The late Robert Fitch, a veteran critic of New York real estate insiders, gave a speech to the Harlem Tenants Association on November 14, 2008 applying his brand of analysis to the history of Obama's rise in Chicago.
In fact, as Obama knows very well, for most of the last two decades in Chicago there’s been in place a very specific economic development plan. The plan was to make the South Side like the North Side. Which is the same kind of project as making the land north of Central Park [i.e., Harlem] like the land south of Central Park. The North Side is the area north of the Loop—Chicago’s midtown central business district—where rich white people live; they root for the Cubs. Their neighborhood is called the Gold Coast. For almost a hundred years in Chicago, blacks have lived on the South Side ...
And in the 1980s, the argument began to be made that the public housing needed to be demolished and the people moved back into private housing. For a while, the election of the city’s first black Mayor, Harold Washington, blocked the demolition. But Washington died of a heart attack while in office, and after a brief interregnum, the Mayor’s office was filled in 1989 by Richard M. Daley—whose father had carried out the first urban renewal. Daley was his father’s son in many ways. By 1993, with subsidies from the Clinton Administration’s HOPE VI program, the public housing units began to be destroyed. And by 2000 he’d put in place something called The Plan for Transformation. It targeted tens of thousands of remaining units.
With this proviso: That African Americans had to get 50% of the action—white developers had to have black partners; there had to be black contractors. And Daley chose African Americans—as his top administrators and planners for the clearances, demolition and re-settlement. African Americans were prominent in developing and rehabbing the new housing for the refugees from the demolished projects—who were re-settled in communities to the south like Englewood, Roseland and Harvey. Altogether the Plan for Transformation involved the largest demolition of public housing in American history, affecting about 45,000 people—in neighborhoods where eight of the 20 poorest census tracts in the U.S. were located.
But what does this all have to do with Obama? Just this: the area demolished included the communities that Obama represented as a state senator; and the top black administrators, developers and planners were people like Valerie Jarrett—who served as a member of the Chicago Planning Commission. And Martin Nesbitt who became head of the CHA. Nesbitt serves as Obama campaign finance treasurer; Jarrett as co-chair of the Transition Team. The other co-chair is William Daley, the Mayor’s brother and the Midwest chair of JP Morgan Chase—an institution deeply involved in the transformation of inner-city neighborhoods thorough its support for—what financial institutions call “neighborhood revitalization” and neighborhood activists call gentrification.
William Daley went on to serve as Obama's second chief of staff, following Rahm Emanuel, who is now mayor of Chicago.
If we examine more carefully the interests that Obama represents; if we look at his core financial supporters; as well as his inmost circle of advisors, we’ll see that they represent the primary activists in the demolition movement and the primary real estate beneficiaries of this transformation of public housing projects into condos and townhouses: the profitable creep of the Central Business District and elite residential neighborhoods southward; and the shifting of the pile of human misery about three miles further into the South Side and the south suburbs.
Obama’s political base comes primarily from Chicago FIRE—the finance, insurance and real estate industry. And the wealthiest families—the Pritzkers, the Crowns and the Levins. But it’s more than just Chicago FIRE. Also within Obama’s inner core of support are allies from the non-profit sector: the liberal foundations, the elite universities, the non-profit community developers and the real estate reverends who produce market rate housing with tax breaks from the city and who have been known to shout from the pulpit “give us this day our Daley, Richard Daley bread.” Aggregate them and what emerges is a constellation of interests around Obama that I call “Friendly FIRE.” Fire power disguised by the camouflage of community uplift; augmented by the authority of academia; greased by billions in foundation grants; and wired to conventional FIRE by the terms of the Community Reinvestment Act of 1995. …
Yes, Obama worked with Ayers, but not the Ayers who blew up buildings; but the Ayers who was able to bring down $50 million from the Walter Annenberg foundation, leveraging it to create a $120 million a non-profit organization with Obama as its head. Annenberg was a billionaire friend of Ronald Reagan and Margaret Thatcher. Why would he give mega-millions to a terrorist? Perhaps because he liked Ayers’ new politics. Ayer’s initiative grew out of the backlash against the 1985 Chicago teachers’ strike; his plan promoted “the community” as a third force in education politics between the union and the city administration. Friendly FIRE [i.e., liberal, multiracial Finance, Insurance, and Real Estate interests] wants the same kind of education reform as FIRE: the forces that brought about welfare reform have now moved onto education reform and for the same reason: crippling the power of the union will reduce teachers’ salaries, which will cut real estate taxes which will raise land values.
Is Obama a minion of Richie Daley? It’s true that Obama has never denounced Daley. He actually endorsed him for Mayor in 2007. Even after federal convictions of Daley’s top aides. After the minority hiring scandals. And after the Hired Truck scandal which showed that the Daley machine shared its favors with The Outfit. But the Daley dynasty has expanded far beyond wiseguy industries. The Mayor’s brother, William Daley, who served on Obama’s transition team, also serves now as a top executive of J.P. Morgan Chase. He heads the Midwest region. And chairs J.P. Morgan Chase Foundation, the core of friendly FIRE. Here’s an excerpt from a recent report: "…[we] achieved significant progress toward our 10-year pledge to invest $800 billion in low- and moderate income communities in the U.S.—the largest commitment by any bank focused on mortgages, small-business lending and community development. In 2006, we committed $87 billion, with total investment to date of $241 billion in the third year of the program. Played a leadership role in the creation of The New York Acquisition Fund, along with 15 lenders and in conjunction with six foundations and the City of New York. The Fund is a $230 million initiative to finance the acquisition of land and buildings to be developed and/or preserved for affordable housing.“
It’s also true that key Black members of the Obama inner circle are Daley Administration alumnae—but they’ve moved up—now they’re part of Chicago FIRE. Like Martin Nesbitt. Obama is Nesbitt’s son’s godfather. He’s the African American chairman of the CHA. But his principal occupation is the vice presidency of the Pritzker Realty group. Although they’re not well known outside of Chicago, the Pritzkers rank among the richest families in the U.S. There are ten Pritzkers among the Forbes 400: Thomas is the richest at2.3 billion. Anthony and J.B. are next at $2.2 billion; Penny in fourth, at $2.1 billion—Daniel, James, Gigi, John, Karen, and Linda weigh in with $1.9 billion. Penny is finance chair of the Obama campaign. Martin is the treasurer.
Daley saw Obama as a potential rival for the mayor's office. After Daley brushed aside Rep. Bobby Rush's challenge for his job in 1999, Daley turned around and provided some quiet aid to Rush in 2000 to help turn back Obama's challenge to Rush. Daley saw Rush, a former Black Panther, as easy to beat, but saw Obama as potentially a greater long term challenge.
Penny Pritzker herself has had a rocky career as a commercial banker. In 1991, she founded something called the Superior Bank of Chicago which pioneered in sub-prime lending to minorities. Superior was an early casualty of the sub-prime meltdown, though, crashing in 2001 when it was seized by the FDIC. Depositors filed a civil suit against Penny charging that Superior was a racketeering organization. The government charged that Superior paid out hundreds of millions of dividends to the Pritzkers and another family while the bank was essentially broke. There was a complex settlement in which the Pritzkers were forced to pay hundreds of millions in penalties; but the agreement contained provisions that may enable the Pritzkers to earn hundreds of millions. Notwithstanding the Superior bank disaster, Penny is being touted as Obama’s next Secretary of Commerce.
Valerie Jarrett is another black real estate executive. Described as “the other side of Barack’s brain,” she also served as finance chair during his successful 2004 U.S. Senate campaign. Jarrett was Daley’s deputy chief of staff – that was her job when she hired Michelle Obama. Eventually Daley made her the head of city planning. But Jarrett doesn’t work for Daley anymore. She’s CEO of David Levin’s Habitat—one of the largest property managers in Chicago—and the court-appointed overseer of CHA projects. Habitat also managed Grove Parc, the scandal-ridden project in Englewood that left Section 8 tenants, mostly refugees from demolished public housing projects, without heat in the winter but inundated with rats. Grove Parc was developed by Tony Rezko, who’s white. And his long-time partner Allison Davis, who’s black.
Let’s look at Rezko and then Davis. It was Rezko’s ability to exploit relationships with influential blacks—including Muhammad Ali—that enabled him to become one of Chicago’s preeminent cockroach capitalists.
Rezko was Ali's business manager in the 1980s because he was the business manager for the Muhammad family behind the Nation of Islam.
Altogether, Rezko wound up developing over 1,000 apartments with state and city money. There was more to the Obama-Rezko relationship than the empty lot in Kenwood. Rezko raised over $250,000 for Obama’s state senate campaign. While Obama was a state senator he wrote letters in support of Rezko’s applications for development funds. But Obama ignored the plight of Rezko’s tenants who complained to Obama’s office. Rezko’s Grove Parc partner, Allison Davis, was a witness in the Rezko trial, he’s pretty radioactive too. But you could see why Rezko wanted to hook up with him.
Davis was the senior partner in Davis Miner Barnhill & Galland, a small, black law firm, where Obama worked for nearly a decade. As the editor of the Harvard Law Review, Obama could have worked anywhere. Why did he choose the Davis firm? Davis had been a noted civil rights attorney and a progressive critic of the first Daley machine. But in 1980 Davis got a call from the Ford Foundation’s poorly known, but immensely influential, affiliate LISC—the Local Initiatives Support Corporation—that had just been founded. LISC, whose present chair is Citigroup’s Robert Rubin, connects small, mainly minority community non-profits with big foundation grants and especially with bank loans and tax credit-driven equity. LISC wanted to co-opt Davis in their ghetto redevelopment program. He agreed and the Davis firm came to specialize in handling legal work for non-profit community development firms. Eventually Davis left the firm to go into partnership with Tony Rezko. Meanwhile, Obama did legal work for the Rezko-Davis partnership. And for Community Development Organizations like Woodlawn Organization.
In 1994, the LA Times reports, Obama appeared in Cook County court on behalf of Woodlawnn Preservation & Investment Corp., defending it against a suit by the city, which alleged that the company failed to provide heat for low-income tenants on the South Side during the winter. There were several cases of this type, but as the Times observes, Obama doesn’t mention them in Dreams from My Father. In the 1960s, under the leadership of Arthur M. Brazier, Bishop of the Apostolic Church of God, Woodlawn gained a reputation as Chicago’s outstanding Saul Alinsky-stylec ommunity organization. Mainly, TWO [The Woodlawn Organization] battled the University of Chicago’s urban renewal program. But gradually, Brazier’s political direction changed. Now TWO is partnering with UC in efforts to gentrify Woodlawn. When Barack Obama left Jeremiah Wright’s church, he switched to Brazier’s Apostolic Church of God.
I don't believe that's fully true.
Brazier is typical of a much larger group—real estate reverends—who play the Community Development game and in the process have acquired huge real estate portfolios. But it’s really a national phenomenon. Here in New York we have Rev. Calvin Butts whose church has a subsidiary, the Abyssinian Development Corp. In partnership with LISC, the ADC now boasts a portfolio of $500 million in Harlem property alone. Rev. Floyd Flake of the Allen African Methodist Episcopal Church in Jamaica, Queens has a sizeable portfolio of commercial property too. Chicago’s disciples of development include Wilbur Daniel. He’s the Pastor of Antioch Missionary Baptist Church in Englewood who really did exclaim “Give us this day our Daley bread,” meaning free land and free capital for real estate development. Daniel’s prayers were answered in 2001, when with Daley’s help, Antioch was chosen to be the lead church in Fannie Mae’s $55 billion House Chicago plan for the redevelopment of the South Side. How has Obama earned the support and allegiance of friendly FIRE? Where does he stand on the Plan for Transformation?
Generally speaking, he’s been careful not to leave too many footprints. If you google Obama and public housing, nothing comes up. But in 1995, a year before he ran successfully for state senate seat from South Side, in Dreams from My Father he wrote about his encounters with Rev. Jeremiah Wright. Obama says he was impressed by Wright’s emphasis on the unity of the black community. But he’s a little skeptical of too broad a unity; of achieving unity without conflict. He says, “Would the interest in maintaining such unity allow Reverend Wright to take a forceful stand on the latest proposals to reform public housing?” Here he’s referring to Clinton’s Hope VI—that provided matching federal money for the demolition of public housing. And the corresponding local initiatives, which culminated in the Plan for Transformation. “And if men like Reverend Wright failed to take a stand, if churches like Trinity refused to engage with real power and risk genuine conflict, then what chance would there be in holding the larger community intact?”
I have to stop now and put Karnak’s envelope to my forehead. What we see is that the Chicago core of the Obama coalition is made up of blacks who’ve moved up by moving poor blacks out of the community. And very wealthy whites who’ve advanced their community development agenda by hiring blacks. Will this be the pattern for the future in an Obama administration? I can’t read the envelope. But I do believe that if we want to disrupt the pattern of the past we have to make some distinctions: between the change they believe in and the change we believe in; between our interests and theirs; between a notion of community that scapegoats the poor and one that respects their human rights—one of which is not to be the object of ethnic cleaning. Between Hope VI and genuine human hope.
Last year, for example, Mayor Emanuel's Chicago Police Department sent a 40-man SWAT team into two houses in Lincoln Park, only seven blocks from Penny Pritzker's new mansion, to find pretexts for evicting the owners, an extended family of poor blacks.
Putting this in a larger perspective, it's reasonable to believe that Obama was drawn to Chicago in 1985 by the excitement of the Council Wars racial struggle between Mayor Harold Washington and the retrograde white leader Fast Eddie Vrodolyak in what seemed like a zero sum racial battle. But Obama found, when he finally got to know real life poor blacks in 1985-1988, that they weren't as uplifting as he had assumed from watching PBS fund-raising documentaries about the Civil Rights era. But he slowly started to realize that who he really liked were affluent, well-educated blacks. So, he bailed for Harvard Law School, intending to come back and lead blacks back to power in the mayor's office.
Over time, however, Richie Daley became mayor and he was more than happy to cut reasonable blacks in on the profits that could be made by clearing out Cabrini Green and the like, just as long as they'd play ball with Friendly FIRE. Michelle Obama had a wealth of contacts — she'd been Jesse Jackson's babysitter, she worked for Daley's deputy Valerie Jarrett, and she liked money — and Barack Obama was naturally drawn into this little world centered around Jarrett and Penny Pritzker.
On the other hand, let me point out a subtle distinction. I suspect that the secret end game envisioned by the more hardheaded liberal white leaders (I'm looking at you, Mayor Emanuel) is likely not just to yuppify the Near South Side and move poor blacks to the Far South Side of Chicago where they can still vote in Chicago elections. Instead, the hard men want to use Section 8 rental vouchers to send poor blacks packing clear out of Chicago to hickvilles like Champaign-Urbana, while middle class blacks move themselves to inner ring suburbs, leaving only Obama-like upscale blacks in Chicago. This would slowly destroy black political power in Chicago, leaving behind only token affluent blacks and pockets of black poverty around the worst toxic waste sites in the industrial deep South Side.
But, as of 1995, Obama and his spiritual adviser, Jeremiah Wright, objected to what was looming on the horizon as a remote possibility: the more massive economic cleansing of blacks from not just the good parts of Chicago like Cabrini Green and the South Lakefront, but from the inland parts, where Wright's church was and where Obama had done his rather feckless community organizing.
Wright is quoted in Dreams, and Obama echoed Wright's argument in a 1995 Chicago Reader interview, that middle class blacks shouldn't flee to the suburbs to keep their sons from being gunned down. They should make a stand in Chicago (at least farther south than the potentially immensely valuable land around the loop and lakefront). Obama said in 1995:
"The right wing talks about this but they keep appealing to that old individualistic bootstrap myth: get a job, get rich, and get out." ...
So, Obama here is agreeing with Wright's stance against black flight to the suburbs, which in Dreams from My Father is symbolized by Wright telling his secretary not to move to the suburbs to keep her son safe. But, as Fitch suggests, Obama's opaque statement in Dreams — “And if men like Reverend Wright failed to take a stand, if churches like Trinity refused to engage with real power and risk genuine conflict, then what chance would there be in holding the larger community intact?” — can be interpreted to mean that Obama wants to play a dual game that Rev. Wright is too stubborn even though it would be in his own interests: Obama wants to play palsy-walsy with people like the Pritzkers, but also to make sure that public housing project blacks are only relocated as far as the South Side, where they can still vote and still attend Rev. Wright's church, not all the way to exurban hickvilles like Round Lake Beach.
Obama told the Reader in 1995:
"I want to do this as much as I can from the grass-roots level, raising as much money for the campaign as possible at coffees, connecting directly with voters," said Obama. "But to organize this district I must get known. And this costs money. I admit that in this transitional period, before I'm known in the district, I'm going to have to rely on some contributions from wealthy people—people who like my ideas but who won't attach strings. This is not ideal, but it is a problem encountered by everyone in their first campaign.
"Once elected, once I'm known, I won't need that kind of money, just as Harold Washington, once he was elected and known, did not need to raise and spend money to get the black vote."
Obama took time off from attending campaign coffees to attend October's Million Man March in Washington, D.C. His experiences there only reinforced his reasons for jumping into politics.
"What I saw was a powerful demonstration of an impulse and need for African-American men to come together to recognize each other and affirm our rightful place in the society," he said. "There was a profound sense that African-American men were ready to make a commitment to bring about change in our communities and lives.
"But what was lacking among march organizers was a positive agenda, a coherent agenda for change. ...
"But cursing out white folks is not going to get the job done. Anti-Semitic and anti-Asian statements are not going to lift us up. We've got some hard nuts-and-bolts organizing and planning to do. We've got communities to build."
But, of course, in 2000, Obama's plan to follow Harold Washington's career path to the mayor's office by first getting elected to the House of Representatives was derailed by the whupping he got from ex-Black Panther Bobby Rush in black districts. When he recovered from his depression, he gerrymandered his district to include the rich white Gold Coast north of the Loop that, culturally, is his natural base. When Michelle threatened to leave him unless he came up with a workable career strategy, he gave up on winning major power in the callous world of Chicago politics, where voters expect their politicians to be more than just elegant symbols of the electorate's own refinement, but instead to deliver the goods. Obama thus reworked his goals to winning statewide and even national office by taking his ethereal everything-to-everybody act on the road to the more naive parts of white America.
One big question is what precisely was Obama's role in real estate driven changes in Chicago that Fitch outlines. The answer appears to be: eh, not that much. He was there, he looked dignified, he uttered sonorous speeches, he was friends with the players, he tried to foster compromises that would advance the interests of the rich, white and black, without damaging the interests of demagogues like Rev. Wright by driving blacks all the way out of Chicago.
But, as far as I can tell, he doesn't appear to have been a major player himself. He doesn't seem to have been a driving force in the dealmaking. Was this out of scrupulousness (ethical, racial, or careerist)? Or is Obama, on the whole, just more decorative than dynamic?
To flesh out this subtle point about black flight to the suburbs, it's worth quoting from Dreams from My Father at length about Obama's first meeting with Rev. Jeremiah Wright:
Eventually a pretty woman with a brisk, cheerful manner came up and introduced herself as Tracy, one of Reverend Wright’s assistants. She said that the reverend was running a few minutes late and asked if I wanted some coffee. As I followed her back into a kitchen toward the rear of the church, we began to chat, about the church mostly, but also a little about her. It had been a difficult year, she said: Her husband had recently died, and in just a few weeks she’d be moving out to the suburbs. She had wrestled long and hard with the decision, for she had lived most of her life in the city. But she had decided the move would be best for her teenage son. She began to explain how there were a lot more black families in the suburbs these days; how her son would be free to walk down the street without getting harassed; how the school he’d be attending had music courses, a full band, free instruments and uniforms.
“He’s always wanted to be in a band,” she said softly.
As we were talking, I noticed a man in his late forties walking toward us. He had silver hair, a silver mustache and goatee; he was dressed in a gray three-piece suit. He moved slowly, methodically, as if conserving energy, sorting through his mail as he walked, humming a simple tune to himself.
“Barack,” he said as if we were old friends, “let’s see if Tracy here will let me have a minute of your time." ...
“Some people say,” I interrupted, “that the church is too upwardly mobile."
The reverend’s smile faded. “That’s a lot of bull,” he said sharply. “People who talk that mess reflect their own confusion. They’ve bought into the whole business of class that keeps us from working together. Half of ’em think that the former gang-banger or the former Muslim got no business in a Christian church. Other half think any black man with an education or a job, or any church that respects scholarship, is somehow suspect.
“We don’t buy into these false divisions here. It’s not about income, Barack. Cops don’t check my bank account when they pull me over and make me spread-eagle against the car. These miseducated brothers, like that sociologist at the University of Chicago [William Julius Wilson], talking about ‘the declining significance of race.’ Now, what country is he living in?”
But wasn’t there a reality to the class divisions, I wondered? I mentioned the conversation I’d had with his assistant, the tendency of those with means to move out of the line of fire. He took off his glasses and rubbed what I now saw to be a pair of tired eyes.
“I’ve given Tracy my opinion about moving out of the city,” he said quietly. “That boy of hers is gonna get out there and won’t have a clue about where, or who, he is."
“It’s tough to take chances with your child’s safety."
“Life’s not safe for a black man in this country, Barack. Never has been. Probably never will be."
A secretary buzzed, reminding Reverend Wright of his next appointment. We shook hands, and he agreed to have Tracy prepare a list of members for me to meet. Afterward, in the parking lot, I sat in my car and thumbed through a silver brochure that I’d picked up in the reception area. It contained a set of guiding principles-a “Black Value System”-that the congregation had adopted in 1979. ... There was one particular passage in Trinity’s brochure that stood out, though, a commandment more self-conscious in its tone, requiring greater elaboration. “A Disavowal of the Pursuit of Middleclassness,” the heading read. “While it is permissible to chase ‘middleincomeness’ with all our might,” the text stated, those blessed with the talent or good fortune to achieve success in the American mainstream must avoid the “psychological entrapment of Black ‘middleclassness’ that hypnotizes the successful brother or sister into believing they are better than the rest and teaches them to think in terms of ‘we’ and ‘they’ instead of ‘US’!”
It's informative to quote that "value" in full from Trinity's website, much of which Obama left of Dreams:
8. Disavowal of the Pursuit of “Middleclassness.” Classic methodology on control of captives teaches that captors must be able to identify the “talented tenth” of those subjugated, especially those who show promise of providing the kind of leadership that might threaten the captor’s control.
Those so identified are separated from the rest of the people by:
Killing them off directly, and/or fostering a social system that encourages them to kill off one another.
Placing them in concentration camps, and/or structuring an economic environment that induces captive youth to fill the jails and prisons.
Seducing them into a socioeconomic class system which, while training them to earn more dollars, hypnotizes them into believing they are better than others and teaches them to think in terms of “we” and “they” instead of “us.”
So, while it is permissible to chase “middleclassness” with all our might, we must avoid the third separation method – the psychological entrapment of Black “middleclassness.” If we avoid this snare, we will also diminish our “voluntary” contributions to methods A and B. And more importantly, Black people no longer will be deprived of their birthright: the leadership, resourcefulness and example of their own talented persons.
Keep in mind that Senator Barack Obama donated $26,770 to Jeremiah Wright's church in 2007, according to his tax return. That's while he was running for President.
How do we make sense of all of this seemingly conflicting information about Obama? I suspect the simplest answer is that Obama never quite made sense out of it all either.