Ohio to privatize development- our tax dollars as handouts.

I’m still not sure why government is in the “economic development” business- instead of working on perfecting the “business of government.” But our new governor, John Kasich, apparently thinks that turning our tax dollars over to a private entity to “invest” is a good idea.

I think it’s illegal. Tax dollars are for public welfare and provision of infrastructure. Handing out tax dollars to private business creates an unequal playing field. Of course, to a former director from Lehman Brothers- this is to be expected:

Gov. John Kasich’s plan to privatize Ohio’s economic development effort by creating a nonprofit corporation run by a nine-member board easily passed the Ohio House on Tuesday….

The bill now goes to the Senate, also controlled by Republicans.

JobsOhio would not be a state agency and the state’s open meetings law and public records law would not apply to it, although supporters said there would be sufficient public disclosure.

Kasich has made it a key ingredient in his plan to make Ohio “open for business.”

It’s what the state needs at a time of unemployment hovering around 10 percent and thousands of jobs continuing to leave the state, he and his allies have said. “We need a different direction,” said Rep. Danny Bubp, R-West Union. “This bill does that…. Ohio is at war with other states and countries for jobs.”

via State House OKs economic privatizing plan.

You have to love idiots who think we are “at war with other states and countries for jobs.” War is an activity that has no winners and everyone loses. Ohio is in a competition with other states and countries- and if we want to be more competitive the answers are to make this a more desirable place to do business.

While GM, Ford and Chrysler seemed to have failed to make cars in Ohio- Honda hasn’t seemed to have a problem. That’s an indication that well-run companies can be successful in Ohio.

However- our population is shrinking. Our schools aren’t performing- yet you don’t hear the governor working on fixing our unconstitutional school funding as a first priority. Nope- funding private businesses comes first in his book.

We’ve got archaic rules on the books- with way too many governmental districts and jurisdictions. Cities, townships, counties- we elect coroners and auditors and clerks of courts- we could cut governmental overhead by eliminating so many of these bureaucracies and save money and cut the overhead for business- but, nope- handing out money to friends and family comes first.

Even though the rest of the industrialized world is building energy-efficient rail transportation- that goes 300 m.p.h.- our governor is convinced that his Wall Street style solution is the answer- instead of building infrastructure that would give us a competitive advantage.

And while the rise in health care costs to business in Ohio have become unbearable- he’s got us trying to undo the only hope many small businesses have for gaining access to health insurance plans that can put them on a level playing field with large corporations that can bully for better rates.

Of all the broken things in Ohio- with our overlapping layers of bureaucracy- the first thing Governor Kasich does is create a new bureaucracy that runs without public oversight.

Ohio is about to take a huge step backwards- thanks to Governor Kasich and his Wall Street Wizard’s-eye view.

Sure we need to get rid of the Ohio Department of Economic Development- but, what we don’t need is a replacement.

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27 Responses

  1. Gary February 2, 2011 / 9:03 pm

    Gov. John Kasich’s plan to privatize Ohio’s economic development effort by creating a nonprofit corporation run by a nine-member board easily passed the Ohio House on Tuesday….
    Yeah, right John!  Nonprofits make big bucks, as long as the profits are put back in the business – better yet, in the CEO’s or ED’s pockets – just like CareSource did!
    And maybe a penny or two will actually do some good for someone!

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  2. Marianne February 2, 2011 / 10:29 pm

    VERY well-said, David!  I cringe when I think about the damage Kasich is already doing and will continue to do in the years ahead at such a critical time.   Unbelievable that he sent back the millions of dollars the federal government gave Ohio to build its high speed rail system that would have provided jobs, practical transportation and pride for our citizens as well as appeal for out-of-state businesses.   This is a public official who is averse to serving the public and to keeping his administration in the public eye……….there will be no transparency, no commitment to our children, no compassion for our people and no progress for our state, I fear, under his distorted priorities. 

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  3. Civil Servants Are People, Too February 3, 2011 / 1:39 am

    The Dept of Development, as it stands today, has several very good pro-urban programs such as historic rehabilitation tax credits and Clean Ohio funds.    In fact, one of his arguments was that their mission was spread too thin with managing so many programs – even though most inside observers would agree they were generally well-managed.  So my first concern is that he is throwing the baby out with the bathwater.
     
     
    My second concern is that this approach seems to be based on little more than a gut feeling that “something” isn’t working.   Yet I’ve seen little empirical evidence that the current plan is not effective in achieving it’s goals (whether or not you agree with them is another argument).    The previous administration had a thoughtful reform plan in the works, and I’m certain most of that effort has gone down with the ship.   David’s point about other pressing concerns in Ohio is well taken here.
     
     
    Third, there WAS some evidence from the Good-Jobs-First study that suggests privatization doesn’t work – based on the experiences in states that ALREADY tried it.    The strategy seems to be to ram this through the legislature with a big bang while nobody is looking, with hopes of a fast return.   Honestly, I don’t really understand why the rank and file Republicans are falling in line so quickly and without question.  Are they afraid of him?  Will they stand behind him if it fails to produce results?
     
     
    The concerns noted in your post are valid….. whether one supports the idea of “economic development” or not.
     
     
    He may have won the election, but he still has a lot of work to do.
     

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  4. Dad February 3, 2011 / 11:08 am

    My wife and I took the TGV (train a grande vitesse or high-speed train) south of Bordeaux and went to Paris at about 200 m.p.h. There were no shakes, bumps, or clatter. The ride was silent. And the French have been expanding the TGV system for many years. It now goes through Provence and reaches the Riviera.
    Our ideologue in the governor’s chair (Four legs good; two legs bad OOPS, private good; public bad) is turning Ohio backwards to pre-Industrial, horse and buggy. He shows his contempt for modern times by appointing an all-white cabinet. (Who was this Martin Luther King Jr. anyway?)
     
    While he’s at it, he might try taking the vote away from women and blacks, putting kids in one-room all-white schools, and turning the Ohio penal system to some private company, too. If we must live in the 19th century, let’s do it whole hog!

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  5. John Ise February 3, 2011 / 1:26 pm

    A private, for-profit entity responsible for shelling out economic development $$$ and is not publically transparent!?!  This has disaster, boon-doggle written all over it. 

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  6. Robert Vigh February 3, 2011 / 6:05 pm

    I think privatization and capitalism get a bad wrap because of poor word use. So, I just want to be clear for some people:

    1) Taking public dollars and giving them to a private company is not really privatizing anything. It is Corporatizing them.

    So, yes John Kasich is a Corporatist goofball. He is however, not wrong, about trains being a very bad investment.

    Dad, I just want to bring to your attention that the French economy is not so good. So, importing their ideas is not an aspiration. Also, was there candidates better qualified for the cabinet that prejudice clearly got in the way of appointing? Or are you saying you are prejudice against white people because races must be mixed no matter what?

    David, sometimes I wish you would keep topics like trains, healthcare and Corporatism separate. It would make for easier responses. Besides, I have to point out that what Kasich is doing is Corporatist…………..just like passing a law that says everyone has to buy insurance, puts a law in place forcing you to buy from Corporations, also Corporatist……………just like taking public dollars to give to private companies to build trains that no private company would, also Corporatist. 

    So, I am on your side for about half the article.

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  7. Greg Hunter February 4, 2011 / 12:34 am

    Hidden due to low comment rating. Click here to see.

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  8. Robert Vigh February 4, 2011 / 12:43 pm

    Greg,
    The train will not generate a profit or break even. I do not think that taxing people to create roads is a good thing either. It has generated excess roads and contributed greatly to sprawl. But, because we have already made bad decisions, the solution is not to make more of them.
     
    I am pretty sure the car was a good thing. I am also certain that would have come about with or without a government.

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  9. Greg Hunter February 7, 2011 / 11:12 am

    Hidden due to low comment rating. Click here to see.

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  10. djw February 7, 2011 / 12:31 pm

    I try to avoid getting drawn into debates with doctrinaire libertarians, but I just can’t resist pointing out the absurd cognitive dissonance of this:
    <i>I do not think that taxing people to create roads is a good thing </i>
     
    AND
     
    <i>I am pretty sure the car was a good thing</i>
     
    One can’t have any actual understanding of the relationship between technology, state and society and hold those two views together. The invention of a remarkable thing like cars that are largely useless without roads is going to create a huge demand for a new public utility (roads) from this new business community, so that they can sell their product, and from actual people, so that they can buy the product. This, in turn, is what makes cars “a good thing” rather than a useless thing. “The government” is not actually some foreign entity imposing it’s will on a bewildered and neutral population (although it can seem like that at times), it is, in this case, responding to demands and incentives from multiple constituencies.
    I know that in libertopia, private landholders would somehow spontaneously create a private market in roads and road access, but the fact that nothing of the sort has ever happened for rather obvious logistical reasons should really give you pause, but it won’t, because you’re every bit as deeply utopian in your political views as a doctrinaire Marxist.

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  11. Robert Vigh February 7, 2011 / 2:40 pm

    Djw,

    Assume that no public roads were ever built. Most roads prior to the automobile were worn paths created by foot and wagon traffic, do you believe that the automobile was not a superior invention that would have been utilized over the horse and buggy regardless of the condition of the roads (or paths)? How is the invention of a combustion engine powered vehicle not good?

    So, I believe that cars are a good invention regardless of my political viewpoint on the funding of roads (not mutually exclusive). ——- So, hopefully this response was not boring hyperbole but actual refutation of absurd cognitive dissonance.

    Cars created a huge demand for roads NOT for public utility. Our solution was to make roads a public utility. How would the free market have created a road when competing with depression era works programs making roads? How exactly would you speculate or predict potential traffic when competing with someone providing the same service through taxation? It is not like I would receive my tax dollars back for traveling the private opposed to the public road. This may be the obvious logistical reason you are referring too.

    Greg,

    I think that if roads were private and the costs of the roads were matched to the users of the road via the use of tolls and associations, you may just see that gas consumption would decline. The cost of travel could very well increase and the purpose and utility of rail would come to light in the private market. So, competing with Private Rail would of course be public roads and public rail, which makes private rail a bad investment. However, generating this public rail would result in more gross inefficiency and loss of the tax payers $’s. Hence, bad decision to subsidize roads and the answer is not to now subsidize everything that could possibly compete with a road, but rather to eliminate the subsidy.

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  12. Jeff Dziwulski February 7, 2011 / 5:25 pm

    Cars created a huge demand for roads NOT for public utility. Our solution was to make roads a public utility. How would the free market have created a road when competing with depression era works programs making roads?

    The concept of roads as public utility, and public funding to improve and pave them, predated the Depression, arising in the years prior to WWI due to the combined demands of cyclists (before cars became widespread) and then by auto users.  Initial investment was via appropriations, I think, before the gas tax came into being.

    Presumably roads could be private, which was the concept behind the turnpikes that were built around Dayton during the antebellum era.  But these companies didn’t survive (they didn’t elsewhere), and went out of business or were taken over by the states and counties (this was also the case in Kentucky with the turnpikes).

    So, perhaps the experience with the turnpikes is why the good roads advocates looked to state and local government for improvements?  An interesting historical question.

    Interestingly, for long-distance limited access highways a very early one propsoed for Germany, between Hamburg, Frankfurt, and Basel, was going to be a privately owned toll road.  The engineering was completed for the stretch between Frankfurt and Darmstadt and Mannheim, but then the Nazis came to power and took over the project, which became their first autobahn.

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  13. Ice Bandit February 7, 2011 / 8:05 pm

    (Governor Kasich) shows his contempt for modern times by appointing an all-white cabinet. (Dad)
     
    …….no question, dear Dad, Ted Strickland knew how to pick a diverse administration. He appointed clueless caucasians, incompetents of color and members of the Asian Persuasion who couldn’t find a particular sphincter muscle with both hands and the help of a proctologist and an open copy of Grey’s Anatomy. And the electorate appreciated Strickland’s diversity so much they sent duck huntin’ Ted a one way Greyhound ducat back to Scioto County. Just the other day, dear Dad. the Old Bandito found himself at an assembly that was exclusively caucasian, and taking inspiration from your missive, chided the ensemble for showing contempt for modern times. Gotta’ admit, dear Dad, that it was a unifying moment. Both hockey teams, the fans and the Zamboni driver joined together to give the Old Bandito a beat-down……..

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  14. Greg Hunter February 7, 2011 / 8:08 pm

    He appointed clueless caucasians, incompetents of color and members of the Asian Persuasion who couldn’t find a particular sphincter muscle with both hands and the help of a proctologist and an open copy of Grey’s Anatomy.

    One could apply that statement to Reagan, Bush I, Bush II and Obama….. It does not change…….

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  15. Bubba Jones February 8, 2011 / 8:31 am

    One could apply that statement to Reagan, Bush I, Bush II and Obama….. It does not change……. – Greg Hunter
     
    You forgot to include Clinton on that list as well.  And Carter.  I’m sure we could go waaaay back to make this list complete!!

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  16. Stephen Lahanas February 8, 2011 / 11:48 am

    There’s nothing wrong with privatization per se – I have spent much of my career working as a private contractor to the federal government. The big difference here with what is being proposed is that there will be no oversight. When someone like me works as a contractor on an Air Force project at Wright Patt for example, I and the company I work for are subject to all the same rules and scrutiny which applies to the organizations I support.
    In this case, The Governor has gotten rid of the entire agency so there is no entity to provide oversight – to complete the analogy I was making before it would be as if the DoD were abolished and all warfighting capability were outsourced to companies like Blackwater.
    I think perhaps the worst impact of this action though, which was totally overlooked by the media is that more than 400 Ohio workers will be laid off as the first act of this new “Jobs Ohio” plan. I’ve had occasion to interact w/ folks from the Development organization and they were very professional and were accomplishing a lot for Ohio with what was already a very limited budget. It is extremely doubtful that a much smaller group dedicated not to our interests but the interests of a handful people participating is likely to help bring more jobs to Ohio.

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  17. truddick February 8, 2011 / 10:23 pm

    Ah, Vigh.  If I didn’t know your approximate age I’d suspect you were the product of a White Hat charter school.
    Back when roads were, in fact, dirt paths, they were privately owned and maintained.  Oh, the city streets were public and maintained through tax dollars.  But back a century ago, if you got outside the urban core, you often came upon a gate.  The people who owned the road would come down, ask how far you were going, and would collect a toll.
    There are some (like you, Robert) who think toll booths are a good thing.  No consideration for the fact that they sometimes restrict free movement.  No consideration for the lost time and fuel as traffic gets backed up for an hour-and-a-half at the George Washington Bridge or the Oakland Bay Bridge–or even the minor loss of time and fuel at the turnpikes.  No recognition of the sheer stupidity of the design of interchanges for the Ohio Turnpike–few and far between and sometimes not directly linked to interstates or major routes.
    Big-L Libertarians ignore the fact that if all roads are privatized and no regulations are in place, the road owner can refuse access to anyone.  Want to see the KKK operating some highways in Alabama, Robert?  Guess who won’t be allowed to drive to Selma for the next march.
    This is another instance where an unsound principle, touted on the basis of “freedom”, in real life would wind up being repressive.

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  18. Rick Kaczmarek February 9, 2011 / 1:29 am

    Why is it perfectly okay for “govt” to provide a check, or food, or a housing voucher, or free health care to a person, family or household?  And why is it perfectly okay for “govt” to devote funds to fixing up the Oregon District or part of Brown Street or Grand? 

    Why do you, David, and others, think individual welfare / transfers of wealth to individuals are fine.

    But leveraging government funds in ways that are likely to produce greater returns on monies while improving the community is not okay?

    This is one of the areas where liberal/prorgressive/maverick thinking fails logically.

    EVERY DOLLAR the government spends constitutes the picking of winners and losers.  This line about government not picking winners and losers is being misused by people who misunderstand the admonition.

    Government hires a local landscaper to mow vacant lots.  They have selected a “winner” to the detriment of all other potential landscapers.  Government decides to improve a neighborhood park, that selection, together with where they buy the materials and who they hire to do the installation all constitute the government picking “winners.”

    Truthfully, the BEST scenario would be if the government provided neither assistance NOR resistance to economic development and job creation.  The primary impact of government activity is to ARTIFICIALLY RESTRICT free markets.  So, if welfare is good for individuals, where is the logical point at which it makes sense to say, welfare for THIS group is good, but for THAT group it is bad?

    Seriously.

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  19. Greg Hunter February 9, 2011 / 11:49 am

    Robert and all of those that think government investment in the future is a bad idea.  Ohio throws away the trains on the recommendation of our wonderful elected governor, who worked for Lehman.
     

    Over the years, the firm’s culture shifted from managing money for clients to proprietary trading for itself. A permissive management style increasingly favored short-term gains and unrealized profits, as marked in portfolios, over the sustained health of the company.

    Sound Familiar?  It should if you can connect the dots.  Now the free marketeers will say that the free market “would solve these problems”  Maybe it would but we (USA), nor the world have such a system.  And based on the examples provided would never work.  So the government is put in place to regulate activity to protect citizens from “robber barons”.

    The sprawl related complex (realtors, construction firms) control much of the dialog and legislature and with that they make decisions in their own interests.  The trains will be required as we continue to go into debt to buy and waste something that we import from overseas.  This resource will climb exponentially or if it doesn’t that means our economy will be in shambles and middle class Americans will not afford it or the increase in food costs that it provides.  That it is OIL and the time is past to begin to get off of the product.  It frightens me to think the the American response will go to war instead of do the right thing.  (The War machine is a real “free market approach right?)

    Wikileaks cables have provided some insight on Saudi production and overstatements.

    US diplomat convinced by Saudi expert that reserves of world’s biggest oil exporter have been overstated by nearly 40%

    Rick Kaczmarek
    Nice analogy on the landscapers, but the REASON the government is picking landscapers is due to the fact that people that disliked government convinced government to OUTSOURCE those things that were “not inherently” government.  The City employee used to manage the park or the Wright Patterson employee used to mow the base, but no longer.  I agree that the government picks winners, but only after the winners have picked the government.

    Nan Whaley was backed by a demolition firm, hence more demolition.
    Turner was backed by a Military Government Contractor hence more Military.
    Bankers bailed out and Kasich becomes Ohio Governer.

    BAAAAA like sheep to the slaughter….

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  20. Gary February 9, 2011 / 1:11 pm

    Even though the rest of the industrialized world is building energy-efficient rail transportation- that goes 300 m.p.h.- our governor is convinced that his Wall Street style solution is the answer- instead of building infrastructure that would give us a competitive advantage.
    I’m not all that upset that the railroad idea was laid to rest–I don’t think it would have been efficient economic development for Dayton and OH and wherever it was going to …
    First of all, trains are scary to me–you would die in a wreck–planes are safer!  Cars and buses are unsafe, too; however, I am very pleased with Dayton’s updated and remodeled RTA system / hubs!
    I just cannot see a bunch of people building railroads like John Henry did, LOL!  People don’t get along at any worksite anymore, IMO!
    What will help our economy in Dayton, is for all of us to get along and use our heads in a direction that will make life easier, not more complicated–ok, off my soap box now!

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  21. David Lauri February 10, 2011 / 9:34 am

    Big-L Libertarians ignore the fact that if all roads are privatized and no regulations are in place, the road owner can refuse access to anyone.
     
    Actually, truddick, Libertarians don’t care if people discriminate against classes of people. See the Libertarian Party 2010 Platform, which states:

    We oppose all violations of the right to private property, liberty of contract, and freedom of trade. The right to trade includes the right not to trade — for any reasons whatsoever.

     
    The party platform opposes discrimination by government (see above link, section 3.5), but Libertarians would be perfectly fine with the KKK owning and operating a privately owned whites only toll road.

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  22. Gary February 10, 2011 / 11:35 am

    Speaking of roads, who the heck is in charge of reparing Dayton’s?  Everywhere I go it’s like bumps everywhere, poor laning, especially Woodman Drive by Ascension Church and on down to Stroop, Wilmington and Wayne suck!  The worst is Riverview by the river downtown!
    Seems every road in Dayton needs fixed–are they privatized?

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  23. Greg Hunter February 10, 2011 / 11:48 am

    Gary, basic services will be cut as pensions and bond payments come before taking care of necessary services.  The politicians and people expect perpetual growth, but as energy prices increase, the investment in sprawl requires that more dollars are required to keep the roads, water lines, gas lines in repair.  Dayton and surrounding communities (Ascension is in Kettering) are in a no win situation.  My suggestion is to buy a street legal motor cycle as you will get great gas mileage and be able to take the pounding as roads continue to deteriorate.
     
    Welcome to the third world in America.

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  24. Greg Hunter February 11, 2011 / 5:00 pm

    Why Ohio Gasoline costs more than Colorado.
     

    There is far more Canadian crude trading in the US Midwest than West Texas Intermediate. Most of it is much lower quality than WTI, but the sheer volume of it is enough to depress the price of WTI at the trading hub in Cushing, Oklahoma. The tanks there are full to the top with Canadian oil.
    According to the Canadian Daily Oil Bulletin , at close of trade yesterday, Brent was trading at $100.87/bbl; OPEC Basket Price at $97.59/bbl; West Texas Intermediate at $86.73/bbl; and Western Canadian Select at $60 to $61/bbl.
    If you were running a refinery, which one would you prefer to buy?
    The price spreads are just getting crazy. It’s gotten to the point where the railroads are running 100-car trains of Canadian oil down to California to supply the refineries there.
    I mean, realistically, the difference between Canadian oil sands and California Kern River heavy oil is purely in the myopic eye of the environmental movement beholder. For a refinery, it is all the same sticky black stuff. Only the price is different.
     

    If you are shrewd you will pick refinery stocks that can take advantage of the great difference in Oil purchasing price from the MidWest visa vie the Coastal refineries which have to buy the expensive stuff.

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  25. joe_mamma February 12, 2011 / 9:29 am

    The party platform opposes discrimination by government (see above link, section 3.5), but Libertarians would be perfectly fine with the KKK owning and operating a privately owned whites only toll road. – David Lauri

    Good point.  However, I wouldn’t go so far as to say they would be perfectly fine with it.  I think they would say they have a right to do that, just as they would say that an African American proprietor would have the right to refuse to provide service to a klan member.  Evidently people who aren’t Libertarians think that is okay http://www.youtube.com/watch?v=oknvBclbZMI

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  26. Ice Bandit February 12, 2011 / 11:32 am

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  27. Ice Bandit February 13, 2011 / 6:37 am

    Guess who won’t be allowed to drive to Selma for the next march. (truddick)
     
    ….the next Selma march? When was the last one, 1965? And since the mayor of Selma and seven of the ten members of the city’s governing body are black, whose going to do all this marching? Disenfranchised caucasians? The city’s growing and oppressed eskimo population? Of course there are those who see any southern male as a closet Klansman, but they tend to be products of the northern public school systems……

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