Speech to The Democratic National Committee–Western Caucus
Saturday, May 25, 2002
Seattle, Washington
I love the West. In some ways, the spirit of my own politics is animated by the mythology of the West: independent, restless, striving, seeking new paths, pushing the frontiers, seeking new horizons. Whether contemplating the pioneering spirit atop the Oregon capital in Salem, the daring trek of Lewis and Clark, the California experience of Carey McWilliams or Seattle’s own Space Needle which flung the dreams of a people toward the stars, the spirit of the West is one of daring, of exploration, of courage and creativity. The narrative of the West has become the narrative of our nation. If all Americans could remember where we came from, a people of courage and daring, we could easily pass through the momentary challenge to our national nerve and recapture the heartfelt rhythms of the land of the free and the home of the brave celebrated in our national anthem.
In November of 1979, I came West to begin my own odyssey. In 1977, I was elected mayor of Cleveland, on a promise to save Cleveland’s 46,000-customer, municipally owned electric system, Muny Light, from a takeover by the privately owned utility, the Cleveland Electric Illuminating Company, CEI. Muny Light’s rates were as much as 25 percent lower. CEI was in the middle of an aggressive nuclear-power building program. A utility monopoly in Cleveland would have enabled CEI to raise utility rates to help pay off their rapidly expanding debt on the nuclear power plants.
How people come to pay what they pay for electricity is one of most fascinating economic questions of our time. City-owned utilities, of which there are over 2,000 in America, have lower rates, are publicly accountable and do not have to pay stock dividends and high salaries. CEI tried to block the creation of Muny Light at the turn of the twentieth century. Federal antitrust case records proved CEI tried for years to put Muny Light out of business. CEI damaged Muny’s self-sufficiency by blocking repairs to the Muny system through exercising undue influence with the City Council.
When Muny looked to purchase power, CEI quietly intervened to stop other utilities from selling to the city. When the city had to turn to CEI for emergency power, CEI charged the city triple what it charged other customers, creating great financial pressures on the public system. It lobbied members of City Council to raise Muny’s rates to wipe out the price difference. Once, when Muny Light needed emergency power from CEI, the transfer was operated in such a way as to deliberately cause a blackout in the Muny system. CEI used its advertising dollar influence with the media to attack Muny Light as unreliable and worthless, even though the system was making a profit. With a military-type precision, the case for a sale of the Muny system soon became the cause of all the radio, television and newspaper outlets in Cleveland. At the time Cleveland was the number three corporate headquarters city in America. The corporate community supported the sale. So did both political parties.
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The City Council and the mayor obliged in 1976 and sold the system for a fraction of its value. I organized a referendum that blocked the sale. I ran for mayor and won on a promise to save the light system. On December 15, 1978, Ohio’s largest bank, Cleveland Trust, demanded that I sell the city’s electric system as a precondition for the bank extending $5 million in credit to the city on loans taken out by the previous mayor. Cleveland Trust was CEI’s bank, and managed its cash flow. The bank had four interlocking directorates with the utility. It held CEI’s pension funds and other investments. With another bank, it was CEI’s largest shareholder. If I said yes to the sale, the bank promised not only to renew the city’s credit and gain the cooperation of other banks but it would grant the city another $50 million in loans. If I said no, Cleveland would become the first American city since the Depression to go into default on its loans.
Where I come from it always mattered how much people paid for electricity. I can still remember my mother and father sitting in the kitchen of our apartment, counting pennies on a porcelain-topped table, to make sure they could pay the utility bill. I can still hear those pennies clicking on that porcelain top. So when the bank president demanded sale of our city’s electric system, I said no. The city was thrown into default, and a year later, I lost the office it took me ten years to achieve.
After default, I couldn’t get a job in Cleveland. I went West, first to California, then Washington State, then Oregon, then New Mexico, then Alaska, seeking a new start, trying to find a way to make a new beginning, trying to reclaim a career in public life. The years rolled along. I wandered back and forth from the West to Cleveland. Muny Light remained unsold. And fifteen years after default, carried aloft on Muny Light’s expansion, with a system that provided electricity at a savings of up to 30 percent, I began the road back toward national politics with a 1994 election to the Ohio Senate. Two years later I came to Congress.
When I was mayor, I was asked to make a conscious choice between competing visions, between whether corporations existed for the city or the city existed for the corporations, between the claims of the community and the claims of commerce, between the requirement for economic justice and the imperative for profit, between the public interest and private interest. These are choices that we all make every day in the accommodations we make with our purchases, where we work, where we live, how we travel, what we eat.
Everyday, as each one of us chooses, so chooses the world.
A few years ago, I could smell the dynamic tension between the claims of the community and the claims of the free market in the tear gas that invaded the locked-down lobby of this very hotel (Westin, Seattle) during the challenge to the practices of the World Trade Organization. I could feel that tension coursing through the streets of this city when I marched with machinists and moms, with Teamsters and turtles in a call for human rights, workers’ rights and environmental quality principles to become integral to our commerce. The challenge before us today, the challenge before our nation and the world is whether we accept the beneficence of Lincoln’s prayer to create “…a government of the people, by the people and for the people,” or whether we timidly accept the economic, social and political consequences of a government of the corporations, by the corporations and for the corporations.
One hundred years ago, Mayor Tom Johnson of Cleveland set the stage for the establishment of a municipally owned electric company. His credo: “I believe in the municipal ownership of all public service monopolies, for the same reason that I believe in the municipal ownership of waterworks, of parks, of schools, I believe in the municipal ownership of these monopolies because if you do not own them they will in time own you. They will rule your politics, corrupt your institutions and finally destroy your liberties.”
The implosion of the Enron Corporation is a cautionary tale of the danger to the people of our nation, to our economy and to our political system of the influence of unfettered, unregulated corporations and the grave risks of privatization. The power industry used its influence at every level of government to create a structure which transferred at least $71 billion from California to itself. It is the haiku of hegemony:
Plotting gains.
False promise low rates,
Political contributions place.
Regulatory controls erase.
Energy supplies manipulate.
Shortages create.
Blackouts.
Taxpayers bled.
Ratepayers dead.
Windfall profitgate.
Earnings misstate.
Stock inflate.
Enron investigate.
Bailouts by state.
System remains.
This predatory system must be set aside. The only way to ensure that Enron does not happen again is for government at the state and federal levels to reclaim a rightful role as regulator in the public interest, to restructure electric rates to protect residents and small businesses, to enact windfall-profit taxes and to finance the construction of municipal power systems.
From the darkness that is Enron, I see a new day dawning in energy in America. I see a new horizon, where the American community consciously chooses sustainability and ushers in a new era of power, of solar, of wind, of hydrogen and other renewable fuels to provide endless energy upon an endless planet.
The Democratic Party must become the party of reregulation, of public control, of public accountability, of public power not only in energy–but in healthcare.
Through the work of our party, I see a new horizon for healthcare for all Americans with a universal, single-payer system. Today such coverage is available to Americans over the age of 65. We need a new Medicare, Part E (for Everyone), which will relieve the suffering and uncertainty of 44 million Americans who currently have no health coverage and the economic pain of those who are paying exorbitant rates for their health insurance.
Many cannot afford health insurance. Some do not have jobs. Some have lost their jobs. Some are people who have jobs yet do not have coverage. You and I know people who do not have healthcare coverage, who do not get diagnosed in time. Who end up dying prematurely. This is what happens with a market-based system. Here again, we are asked to consciously choose our priorities: between the claims of the community and the claims of commerce. Between the requirement for economic justice and the imperative for profit. Between the public interest and private interest.
A market-based approach to healthcare benefits no one except the insurance companies. HMOs are more costly than Medicare. People are getting less care. Fewer people can get a doctor of choice. Fewer people can get the treatment they need. People are waiting longer for appointments. Pre-existing illnesses are being used to deny coverage. Physicians are given monetary incentives to deny care.
On January 1, 1999, 400,000 Medicare patients lost their HMO coverage. HMOs claimed that the reimbursement rate was too low, so seniors were denied coverage. Remember this date. Because it predicts a trend if we allow Congress to privatize Medicare. We must challenge this system. We must change this system. Our Democratic Party can claim universal, single-payer healthcare as our cause, healthcare for all, in a nation that recognizes that a government for the people means all people must have an opportunity to survive.
Today there are senior citizens throughout America who are forced to make cruel choices between paying the high cost of prescription drugs or buying food: between prescription drugs or clothing. Seniors are splitting their pills to make prescriptions last, splitting their budgets with $600 monthly prescription bills, splitting their physical and their economic health.
The pharmaceuticals industry is the most profitable in America, even more profitable than the banking industry. America is a captive market. Americans pay 64 percent more for the same pharmaceuticals than Canadians. Canadians have a system to control prices. Our government should place limits on the price that any manufacturer can charge for prescription drugs. We need a new Prescription for America, a regulatory structure which puts a ceiling on drug company profits the same way credit laws establish what constitutes usury. As with utility rates, our government should be empowered to lower prices and impose windfall-profits taxes to correct excess pricing.
As we look to tomorrow, our government needs to welcome holistic medicine into America’s mainstream. Alternative medicine encompasses a focused commitment to personal responsibility for one’s health, which is the precursor to a nation of well beings. A nation where people may live qualitatively.
I see an America of retirement security for all. I see a new horizon for Social Security in America, through restoring the age of retirement to 65, instead of the current 67. The normal age for retirement was raised in phases beginning in 1983 from 65 to 67. The reason? People live longer. The economy was transitioning to white-collar jobs. But, while people were living longer, they were not working longer, because their bodies wore out. Medical technology has enhanced longevity. Still, increased longevity sometimes means people are sicker longer.
We need to reclaim the benefits of quality life extension for our seniors by reclaiming Social Security benefits at age 65. America can afford it. Social Security’s finances are more secure than ever. The fund is solid through the year 2041, without any changes whatsoever. And America is wealthier than at any previous point in Social Security’s history.
Yet, Wall Street advocates of privatization look at Social Security’s accumulated surplus as a source of revenue to fuel an erratic market. The present Administration has created a commission which stands for privatization, even in the face of collapsing markets. The proposed privatization of Social Security challenges us once again to consciously choose between the claims of the community and the claims of commerce, between the requirement for economic justice and the imperative for profit, between the public interest and private interest.
As each day’s accounting news brings new questions about the true value of a company’s stock, about the safety of the individual investor’s holdings, it becomes an urgent matter of the highest public priority that we not let the retirement security of our nation be lost to profiteers and speculators. It is the obligation of our Democratic Party to keep the historic commitment which we made to intergenerational security, to economic freedom and to fairness.
Despite the overwhelming influence that corporations have in the life of our nation, I see a new America of corporate accountability. I see a new horizon in America where ethics, sustainability and sensible priorities guide corporate conduct in cooperation and harmony with vigilant, but fair-minded government regulation.
How do we get there? Our Democratic Party cannot stand by idly while the great economic engines of our society trample workers’ rights, human rights, ruin the environment, shatter regulations, sweep aside antitrust laws, destroy competition and accelerate the accumulation of wealth into fewer and fewer hands, and control the government itself.
Undue corporate influence has diminished our party. It has distorted our priorities. It has eliminated debate. It has blurred the differences between the political parties.
We need a new relationship between the Democratic Party and corporate America–call it arms-length–so that our party is capable of independently affirming the public interest. We need a new relationship between corporations and our society. Just as our founders understood the need for separation of church and state, we need to institutionalize the separation of corporations and the state. This begins with government taking the responsibility to establish the conditions under which corporations may do business in the United States, including the establishment of a federal corporate charter which describes corporate rights and responsibilities.
Corporations should be compelled to pay a fair share of taxes. If corporations shift profits offshore to avoid paying taxes, they should not be permitted to operate in the United States. The decrease in corporate tax responsibility is an indication of the rise of corporate power. According to the Institute for Policy Studies, after the 2002 tax cuts, corporations will pay in taxes an amount equivalent to 1.3 percent of the US gross domestic product. In the 1950s they paid taxes of 4.5 percent of US GDP. Corporations have less regulations, pay less taxes and yet have greater influence. (Can there be any clearer indication of the urgency of full public financing of our elections?)
I see an America where the economy works for everyone because everyone is working. I see a new horizon in this country where there is no such thing as an acceptable level of unemployment. Nearly 9 million Americans are unemployed. Millions more are not being included in the official count. Average wages are falling. People are taking pay cuts to keep their jobs. The unemployed and the employed alike are experiencing a falling standard of living. The middle-class aspirations of many are being dashed.
Where the private sector fails to provide jobs, the public sector has a moral responsibility to do so. People want work, not welfare. And while there ought to be welfare for those unable to work, there ought to be work for those who are able to work and who want to work. And there is enough work to do.
I see a newly rebuilt America. I see a new horizon where America provides a means to have massive public works to rebuild our cities, our water systems, our public transportation systems, our schools, our parks, our public energy systems. Nearly $150 billion is needed over twenty years to repair and provide for adequate wastewater treatment systems. Another $120 billion is needed for drinking water systems. We need a new financial mechanism to get money to cities and states to begin rebuilding and to put America back to work.
The federal government can give cities and states loans for infrastructure programs to be repaid over a period of thirty years, at zero interest. This will boost economies and spur private investment. A Federal Bank for Infrastructure Maintenance would administer a program of lending $50 billion per year to state and local governments. The money comes from an innovative adaptation of the normal money-supply circulation activity of the Federal Reserve Bank. The cost to the American taxpayer is simply the cost of the interest on the loans.
It is up to the Democratic Party to be the advocates for economic progress for all the people. We must advance policies which preserve high-wage jobs and support unionization. We should endeavor to condition trade agreements (as 113 Democrats so stated in 1999 to President Clinton before the Seattle WTO talks) “on the guarantee of internationally recognized rights of workers to organize into independent unions; to prohibit the use of child and forced labor; to be protected by workplace safety laws and to benefit from minimum wage laws.” We must take the financial incentive out of capital moving overseas.
I see a Democratic Party which takes a new stand for America in the world. I see a new horizon of international relations guided by progress of the many, not the profits of a few. We must work to reform the IMF, the World Bank and the World Trade Organization. These institutions should not be allowed to condition financial assistance to poor countries by imposing “structural adjustment” policies which deny minimum wages and privatize water, health, retirement and education systems. If we are prepared to require a higher standard of corporate conduct in the United States, we can require a higher standard of corporate conduct throughout the world through these financial institutions.
Finally, our party must become the party of peace, “to secure the blessings of liberty for ourselves and our posterity.” I see a new horizon in America where we work to make nonviolence an organizing principle in our society through the establishment of a Cabinet-level Department of Peace. This concept, which is already endorsed by forty-three Democratic members of Congress, seeks a new nation that faces squarely the violence in our own society and that fashions a new international policy which seeks to make war itself archaic. Over 100 million people, most of them innocent civilian noncombatants, perished in wars in the twentieth century. Given the destructive power of today’s technology, given $400 billion a year for the military, given the Administration’s statements renewing the nuclear first-strike option, building new nuclear weapons, canceling the ABM treaty and putting weapons in space, we must recognize that the survival of humanity depends upon our ability to evolve, to become better than we are, to become more than we are, to protect this fragile world and to create new worlds of possibility.
In this moment when all is in the balance, it is time for us to rethink the purpose of our party. We must reclaim our historic mission as the party of bold ideas, of new national beginnings. We must do so with a passion for democracy and with hearts that are filled with courage and love.
Let us make in the days ahead one more call to action for the generation that suffered the Depression and served in war, and now in its twilight years remembers the dreams of its youth for personal independence.
Let us make in the days ahead one more reveille for our generation which unfurled its banner of change in the 1960s, believing “we can change the world, rearrange the world.” Let us reclaim the dreams of our own youth for “harmony and understanding, sympathy and trust abounding, for the mind’s true liberation.” And let us have a clarion call for a new generation which longs to hear and to see and to feel real commitment, real conviction, real courage to recreate the future.
Nothing less than the future of our nation and the world is at stake. Americans are waiting for us. The voters are waiting for us. They will show up when we show up. Our greatest power is not even political. It is the ability to move the human heart. It is the ability to see our nation as truly indivisible, truly united in the cause of all who long for unity, of all who long for connectivity, of all who seek integrity and wholeness in their own lives and integrity and wholeness in the life of our nation.
We have done it before. We are the party of FDR and the New Deal. We are the party of JFK and the New Frontier. We are the party of LBJ and the Great Society. We are the party of the realized dream of Martin Luther King. We are the party of the unrealized dreams of Bobby Kennedy. We are the party of Social Security, of Medicare, of civil rights, of equality for women, of a green planet, of a peaceful planet. We are the party of the people.
We stand looking out upon the new horizon of the twenty-first century. It is still daybreak, the sun is about to come up like thunder. And it is our Democratic Party, which has the opportunity to widen the bright horizon for all the people, to help people, particularly our youth, to become excited about participating in the process of citizenship, by fearlessly stepping into the crucible of change, by working for new initiatives which will win back people’s faith in our government, faith in the political process, faith that their vote matters and faith in each person’s ability to make a difference. One person can make a difference.
Senator Robert Kennedy, addressing students in South Africa who suffered under the yoke of apartheid, understood the potency of the human heart as surmounting all obstacles. He said: “Each time a man (or a woman) stands up for an ideal, acts to improve the lot of others or strikes out against injustice, he (or she) sends forth a tiny ripple of hope. And crossing each other from a million different centers of energy and daring, those ripples can create a current which can sweep down the mightiest walls of oppression and resistance.”
This is my commitment. I am sure it is yours, too.
