Monday, October 22, 2012

Archibald Johnston on Pawlowski's Privatization: "Criminal Negligence"

None of us is old enough to have experienced the frequent cholera outbreaks of the 19th century. They were all the result of contaminated food or water. And in 1918, the United States was reeling from the deadly Spanish flu, a pandemic that may have killed as many as 100 million people worldwide. Many blamed "swamp gas", electricity in the air, and of course, a vengeful God. This is the world in which Archibald Johnston became Bethlehem's first Mayor.

His city, which had both a strict quarantine and a makeshift hospital at the Steel Company, suffered only about 100 casualties. More corrupt cities like Philadelphia, which failed to plan for or react to this calamity, dumped close to 13,000 bodies outside police stations and in trench graves.

Johnston, an engineer, believed in planning. He opposed private water sources. In fact, in his first message as Mayor, he explained why.

"The municipal problem is primarily and essentially one of human welfare," stated Johnston. "Every municipality is morally bound to furnish to its inhabitants an abundant supply of pure water, the purest air possible, and a well-drained soil (which means proper sewerage), street cleaning, garbage and refuse collection and disposal. Any other than these sanitary standards in a city will be considered, some day in America, as criminal negligence and sufficient cause for just punishment; since public health is a public duty."

At the time Johnston took office, Bethlehem had both a municipal water supply serving West Bethlehem and a private supply for the rest, furnished by The Bethlehem City Water Company. This private company gathered its water from the Lehigh River. It met state quality requirements of 1918. But according to Johnston, it was still contaminated by sulfur, sewage and manufacturing waste.

As Johnston points out, a private company is motivated more by profit than concern for a citizen's welfare.
One important difference between a privately owned and a municipally owned public water works is, that the former is considered in the light of an investment upon which the fixed interest and other charges must of necessity be earned at not less (let us assume) than the legal rate of interest. Hence the water company must consider extensions and improvement of plant and service in the light of probable returns on capital investment, otherwise bankruptcy might result; but a municipality, owning its own water works system, may elect at any time, on the score of public policy, to make extensions and betterments and distribute the cost by general taxation. The facilities and SERVICE ARE PARAMOUNT in the latter case, while in the former, they MAY be subordinate.
Those words are as true today as they were in 1918. They demonstrate clearly that Allentown Mayor's short-sighted water privatization plan, is nothing short of what Johnston himself would call "criminal negligence."

In numerous power points, Allentown Mayor Edwin Pawlowski essentially claims he has no choice but to privatize the Queen City's water and sewer. There are no other options, he argues. But that is simply untrue.

First, while demanding state protection for a pension mess caused by the state, Pawlowski could demand some help from Harrisburg while refusing to make the MMO payment until he gets it. If state legislators are so willing to create a gigantic NIZ to help out J.B. Reilly, perhaps they'd also be willing to help out the people they are actually supposed to represent.

Second, Pawlowski could send the pension portfolio to an outfit that actually can generate a higher annual return, instead of one of his campaign contributors. Even a small, 1.5% increase in pension performance can sometimes reduce the annual required payment (MMO) on a pension by as much as one-third.

And of course, there's always the possibility of doing a combination of small tax hikes and borrowing.

None of this three options has even been mentioned, probably because they would work. Besides, I thought the NIZ was supposed to "transform" Allentown. If that is so, why the hell does he need to privatize what Archibald Johnston regarded a moral imperative?

But what the hell did Johnston know? He just steered Bethlehem through a pandemic. He was never a Chicago community organizer.

22 comments:

Anonymous said...

One of your best written essays, BO.

Bernie O'Hare said...

A friend showed me Johnston's speech yesterday afternoon and I was amazed at how much his sentiments then still make so much sense today.


Anonymous said...

You know, it's funny.

It wasn't too long ago that Ed Pawlowski was telling us (and the LVIA board) that the only way to pay off LVIA's legal settlement was to sell Queen City Airport, yet somehow an alternative was found.

He also told us the KOZ was going to save Allentown. That didn't happen, and the NIZ is now in place.

And Johnny Manana's was going to be a part of Allentown's "Restaurant Row". TC Salon was going to anchor the turnaround on 19th Street.

Plus he backed out on a campaign pledge to solve the pension issue via the courts, settling early and solving nothing. Just a few years ago, the pension issue was going to be solved by raising the earned income tax.

Seriously, the guy's been wrong more than a broken clock. In a sane city he would already have been tarred and feathered or run out of town with pitchforks and torches.

Anonymous said...

Anything from anyone who had anything to do with the so called steel is dubious at best. The so called steel was arguably the biggest polluter in the area and was run out of existence by corporate and union greed.

Anonymous said...

But government's moral obligation toward human welfare stops short of supporting a community-wide health organization. Privatization is the smart alternative there, right?

Anonymous said...

Great post, Bernie. The more things change, the more they stay the same.

Just say no to corporate owned water.

Carol said...

Morning Bernie, great article, it also brought back memories of my Dad, Archibald Leigh (Archie) had 10 sisters, the only son, I asked the family why was he given the name Archibald, my grandfather named him after Archibald Johnson.

Anonymous said...

Yes, and we have a private system that is the best in the world. It's even used by leaders of nations who have public systems.

That said, you're trying to mix arguments. Public water systems have served this nation well.

Bernie O'Hare said...

"Anything from anyone who had anything to do with the so called steel is dubious at best."

That would eliminate about half the population of the LV. Your argument, incidentally, is a logical fallacy.

1) The Steel is Evil. 2) X worked at the Steel. 3) Therefore, X is bad.

This is what we call the fallacy of the undistributed middle.

Bernie O'Hare said...

Carol, He must have been a great man. I admit I kept reading and re-reading his speech last night.

Bernie O'Hare said...

"But government's moral obligation toward human welfare stops short of supporting a community-wide health organization. Privatization is the smart alternative there, right?"

No. And I can tell you that, in 1918, Johnston spoke of the importance of public health. Pretty amazing little speech. But supporting public health and supporting a specific plan that may not serve its goals are two different things. The devil is in the details.

Anonymous said...

Excellent work sir. You have provided input, and provided it eloquently. Something which ReNew LV has never been able to accomplish even after launching a study group and report on this critical issue.
Thank you for this fine work.

Anonymous said...

Great Article, except for the LAST LINE.
No need for it

Bernie O'Hare said...

Fair enough.

Anonymous said...

I have to point out that other options were offered. Some people with the training(professors and bankers have been reviewing this) to crunch the numbers understand the problem. It isn't going to be a series of small tax increases to solve the pension problem.

The real estate tax would increase about 40% to fund the pension shortfall.

Please seperate the dislike of this mayor from the quatitative issue. It takes a lot of money to cover about $150 million in unfunded liability.

That problem was caused by an incompetent mayor, bad advisors and clueless council members.They got there by voters pulling a party line lever when the facts said the popular guy couldn't do the job. Watch out in two weeks!Popular will not be a good basis to vote for a person in this election.

Bernie O'Hare said...

Actually, the problem was caused by a state system that allowed for this kind of monstrosity. And I did not say it could be solved by a series of small tax hikes. I argued for a combination of things, which has not been considered. I also argued for refusing to pay the MMO until the state steps in and makes a contribution. None of these options was considered. And my disdain for Pawlowski is aggravated by his approach to this problem. I suspect his pockets will be greased by Marcel Groen and the successful bidder.

Anonymous said...

2:36 -

Is it too much to ask that the taxpayers see some benefit from the NIZ, or is it being done to benefit only a select few?

If Allentown is truly being transformed, shouldn't there be some gains in tax revenues to offset the predicted increases in pension payments?

Anonymous said...

This argument could be extended to nursing homes and many other services, including health care in general.

Reality Now

Bernie O'Hare said...

Here's a dose of reality. When Archibald Johnston was Mayor, out seniors were cared for by their loved ones and in their homes.

Anonymous said...

O'Hare hates reality, it interferes with his world view.

Anonymous said...

But the Life expectancy was only what 58 ?

Come on that is not todays reality

And I believe that the Moravians had a little thing called the Poor House, that they gave to Northampton County

Can you do a story on THAT history lesson?

Non-Biased of Course

Bernie O'Hare said...

As a matter of fact, I did. It's called The Evolution of Gracedale.

Moravians did not "give" Gracedale to the County. It was sold to the county, $90 per acre, and it was purchased bc a state law mandated that the county buy one. It was not the county's idea. It was a poorhouse maintained as a working farm, and residents were expected to and did work or they were imprisoned.

That's the reality.