Why Is New York City Planning to Sell and Shrink Its Libraries?

Defend our libraries, don't defund them. . . . . fund 'em, don't plunder 'em

Mayor Bloomberg defunded New York libraries at a time of increasing public use, population growth and increased city wealth, shrinking our library system to create real estate deals for wealthy real estate developers at a time of cutbacks in education and escalating disparities in opportunity. It’s an unjust and shortsighted plan that will ultimately hurt New York City’s economy and competitiveness.

It should NOT be adopted by those we have now elected to pursue better policies.

Sunday, December 30, 2018

NYPL Trustee Stephen A. Schwarzman, With His $1 Billion Salary, Claims Success `NOT Because We’re Smarter’, But Because `We Just See Things Others Can’t See,’ Have Data Others Don’t, And Get Advance Warnings

Its sort of a creepy thought: Seeing what “others can’t see.”  We wondered who else might be unnerved by some of the things in a new Barron’s interview. . .

Stephen A. Schwarzman is the head of the Blackstone Group (and the highest paid CEO in the country- the first $1 billion CEO).  Many are familiar with the fact that the 42nd Street Central Reference Library has awkwardly been renamed after Schwarzman, who, is not exactly about spreading the wealth or being magnanimous to the common man or general population.  He wants the poor to pay more taxes, while he pays, along with others in the hedge fund industry, an exceptionally low rate in taxes due to the carried-interest tax loophole, from which he personally benefits.  He has opposed that loophole's repeal saying repeal would be akin to the German invasion of Poland. And Mr. Schwarzman has also been leading the Trump administration’s initiative to privatize America’s public infrastructure. Mr. Schwarzman is a trustee of the NYPL.  What?  Of course!  What could be more natural than to name a major research library after such a man?

The library was renamed after this living individual (something of a no-no) after Schwarzman transferred $100 million to the NYPL based on his understanding that the consolidating shrinkage of the Central Library Plan was to proceed.  That plan involved selling off major central destination libraries in Manhattan.

Barron’s just released an interview with Mr. Schwarzman.  No doubt the interview is intended to be flattering, as there is little doubt that the parties mutually understood it was to follow the prescriptions of “access reporting.”  See: Barron's:  ‘We Can See Things Other People Can’t See.’ Stephen Schwarzman Talks Blackstone’s Edge, Succession Plans — but Not Trump, by Jack Hough, December 28, 2018

So it was probably meant to be both Mr. Schwarzman’s feint at humility plus, hint, hint, a lure to future Blackstone investors (communicating that he had an inside track) when Schwarzman explained that Blackstone successes (and implicitly his own record-setting $1 billion salary), was “not because we’re smarter,” but because the Schwarzman Blackstone crew “can see things that other people can’t see” and have extra data that others don’t.  Specifically, in response to how Blackstone “finds” what Schwarzman says are “new areas that have good returns for the risk” that appeal to “Blackstone’s DNA”:
That enables us to see trends and patterns and avoid risk and lean into return. We can see things that other people can’t see—not because we’re smarter, but because we have more data.

We have businesses that generate a lot of intellectual capital. That enables us to see trends and patterns and avoid risk and lean into return. We can see things that other people can’t see—not because we’re smarter, but because we have more data.

For example, in real estate, we own major asset classes all over the world. We can tell more or less without consulting anybody what’s happening economically in different locations. We also have private equity in those countries. . . .  We can get advance warnings of when something looks interesting or when to avoid it.
Recently, from research done by Jeffrey Wollock, we learned that, as the Inwood Library is now yet one more NYPL library being sold as part and parcel of the rezoning of Inwood, a Blackstone portfolio company, purchased a major interest in a portfolio of 12 multi-family buildings in the vicinity, both in Inwood and adjoining Washington Heights, an ownership that will likely profit from these City/NYPL plans.  Mr. Schwarzman is a trustee of the NYPL.

Blackstone was also investing in buildings around neighboring Bryant Park when it was expected that the NYPL would sell the Mid-Manhattan library there as a result of the transfer of funds from Mr. Schwarzman that got the 42nd Street Library named after him.  The fact that Blackstone was actually buying up that real estate makes less comically playful the remarks of NYPL president Tony Marx back then on February 1, 2013.   Talking about the Central Library Plan before the Association For a Better New York Mr. Marx said, “little hint,” it would be a good idea to buy up such real estate in the area (and “I think I can say that as long as I don’t actually do it.”)

It is worth mentioning that, just before the NYPL sold the Donnell Library, its first major sale of a library to benefit the real estate industry, before that sale was even publicly known about, there were rumors that Schwarzman’s Blackstone would be involved in the sale, but it is impossible to say exactly what actually then happened behind the scenes.

When Schwarzman crows about the information and things he and Blackstone get to see that others don’t, is it disconcerting that ownership of one of the buildings bordering Bryant Park (1095 6th Ave #25B, New York, NY 10036, aka 3 Bryant Park) made Mr. Schwarzman landlord for Booz Allen Hamilton?. .  Or is it disconcerting that Booz Allen Hamilton is known more than anything for its surveillance work for government (the U.S. contracts out the huge preponderance of its surveillance to private firms, and mainly to just a few firms with Booz Allen Hamilton regarded as the “colossus” of those few), and that Booz has been one of the prime players in the library sell-offs?  That’s because the NYPL trustees hired Booz for that role not long after librarians had proved troublesome for the government in terms of PATRIOT Act surveillance efforts, and shortly after the NYPL’s board (according to its minutes) was advised that it was expected that the federal government was going to “require” the NYPL “to reengineer their Internet service facilities to enhance law enforcement’s ability to monitor and intercept communications.” 

Of course you don’t have to have even a single conspiratorial thought in your head to simply worry about the implication of how, with monopolies and mass consolidations everywhere, the world is increasingly becoming just a few conglomerate firms.  When everything boils down to just a few huge companies, it gets to be just too easy; then it seems like the dots always connect.

And maybe that’s why it should also be disconcerting to read in this article about Blackstone’s acquisition of a controlling interest in a major information company, the main competitor to Blooomberg.  (It will rename the unit “Refinitiv.”)  Schwarzman told the interviewer it was an example of what Blackstone could do, by exercising its special advantage, that “few firms in the world can do”:
    . .  our $20 billion Thomson Reuters (TRI) deal [for a majority stake in its financial-data unit]. We did that in private conversations. There was no auction. We got a chance to study the business. That’s a real advantage.
In theory, acquisition of the “financial-data unit” of Thomson Reuters might not affect the Reuters news `unit.`  The international Reuters news service had its origins in the mid 1800s with the distribution of radical pamphlets distributed by Paul Reuter in connection with revolutions in Europe.  As of 2002, it was reported to be one of the three major new agencies, along with the Associated Press, and Agence France-Presse that provided most of the world news.  Basically, all the major news outlets still subscribe to it.   

In 2008, Reuters was acquired by Thomson (with Reuters staff worrying about continuation of the editorial independence of which it had, historically been fiercely proud, plus already worrying about other overall acquisitions such as this in the future).  In 2009, Noticing New York wrote about the strange competition between Thomson and Bloomberg LLP that, among other things, catapulted the formerly not very significant wealth of Michael Bloomberg, turning him into the richest New Yorker while in office as New York City Mayor.   There is a lot to think about here.

Reportedly, according to an article behind a Bloomberg paywall, in 2016 Reuters went through a restructuring eliminating 2,000 jobs around the world as it sold “its intellectual property and science operation for $3.55 billion to private equity firms” (Onex Corporation, “Onex” and Baring Private Equity Asia, “Baring Asia”) in cash.

Meanwhile, as an enduring part of the NYPL Central Library Plan that Schwarzman helped to push forward with a $100 million transfer of cash, the NYPL is getting rid of the city’s largest science museum.  It will be turned into a comic book museum.  Interesting, what is happening to information in this society.

NYPL officials excused the loss of the science library and its collections saying that people who want science information can get it from the internet.  At the same time, the FCC, is being extremely non-transparent and surreptitious as it tries to eliminate net neutrality, the free and open access to resources on the web.

The Barron’s interview briefly touched upon the possibility that Schwarzman’s Blackstone would convert to a “C-Corp” allowing it to be included in index funds.  Blackstone already files SEC filing as a “public,” company.  Maybe someone else who understands this better wants to comment, but it seems a C-Corp status would mean more filings making public information available.

Traveling with Trump to Saudi Arabia in 2016, Schwarzman brought back $20 billion for Blackstone as seed money for the selling off and privatizing of American public assets.  Asked, in the Barron's interview, about the recently much more obvious moral problems of working with those in power in that government, Schwarzman said:
We deal with the government, and we’ve been doing that for decades. Our approach is to maintain consistent relationships.
Maintaining consistent relationships. . .  Interesting fellow Schwarzman.  Do we all find all this creepy?

BTW:  Libraries are about sharing information so that everybody can see it, not just a few among the lucky elite.

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