Yves Talks With Zephyr Teachout, Challenger to Cuomo in New York Democratic Primary

Zephyr Teachout, with her running mate Tim Wu, is running against Democratic party fixture, the State governor Andrew Cuomo, and his lieutenant governor nominee Kathy Hochul. A corruption scandal has dented Cuomo’s ratings, transforming the Teachout/Wu challenge from quixotic to distantly plausible. You can read Lambert’s interview of Wu, who is famed as a net neutrality advocate, here.

Teachout is a Fordham assistant law professor and was digital director of the 2004 Dean campaign. I met her in 2011 near Zuccotti Park when Occupy Wall Street was out in force and she co-founded A New Way Forward, an initiative to break up major banks. Teachout is an old-fashioned liberal who favors restrictions on monopoly/oligopoly power, progressive taxation, supporting unions as a way to improve labor bargaining power, and strong social safety nets.

YVES SMITH: Zephyr hi, this is Yves Smith. I’m sorry for being a couple of minutes late.

ZEPHYR TEACHOUT: You are exactly who I was waiting for. How are you!

YVES: Just fine. You sound a little throaty. It sounds like you have had a big day, or you are having lots of big days.

TEACHOUT: Oh my goodness. The last three weeks have been extraordinary, but the last 3 days are just completely game-changing. One day one, we get on pages A17 and A20 of the New York Times. Now one is a story about us, very positive, and the other is an editorial. And I can’t think of an editorial like this. It’s not an endorsement. It’s, “Here is a new candidate. Andrew Cuomo, you should debate her.” With really glowing comments on it. So it’s this unprecedented moment. And then yesterday we got 612 new donors, and then today we got the PEF endorsement. So, things are changing fast.

YVES: That’s fantastic. The debate would make a huge difference, so let’s… it’s intriguing that the Times is supporting you, even if in an indirect way. This is one of the things I wanted to discuss with you. We’ve talked about the long odds of your candidacy, although they appear to be changing. But the usual sort of cynical response is, “Oh, all this is going to mean is that Cuomo moves his position to the left.”

TEACHOUT: We’ll wait and see, but right now what we are talking about is a Democratic primary in a year of upsets. Just look at what happened in Hawaii this past week. Brat and Cantor we talk about all the time. But a Democratic primary in a year of upsets, in which we are talking about half a million, maybe 750,000 people voting. So, it is very different in this sense. Because what those people, the high information people, are going to have to see something really credible from Andrew Cuomo to believe that he is seriously moving to the left, because he is not somebody who has held to his promises before. Particularly promises related to money and politics, or redistricting, or fighting for a Democratic Senate.

So, look. He has $35 million. I don’t have $35 million. He has decades of name recognition; I don’t have that. But things are moving extremely fast and changing extremely fast, and there’s a sense that something fundamental has changed in this race. And it is not just getting the editorial. It is the Times saying this is a serious candidate. And I think that’s a signal that a lot of people were looking for. This is a signal that we have a race here.

YVES: Yes, yes. Now, I’m sort of curious about the background here, how this all came about. The Working Families Party had recruited you, and then they turn around and endorse Cuomo. What was that about?

TEACHOUT: Well, I think most people expected that I would have been endorsed by the Working Families Party, but I don’t think Andrew Cuomo took me, before he knew who I was, seriously. My sense is, that the assumption is, that they just had sort of a stand-in candidate, a fictional person, not someone who was running for Governor. And so the minute that he learned that I was a serious person and candidate, he immediately came on extremely strong with a set of promises and commitments, that seemed like pretty basic commitments for a Democrat, like fighting for a Democratic Senate, or the Women’s Equality Act, or Dream Act, fighting for a minimum wage, things that I think are just foundational, not even visionary. And the Working Families Party took the moment, accepted the deal, although I will say that I still got 41% and he got 58%, and for a 3-day campaign where nobody knew my name 3 days before, I feel pretty good about that 41%.

YVES: In various places you’ve commented about wanting to, the need to take back the soul of the Democratic Party. I have to say, my readership doesn’t share that view. They see the Democratic Party as beyond redemption. That it is just another flavor of corporate party that makes some gestures to various ethnic groups, in an almost Rovian cynical manner. What is your response to that?

TEACHOUT: Well, I am talking about FDR. We each pick the traditions that we draw on, and the tradition that I want to draw on is the tradition that is strong unions, strong antitrust, total commitment to public education, a complete commitment to public infrastructure, to public transportation, and to the public itself, and to the idea of a public. And then build on top of that, and build a small-business economy, that is a thriving economy that we can have on top of that. And, to me, that is what I am drawing on, that deep, powerful tradition. Granted, it has been many decades since Democrats have fearlessly advocated for that. So, I am not talking about 2 years ago. I am talking about an older tradition. But, (it’s) certainly where the people of New York are. I don’t have to convince anybody in New York State that we should have small class sizes, that we shouldn’t have classes bigger than 20 kids. All I have to do is convince people in New York State that they have a viable alternative. Because on policy issues, I am right down the middle with New Yorkers.

YVES: Well, some of these things are more easy to effect at the state level than the others. I mean, in terms of antitrust. My understanding is that even though New York has its own antitrust statutes, that a lot of federal decisions have pretty much vitiated antitrust. And the Attorney General is an elected position. We now have this famed rivalry between Schneiderman and Cuomo. How would you propose to address this…

TEACHOUT: I should be clear. I talk to two sets of people about antitrust: the people who get really technical really fast, (and) the people who have never heard about it. And I want to be somewhere in between. Which is when I talk about antitrust or antimonopoly, I am talking about an ethos, a way of approaching things. And, as you know, if you want to take on big business, there is a whole suite of tools you can use. Lending policy, subsidies, it’s tax breaks, who you are giving tax breaks, who you are not giving tax breaks to. One of the ways in which big business has become so concentrated is through tax breaks and subsidies. So part of it is just pulling back on the support of these really, really powerful companies. But, in New York, there is a really clear example that I think people can grab onto, which is what’s happening with Time Warner and Comcast. Because, there, the Public Service Commission has the authority to review it and is, in fact, not supposed to allow the merger in New York State if it is not in the public interest, and the burden is on the big cable companies to prove that it is. They are not supposed to allow the merger if it is not in the public interest. Well, it is not in the public interest. A Governor with a trust-busting ethos, or who wanted to take on the expression of private power that is taking over our government, a Governor with that perspective would be very clear in directing the Public Service Commission not to hold a handful of hearings, but to make sure that Time Warner and Comcast actually meet their burden, and to be totally open to actually blocking the deal in New York. And we haven’t got that kind of signal from Andrew Cuomo. He has really governed for the few, not for the State. And, what’s happening in the Moreland Commission just highlights that. It is so clear that his administration, his top aide, is getting in there, interfering with issuing subpoenas, interfering with the contents of the report, basically effectively asking for one set of laws for all of us, and other set of laws for those who are Andrew Cuomo’s donors.

YVES: I’m sort of curious. I don’t know if you have any inside baseball as to why the Department of Justice has gone after him. Because, unfortunately, that kind of cronyism is business as usual in Washington. The Australians talk about the tall poppy that gets cut down. But that is their sentiment, not ours. Do you have any sense as to why he’s been targeted?

TEACHOUT: I think the wrongdoing is pretty egregious. I’m not going to make a separate legal judgment here, but on its face, just looking at what we know, under New York State law, it looks like criminal solicitation of official misconduct, under federal laws. I think the key here is, you have got to understand, as a matter of law, that these were deputized Attorneys General. So this is pretty scandalous behavior. Imagine if Barack Obama starts telling his Attorneys General to pull back subpoenas when they get too close to his business associates. That would be a national scandal. And, so what I see is that there is some pretty egregious use of governmental power for political ends, and I am delighted that there is federal prosecution, but that isn’t enough, obviously. A state has to be able to take care of its own corruption problems as well, and the easiest way to take care of a serious problem of corruption is to vote the Governor out.

YVES: Right, right. I wanted to return to your antitrust discussion for a second, because you were involved with a group, actually founded a group, that – around the time of Occupy, and in a similar spirit to Occupy – wanted to curb the power of the banks. What are your ideas on that front?

TEACHOUT: Yes, we actually founded this in 2009, it was called The New Way Forward. And just this spring, we renamed it the Antitrust League, named after some people about 100 years ago who were involved in something very similar, because we had a lot of similar things going on in society at the same time. So, the basic belief is that there are too few banks and they have too much power, and their political power is distorting the democratic process. So, I think you and I may have talked about this before, but it certainly, I talked to many people about it, one of the best examples of what is wrong with politics right now, is people want more banks to get prosecuted. They want more criminal investigation of what the big banks are doing, instead of criminal investigation of kids smoking pot. And they desperately want the power of the banking industry to be broken up. If you propose something like a financial transactions tax, and explain it, it polls incredibly well. People say, “Yes, that makes sense, banks have to pay their fair share.” And yet, they are not. So, it is not a matter of politics. It’s not because the people in the country think, “Ahh, it’s OK if we only have a few banks, and they can do whatever they want.” No. It’s that there is a real disconnect between where the public is and where the laws are, and the old fashioned way of dealing with that disconnect is take on that power; bust them up.

YVES: But how you proceed, assuming you won, how would you proceed with that on a practical basis?

TEACHOUT: Yes. So, on a practical basis, what you’d look at, is again, you lay out a vision, a vision of a small business economy. And you, first, make sure that we are not subsidizing, whether they are monopolies or whether they are just overly concentrated power, we are not subsidizing businesses because of their political friendships, instead of some other reason. We could save billions of dollars if we just go through and get rid of all the tax breaks and subsidies that currently flow to cronies of Andrew Cuomo. That’s step one. Step two is saying, OK, we have some really important industries here that are under assault, like the book publishing industry. Amazon is really taking over the book publishing industry in a lot of ways, and picking and choosing winners and losers in a way that feels like the railroads of 100 years ago.

YVES: Oh no, I mean, I am very sympathetic to the anti-Amazon argument. As a writer, I can tell you that advances have collapsed, because publishers are so squeezed.

TEACHOUT: Right. Yes.

YVES: And you have even more of a power-law payoff than you used to from writing. The people at the top, who are established, can still cut very favorable deals or go directly to the public, but how do you incubate new writers. That’s one of the functions that publishers serve. In particular, J.K. Rowling got a $2500 advance for her first Harry Potter book. I can’t imagine J.K. Rowling would have gotten anywhere if she had self-published.

TEACHOUT: That’s such an important point. It’s also affected other writers. I am going to be very state-focused right here, then. As a New York Governor, I care about the writers in my state. I care about the book publishing industry top to bottom: the people who are making the books, the people who are selling the books, and the people who are writing the books. And what that would mean, is that, I’m going to say, OK, look, do we need to pass new laws to make sure Amazon doesn’t continue to operate in this really feudal, discriminatory way. Because, it’s my job to protect our vital industries, and I think book publishing is a vital industry in New York. I’d love to hear your thoughts on this, you are certainly an expert in this area. But I can’t tell you the precise law that you’d pass. I mean, what we used to have is a lot of laws around pricing that wouldn’t allow a company like Amazon to have the control over pricing it does.

YVES: I’m just surprised … I’m not current on Amazon’s pricing, but from what you can see in their economics, they look as if in a lot of businesses they’ve engaged in classic predatory pricing, pricing below their cost. The fact that they’ve been allowed to get away with this for so long, I find very surprising.

TEACHOUT: I do, too. So, this is something that a Governor can push on. Maybe we need to, I think we probably do, for something like Amazon, is we need to push for passing new laws. And I think that’s an area where you’d find… it’s just a forgotten area of law … where you’d find bipartisan support because people really want book publishing in New York State. So let’s be a leader on taking on Amazon. Again, I can’t draft the law for you, but I can tell you that we can find those laws, because this is traditionally one of the roles of states, is actually deciding, you know, what kind of economic development do we support, what kind actually threatens the state’s own integrity.

YVES: Right, right. Now, you also talked about strengthening unions. How do you see facilitating that on a state level?

TEACHOUT: Well, certainly, a part of it is just a matter of respect and engagement. I’m thrilled because we got the Public Employees Federation, the second largest union in the state, endorsed us today. This is a really big deal. And, I’ll tell you, when I talk to their members, and I’ve talked to their members for a while, a lot of what they talk about is respect. Just simply really understanding the value that workers bring. That is something that Andrew Cuomo has not done, and it is something that I would do, just as a matter of doing what’s best for our state, for the people in it. For the patients that our nurses care for, for making sure that our milk is actually safe because it is actually getting inspected, you know, all the sort of the basic modes of respect. But then the second level is really looking at what we can do on a state level to support, to enable the creation of unions in non-traditional areas, like in the car wash area or elsewhere, with the changing economy.

YVES: Here in the U.S., the deep anti-union sentiment has been very carefully inculcated for decades. I’m not telling you anything you don’t know, but Germany has very powerful unions. It’s not like you can’t have a very highly competitive economy and strong unions. I’m just astonished at the lack of willingness to look at other models, but that’s where we’ve been for a while.

TEACHOUT: We have to open up our imaginations, that’s for sure.

YVES: To switch gears a bit, what would you do to improve inner-city education?

TEACHOUT: Education has been… You and I have been talking about some things that you know I care about, but when I am on the campaign trail, what I talk about the most, and this is such a deep commitment of mine, is schools. Because Andrew Cuomo has really looted from school funding to pay for tax breaks. And to pay for tax breaks for bankers and for folks who don’t need it. And what we see is extraordinary rates of suspension, of kids not graduating, and huge class sizes, no arts, or if there is art, there is one art teacher for 1200 kids. I don’t think Andrew Cuomo understands schools, and I think a lot of the people who are proposing “school reform” as it is called, it is a perversion of the term reform, are people who haven’t spent time in a classroom. I used to be a Special Ed teacher’s aide, in a small classroom with 12 kids, and I will tell you, it helped that I was in the classroom because every kid got to be paid attention to as an individual. Children are still children, and they are not widgets, and no amount of wishing is going to change that. That takes direct investment in schools, in small class sizes, in arts, in counselors, and the resources that support those schools. To me, that is non-negotiable. There are always efforts to find magic bullet around school some other way, maybe we can test our way into excellence, maybe we can data-track our way into excellence. But schools are complicated because kids are complicated, and you have to invest in them.

YVES: How do you respond to the enthusiasm for charter schools?

TEACHOUT: Well, charter schools are supposed to be an experiment, they are not supposed to be a replacement for public education. I don’t mind a few charters as experiments, but I am troubled by the idea of charters as part of a multi-faced assault on public education itself, as a true alternative. But most parents send their kids to charter schools because the public schools aren’t taken care of. So, instead of turning to another magic bullet, we’ve got to turn to our basic work, which is respecting teachers, trusting and funding those schools.

YVES: OK. You and Tim Wu have called for a ban on fracking. I’ve been at presentations where people who have had experience in places like Canada claim that you can frack in a way that doesn’t damage aquifers. How do you respond to people who claim that the problem isn’t fracking per se, but that the fracking industry is unregulated and tougher regulations might make it less dangerous.

TEACHOUT: Well, I’d just look at the science, and the science is pretty clearly in on the extreme dangers of fracking – the toxicity, and also lack of information we have about all the chemicals that are used. It is actually inhibiting New York’s economic growth right now, that Gov. Cuomo hasn’t pushed for a ban. I’m very concerned that, if re-elected, he would immediately move toward a hydro-fracking experiment, because he has taken over $1 million in pro-fracking money. So, to me, this is a case of, we actually have to let the farmers and the people who are our land-owners rest safe that they are not about to be assaulted by hydro-fracking.

YVES: So, what’s the trade-off? I mean, obviously, you’ve got the criticism from the farmers. But you also have some pretty distressed counties on the – I’m just being devil’s advocate here – on the Pennsylvania border here who are very pro-fracking. So it’s seems as if this is a regional issue, that some regions feel one way about it, and others feel differently.

TEACHOUT: Actually, I mean, but the southern tier is now a majority anti-fracking. Opinions have changed. I think a lot of people were first drawn to it because it sounded like jobs. But, there are other ways to get jobs, like direct investment in schools, invest in the public infrastructure, actually trying to build towards a long-term future instead of the short-term approach of hydro-fracking, I mean, you and I know very well what short-term economic models can lead to. They are highly fragile, they can collapse, they are not the direction we should be moving in, especially after 2008 and we are still experiencing the wreckage after that.

YVES: Right. Now, let’s assume that you and Tim win in the primary. Then, you are going to face the heat of, that you are both academics, that you don’t have any administrative experience. How do you respond to that?

TEACHOUT: Well, I was national director of the Sunlight Foundation. I have served on a lot of boards, as well as done some private sector consulting, and I am quite confident that the role of a governor is to express a clear vision, hire great managers, work with them well, respect them. I am quite ready for that role. I think probably like 1 in 12 or 1 in 10 governors have not had prior electoral experience. Tim has worked at the FTC and also in the private sector. One big difference between myself and Gov. Andrew Cuomo is that you will always know where we stand. Very clear and, in my view, that is an essential feature of leadership itself.

YVES: I just have one more question. One of the other issues is just that you and Tim have, one of your strengths as candidates, is that you are from the outside–

TEACHOUT: Absolutely!

YVES: — and not being part of the old boys’ network, but the flip side is that you are then going to face a bureaucracy and a legislature. How do you avoid the Jimmy Carter syndrome? Can you be pristine and still be effective?

TEACHOUT: Look, I know politics really well. I’ve been working in politics for a long time. So, this may be the first elected office that I have run for, but it is not certainly the first time that I have engaged in any part of the political process, so I don’t have any illusions about how easy this is. But what I see is that clarity and good management and good leadership are essential.

YVES: OK. That’s really good. Any other final comments?

TEACHOUT: No. It was wonderful. Thank you so much. Let me know when this goes up.

YVES: Thank you. I certainly will. I appreciate you making the time. And best of luck.