NGOs.  Nonetheless, these organizations clearly have important impacts on individuals underserved in the community, regardless of cost-effectiveness.  Oakland Rising, for one, seems to have admirable goals.  And it is certainly centrally located and well liked in the “progressive” community in Oakland.

But whether these organizations are admirable, lets not kid ourselves: they are also part of an entrenched patronage network that has existed– and grown more powerful– for at least a decade if not longer.

Budgets have to be written, and at a time of forced austerity, something has to give.  Unfortunately, in Oakland, cops are laid off but the patronage money keeps flowing.  Once patronage systems are established, they are difficult to rip apart.

Don’t believe the patronage network exists?  How about more examples:  Marleen Lee describes another channel of unaccountable patronage here.  Then there was the unaccountable (and thankfully repealed) “paygo” money given to city council members to spend in their districts on whatever they wanted, which councilwoman Quan used to pay for a mural (!) in the Dimond District during the mayoral campaign.  A snapshot in time of Oakland’s never-ending corruption problem at City Hall is summarized by Chip Johnson here.  Perhaps the worst (and most tragic) recent example of pervasive patronage was the City establishment’s relationship with the now defunct Your Black Muslim Bakery, a criminal organization posing as a religious organization, which ended up assassinating journalist Chauncey Bailey.

And surprise, surprise, Don Perata is not involved with this shady patronage emanating from City Hall.  But but but but but the East Bay Express!  All those articles!  If you still believe anything they have to say, I have a bridge running between Yerba Buena Island and West Oakland that I’d like to sell you.

Conclusion

The result of the influence of these two powerful constituencies in Oakland, fighting for their interests, is that there is no one powerful enough to argue for simple quality of life issues: more police, more housing, more development in West and East Oakland, fewer potholes, cleaner streets, faster permitting, blight abatement, etc.  Instead of advocating for city-wide and systemic reform, the most powerful organizations in Oakland advocate for their parochial interests.  (Again, I don’t blame them!  I would be surprised if they didn’t!)

Unlike in other cities, in Oakland there aren’t countervailing powers in the form of effective small business or homeowner lobby groups.

As a result, Oakland’s political system is focused on:

  1. Approving and expediting large projects (fine! but let’s not forget the little businesses!), and
  2. Funding dubious non-governmental social programs (maybe fine! but maybe not! Do we have cost-benefit analyses that they work?).

To my mind, this particular distribution of power across Oakland’s political system explains the long-term and stagnant political and administrative trends in our city.

[Edited at wife's suggestion to remove some tart language and the familial disclosure.]

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