Author: Money on the Left

In this episode, we speak with Tyler Creighton about the ongoing struggle to save the Consumer Financial Protection Bureau (CFPB) from defunding and closure at the hands of Russell Vought in the second Trump Administration. Creighton is a lawyer at the CFPB and a member of the National Treasury Employees Union (NTEU), Chapter 335. Before joining the CFPB, Creighton clerked for the Massachusetts Appeals Court and, prior to that, he was an organizer for pro-democracy reforms at Common Cause and ReThink Media. We talk with Creighton about life at the CFPB under the leadership of Vought, central architect of the notorious Project 2025 document and avowed opponent of the agency he now directs. 

During our conversation, Creighton details how, in spite of Vought’s attempts to defund and close the agency, the CFPB continues to survive. In Creighton’s telling, the agency’s endurance owes in no small part to the continuous labor actions undertaken by the NTEU and its members. In February 2025, for example, the union sued the Trump Administration, securing an injunction against Vought’s efforts to close the agency. (Read the judge’s extraordinary Memorandum Opinion here.) Then, in late December, a federal district court judge ruled that the Trump administration must continue to fund the CFPB through the Federal Reserve, contradicting Vought’s absurd claim that the CFPB can no longer seek financing from the Fed because the nation’s Central Bank is operating at a loss.

Despite the NTEU’s string of successes, the fate of the CFPB still remains to be determined. The good news, however, is that there are ways that you can support the bureau as it rounds into its second year of the second Trump Administration. Learn more about the fight to save the CFPB from the CFPB Union website. Follow and share news from the NTEU account on Bluesky. Join the union’s public demonstrations, if you live near or find yourself visiting Washington D.C. You can also help fund the NTEU’s activities by purchasing any number of cheeky items in their online merchandise shop. 

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Billy Saas

Tyler Creighton, welcome to Money on the Left.

Tyler Creighton

Thank you. Glad to be here.

Billy Saas

It is a pleasure to have you. We are looking to talk to you about a lot of things. You work principally now as a lawyer with the CFPB, the Consumer Financial Protection Bureau. Could you just maybe kick us off by telling us a little bit about what that’s like now in January of 2026?

Tyler Creighton

Yeah. The past year at the Consumer Financial Protection Bureau has been just a little bit different than my prior few years at the CFPB. I will say, I am an attorney at the CFPB. I’m here just talking in my own personal capacity. Nothing I say can be attributed to the bureau, representing my public sector union: the National Treasurer Employees Union.

But, yeah, it’s been an interesting year. I joined the bureau in 2022, so I’m actually a relatively new employee compared to a lot of other people that have been there since the start. When Trump got elected, it was a little unclear exactly what was going to happen to the CFPB.

It’s kind of been a little bit of a political lightning rod for its entire existence since 2011. But we didn’t really know what to expect. Oddly, we kind of flew under the radar for the first month. Our former director who had been appointed by President Biden, Rohit Chopra, stayed on until the end of January, and into the first week of February before he was finally fired by the president.

That’s when everything really changed. Trump appointed the architect of Project 2025, Russel Vought, as our acting director. Within days of him being appointed, he had closed down all of our office buildings and kicked everybody out and had sent an all staff email saying, “stop performing any work task, whatsoever.”

Everything just kind of came to a crashing halt and a lot has happened since then. They have been trying to close us down since that first week in February and, although they have really mucked around with the operations of the bureau – despite the best efforts – it is still standing.

I think this is largely in part due to a lot of dedicated workers at the bureau who have been organizing through our union and using litigation to keep the bureau alive as Congress intended.

Scott Ferguson

Can you tell us a little bit about just your own personal history? How did you come to the CFPB? You’re a lawyer. What’s your background? What’s your specialty? What do you do at the CFPB in particular?

Tyler Creighton

Yeah. So, I’m actually a relatively new lawyer. I graduated law school in 2021 and I clerked for a year on the Massachusetts appeals court, and then went directly from there to the CFPB in 2022. I work in our Office of Supervision. I’ve primarily focused on the mortgage market, although I’ve also done some work on student loans and auto loans.

I think a lot of people don’t really know what “supervision” means at the CFPB or “supervision” across other financial regulators. But, at the CFPB, in terms of compliance, we kind of have our enforcement division, which is, I think, what people generally think of when they think of regulators. These are the folks that are running investigations and suing bad actors when they find potential legal violations.

That’s all very public. These lawsuits will be on the public docket and you can read the complaint and you can see all the details. Supervision is very different. It is a confidential process. This is an authority that was granted to us by Congress and the Dodd-Frank act, which established the CFPB and gives us authority to conduct periodic examinations of certain financial companies that are under our authority.

What that means is we request a bunch of information and documents from an institution, and then we have teams of expert examiners who are looking at the information and making sure that policies and procedures of the companies and their functions are all complying with our various federal statutes and regulations. If we identify any problems, we try to resolve the issues in a collaborative process with the companies.

It all remains confidential. For the most part, everything is kind of resolved in that confidential space. It only kind of comes out later if companies are disagreeing with our assessments, or it seems like the conduct is particularly egregious or intentional in which case the issue might end up getting into the enforcement side and then leading to litigation.

I’ve been doing that work since 2022. Unfortunately, as public reports show, that work has more or less not existed since February of 2025. Just hoping that we can kind of get back to actually supervising the companies that Congress intended us to.

Billy Saas

And so that’s just a function of companies, I guess. What side is that lack of continued supervision activity most attributable to. Is that a function of the top down directives from Russ Vought, or is it companies not feeling like they need to participate any longer? Can you talk to us a little bit more about that?

Tyler Creighton

It is directly attributable to Russ Vought stop work order in February that, for all intents and purposes, really hasn’t fully disappeared or really been rescinded.

Scott Ferguson

So what determines what is actionable work versus what must be stopped?

Tyler Creighton

You know, we are civil servants. We don’t go off and sort of just do our own thing. We are directed by political leadership on what our priorities are and what the work is. We have not been authorized or directed to do the supervision work that we had previously been done.

Billy Saas

It’s similar on the enforcement side, I would presume as well.

Tyler Creighton

Yes. I’m not on the enforcement side, but yes, I think public reporting shows that there isn’t enforcement going on. Investigations are not continuing. And you’ve seen publicly that a lot of open litigation has either been dismissed or settled, including a number of open consent orders that companies and the CFPB had already reached and had not yet expired have been terminated prior to the expiration date in the consent order.

Scott Ferguson

We’ve started to talk about the division of labor and the division of the institution a bit. But I was wondering, to the best of your ability, I know you haven’t been there from the beginning, but can you give us a little more detailed sense of when the CFPB arises? Under what circumstances? The specific things it was tasked to do and what it has been doing ever since.

Tyler Creighton

Yeah. So, the sort of neat and tidy story of the CFPB’s founding is that it’s really a product of the subprime mortgage mortgage crisis that triggered the 2008 global financial crisis and then the Great Recession that followed, which, as many people remember, there was kind of rampant fraud in the mortgage markets.

There was a lot of predatory lending that led people to default on their mortgage and then massive foreclosure crisis. And in the wake of that, or really in the in the midst of it, Senator Elizabeth Warren, but then-law professor Elizabeth Warren, wrote a couple of journal articles in like 2007, 2008, that talked about or envisioned a new federal agency that would really be charged principally or entirely with regulating consumer financial products with the eyes of the consumer in mind or the benefits of the consumer in mind.

She kind of analogized, saying “we have agencies to stop unsafe toys and toasters. But we don’t really have that for financial products.” And so she envisioned this agency as kind of being analogous to some agencies that already existed. Those articles resulted in Congress passing the Dodd-Frank act in 2010, which is one of then President Obama and the newly elected Democratic majorities in Congress first major bills.

The idea there was to essentially consolidate a bunch of split and overlapping authorities that are then split across a bunch of agencies and consolidate that all into a single agency that could take a more holistic and dedicated approach with consumers that would be front and center. Then it also added some  new authorities as well.

At this point, I already talked about the enforcement and supervision aspects of the bureau. There’s also the consumer complaint database, which some listeners might have used before. I think there’s been like 5 million consumers who have filed a complaint since 2011 when that started. That’s been a tremendous tool to quickly resolve individual problems between consumers and companies where previously, maybe the company didn’t feel like they needed to do anything, but now there’s kind of this public record out there when consumers are complaining and they feel more compelled. Then, at the bureau, there’s also a lot of market research that folks are doing to identify potential risks and hazards and new products, new financial markets. Then there’s a lot of consumer education resources that the bureau puts out.

In my mind, some of the clearest, concise information on what you should be thinking about when you’re getting a mortgage. Like, here’s step one here, step two… I was working at the bureau at the time, I think it was right before I started working there and was buying my first home and was just like all over the website using the resources, which have been, I think, a huge help for people.

It’s not just mortgages, it’s auto loans, or if you have problems with credit reporting, just a ton of great information.

Scott Ferguson

Is that all still up?

Tyler Creighton

It is all still up. Yeah. I definitely was worried in the early days about a lot of that stuff going away in some way. 

Scott Ferguson

It’s not too woke.

Tyler Creighton

Yeah, it’s practical enough. We haven’t gotten into a lot of the litigation that has been going on, but there is an injunction that’s still in place that is preventing the kind of full shutdown and wrap up of the bureau.

I don’t know to what extent that injunction is planning on keeping up a lot of these existing resources that the bureau has put together over the years.

Scott Ferguson

Can you tell us a little bit more about how the consumer complaint database works? I mean, I’ve never used it, so I have no idea. Is it like a Yelp review? You can just like, have an account log on or is it a little more formal? Do you need a lawyer or something like that?

Tyler Creighton

I don’t know if it’s quite Yelp-review status, but it’s closer to that than like a formal thing where you need to write out a very legalese complaint. It’s very accessible. You can log in and you put the company that you have issue with, you write a narrative about what happened and on the public facing side, if you put in any personally identifiable information that will not appear on the public side of the consumer complaint database, but other people can see what you wrote about, even if they’re just like your neighbor or whatever. There is a rule in Dodd-Frank that the companies have to provide a response.

It doesn’t necessarily say it’s got to be a substantive response or it has to rectify or agree with the consumer. I mean, the consumer can be potentially wrong, but they have to provide a response. By and large, if the consumer has raised a legitimate issue, you look at the company response and the company will have provided some kind of remedy, whether it’s erasing a charge on the person’s credit card that shouldn’t have been there or fixing some inaccurate information on the consumer’s credit report or whatever it is.

Oftentimes the complaint, if it’s legitimate, will result in some kind of action that benefits the consumer. On the bureau side, all of those complaints are taken into account when you’re thinking about enforcement and supervision. Where’s the risk? Sort of like an early kind of warning system to the regulators of where there’s risk, where there’s problems, because obviously the consumers are on the front lines. They know where the issues are and so it’s a great resource for the CFPB to figure out where to dedicate finite resources.

Scott Ferguson

Obviously, the CFPB has a history of contestation around it. This is maybe the most life threatening, so to speak, battle that the institution has faced thus far. It’s not like the first Trump administration was very happy about this institution either. So I was curious if you have a sense of the history of largely Republican challenges before this particular present moment.

I know from doing a little bit of research that there was a court case that had to do with how the director was appointed and the reasons that the director could be removed. So any of this that you can speak to, to just contextualize what’s going on now.

00;17;36;10 – 00;18;08;14

Tyler Creighton

Yeah. There’s a lot of history there. You know, it’s no secret that most politicians on the right and Wall Street banks have not been the biggest fan of the CFPB, and have tried various ways to reform it or get rid of it in whole. There have been two very high profile Supreme Court cases challenging aspects of the CFPB structure.

The first one, which you mentioned, was about the ability of the president to fire at will the director of the agency. If folks been following any of the legal cases going on in the current era, this will be very familiar to people, because we have Supreme Court cases about this very issue with regard to the FTC commissioners (Federal Trade Commission) and also potentially down the road, the Federal Reserve, and the ability of the independence of the fed and whether or not the president can can get rid of fed chairs.

So anyway, back in, I think it was in 2019, there was a challenge to the provision of Dodd-Frank, which said that the director could only be removed for cause. That was challenged. And the Supreme Court struck down that provision. Since that time, the director has been essentially removable at will by the president.

Since that happened, the presidents have used that power. So, when Joe Biden came in 2021, he used it to get rid of the existing director who had been appointed by Trump during his first term. Then when Trump came in in 2025, he used it to get rid of Chopra, Biden’s director.

The kind of more existential case was in 2024. That one challenged the constitutionality of the CFPB funding structure, or funding mechanism. We are a little bit distinct, not entirely unique, but different from a lot of other federal agencies and that we are not part of the Congress’s annual appropriations process. So, you know, all this talk of government shutdown last year, and currently they are trying to get the funding bills together so we don’t go into another shutdown at the end of January here, but the CFPB is actually not part of that. We have a dedicated funding mechanism. Where the director is required to request money from the Federal Reserve who gets money from interest payments and fees, paid by their member banks.

Our directors are required to request money from the fed to carry out our functions. Congress has tapped the total amount of money that we can request, but that funding is just always there. It doesn’t require Congress to pass a new bill each year saying like, this is how much money is available for the CFPB.

The constitutionality of that mechanism was challenged by an industry trade group. Ultimately they lost pretty bigly, in terms of our president, and I forget the exact breakdown, but it was like 7-2 or 8-1 in terms of the breakdown of the Supreme Court justices. They were not able to convince many of the justices, including some that are very far on the right and sympathetic to these types of arguments, that the mechanism was unconstitutional.

We survived that. Then, obviously, more recently we’ve come under the attack of just trying to shut down the whole place by pure legal fiat. Congress hasn’t repealed the agency or anything, but we’re just going to try to shut it down because we want to.

Billy Saas

Well, thanks for that. It brings us nice and up to date. There’s more that we can say about those current court cases. And I want to talk about the union’s efforts, and advancing those cases, and defending the CFPB from those attacks. I want to step back just a little bit.

We mentioned the complaints division or the complaints process that consumers previously had available through the CFPB. In addition to the enforcement supervision, for the complaints, I understand that those would sort of become the grounds for action. Is that correct? Like, on behalf of enforcement or from the CFPB, there could be efforts taken to address those complaints.

Tyler Creighton

Yeah. I mean, so obviously we have finite resources over a rollover of these massive markets with hundreds of hundreds of players, and we have to take in whatever information we can to help focus where we’re going to use those resources. So complaints are one of many different data streams, whether it’s enforcement or people in supervision, that we are using to help identify which companies we should be looking at, which practices we should be looking at.

Sometimes what you get with the complaints is maybe that individual consumer’s complaint was rectified. So they were charged an illegal late fee on their mortgage and the company said, “Okay, great. Yes, we did that. Sorry. We will credit your account,” but they don’t really say anything about if this affects other people or is this a one-off thing?

Was it a systemic problem? You don’t necessarily get that information. The other divisions can kind of use, “oh, there’s this one consumer, maybe there was a couple,” and it sort of indicates, okay, maybe this is more a systemic problem that requires additional looking into and ensuring that it wasn’t just this one consumer who got their issue rectified, but actually all of the impacted consumers got the issue rectified.

Billy Saas

Yeah. So in any case, it’s a line of communication between everyday citizens, consumers, and the government. That’s a highly valuable thing. I wonder if you could say something about where we’re at now with the stop work order and, it is my understanding that the closest equivalent to the complaint line is like individual state attorneys general, right?

If there are bad actors in the financial sector, and maybe you can tell me if there are others, the most charitable reading of the perspective on the argument for closing the CFPB would be like, “there are already enforcement mechanisms in place at the state level.” What exists and maybe help us see through that argument.

Tyler Creighton

Yeah. The consumer complaint database is a very, very powerful tool. I highly recommend that consumers continue to use it even in this time, because I think companies are continuing to respond to it despite the CFPB’s kind of beleaguered status at the moment.

In terms of other regulators out there, if the CFPB’s current trajectory continues and it is not operating at anything close to what it was doing in 2024 and before that, the states will step in to a certain degree. But the attorney general’s offices are already overtaxed on other things.

They also are only responsible for the actions and the residents of their own state. So, you know, if the AG of Massachusetts brings a case because they’ve noticed that some mortgage lender is selling predatory loans, that’s not necessarily going to help the person that is in Mississippi that is also getting predatory loans from the same provider.

It creates this real patchwork where, depending on where you live in the country, you’re going to be given more or less protection from these companies. The bureau has this kind of national outlook and has a lot more resources in terms of lawyers, but we also have economists and people that are familiar with the market and data technologists and all these other people that a lot of state regulators don’t really have. It really helps to identify these new products that are complicated. It’s not necessarily obvious how they work or how they might be harming consumers. I think that’s been really important to have at the CFPB. There’s been a lot of innovation in financial services. And then also, a lot of these states have just come to rely on the CFPB expertise and that they’re going to be there.

So, yeah, again, they’ll adapt, but I think, in the end, consumers will be the ones paying the price.

Billy Saas

If the CFPB continues down the way it’s going, they’re probably not going to rechannel that direct fed funding to the individual states attorney generals.

Tyler Creighton

No. Yeah. Probably not, probably not.

Billy Saas

And so those resources go away and I think it would increase the burden on those states individually, who are, under the current regime, limited to tax revenue and local politics. 

Tyler Creighton

This just reminds me of how kind of nonsensical getting rid of the CFPB is. You know, it all started when Elon Musk’s DOGE (Department of Government Efficiency) folks came in trying to eliminate fraud and waste, or purportedly trying to eliminate fraud and waste. The truth is that, at the CFPB, prior to the current administration, we had returned something like $21 billion or more to consumers through our efforts.

If you break that down in terms of how much money is going back to consumers versus how much money is going to pay for the CFPB’s operating cost, it’s like almost a $3 return on investment for every dollar that goes to the bureau is going to result in nearly $3 going back out to consumers, because we’ve identified some illegal practice and gotten refunds.

So, there’s obviously bloat in the government, and probably some bloat at the CFPB, but like, by and large, the consumers and Americans are benefiting greatly from the relatively small amount of money that was going to the Bureau to keep it running.

Scott Ferguson

So I’m chomping at the bit to hear the story of the DOGE occupation of this. But before we do, I guess I wanted to ask one more preliminary question. I have not studied this document closely, maybe I should have, but Project 2025, which is Vought’s little brainchild. As far as I’m aware, it includes language about what the intention of this administration was when it came to the CFPB. Were people in the agency reading Project 2025 and sort of like, I don’t know, bracing themselves for this or strategizing or not really.

Tyler Creighton

I don’t remember that so much. I mean, there were probably some conversations here or there of people who had taken a peek. I mean, honestly, I don’t. I don’t know if you have looked at it recently, but it’s pretty sparse on the CFPB. There’s not a lot of meat on the bones there. I mean, it kind of gestured that, “Oh, yeah, we should just get rid of this whole thing,” but then it ultimately has like a few bullets that are much less than that. It seems fixated on a completely fabricated idea. I honestly don’t even know where they got this idea from. The civil penalties fund, which is the fund that the bureau operates when we do enforcement litigation and the companies have to pay some kind of penalty to us, and then that gets redistributed back out to consumers.

They have this completely fabricated idea that the penalty fund was just the slush fund for like liberal advocacy groups. That’s like the main thing that it’s focused on in the Project 2025 document. Honestly, I just don’t even know where that comes from. It sounded like there was a minimal amount of consumer education that’s been funded through the penalty fund, absolutely tiny compared to the amount of overall money.

Maybe that went to some groups that are involved in that consumer education. But like to say that it’s just this slush fund for liberal groups and that’s the reason why we got to get rid of the whole thing, it just struck me as really grasping at straws there. 

I don’t think we talked about it too much, but there was a lot of waiting. Elon and company have been talking about taking the chainsaw to the government, and it was unclear what was going to happen because a lot of people at the bureau have been there since close to the start.

They went through Trump one. They thought, incorrectly – now we’ve all learned – that it wouldn’t be something similar to Trump one in that, things changed, things slowed down a little bit, but after some initial kind of bumpy-ness that happens with any change over administration, from what I’ve understood, I wasn’t there so I can’t speak to it from personal experience, but like they were doing similar work to what they had been doing before. Priorities changed a little bit. Maybe they weren’t using some legal theories that they had been using before. But, you know, they were doing good work. I think people kind of thought that something similar would happen, and were obviously proven wrong by that.

But, I think in those first couple of months after the election, while we waited to see what was going to happen, that I think that was sort of the optimistic take.

Scott Ferguson

So walk us through this early timeline of Musk and DOGE first. Is that prior to Vought?

Tyler Creighton

It’s concurrent, really. You’ll have to forgive me a little bit because at this point, it’s been almost a year and a lot of this was like moving quickly. I wasn’t personally one of the people who was in the building when this was all kind of going down. Musk and his folks have been infiltrating other agencies in the lead up to us.

So we had kind of already seen the USAID (United States Agency for International Development) playbook: go in there, take control of all of the computer and data systems and then just start quickly closing up shop.

The exact tick tock of this was, I think it was January 31st or February 1st, Cobra gets fired. Initially, Trump appoints Scott Bessent, the Treasury secretary, as acting director. But on the president’s first day, he sends a message to all staff with six bullet points or something like that, of the work that should stop including enforcement, oddly not supervision.

So we continued to do that.

Scott Ferguson

Is that because he didn’t know about it?

Tyler Creighton

That’s my speculation. But I don’t know for sure. So we continued and then, by the end of that first week of February, the first DOGE people started accessing the building, which is right across the street from the White House in DC. Then Trump appointed Vought right at the end of the week.

He sent out an email saying, “you can’t come into the building anymore,” and then on that following Monday sent an email saying much more explicit things, expanding on the six bulleted things that Bessent said we weren’t allowed to do and just said, “don’t perform any work whatsoever.” Then it was really in that first week under Vought when things were moving very, very quickly, we had been kicked out the building and told not to work.

The union actually organized a very quick action at the building, like that, I think even before it was officially closed. So folks were picketing out front and then Vought used that picketing as the pretext for closing the building, saying that, “my employees feel unsafe coming to the building because a bunch of folks are chanting and holding signs…”

Scott Ferguson

Who are also employees.

Tyler Creighton

Who are also employees, yeah, exactly. In that preceding week – this all kind of later comes out in litigation, we were not totally privy to it at the time – but basically there starts being leaks to members of the union that folks in H.R. are racing to fire everybody, to just completely axe the place in the same way that they did with USAID. Running just exactly the same playbook.

So as that information is trickling out through union members and colleagues, we are getting legal counsel through our national union to figure out what to do about that. They file a lawsuit very, very quickly in that first week and are able to get a temporary restraining order by that Friday immediately following Vought’s appointment and it later comes out when we are arguing for a preliminary injunction. A temporary restraining order is very temporary and so we’re filing for a preliminary injunction, which would hopefully stop firings, stop the shutdown going while the litigation that our union had filed precedes. While we are gathering evidence, while our attorneys are gathering evidence for that preliminary injunction, we get all of the details about what was happening in that first week. I encourage people, if you have a minute to go look at the district court’s opinion when the chief finally granted the pulmonary injunction, that’s just like documenting all of the emails and the meetings and everything that’s happening. They are just absolutely racing to fire 1700 people. It’s up until like the moment on late Friday, there are attorneys in court with the DOJ trying to argue for this temporary restraining order. H.R. is getting emails that there’s this court proceeding happening right now, and they’re like, “no, just get it done. Get the firings out the door, like we need to get them done before the court acts.” It’s like Friday afternoon. They’re trying to race to get them out. The court just got it under the wire to get the temporary restraining order in place before everybody at the agency was fired.

Scott Ferguson

Can I ask a potentially sensitive question which you may not be able to answer, but are the HR folks, they’re people in the agency who do HR? So they’re just sort of following instructions in doing all this?

Tyler Creighton

Yeah. So I mean, DOGE was a small-ish operation. They needed actual people who had expertise and some experience actually working in government and know how things work to effectuate what they wanted to do. So in the government, we have these things called reductions in force, which are effectively like mass layoffs when an agency director wants to change priorities or Congress has cut funding again. None of that happened here.

But like, they were trying to use these reduction in forces to get rid of everybody. They’re using the H.R. people within the CFPB to get that done. You can look at the litigation. A number of people filed anonymous declarations and actually then testified in court about what was going on in these meetings that they were being brought into about, where they were just trying to quickly fire everybody before the court was able to get the restraining order done.

And actually, I forgot an important detail with some of my fellow employees who were actually fired during that first week, because it was horrendous and more uncertain for them. But, yeah, there were successful firings of about 200 of our term and probationary employees in that week of February, while they were racing to get rid of the rest of us.

Fortunately, those folks were reinstated through our litigation. But it was obviously unexpected from them and there was one employee who has a big profile in the Atlantic. She was in her doctor’s office getting a cancer diagnosis when she was illegally fired, or when she received an email saying, “you’re fired.”

It’s not the worst part about it, but just kind of an insult to injury, with these notices, because they were trying to get them out so quickly, they failed the mail merges. It just said, “dear [first name, last name],” instead of like “dear, ‘the actual person’s name,’ you’ve been terminated because your skills and needs are no longer relevant to the work that we do.”

So, yeah, it was a horrendous week, but fortunately, we are still here a year later because a lot of people moved quickly to get into court and stop this.

Scott Ferguson

So what’s been going on this year after the first week?

Tyler Creighton

Yeah, it’s hard to think back on it all. In those first few weeks and months, it was very frenetic and really all-hands-on-deck with people really stepping up to make these declarations to the court where they’re essentially being whistleblowers to talk about what was going on on the inside with these firings.

The union is organizing weekly pickets out in front of our building. We had a number of court dates where we’re organizing events out in front of the court. Everyone was very fired up and working together to kind of support the litigation that was going on inside the courtroom. We weren’t the attorneys involved in it, but the rest of us were outside, telling the public the story about what was going on and why this was important.

I think that slowed down a little bit as the litigation dragged on, but we’re continuing to organize and get our message out about why the bureau is important and why we should be able to get back to work and also about workers rights. These are good working class, well-paid jobs and there’s something to be said about how we’re in the middle of an affordability crisis, and they’re trying to get rid of these jobs that are very secure for people who are in the middle class.

So we’re continuing to fight on against the immediate shutdown. One thing that Congress was successful in doing last year was actually lowering our funding cap. They cut the max funding that we can get almost in half. So we’ve been continuing to work with our legislative partners to hopefully get that reversed and get the cap back up.

Then we’re pounding the drum to get Vought impeached, which is another priority for us as a union.

Scott Ferguson

I have another question. How has the press been in your experience and the collective experience of the union? Does the press ask the right questions? Does it tell the right stories? Does it care enough? Does it focus on what’s going on enough? I’m just kind of curious to hear you talk about your experience precisely with publicity and, like, the politics of publicity around this crisis.

Tyler Creighton

I think publicity around these kinds of major rule of law, democracy stories can be tough for the press, but by and large, I think they have covered this past year of the bureau well. There obviously is the day to day of what’s going on in the litigation. But there’s also been a number of great pieces about what this means more broadly to consumers.

A lot of good consumer snapshots of people who had been helped in the past by the bureau and the fact that if we ceased to exist, that person who was facing foreclosure and was able to grab this lifeline to keep them and keep their family in their house, that won’t be there anymore.

There’s been a lot of good reporting on that front. There’s a lot going on in the Trump administration right now, it’s hard to keep anything focused. Where does the CFPB rank in the list of the many, many other things that are happening right now?

Is it the most important thing? People have disagreements about that. I think I’ve generally been impressed with the coverage. I think one difficulty is like, how do you tell the next part of the story?

It’s like, there’s only so many times you can say, “oh, here’s this consumer who was helped by the bureau, and that help won’t exist anymore,” right? Only so many people can write that story. So what’s the next page in the story as we continue. We’re coming up on the year anniversary of this whole saga.

That’s nothing unique to this particular fight. It’s true for any kind of advocacy policy fight that you’re going to have. Before I became a lawyer, I did communications advocacy for issues around campaign finance and voting rights and we had the same kind of issues on those topics as well.

Billy Saas

Journalists love a news peg. Perhaps the year anniversary will generate some additional impetus for coverage here.

Tyler Creighton

I totally agree with you. It’s something I’ve been thinking about because this conversation’s a good impetus for it. It’s been almost a year since Elon Musk tweeted “R.I.P. CFPB,” a year ago and we’re still here. That can’t necessarily be said for some other agencies that got targeted.

What’s the difference? I think the existence of our union and the organizing around that has actually been pretty key to that. There’s been some allusions in some of the reporting to that effect, but I think it’s a little bit of an untold story that the organizing of the workers themselves has been pretty critical to preserving this agency that Congress created. It might not exist if the union hadn’t been as organized and kind of jumped on the issue as quickly as it did.

Scott Ferguson

Something you told us before we started recording was that Vought is this kind of spectral presence who never shows up. You said you’ve never seen this man, who is your boss. Has anybody seen him at the agency? Presumably Musk actually showed up into the building to occupy it, and people saw him, but, has anybody had direct communication with Vought?

Tyler Creighton

Not sure. Yeah, I have not. Initially we were 1700 people. We’ve lost a lot of people. But like, you know, with organizations of that size, you’re going to get email communications talking about organization priorities and what we’re doing and have broad staff meetings to kind of keep everybody on the same page. That has not been a thing that is happening at the Bureau.

So, yeah, he is the director, but, I can’t say I’ve had any direction from him.

Scott Ferguson

So there’s been more recent litigation and litigation that has gone in the agency’s favor. Back to this funding question, maybe you can tell us about the arguments made on both sides and how this has all played out.

Tyler Creighton

Yeah. It’s funny when you said, “in the agency’s favor,” it actually technically went against the agency, if you think about the agency and who currently runs it. But, yeah, it went in favor of keeping the agency alive and protecting consumers down the road. We secured a preliminary injunction back in March against firings, against contract cancellations, against closing up shop essentially, or to kind of generalize. But, while that injunction has been in place, Russ Vought has not requested any additional funding from the Federal Reserve since he took over. The agency happened to have quite a large balance when he took over, so that wasn’t a problem for a while.

Scott Ferguson

Does that tend to be a regular periodic request, or is it just sort of as needed, whenever?

Tyler Creighton

It’s a little slightly out of my expertise on this, but I think it’s generally been quarterly. I’d have to look back at the statute on whether or not it actually needs to be quarterly or it can kind of be as needed. I think, in effect, it kind of acts as needed.

Prior directors have planned out the year and have a sense of how much money it’s going to be required and then make quarterly withdrawals for that money. But anyway, Vought hadn’t requested any money, so while this injunction against firings existed, we were quickly dwindling our reserves. It was getting to the point where he was saying that the agency wasn’t going to have any more money at some point in early 2026.

The position he was taking was this, novel and fairly ludicrous legal argument that Congress created this dedicated funding for the CFPB by allowing it to withdraw money from the Federal Reserve’s revenue. But, the language that that Congress used was the Federal Reserve’s, quote unquote, combined earnings. To date, that has been understood as the Federal Reserve revenue. So any money that it earns. He took the position that, “Oh, no, actually combined earnings is referring to profits,” which is a weird construction for a government agency that isn’t a for-profit enterprise that’s trying to make profits. But, you know, putting that aside, he took the position that it is the feds operating revenue minus their expenses.

Since sometime in 2022, if you do that calculation, it’s actually a negative. So it’s been losing money, if we were to analogize it to a for-profit institution, which it’s not. So he said, “I’m not permitted to request additional money because Congress hasn’t provided any set aside.”

Why would Congress have said, “okay, we’re going to have this dedicated funding mechanism, but it only works if the fed has profits.” But if it doesn’t, then this agency just disappears for that time. You know, it doesn’t make a lot of sense. But, our lawyers went in and filed a motion to clarify that this novel interpretation, that had not been used before, wouldn’t let the agency off the hook for complying with the preliminary injunction against firing staff, against canceling contracts, against shutting down the agency.

In late December, the district court agreed and said, “yeah, this interpretation of the statute of combined earnings makes no sense. You, Vought, have manufactured this funding crisis, and I am not going to allow this thing that you’ve manufactured totally on your own accord to take you out of the injunction that is still in place.”

Essentially, they are setting up this scenario where you could either request money and comply with the injunction or you could continue to drive the CFPB into bankruptcy and therefore be out of compliance with the conjunction and face the consequences of that. Just last week, Vought  ended up saying, “Okay, although we disagree with your opinion, federal judge, we will request the money.”

So he requested enough money for, according to the letter to the court, for this quarter, which I guess will go until March. So that’s where we’re at now. Concurrently, the preliminary injunction that started this whole thing is under appeal to the full D.C. Circuit Court of Appeals, which will hear arguments in that case in late February.

Billy Saas

We have seen a lot of things over the last year, but administration officials complying with judicial orders is not top among those. Do you have any sense for why Vought  would have proceeded or honored this? I don’t know. Do you have any ideas why?

Tyler Creighton

I don’t really, I haven’t really seen any theories put out there. He obviously didn’t do it happily. He made it very clear that he wouldn’t have done this, if he was able to act on his own accord.

Billy Saas

Well, I’ll say kudos to Russ Vought in this one instance. Compliance. Do more. He could do more.

Tyler Creighton

Yeah. Doing the bare minimum.

Billy Saas

I wanted to maybe return to the point that you mentioned, you’re here as a member of the union. The CFPB is not even 20 years old, but the union that y’all are a part of now, chapter 335, has been around for at least 100 years.

It’s associated with the Treasury. Could you talk just a bit about the union and maybe, by way of wrapping up, give our listeners some sense of what we might or what they might be able to do, and to support the union’s efforts.

Tyler Creighton

Yeah. I won’t be able to speak to the 100 year history of the union.

Billy Saas

Understandable. Yeah.

Tyler Creighton

A bit beyond my knowledge, but we’re a local chapter, 335, of the National Treasurer Employees Union, which represents employees at a number of different agencies across the federal government. As I was saying before, I came to the bureau in 2022. So, I don’t have personal experience with the union’s early days, but as I understand, it was formed towards the end of 2012.

So a little over a year into the existence of the bureau and the history between 2012 and 2020, I don’t get the sense that there was like a ton of agitation going on. You know, it was helpful for workers, but has really kind of transformed, I think once Covid was like dramatically changing workplace norms for the federal government, but also for workers in every sector of the economy.

There were a lot of open questions like, “what are the expectations around work from home?” Making sure that people had correct set-ups at their home offices as they had to quarantine and such. I think there’s just been a lot of good organizing and build-up since then. So there was a lot of work being done. 

This is kind of the tail end of when I’m coming in. So again, I’m speaking primarily from reports from other people, not my own personal experience on this, but, after Covid, as with all companies, it was like, “so what are the rules around working going to be as we kind of get back to a quasi-normal life?”

There was a lot of union organizing around the contract around remote and work from home policies and all that. I think that was a stepping stone to a bigger internal fight around pay and pay equity at the CFPB, which I think one reason why our union has such good strength is that we actually can negotiate on pay and benefits, which is, as I understand, not something that is universal across other federal agencies where their pay is set by the GS (General Schedule) scale and Congress. Our pay is not. It says something to the effect of, “we will be paid in comparable levels to people at the Federal Reserve,” which also has its own payment structure. Despite that language, our pay scale had not changed since the founding of the bureau. Meanwhile, the Fed’s pay scale kept going up.

There was this increasing disparity between the workers at the Fed and the workers at the CFPB, even though the statute said that we should be paid at a comparable level. There was a very big campaign spurred by the union that was very galvanizing for people around rectifying that issue.

Updating the pay scale to bring us closer in line. We didn’t get as far as we were intending, but closer in line to what the pay scale at the fed is, and also to help decrease disparities among similarly situated employees at the CFPB, where there were just these kind of arbitrary pay differences between people who had very similar experiences or had very similar responsibilities.

It was coming out of that that I think just set the union up very well. There were structures in place like good leadership and trust among workers that, when all of this most recent mess started in 2025, we kind of had some communications infrastructure in place to quickly gather intel about what the heck is going on at the CFPB and get in touch with appropriate outside counsel, get them the intel that all the workers are providing and then also get out into the streets and have mechanisms for getting information back out to the workers. Those kinds of early internal organizing efforts, I think, really set us up, even though the current fight is so radically different. There’s also been a lot of bumps in the road as we’ve tried to turn a union infrastructure that was mostly focused on applying pressure to our internal leaders who had their own interests, but at least were listening and receptive and we could sit at the same table with them, to, now, really focusing outwardly because our current leadership doesn’t care about the work life is like. I’ve been trying to get other people outside of the bureau to understand what’s going on and why this fight is important.

But I think it’s been pretty impressive. And I don’t think there’s any doubt in my mind that if the union didn’t exist in the way that it did in February 2025, that we wouldn’t be having this conversation about what the future of the CFPB is going to be. The future remains very uncertain, but it’s still here.

Every day that it continues, it increases the odds that it will continue to exist in the future. I give a lot of props and kudos to the leadership of our chapter to really inspire people. We had pretty good membership going into this.

Just in terms of the percentage of workers who are in the bargaining unit who actually pay membership dues and are considered members of the union, but it just went through the roof, like everybody joined. We’ve opened the merch shop. That’s a very, very long winded response to your question, but in terms of one way that you could support and get involved is we have a merch shop which has some great sweatshirts, hats, shirts, that I see all the time on people that are not from the CFPB. All that money goes to support the union in various ways. In the past, we had used it as resources for employees who had been fired and then don’t have income and were facing other kinds of hardships. So, that’s definitely one way to support the group.

As I mentioned earlier, we are advocating in Congress to increase our funding, cut back to where it was prior to the big beautiful bill, which decreased it. And then I think, most importantly, we got to get Russ Vought out. You know, he’s been terrible at the CFPB and he’s been terrible across the whole government as the head of OMB (Office of Management and Budget). So, you know, we’re continuing to beat the drum for impeaching him.

Scott Ferguson

What would be the legal grounds for impeaching him?

Tyler Creighton

The legal grounds? Well, remind me what the Constitution says about…I should know this as the attorney on the call, but he did the bare minimum by requesting funds back in January. But, you know, for the past year, he’s just been blowing through every legal safeguard around, like, around how you treat workers and firing them and withholding money that had been appropriated by Congress. I think there’s plenty of grounds to say that he’s been derelict in his duties.

Scott Ferguson

For sure. You know, I think one of the biggest revelations for me that’s come out of this conversation is, I became aware of the union and appreciating the work of the union, but not really knowing the extent of it. I don’t think I had a strong sense, and I certainly didn’t know anything about the history of the union, but I didn’t have a sense of the way that union organizing and infrastructure and activity has been constitutive for the survival of this agency.

That’s really inspiring to hear. Maybe sometimes we hear these stories like, “well, you know, one judge made a decision and it’s either good or bad or some crisis happened and people responded,” but I really appreciate this backstory too. It’s really great to hear that y’all were organizing around actually different issues, right?

Like, you were building capacity for a crisis that you didn’t even know was coming, but because you had built this capacity and taken on at least two major problems, when this major, major crisis hit, you were ready. That’s just such an inspiring story and lesson.

Tyler Creighton

Yeah. Yeah. I couldn’t agree more. At the same time, I shouldn’t forget to say that obviously other people have been involved in this outside of the union, which has been very integral. The legal counsel that NTAU (National Treasury Employee Union) retained for this case has been just like some of the best attorneys work I’ve seen.

So, you know, yes, the union’s been very integral in getting the information and doing the outside organizing and getting the message out. But inside the courtroom, our attorneys have been absolutely great. There’s been a number of other advocacy groups, whether it’s the Student Borrower Protection Center or NCLC (National Consumer Law Center) or Public Citizen who have also been involved in the litigation in various ways and then also activating their own members and doing public education around the bureau as well.

So we are not, by any means, the only folks that have been important in this fight. But, I do think it has been a very integral piece of the story and as you’re saying, kind of hidden, I think, in terms of the role that the union has played.

Billy Saas

We’re going to be sure to include a link to the union page and then also to the union merch shop. And speaking of that, I brought up a window here, and I’m going to do something I don’t think we’ve done in any show so far, but your merch is so great that I want to share it and talk about it. This Skully 335 hoodie. Yeah. Tremendous. No artist is credited, but listeners, I would encourage you to go check it out. I’m pretty sure I’m going to get one here as soon as the calls are over. But you have it.

We have some pretty provocative imagery. Can you talk to us about this, to have any context for us? 

Tyler Creighton

I’m, unfortunately, the wrong person to answer this question, because I really was not involved in it, in any way. But the folks that were. Yeah, I don’t know where they came up with the art and who did it. We honestly should make that public on the site, but yeah, it’s not what you’re going to expect from the union merch stuff.

You’re talking about the Skully hoodie, and I don’t know if it’s this specific one, I think there’s a couple of different versions, but my father-in-law has one. He lives in a town up in rural Maine and there’s weekly actions on the bridge over the water in Maine where people gather to protest whatever insanity Trump is up to that week. He’s just wearing his skully sweater out on the bridge with all of the other folks in Maine. So, yeah, there’s a lot of great stuff in there. There may have been more and some of it has been dropped over the times, but there’s also all just a lot of like inside joke type stuff that, if you were following the litigation closely at the time when we were getting all of these revelations about what was going on behind the scenes in these emails and such, there’s a lot of, good content around that as well.

Scott Ferguson

So, I saw a “Fed Up” shirt. Is that actually connected to the organization “Fed Up”, or is that just a slogan that you all came up with on your own?

Tyler Creighton

Again, I don’t know. I’m the wrong person to answer that question. My assumption is that it’s a very common slogan that if you were to be in DC with all the other federal workers, you would see that as a common sign. My guess is that we have just done it because of that. But, there might be more of a backstory to it.

Scott Ferguson

Yeah. Then something else again, we can keep this in or not, but like, I actually think it would be cool to include some of this merch in the art in our episode graphics, you know?

Billy Saas

Yeah. So in that case, we would definitely want to know who the artist is and see if they are down to share for the cover art’s collage work. But, anyway, we are having too much of a blast looking at all this stuff. It’s really great merch.

Tyler Creighton

Yeah, it’s too bad we didn’t do this before Christmas. It’s a great holiday gift. I know a lot of people that were giving it for holiday gifts.

Billy Saas

Yeah, well, there’s all sorts of great occasions. And, you know, you just want to support unions all year round, right?

Tyler Creighton

Exactly, exactly. So yeah. And it says here 100% of the proceeds go to the CFPB Solidarity Fund, which has, as I said, in the past, been used to help workers who’ve been illegally terminated and are facing various financial hardships because of that.

Billy Saas

Well, I just found the Skully 335 bomber jacket, and I’m just even more excited. This is a super, super high note to end on. Tyler, is there anything else you wanted to say before we say goodbye?

Tyler Creighton

No, I don’t think so. We covered a lot of ground today. I hope I didn’t ramble on too much and go into too many rabbit holes, but I appreciate it. I appreciate the time and the focus we could put on the union’s efforts and on keeping the CFPB alive. You know, Congress created the agency before for very specific reasons.

We went through a huge mortgage crisis. A lot of people lost their homes and it’s been doing great work since then, and there’s really no reason to get rid of it. So, we’ve kept it alive for the last year, but obviously we need people outside of the union to help us. So encourage you to get involved in whatever way that is, whether that’s buying some merch or calling Congress and telling them to make sure they don’t let Vought win and kill the agency.

Billy Saas

Excellent. Thank you so much, Tyler Creighton, for joining us on Money on the Left.

Tyler Creighton

Thank you.

* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript. 

We are joined by David I. Backer, associate professor of education policy at Seton Hall University, to discuss his new book: As Public as Possible: Radical Finance for America’s Schools (The New Press, 2025). The right-wing attack on education has cut deep. In response, millions of Americans have rallied to defend their cherished public schools. Backer’s incisive book asks whether choosing between our embattled status quo and the stingy privatized vision of the right is the only path forward. In As Public as Possible, Backer argues for going on the offensive by radically expanding the very notion of the “public” in our public schools.

Helping us to imagine a more just and equitable future, As Public as Possible proposes a specific set of financial policies aimed at providing a high-quality and truly public education for all Americans, regardless of wealth and race. He shows how we can decouple school funding from property tax revenue, evening out inequalities across districts by distributing resources according to need. He argues for direct federal grants instead of the predations of municipal debt markets. And he offers eye-opening examples spanning the past and present, from the former Yugoslavia to contemporary Philadelphia, which hastens us to envision a radically different way of financing the education of all children.

Backer’s book is thus a must-read for anyone interested in building a robust and democratic public education system today and in the future.

Visit our Patreon page here: https://www.patreon.com/MoLsuperstructure

Music by Nahneen Kula: www.nahneenkula.com

Transcript

This transcript has been edited for readability.

Scott Ferguson

David Backer, welcome to Money on the Left.

David Backer

Hi there. Thanks so much for having me. I guess I’m a longtime listener, first time caller.

Scott Ferguson

We are so overjoyed to have you. So we’ve invited you onto the podcast, finally, after many years, to talk about your forthcoming exciting new book, As Public as Possible: Radical Finance for America’s Public Schools that is set to be published December 2nd. Do I have that correct?

David Backer

That’s right.

Scott Ferguson

Cool. We want to dive into this book, but per usual we’d like to invite you to introduce yourself to our listeners a little bit. Talk a little bit about your intellectual, academic background and work and what brought you to this book. I think we’d also love to hear something about your history as an activist and an organizer in educational spaces and potentially beyond. So, the floor is yours.

David Backer

Thank you. Well, thank you again for having me. Again,  I’m a fan of the pod, and I’ve learned a lot from it and a lot from you, Scott, in particular over the years, so it’s great to be with you and with your listeners. About me, I started studying philosophy in undergrad. I guess I’ll start there. I was really into the philosophy of mathematics, logic, that kind of stuff. I don’t know what it was.  I was a terrible math student growing up. I guess I hated math and not only that, one of the reasons I hated math was because if you weren’t good at math, you weren’t smart. I wanted to be smart. Everyone wants to be smart, right? I was made to feel like I wasn’t because I wasn’t so good at math. I hated tests. I hate practical jokes and it really felt like one big practical joke. Like, what’s the answer, you know? So, I really hated it and I hated all the emphasis that my parents put on it growing up.

Scott Ferguson

Were they big math people? Did they work in mathematical professions? My father was an accountant, by the way. Big math and incredible penmanship.

David Backer

Yeah. My grandfather was actually an accountant and my whole family’s from South Brooklyn and, I found out recently, worked in the Empire State Building in the 40s and 50s, but he was actually the nicest in terms of all this stuff. He was the most understanding of all of it somehow. My parents, I don’t know. They had sort of reformed Jewish middle class types of anxieties about having a successful son and being good at math is just such a badge of success that there was a lot of pressure. I don’t know what it was, but I got that from teachers. You get that from everywhere too. 

So by the time I got to college, I took a logic class for a language requirement and the professor said I was really good at it. She ended up being my advisor and I ended up taking a course with her over and over again where she just created her own sort of graduate seminar in lieu of a graduate program in philosophy of math and logic. I also studied continental philosophy and I had a real hatred of the continental analytic divide. I really didn’t like it. I didn’t understand it. We had a little group as undergraduates and we tried to name ourselves. We were in Washington DC, so we called it the Washington Circle. We tried to really do it up, you know. We called ourselves the “New Positivists” because we were positive about all philosophy. We’d get together and have these reading groups, people would give papers on Heidegger and the empty set, or things in philosophy of law. I just really hated how some of these professors on both sides, frankly, were so dismissive of the other when I felt that there were tools on each side that were really great. After that I found I really had a flavor for teaching. I also thought philosophy was great to do with young people and so I was a part of the Philosophy for Children movement.

Scott Ferguson

You were? Get out! Oh my goodness. For years I was intrigued by that. I never joined it, but oh my goodness. We’ll have to talk in more depth about this later. But anyway, go ahead. Go ahead.

David Backer

I think it’s all relevant because I really thought these ideas were liberatory, and I felt like thinking this way could have helped me as a younger person before I got to college both personally and intellectually. We had a high school philosophy seminar where we set up relationships with schools and we had students in the philosophy department go out to the schools and lead discussions about whether or not you’re awake and stuff like that. I got really into teaching and I had a background in the youth movements and the Reformed Jewish movement and I’d gotten a taste for facilitating discussions and learning in a very horizontal way. I really like being in the classroom. My grandmothers were both teachers and so after I graduated, I became a high school teacher. 

I was at a Catholic school in Washington, D. C. for two years and I really loved it. After that, I got a job in Quito, Ecuador, teaching at the American International School there. In South America I really “got” left politics. I didn’t really have a left analysis until I moved to Ecuador in 2008. I’ve been relatively lucky. Speaking of activism, I’ve been thinking about this, and maybe this would be an appropriate place to recount my own background in this way. I have been lucky world-historically. That is to say, when I went to college in Washington DC, I went in 2002. Then, in 2003, there were the marches against the war in Iraq. I moved to Ecuador after that and that was Rafael Correa’s first term. Technically it was a second term, but they passed a new constitution that gave rights to nature and everything. It was really far out. I moved there right during that vote in 2008. So, I was in Quito for a while. I taught high school there. I read Paulo Ferrari for the first time and that really opened my eyes to the space of the classroom in the wider social structure and what I was up to in this sort of neocolonial project. The longtime Ecuadorian teachers at the school getting paid half what I was getting paid as a twenty-something from the States. I was trying to make sense of all this. 

I read Capital for the first time with David Harvey’s videos along with a friend of mine who was an anarchist but also working for the UN as a speechwriter. It also happened at that time in Quito, Dan Denvir and Thea Riafrancos were there. It was cool. I felt I kept wanting to read more and study more and I thought I was gonna be a high school teacher the rest of my life, but I’d been rejected from philosophy graduate programs in my previous attempts to apply to them. I just thought, “well, is there anyone that does philosophy and education? I really like teaching and I like education, but I really like philosophy. Like, can I do both?” There’s a program at Teachers College Columbia. One of maybe two or three in the country. I’ll apply and if they say yes, cool. If not, I’m just gonna teach high school in New York City and figure it out from there. 

They let me in and then I started doing my doctorate from there. But in a continuation of world-historical luckiness, I moved back to New York City in 2010 and then Occupy Wall Street happened in 2011. I became very involved in Occupy Wall Street and the education working groups. I was mostly in Occupy University, but a lot of my closest friends were in the Occupy Student Debt campaign, which then became Strike Debt!, which then became the Debt Collective, which is one of the more powerful, successful kinds of movement groups we’ve seen in the last couple of decades. I was really, really into Occupy. I mean, hours and hours and hours. I never slept at the park because I had a bed in the apartment, but I was there when it got evicted but we kept going. The thing I was most active in was a thing we called the horizontal pedagogy workshop. We held it in Trump Tower, in the private public space of Trump Tower in 20011 and 2012. We met for a full year. We’d meet every Thursday for a couple hours and we came up with a set of protocols that we thought were good like learning and studying methods that were consistent with the Occupy movement. We were there in Trump Tower because we thought Trump represented everything that was wrong with the country. 

Billy Saas

For a little color, where in Trump Tower? Like the lobby? 

David Backer

In New York City, and this was very important to the Occupy movement, there were things called privately owned public space (POPS). Privately owned public spaces are designated by regulation that says if you’re gonna have a big building that you have to have a certain space, like an atrium or a sitting area, that the public can go and sit. I don’t know if it still is part of the building codes. I’m not as familiar with the building codes, but that was the Occupy Wall Street movement’s strategy for occupation, to use this kind of quirk of the building regulations to find these spaces and then just go and never leave. We didn’t occupy it properly because we would leave, but we would come back every week. There was an atrium at 57th and 7th Street in Trump Tower that was privately owned public space. We would just sit in there and do our thing. There were privately owned public spaces all over the city. The Occupy movement had maps where they could direct you to POPS and they encouraged people to go to those different spaces to get the embers of the occupation flowing in other places. 

Scott Ferguson

Did you get harassed? 

David Backer

We were never harassed. We made friends with the kind of cop or the security guard who was on beat. He thought we were just a bunch of weirdos.  No one ever gave us too many problems. I mean, we were sitting there in a circle talking. It was a bunch of nerdy anarchist types. We came up with a set of protocols. There were a bunch of us from different places that were coming at this from different angles; a psychoanalytic angle, Latin American particularly, philosophy for children, a Brazilian angle from my friend, Jason Wozniak, poetry and interpretation angle. We just sort of brought our interest in teaching, studying, and learning. We kind of thought, “well, how can we do this for the movement?” We opened it up to the movement. We said, “if you want to come and study anything or whatever, just come.” We were basically doing the same thing every week. Someone chooses a text, one time the text was the atrium itself, so we just wandered around the building.

Scott Ferguson

Nice. Like Fred Jameson. 

David Backer

Yeah, yeah. Our protocols were very simple. You check in, you say how you’re feeling, and then you write a question for discussion about whatever the text is. Or you examine a text, whatever the text is, then you write a question for discussion. Then we made a list of all the questions. We read the questions out and then we see what happens. We just did that over and over again for different texts and it was transformative for me. I made so many networks, it was my first organizing experience, and I had the first energies of a young person in a movement in a country that hadn’t had a big movement moment like that in a long time. And I still use those protocols today. I still teach with that kind of thinking in mind. This is a really long answer. But you said I could speak at length, right? 

Scott Ferguson

No, I love it. It’s great. This is perfect.

David Backer

The next way in which I was world-historically lucky was, I got my first job after I’d defended my dissertation, which was on the ideology of discussion facilitation. I had used that horizontal pedagogy experience as one case of a series of cases. I did a sort of Marxist psychoanalytic workup on classroom discussion. I got my first gig after defending in Cleveland, Ohio. And it just so happened I was living just a few blocks away from where Tamir Rice was murdered. The Black Lives Matter movement that was emerging at that time in 2014 and 2015, Cleveland was a node of that. They actually had their national conference that next year at my university, Cleveland State University. Now, the way that Black Lives Matter worked, at least in Cleveland, is you really organize with affinity groups, and at that time you call them ally or accomplice groups. There were a bunch of interesting Catholic worker types who were there in Cleveland and I was teaching courses in social foundations of education and also doing teacher-student teacher field evaluations. I would go to the schools and I would observe someone who was learning to become a teacher as they were working with a mentor. I would be the faculty contact. I would meet with the mentor, I’d meet with the student, I’d make sure that they met all of their certification requirements, but also I got to get into these schools and see what the Cleveland schools were like and what Cleveland was like. There was one thing I wanted to mention too, there was this project where I met up with some anarchists. At that time. I was coming out of Occupy, but Occupy, by 2014, had been metastasized into different things. I found some kin who were former Bread and Puppet alums. 

They had bought a house for nothing in this neighborhood of Cleveland called Buckeye. They were calling it an urban homesteading  organizing project where they would go to this house, they’d work on it, but they’d connect with their neighbors. They were white, right? But this neighborhood is like an all black, working class type of place. Buckeye did not appear on city maps. It was literally a disappeared-neighborhood in the city. In my last semester at Cleveland State I was like, “oh, this would be a great thing to do with a class.” So I had a class and I made the class project mapping Buckeye and the educational reality of Buckeye. At first, I was like “everyone has to,” but then the pushback was so immense that I had made it optional. I wanted people to go to the house and meet me at the house and have just a discussion in the house and go to the neighborhood. 

I was thinking of the Black Lives Matter movement while doing this because I had mostly white middle class Clevelanders training to be teachers training to be elementary school teachers. There were young white conservative type women, and I was asking them to go to this sort of township/apartheid area of their city. I literally had a mother of one of these students meet with me and say that this assignment was endangering her health as a mother. She had had brain surgery and she thought that she was so worried about this that she was gonna have a relapse. I had another parent who followed his daughter in a car behind her car when we went to this neighborhood. There were parents who were worried about their students being trafficked by the neighbors, you know just wild stuff. 

Scott Ferguson

They lived in the city?

David Backer

They lived in the city. They were training to be teachers in Cleveland.

Scott Ferguson

Because you hear about this, the people who live in rural small town areas or exurbs where they’re paranoid of the city, but people who live in the city are afraid of having brain disease relapses.

David Backer

The parents live outside the city and the kids are going to Cleveland State. The kids are living in the city because they’re going to Cleveland State or maybe they’re living with their parents and commuting. It’s in and out. There’s cities and then there are cities, right? There are places in every city where you say, “well, we don’t go there.” I haven’t written about that, but I really would love to someday. I was in Cleveland for a while and then I got lucky again because in 2016, while I was in Cleveland and in the dead of winter, I was watching the presidential primaries, and I heard that Bernie Sanders was gonna run. I had read a piece about Bernie Sanders in the New York Times magazine in 2006, and I was impressed with him then.  I remember the kicker to the piece was about how he was concerned with teeth. I don’t know why I remember that, but this was a senator who was concerned with teeth. I was like, “well that sounds cool.”

Kshama Sawant had run and won in Seattle, and it was feeling like a turn. In Occupy, we were not concerned with electoral politics. We were concerned with prefigurative politics. We didn’t want a truck with the state apparatus at all.  We were gonna make the world we wanted and then see what happened. I always remember the story from Denver. I don’t even know if this is legend or if it actually happened, but the occupation there got a request from the mayor’s office to negotiate demands from the occupation. Apparently the occupation agreed to the negotiation but sent a dog as their lead negotiator. That was our attitude. But when Kshama Sawant won I was like, “Oh, that’s cool. Maybe we should get elected too. Like why not?” I feel like that would probably be important.” 

Then Bernie Sanders started running and that was cool, and then Trump was running and that was terrifying and then by the time 2016 came around, we moved to Philadelphia for my first tenure track job. The reason why I feel kind of world-historically lucky to be in Philadelphia in 2016 was that Philadelphia had one of the biggest and most active Democratic Socialists of America chapters. It had about a hundred people, and at that time the DSA was probably about like a thousand members or something. I’m looking for a movement, looking for a place to get involved because, at this point, starting in Occupy, I really wanted my research and academic work to be with the movement, to help the movement, to be part of the movement. It wasn’t going to be about the movement and it wasn’t gonna be from the side, it was gonna be in it. I was gonna try to help if I could.  I was like, “well, this seems like an interesting organization.” Cornell West is on the board and I don’t know, I guess I’m a socialist. I don’t know. But I felt like electoral stuff was cool. They were endorsing Bernie Sanders and they were out on all these strike lines. Verizon went out on a big strike that summer. 

I joined and that was in the spring of 2016 and I actually went to a Brooklyn DSA meeting. We spent a summer back in New York City on our way from Cleveland to Philly and I went to a Brooklyn DSA meeting that was twenty people in a basement of a school. Now I think it’s thousands and thousands of people, right? We’ve just elected a mayor so just thinking about that experience is sort of amazing. But being in Philly and DSA, I had a period of several years of intense factional socialist work. It was oppositional factionalist work, which was unpleasant and I thought it was important, but I caused problems. There were a group of us who were causing problems and we were fighting over what we thought socialism should be and a lot of the lines of that were race class lines. Philly is just a really interesting place to be doing organizing. I did a ton of work there, that brings us up to today. 

When I got to Philadelphia, I wanted to be with the movement and I got a job at Westchester University doing policy and law and education. I was like, “what policy law thing would be great to apply my framework?” At that point I was completing my second big project after the discussion project, which was a rereading of Althusser’s educational theory, which I thought had been severely misinterpreted in the tradition of critical education, and maybe more widely in cultural studies. I was like, “well, it would be fun to apply that framework to what I don’t understand. What do the movements seem to be focused on in Philadelphia?” 

In Philadelphia, they were focused on the school buildings. The school buildings were toxic. There was a teacher who had been diagnosed with mesothelioma, a longtime elementary school teacher, and they attributed it to the untreated asbestos in the school building. The working educators, which at that time were a left caucus of the teachers union, had made toxic schools a campaign priority in their organizing. A lot of the demands were like, how do you get money for the school buildings? We need money for these school buildings. How do you get that money? I thought to myself, “I have no idea. I have no idea how that works and I’m a professor of education. I should understand.” So I started teaching about school finance around 2017 and studying it more closely and then I encountered the bond market for the first time. 

Scott Ferguson

I’m sorry. 

David Backer

Yeah, I know. It’s when you meet the reaper, right?  The last thing I’ll say, and this brings us to when we met, Scott, was in Philadelphia during the pandemic shutdowns in 2020. I would say the most recent very radicalizing moment for me was understanding the possibilities of the municipal liquidity facility and reading more and more about MMT. I had been reading Naked Capitalism and Nathan Tankus since Occupy, really. They were critical of Occupy in various ways, but it was important, because that’s where I got my news. I had been reading about MMT and the blogosphere and all that, but suddenly now to have an interest in school finance, to be focused on the project of school buildings, and the school building financing tied up in this municipal bond market and then have the municipal liquidity facility burst into existence like that  was quite a moment for me. 

I made connections to you and Robert Hockett and Nathan and we started a campaign with our little organizing group, which at that point had actually broken off from the DSA. The campaign was to push the Philadelphia Fed president to advocate for  school districts to be eligible for the municipal liquidity facility to issue low-cost long-term loans directly out of the Fed, backed by the Treasury. We had a call and he got flooded with emails and he took a meeting with us. We didn’t advance because, in 2020, Pat Toomey killed the MLF and salted the earth to some degree. That sort of brings us up to today. I started a newsletter. I’ve gathered all of these experiences in my life, education, philosophy of mathematics, Marxism and now I’m training them on school finance and trying to make it more movement oriented.

Billy Saas

Maybe we can pull back. It seems like from your own personal experience in your long term study, in this book you provide a framework or a sort of diagnosis of how financing for public schools works currently. So can you give us a picture or a sketch of the mess as it is by way of getting us into your very helpful and exciting proposals to fix it.

David Backer

I’ll just add one other thing to my answer, which is that now I moved back to New York City in 2023 and who gets elected mayor? Hey hey! So I’m very lucky.

Billy Saas

You had a rabbit’s foot in that back pocket or something.

David Backer

No, seriously, I was like, “oh, we’re moving back to New York.” I don’t know what’s gonna happen now and look at that. I mean, I’ve got to be able to do it. 

Scott Ferguson

Have you ever inverted the causality? Maybe you’re the causal force. I’d like to invite you to move to my city, if possible. 

Billy Saas

New Orleans, next.

David Backer

This is the justification for a book tour, I suppose.  So, school finance and how it works. It’s not irrelevant to that Mamdani thing because I’ve been in touch with the campaign. I’m sort of peripheral to the campaign, I wouldn’t say that I’m working with it, but because I was involved with it early on on the ed policy side, if the DSA is running a candidate, I just get involved. If people want help with school funding, I just I’m like, “yeah sure, whatever. You want me to write something, I’ll have ideas.” I did that with Nikil Saval’s campaign too, when he was first elected in Pennsylvania. Okay, but you asked about how school finance works and what we should do about it.

Billy Saas

We’re looking for as public as possible. Currently it is not very public. Is that right? 

David Backer

Well, it depends who you ask and what “public” means.

Billy Saas

I’m asking you from New Orleans, the belly of the neoliberal education beast where we have CEOs as principals and whatnot.

David Backer

That district got fully charter-ized by Paul Vallas in the wake of the terrible hurricane.

Billy Saas

Mm-hmm.

David Backer

It’s the only district that’s fully charter-ized. Philadelphia’s the next biggest with a third charter-ized, and guess who was leading Philadelphia schools, Paul Vallis, before he went to New Orleans. School finance and the image that I use in this Baffler piece, which was inspired by reading Scott’s book and teaching it over the summer, school finance is in a straitjacket. The threads of this straitjacket, the belts and the buckles and the sleeves of this thing are made of a a hard-to-comprehend-in-it’s-totality set of government regulations and revenue streams through taxation, borrowing and repayment. In between studying philosophy and mathematics, I think about infinity sometimes. Between every two numbers, there’s an infinity of numbers. It’s like between any two governments, there’s an infinity of governments. Governments, particularly socialists, who over the last ten years have been interested in electoral power, since Socialist Alternative and Kshama Sawant sort of led the way on that.  These governments are essential to understand, but no one understands them in a comprehensive way. You have technocrats at every given level who will understand their little position and their little thing, but not the whole of the thing,

Scott Ferguson

And who’s criticizing it, right? 

David Backer

Who’s critiquing it? If you wanted to think about it dialectically, which I do, you actually have to know where the forces are arrayed and where the pressure points are.  But to do that, you have to understand the thing. Honestly, I’ve met very few people who, number one: understand it comprehensively like that from the school board seat, let’s call it. Or even the teacher union and the school board’s subcommittees, right? In the school boards you have finance committees who review budgets for school districts who will recommend cuts when austerity comes in. Who’s on that subcommittee? I’m just gonna try to zoom out. I’ll paint a portrait here, and start from there. So the subcommittee recommends a series of cuts to a school board, most likely at a meeting attended by the superintendent, who the school board picks. Now, sometimes the school district itself can levy taxes and issue bonds, but sometimes not. Sometimes the school district is just the department of local government, or of the municipal government.  The budget and its borrowing and its expenditure and revenue are limited by its relationship to that government. But sometimes that government is a town, sometimes it’s a county. Sometimes there’s a consolidation. So sometimes there are consolidated school districts that are then subject to different municipal regulations. Sometimes there are regions. There are regional authorities. There are even, in Pennsylvania, intermediate units. But I just learned today at a meeting of organizers in Iowa that there are regional bodies called AEAs, educational associations that are conglomerations of school districts trying to coordinate resources, particularly for special education. We haven’t even gotten to the state level yet. All those things occur within the state government. 

But in the state government you have the Department of Education and its sort of state decisions, its state constitution, its state courts, its state legislature with the state assemblymen and the state senators who all oversee this. Not to mention sometimes there are county courts and municipal courts that become very important in school finance. These state governments also have school finance programs, state grants programs, and then sometimes they have capital programs where they provide aid, sometimes they don’t. The state governments can issue bonds. Now, there are sometimes authorities that issue the bonds for school districts. Sometimes the authorities issue them for individual schools, in the case of charter schools, and sometimes there are borrowing authorities that issue bonds across state lines. There are three states in this country that issue bonds across state lines primarily for charter school and private school capital financing financing. One of them happens to be in Arizona. I was made aware of this recently and it just blew my mind. It turns out this one, I think I want to say it’s La Paz County, but maybe not. There’s a place in Arizona that has a borrowing authority where the municipality gets most of its revenue for issuing bonds for charter schools primarily in Texas, private prisons in Oklahoma and Texas, and surveillance technology. That’s how they finance their capital expenditure.

Scott Ferguson

How does it get routed there? Is it like they offer a certain kind of premium? How do they attract this?

David Backer

Low borrowing costs, and a lot of times these places, if they have technical expertise in a very specific form of public financing like for instance charter school financing, they just become known as a shop that can do that. A history of how that relationship started is definitely worth writing. There are these networks of borrowing authorities and at the state level you can have several borrowing authorities, economic development authorities. Sometimes the county has a borrowing authority. That’s how the school district finances its buildings. In New York it can happen that way a lot, but also in Pennsylvania. A lot of times states will have dormitory authorities for the higher education institutions, private and public, so you can actually get bond statements for Columbia University in New York by looking at the New York Dormitory Authority, which was actually formed in the wake of the 1975 fiscal crisis, which was basically just bonds. 

Nobody wanted to buy New York City’s bonds and no government bailed them out. No bank did either. Typically, at the local level, taxes on property are the ones that are levied. As an answer to your question, is this public? Tell me if you think this is public. School districts or their municipalities will levy a tax on property within the boundaries of that district. That’s how they fund the school upwards of, I think, 45% on average, but the average hides extreme inequity in the sense that you could have an area where the suburbs are wealthy, predominantly white, where 95% is funded through property taxes because their property is so high. Now, is it public education if a student who lives, let’s say, in the south west of Philadelphia, and their mother wants to send them to a school in Upper Darby, and she does that, and then she gets arrested for it. You can’t cross that school district boundary. That’s not for everyone. 

When I think of public school, I think of public school for everyone and it’s certainly not public when you divvy it up like that. There’s a phrase that school districts are fortresses. I think that’s right. This school district can’t be for everyone. There’s a phrase that was bandied about in the neoliberal period under  Bush and Obama, “schools that are good independent of your zip code.” That was their justification for charter schools. But like if you were to just sort of flip that slightly and say like what would it take for every school in every zip code to be a good school? That’s public education. We don’t have a system like that and for all the reasons that I’ve talked about, the federal government only puts in about 8% funding for it. It was anemic and compromised and confused even before Trump started dismantling it. Now, who the hell knows what’s gonna happen? This past July, at the federal level, school districts around the country got an email saying, “oops, you’re not gonna get your payments from the federal government. Sorry.” They ultimately did, but it caused a lot of uncertainty. 

The federal government — just to finish the sort of levels — has only really pitched in for public education in times of war and for its own military and imperial concerns. The first big federal initiative in school funding that we see is in the wake of World War I. When the US decides to get involved fashionably late to the conflict, I suppose. They find that their draft yielded a bunch of very sickly white boys from the country who didn’t know how to read. They were concerned that if they wanted to be projecting power across the world, they better have literate, healthier white men. So they decided, well, maybe we should pony up for some education at that point.  The next big stage isn’t necessarily a war, although it’s a war to some degree, a proxy war against communist revolution, it is the New Deal. You have the New Deal, which is a big bastion of social democratic programs and funding and particularly in school infrastructure. Very exciting reconstruction finance creates the precedent for a lot of the creative thinking today about how we should be doing this. 

As Derek Bell argued, the Brown v. Board of Education decision, which reverses the Plessy v. Ferguson ruling about segregation, the political economic context of that in 1954, a good ten years before what we saw as the civil rights eruption of the 1960s, that happens because a couple of the Supreme Court justices were on a world tour and they kept hearing the same line over and over again, which is, “why do you pose as the country of freedom in the Cold War against Soviet Russia when you treat your people so terribly in segregating particularly black students, African American students in the schools?” They felt like they were losing the Cold War on that message so they thought, “well, we better do something about this.” That’s Derek Bell’s argument. I believe him. 

I think that integration happened because there was an interesting convergence between white capitalists in their fight against communism. Other times, you see the federal government being generous. You see the result of that civil rights movement in the Great Society legislation. Those projects, those educational policies that we know of as the ESEA, Elementary Secondary Education Act, have been diluted and compromised since then. The last big moment we saw was, in the wake of the most recent crises of 2008 and 2020 pandemic shutdown. The thing about education is that everyone’s so worked up about it and everyone wants to have their say, but very few people understand how the money actually flows. 

The reason why certain things happen and other things don’t, I think, is because of these monetary flows. I do not think it’s public. It’s something else. People who get really excited about values like democracy and citizenship and the like will say, “well, we have to protect our public schools.” If you think about the financial values that those schools rest upon, I don’t get as excited. Not as many people are looking at school finance as a leftist, as a Marxist and from these sort of heterodox or political economic frameworks, from the perspective of racial capitalism, or private property as the problem.

Billy Saas

As a parent with a child in an elementary school in New Orleans, but I think this is representative too, one of the probably most common touch points parents and families have with school finance is being constantly solicited by their schools for donations and support. I’ve found it interesting myself, right? I show up to these, they’re good events. They’re fun. But they’re about fundraising. So schools are perpetually in fundraising mode and it reminds me a lot about what we’re talking about with the relative lack of publicity for our public school system. There’s an analog in the public media system, right? 

There’s a similar act in public broadcasting act in the 60s that sort of permits folks to think and talk about things like national public radio as a meaningfully public thing when it’s really supported by charitable donations and philanthropic donations from individuals with a paucity of actual contribution from the federal government. So just to kind of notice the rhetoric of “public” when it comes to these pseudo-public institutions  does a whole lot of work and — like you demonstrate in your book — takes a lot to undo and to separate and demystify.

David Backer

Yeah. I’ll just note something I thought of when you were talking was sometimes the reverse happens, which is something was more public than you thought because it was so decentralized. In the second Trump administration’s dismantling of higher education financing at the federal level, the indirect cost threshold dropped my jaw to the floor when I saw just how much money was flowing into universities from the federal government for all kinds of expenditures. I didn’t think of the university system as being as public as it actually was, but it took a wrecking ball to reveal just how powerful it was. Obviously, it could be way better and whatever, but I didn’t know that that was like that. That’s one of the reasons I wrote the book. 

I started focusing on this stuff and talking about it because I feel like education is something that we all care about very deeply, and it’s an extremely important part of the terrain of political organizing. Historically and now, if you think about the ways in which the right wing is able to kind of cobble together coalitions on issues in education and the like, but without understanding how this stuff actually works. How can you have an understanding of state power? And then how can you then take state power and be effective? One of the writers who I really love about love on municipal finance named Alberta Sbragia has an image in the beginning of her book called Debt Wish from the 1980s and 90s about municipal finance and cities. Her line is like, “people who are interested in politics but don’t understand municipal finance are like doctors who are scared of blood.” I think about that a lot. 

You know, particularly as Mamdani’s taking power now, but I think actually over the last fifteen years or so in the wake of Occupy, which was a wonky movement. One of the things that we read in Trump Tower was Carl Levin’s report on credit collateral debt obligations. In the wake of the 2008 financial crisis we read that report. We read the Senate report. I think that there’s a deep bench, particularly being in New York City now, there’s a deep bench of people who are on the left who now are very interested in this, or have been interested in it for a while, and have the chops to actually really change things, which maybe turns the conversation to what you asked about before in terms of the policies I talk about in the book.

Scott Ferguson

Well, I’d like to get into some of the more fine grained diagnostics that you lay out in the book. There’s the issue of how taxation is set and these mill rates and then there’s the bond market, and then you have a whole section on teacher pensions. I’d like to give some time to each.  Maybe to ease our way into how this totally dysfunctional tax finance system is structured, I’d also like to defamiliarize it by asking you to talk about the kind of historical background, right? It’s my understanding from reading your book that the school districts weren’t always, in all cases, these siloed fortresses, especially as financial zones that were atomized and had to kind of sink or swim on their own because they were integrated into state level finance in a more  robust way. Am I remembering correctly? How do they get from that to this system that is designed to fail around just taxation?

David Backer

You’re sort of asking a historical question. To some degree, I think historians have actually done some of the best work on school finance in terms of this larger project of what I call politicizing it, or activating school finance. They’ve done some of the best work because, in history, you can tell stories and you can tell stories about how it was otherwise. A lot of the historians of school finance have told really excellent stories that show us how things have emerged, but also how they could be different. There’s a slew of historians that I’d want to shout out. Michael Glass has a new book called Cracked Foundations that will really blow your mind about Long Island and the New Deal. But there’s Esther Cyna and Andrew Kahrl and  Kelly Goodman and others doing great critical historical work in this space. Matthew Gardner Kelly wrote a book called Dividing the Public, which has partially informed my little potted history there in the second chapter where I tell this story about how the school district actually as an entity goes all the way back to colonial Massachusetts. That entity has existed to some degree in a relationship with pro private property and private property financing. 

Since then, it is actually an extremely old branch of our government. But with the relationship of that entity to both the region and the state government and the federal government and then the ways in which that entity receives its financing has shifted and manifested differently in different places over time. The story that you’re referring to is that, for a long time, the property tax levied to fund public schools was a white working class victory against a previous system called the poor rates bills, which was a way of financing  school for the poor schools for the poor through tuition paid for by taxes on the poor. It’s called a pauper tax. You declare yourself a pauper and then you have to pay. It’s a sort of tuition, but the state sort of centralizes the tuition monies and pays for these schools. They also relied a lot on philanthropy, churches, and the like. But you know, working classes were like, “no, we’ve got to tax property for this, the property owners should pay and everyone should be able to get schooling.” Those property taxes were levied by the state government and the state government would allot the the funding based on property taxes across the districts and that is a much more redistributive policy than what would end up happening at the turn of the 20th century, which was the districts levying that property tax within their own boundaries. So those district boundaries were not as loaded with the racial capital relations as they were before that levy. 

The other part of the story that I tell is the story of home rule charters and local control and the ways in which municipalities decided to have their own constitutions. In addition to the state constitution, the federal constitution, you’ll have a local city charter, which is essentially your city constitution and how school finance is sort of wrapped up with that. The way I tell it in the book, that home rule movement, which sort of starts in the 1870s and then really booms in the early 20th century, links up with the real estate zoning movement that then also links up with the local property levy that creates the situation that we have today. Some historians recently gave me some feedback which I think is helpful to note, just that home rule was not a uniformly negative thing. There were a lot of victories, important victories, like in the case of the District of Columbia.  where home rule is extremely important for having relative autonomy to be able to provide for your citizens. But I still think it’s part of that story. If you don’t have home rule charters, you don’t have the situation that we have now, which is where places that have very high property values can tax a little bit and get a lot for their kids. But if you can’t afford to live there or you don’t live there, sometimes next door you can’t go. 

There are maps. There’s one called Crossing the Line from New America. New America is an association that has a great map that shows across school district boundary lines just how bad it is. That gets to the mill rate question that you were talking about before. The mill stands for millinesium, which is every thousandth. A mill rate is the number of dollars per thousand dollars of assessed value that a school district or municipality is gonna tax. You all have published great work around the tax revolts and thinking about tax revolts and actually it was from you that I learned about Josh Mound’s really important history of school bond voting that I actually feature in the book too that really just it blew my mind about about the history of neoliberalism and the role of school bonds in that. 

Anyway, you have these situations where if you have high property value, you can set a very low mill rate and get a lot of money. But next door you can have very low property value and have an exponentially higher mill rate to get much less. I think of this as super regressive taxes in my mind because there’s an added element of regression there that doesn’t typically get talked about. Like it’s not just the poor who pay more. It’s not just that. It’s actually that they also get less somehow. The reason I bring all that up is because it puts some context on tax revolt. So, when really wealthy areas with high property values say we pay so much in taxes, they’re talking about that in absolute terms, not relative terms. You know who pays the taxes in relative terms are the diverse working class people. People in places like Reading, Pennsylvania, who have to pay extremely high mill rates on extremely low property value to get a drip for their students in a context of a very ungenerous state government and a historically ungenerous federal government. But again, that’s all historically, all that stuff is contingent. It all changes.  We just have to figure out how.

Billy Saas

You said that school districts are sort of like fortresses, or that is sort of a catchphrase. From your study, from your close looking, from what you’re seeing, it seems like on one hand, as you note several times throughout the book, people are invested in their schools and people love, in many cases, their schools and want to see them be successful. To what extent do you understand the fortress-making of the school districts as a sort of a defense against a siege against their welfare from outside, and to what extent is it a fortress built to preserve the kind of neoliberal practices that we’re talking about? Can we think about the fortress in a couple of different ways as a metaphor?

David Backer

Yeah, that’s a great question. There’s a discourse that is obviously very old in terms of the American Revolution, but then gets taken up in a different way when the Bolshevik Revolution happened in the early 20th century. There’s a discourse of tyranny and totalitarianism that gets taken up around the issue of local control. The idea of local control is the idea that you’re kind of talking about. What are you controlling with local control? What is being controlled by local control? And who is doing that controlling? For who? It’s a very profound question. I thought of a couple things. 

That local control, again, manifests differently at different moments of history. In history, I don’t mean to even just say this sort of linear time, I also mean it in this sort of more uneven way of the present. There are places where the relationship of local control to the state government to the regional government to the federal government are different and differently  configured and are therefore subject to different forces or exert different forces. Also, what is being controlled and what that means to the people doing the controlling changes. 

In every place the story is just a little bit different. It’s just a little bit more complicated than you’d think, given the meta-narratives that we have about the country in terms of deindustrialization, segregation, white flight, these narratives that are helpful for condensing and reducing in some ways, but in other ways when you start to look at specific districts, and specific boundary lines and how those have changed and what those communities have been and who they are, the stories don’t necessarily all match up that way. 

Just as a sort of side point or method point, this is a point that Destin Jenkins makes really well in his work  on the municipal bond market in that book, The Bonds of Inequality, where he says the meta-narratives of urban segregation and de-industrialization actually don’t capture the work of municipal finance and the history of municipal finance. This is a thing that’s operating in its own temporality, in its own way, manifesting in different ways at different times. 

But you asked about the metaphysics of local control or the being of local control. I was gonna answer with this, because I never get to talk about this, the home voter hypothesis. I don’t know if you’ve ever heard of Fischel. This guy named Fischel has a book called The Home Voter Hypothesis, it’s cited widely in economics, in like sort of very straight-ahead economics on municipal finance, public finance type stuff. But when I read it for the first time it was sort of “Wow,” my mind was blown. He writes in a very conversational way. His home voter hypothesis is that, in any given situation where there is a local vote on something that will happen in the municipality, voters are voting as to whether or not the thing that’s being voted on increases or decreases their property value. That’s it. It doesn’t have to do with how wonderful this sewage project is, or how much you need a water treatment plant, or how much we need highways, or how much we need schools. People in the situation that we have now, the configuration that we have now, local control under the situation of local levy of property tax, state grants through sales tax, federal grants through income taxation and the like, what we have now is a situation where the home voters are going to be voting on the capitalization of their asset. 

It’s a very cynical thesis, but when you start to think about it and let it sort of take root, you start to understand perhaps some of the dynamics around local control. So if you have good schools in your school district, there might be higher demand to live within your school district. If there’s higher demand to live in your school district, there’s gonna be increased property values within your school district. If there’s increased property values, then the rich people live there and if the rich people live there, there’ll be businesses to serve those people, and politicians that listen to those people. Then those people in that district want to protect what’s theirs because there’s a wall around it in the form of the school district line. What is that? Racial capitalism. That’s what that is. That’s one of the clearest names that I’ve found for it, because essentially they just want to preserve what they do and what they have, what’s theirs. 

This then comes to bear on all kinds of things and it’s very difficult, although it’s not impossible to combat that redistributively through state courts, which is what the legacy of the civil rights movement has been. In the wake of 1973 court case: Rodriguez, and 1974 court case called Milligan that decided that because the word education isn’t written in the Constitution literally, then the federal government doesn’t really have any obligation to it. Ever since then there’s really been a sense that like “you get yours, I get mine. We’ll see how it all works out.” The communities that can work the system for their benefit do and sometimes that actually involves really high debt loads. You’ll see very wealthy districts with a lot of debt service obligations, because they can borrow and then they can repay it because they have high property values that they can tax. 

The only other way to answer your question to some degree is to think of this investment in schools, as you put it, as having a material aspect and a spiritual aspect. The material aspect is the home voter hypothesis, which is: a lot of a lot of homeowners out there and their biggest asset is their house and so school finance is ontologically tied to the capitalization of their biggest asset. But the other horn of this ontology is the spiritual, and that is their own children and their own children’s experience and what their kids have. Not only what their kids have, but also like what kids have in general. There’s a very deep interest that people have in social reproduction, which is to maintain the continuity of what we do around here. Wherever that “here” is and whoever that “we” is, there are strong spiritual investments in the maintenance and the continuity of that. Schools articulate all these things very tightly together. 

They articulate a desire to maintain the continuity of what we do with the capitalization of your biggest asset. Local control is about controlling all of that, holding on to all of that and not letting it go. I tell my students, who are largely superintendents and principals and people who want to be educational leaders, people will go to these school board meetings and they’re sounding off in the comments, and you’re thinking to yourself, “all I need to do is approve a bond so that we can fix our roof. I don’t know why these people are screaming at me.” They’re screaming at you because what you’re talking about is a threat, potentially, to the capitalization of their most valuable asset and their spiritual commitment to what they think of as being the best for their kids and kids in general in the future. That’s why I use this line in the book. 

I think that this school finance is the sort of weakest link in the chain of racial capitalism in the US. When you hit this link, other things are gonna shake. When you move this piece in the Jenga board of the United States, other pieces are gonna shake. We saw that in the civil rights movement and anytime these boundaries get challenged, it’s like a third rail. It’s like a vulnerable underbelly to this whole structure and I think it’s a big shame that people don’t understand it. But also I can understand because that vulnerability would want to be protected by a sort of broad ruling class who wouldn’t want it to be different.

Scott Ferguson

So, let’s pivot to the bomb market. How does the educational wing of the bond market work and how is it structurally designed to fail?

David Backer

The municipal bond market’s like the most powerful thing people don’t know anything about. James Carvel very famously said that when he was a kid he wanted to be reincarnated as Babe Ruth or the Pope or the Dalai Lama and now that he got state power with Bill Clinton he was like “now I want to be reincarnated as the bond market because you can intimidate everyone.” The thing about this bond market is that it is unique in the world. There’s no other municipal bond. There are municipal bonds in the world, so far as I understand, and this is something I want to study more internationally, but so far as I understand there is no market like the United States municipal bond market. 

According to the most recent estimates I’ve seen, twenty-seven percent of that market is devoted to education, which is the plurality. It’s higher than the category of general purpose. This bond market is devoted in its plurality to educational purposes. Now that’s higher education and Pre-K through twelve.These markets are huge markets. Municipal bond market is a four trillion dollar market. It has 1.5 million issuers which dwarfs the corporate bond market exponentially in its size. Since the Erie Canal, municipalities and state governments have financed their infrastructure through this market in some form or another and it’s been configured and reconfigured in different ways. 

There’s no history of the school bond, I don’t even think there’s a history of the municipal bond in the United States, which there really should be, but there’s certainly no history of this school bond. This is a very old structure. It’s not neoliberal.  It is as old as the Erie Canal and then the competition between state governments in the sort of post-revolutionary period to build themselves up infrastructurally using foreign credit. A lot of times English credit. So you know, the country fights this whole revolution and then finds itself several decades later essentially indebted to the imperial body from which it separated. 

Scott Ferguson

That’s how postcoloniality rolls. 

David Backer

That’s right. That’s how it rolls. The first school bond that I have found in history is in Kentucky in 1837. It’s the earliest date that I’ve found that a school district went into debt that it had to pay back with interest. But you know, the first municipal bond dates back to about 1647 outside of Utrecht, when a dike froze over and the municipality needed to go to a businessman and say, “hey, can you lend us money with interest to fix this dike,” and he was like, “yeah, sure.” It’s still paying out to this day. There’s a ceremony there on the River Lek where they roll out this bond statement from the 1640s. So this is a very old situation and philosophically I want to say that the reason why we have this situation is because of the very fundamental temporal differences in kinds of expenditure. 

This is a problem that I think anyone who is interested in creative financing needs to contend with and contend with seriously. There are different kinds of expenditures. They’re typically called operating expenditures and capital expenditures. The operating expenditure is the sort of regular yearly — in the case of school districts, but for us as individuals could be monthly — charges that we just budget for. So we get income and then we have to pay our rent and we have to pay food bills and we have to pay this and that and that’s a regular thing. Then for firms and for governments, there’s salaries and benefits to pay out yearly. 

But the operating expenditure that is in that regular temporal rotation is very different from the irregular needs of infrastructure and facilities of all kinds. The word that’s used sometimes in the literature is lumpy because the pattern of the need for this kind of project, if you’re thinking about a trend line, there’s a sudden bump and then it goes down, it’s lumpy, because you need a lot of money and a lot of resources up front to be able to complete this project that you might not need to do again for a hundred years in the case of a school building or you know in the case of  cybersecurity infrastructure that you need to put in place like in the case of Los Angeles where they had multiple cybersecurity attacks and they had to take out bonds to be able to finance a cybersecurity system. 

Or, also in the case of Los Angeles, when your state law changes and the statute of limitations on being able to seek relief and damages from sexual predators and sexual  violence is extended, your school district suddenly now is on the hook for upwards of 250  claimants going back in time to be able to pay out the court cases, that’s a huge expense, right? That’s not in your operating expenditures and so in the case of the Los Angeles School District, which I just read about recently, they issued something called a judgment obligation bond or a JOB. A JOB is a bond that is a loan that is taken out to pay judgment to claimants. They had to take out this big long-term bond, but they needed short-term financing for this bond to be able to pay out to the claimants so they got a non-revolving credit agreement with the RBC, the Royal Bank of Canada, to provide short-term liquidity for a longer-term liquidity need for the sexual violence cases. I try to bring in as many cases as I can, but the capital expenditure is a temporal problem. 

It’s a metaphysical problem, which is that things happen at different rhythms. The rhythm of my need for paying rent is different from the rhythm of my need to fix my HVAC system and I knew this too when I owned, quote unquote, a house, that is to say the bank owned it and I was paying the mortgage. That was a whole education too, by the way. The temporality of these needs are irreducibly different and you need to be able to have a financing arrangement that will provide the resources necessary at the right time to satisfy them. 

So if you need to build more schools because everyone’s moving to your school district, like in the case in some places in North Carolina, people are flocking to these certain districts of North Carolina and Virginia too, and they have these needs because so many of their enrollments are actually increasing. They have to build more capacity. How are they going to do that? Now, the cocktail of local property tax, state sales tax, and federal income tax does not come in at the right rhythm. Those are for the operating expenditures. So, what do you do? And I know that in MMT it’s sort of a faux pas to liken this to the individual, but I’ll do it anyway because I think it fits within the context of subnational government. 

If you need to buy a house, quote unquote, or if you need to go to school, you need to pay tuition, or you want to get married, or you want to get a car. These are big capital intensive expenditures that you need to engage in. So how do you do it? Well, in the United States, typically you get a loan and the loan, in this case, the credit that is extended to you, is a solution for the temporal problem of the capital expense. When you have this lumpy need and you need capital up front that is not part of your regular operating needs then you need to be able to get that liquidity from somewhere. The municipal bond market has been the country’s solution to the temporal problem of the capital expense in terms of infrastructure and school infrastructure in particular for 200 years and counting. 

Though they treat this capital problem as, number one: a credit problem, you don’t have to treat it like that as you could treat it as a grant problem, right? You could just say, “oh, you need this? We’ll give it to you.” That’s one way you could solve this problem. That’s why I like talking about it this way. Not only do they treat it as a credit problem, they treat it as a private credit problem. Where they think of the state — the subnational governments — as being like private firms that need liquidity to be able to deal with their capital expenditures. A school district has its page on the Bloomberg terminal and it has its credit rating and it has its yield calculations and its deal structures and the financial consultants and the bond lawyers and all of this stuff. It’s a whole regime that is set up to be able to meet its capital expense needs, which has sort of called forth into being this regime that has held on in one way or another for so long, it’s even survived the most recent Trump budget bill. There were people who were advocating for a law that was put into place that really solidified this situation in the early 20th century, which was under the federal income tax law that exempts interest payments on municipal bonds from taxation.

So if I invest in a municipal bond and then the municipality pays me back with interest, I don’t have to get taxed on that. That is the country’s infrastructure policy. So school districts are essentially competing and they’re under a constant threat of getting their credit ratings reduced, even though ultimately debt service ends up being about eight to ten percent of their yearly budget, which by the way is a lot.The budget officials and the superintendents are nervous that any given movement, anything could threaten the credit rating on the municipal bond market, which would increase borrowing costs, increase taxes, decrease property values, decrease trust in the government and so I think the municipal bond market is, as I say in the book, this hidden force of educational injustice, because a lot of the reasons why a movement will go into a school board meeting and they’ll demand XYZ and then the superintendent and the school board members all look to the CFO or or the budget official or whoever it is and they say, “Can we do this?” He’ll say “no, the credit rating.”  

That one little moment that just feels like, when you hear it, if you don’t know what it means, it feels like nothing. It feels like air or cardboard, something very ethereal, two-dimensional. Both somehow normal and incomprehensible at the same time, and you just sort of go, “okay, fine, let it go.” These are the structures that inhibit change and it’s a very deep problem. It’s a very old problem. It’s such a problem, in fact, it reminds me of that line from the usual suspects, Keyser Söze, “the thing that the devil did was convince everyone he didn’t exist.” It reminds me a bit of that. So yeah, that’s the bond market.

Scott Ferguson

Well, thank you. Obviously, from our point of view, we would want to maximize public credit facilitation in the form of granting that wherein the lumpy temporal horizon of all provisioning would be for public purposes. It would take political contestation and analysis. It wouldn’t be easily solved but we wouldn’t be dealing with this kind of straitjacket, but what you do in the book is you offer both historical and some of your own more contemporary examples of different strategies to put pressure on, or to ameliorate, or to partially overcome some of these obstacles. Maybe we can begin to talk about some of those. I know there’s been legislation, there’s been movements. Where should we start?

David Backer

Yeah. Well, I’m a big believer in — and I think this must come from my reading of Althusser — how you have to take up and take on the terrain as you find it in order to get the transformation that you want. The arrangement of forces that are in front of you are the things that you have to work with to get to where you want to get to. I think some of the policies and tactics or arrangements that I’ve proposed start from that premise. It’s not like what Aaron Benanav is doing now, which is fascinating, which is his work on the multi-criterial economy and the new left review,  communist economics and all this. It’s not that. This is sort of like “here’s how it works, here’s what we could do from within this thing to take it up.” We have to take it up first and then you can take it on. It’s not as though there’s gonna be some kind of revolutionary moon landing that’s just gonna smash everything and then you get to build whatever you want afterwards. The policies I’ve come up with are in that context. 

The first thing I always start with, because it still exists, are the financial disparities programs in the Twin Cities. This is a tax-based revenue sharing program that condenses the disparities between municipalities with differing revenue. It was created by a very plucky former bond salesman turned civil servant in Minnesota. He brought the idea in a briefcase to a pancake house in a meeting in 1968. The story of this program is one that I love telling, but basically what it does is it creates a regional sharing pool and a percentage of the growth in municipal tax bases from year to year — 40% — is put into a pot and then redistributed according to the changing revenues of the different municipalities, such that if you happen to have a bad year or your shopping mall closes down or your real estate, and properties go down, what you have is a pool at the regional level that will be able to compensate a little bit for it. The reason why this thing is kind of magical is it passed by like a single vote in 1971. It’s called the Minnesota Miracle and they called it Municipal Socialism and the like. But it’s decentralized collectivization at the regional level from within this system that we have and I think the more that we can talk about that kind of arrangement and try to adapt it for the different places and regions that we have in the country, the better. 

Which is why, in these different political projects I’ve been involved with, I always come in as this very specialized person to talk about school finance. But in the Green New Deal for Schools legislation that Jamaal Bowman introduced during that very exciting period between 2021 and 2022 in that budget reconciliation process. I consulted on  the white paper that the legislation was written around and one of my little suggestions was to create equity grants that incentivize tax-based sharing across racial and class lines, such that the federal government would be able to incentivize places that have this kind of tax-based sharing with further rewards, granting grants and loans for having that in place. 

Sarah Quinn in her book, American Bonds — that’s a great book too — provides a sort of a sociological history of the bond market in the US. Her finding is, essentially, that the way that you govern federally is through credit. The way to govern in a way decentralized in federalism through credit is to essentially find ways to try to get states and municipalities to do what you want them to do by making it easier for them to borrow. I think trying to encourage places to adopt fiscal disparities legislation like that and even in new and expanded ways, like maybe increase that 40% number. Maybe also do debt sharing, you know, which they don’t do in the Twin Cities. But what if what if you could do debt sharing in addition to tax-based sharing? Because there’s still actually a big difference in those municipalities and the Twin Cities in terms of their death service obligations. Okay, so that’s one thing that I like. 

Another thing that I like, which doesn’t exist anymore, but briefly did, was Vermont’s Act 60 in 1998. That policy is sort of a state level policy. Given the history, it’s sort of a throwback to the days when the state government would collect that property tax. But the state government in Vermont in the 90s didn’t collect the property tax and redistribute it. They did something even a bit smarter, dialectically. They took up and took on this system of local property taxation. Essentially, after there was a lawsuit that said the state was out of compliance with its education clause and its constitution, which is the legacy of the civil rights movement, which are still going today, these state court cases you sometimes read about, how the state is found to be out of compliance with its own constitution. 

That was the civil rights strategy after they lost at the Supreme Court in the 1970s, they had to bring it to every single state. The ways in which education funding has been compensated for across disparity has largely come from the yeoman’s work of lawyers on the ground over periods of decades going with the the the slow machinations of the repressive apparatus trying to get these judges to say that the government’s out of compliance with its constitution, which then pressures the governor and the state legislature to do something about it. There’s never any guarantee that they’re gonna do something about it, but like in Pennsylvania recently, Shapiro’s answer in 2024 to the Supreme Court case victory the previous year was to say, “oh, we’ll just publicly fund private schools more with vouchers.” 

In Vermont they came up with, what I think, is the best system which does the following. We talked about mill rates before, right? Now, the big problem is that some municipalities have a lot of municipal revenue and others don’t. Those municipalities that have a lot of revenue can set their mill rate really low and get a lot. Whereas the other ones can’t, the super regression, right? This policy took that up and took it on. What it said was the state is going to set a high minimum threshold for the mill rate across the board, relatively speaking. So every district has to have a high floor. You can’t just tax really low to get a lot anymore. But also for the districts that don’t have a lot, they only have to tax that level, they don’t have to go much beyond that. So for them it’s a low floor actually. But combine that high floor with a low ceiling for per pupil expenditure, which means that the state determines what the adequate per pupil expenditure is for students in your school district. So you can’t just be spending lavishly on your rich kids anymore. 

Scott Ferguson

No more observatories? 

David Backer

No more natatoriums and ceramic studios and the like. Actually, no, to educate your kids, you just need this and anything beyond that low ceiling goes to the state and is redistributed to the districts with the low municipal revenue. It really put the squeeze on the bourgeoisie there. Because it really puts the squeeze on the property owners with the high property values and redistributes it from within the system of taxation. It only existed for a couple years. The author, John Irving, was so upset by this system that he started his own private school for his kids because he didn’t want them to have trailer park envy, which is a quotation. I think he later felt bad about that, but every time I see John Irving I’m like “ugh.” 

Howard Dean, in the next cycle’s governor’s election, came out against this system. Even though it was actually yielding tons of great results, test scores were going up,  the disparities were being compensated for. In Vermont, the big problem was that you had wealthy ski towns where there were ski slopes and they had a lot of municipal revenue and then very poor farming towns that didn’t have the same property that they could get taxed. The research that I’ve read has shown that it was quite successful. But then they killed it and the conservative won the next governor’s race, basically a referendum on that policy, which the regional ruling class in Vermont came out in force against.  

One of the things that they did was that they started their own network of private donations for their local public schools, such that they went door to door and they asked people to make donations to this fund. The fund would go directly into the school budget, but it was not subject to the state’s limits of Act 60. So they created their own private funding streams for their public schools in order to circumvent this policy. They’ll go to any lengths to not redistribute so that was ended but I think that model creates this kind of imagination that we can work with where I really think it took up and took on the system. 

Another thing I bring up, which I think people are starting to disagree with me about, is Richard Nixon’s idea for a value added tax to fund schools. I just think that’s a cool story, but it’s also a way of thinking about how it might be different. I think maybe having a value-added tax at different levels of production rather than sales taxes, which are excise taxes, even though VATs sometimes happen at the point of sale, but I think that’s still an interesting story that gets us thinking creatively. When it comes to the bond market, there haven’t been a whole lot of alternatives that have existed in history. So we don’t have a lot to work with. I don’t talk about it in the book, but the Reconstruction Finance Corporation is definitely something to look at. Although some people argue it’s just state capitalism. 

James Olson in his history of the New Deal says that was saving capitalism. That informs people down the line, like Saule Omarova and the National Investment Authority, which would have a national investment bank, but I still think that’s a good idea so I try to talk that up as a solution. The Green New Deal for Schools legislation is another great resource. It provides just tons of grants and it expands our understanding from physical infrastructure to social infrastructure. So it starts to include labor costs in the costs of having functional buildings. The National Investment Authority has essentially found a third pillar of the federal financing apparatus. There’d be the Treasury, the Federal Reserve, and then this investment authority. 

From my understanding of it, the risk that’s created from the temporality of the lumpy capital needs across the spectrum of society, because there’s a risk inherent in that because you need to be able to front the capital to be able to pay for that but where’s that capital gonna come from and is it going to be able to be paid back? The more you pool that risk, the better. The National Investment Authority pools it at the federal level. Anytime you need a project, they’re going to deal with the financing, the borrowing, and the lending, and then there’ll be better technical service, pay as you go grants, low-cost grants, long-term grants that finance this stuff. My little contribution to this that I go around talking about a lot involves pensions. The whole last book, the last part of my book, is about pensions because I also think there’s a lot of stuff about school finance that’s taken up by pensions. 

Pensions are huge pools of capital and they serve a very important purpose of meeting the social risk of aging. There’s traditions that think about the pensions that actually have the pensions as the huge public pools of capital for the public’s infrastructure. There’s a story from Singapore where the pensions got involved in the mortgage business to be able to increase birth rates in the country. The pension is now underwriting mortgages and what did the pension decide to do? It started to host singles dating nights so that people could meet each other, have babies, and then buy houses and take out mortgages from the pension. The pension is a great big pool of the public’s money that’s meant to meet the risk of aging and death, which is essentially our encounter with death, writ finance. We can use our resources that we’ve built up to meet death, to fund our life. 

The sort of policy that I like to recommend it comes from something called fiscal mutualism, which is, in the case of schools, and I think it can be in the case of housing or water or other things it could be used similarly, but in the case of schools, the historians Mike Glass — who I talked about before — and Sean Vanatta — whose work on pensions is very good — they found that the teacher’s pension in New York was historically 10% invested in New York school bonds. They named this approach to pension investment, fiscal mutualism, which is the usage of the public’s money for the public’s infrastructure. If you position the pensions in a stronger way against the more traditional underwriters in the bond market, who are the underwriters? Who are the ones that confront that capital immediately? The big private banks and the big investment banks. They’re the ones that have all that capital and they’re the go-betweens between the bondholders and the municipalities and the borrowers.

If you can challenge and take up and take on those underwriters by exerting the force of the pension and trying to have a sort of more just usage of the public’s money, you can actually do that at the subnational level without relying on the federal government at all. Which is why I sort of talk about it more and more because of the fascism that we have. Like in the case of New York City, I’ve been pitching around the idea that the teacher’s retirement system could be an underwriter along with the green banks, de-risking school bonds that would fund green school infrastructure. I call that green fiscal mutualism, where the green bank becomes a dialectically very exciting institution. 

I think a lot of people on the left hear me talk about this stuff and they’re like, “what? Like that’s still capitalism.” I’m like, “well, I mean everything’s dialectical.” What the Green Bank does in my understanding is it’s a reverse charter school. So whereas the charter school is taking public money and putting it in the private sphere for the private provisioning of a public good, the Green Bank is actually wielding private money for the public good and funneling money from the private into the public for the public. I think if you could have green banks de-risking pension purchases, school bonds, then you’d be meeting this climate issue because school buildings emit a ton of carbon but school buildings have also been totally underfunded historically and they’re not safe and they’re not healthy. 

So these are some of the policies I like, some of the things some of the things Dave likes. The other last thing I’ll mention, which I haven’t mentioned in other places, but I hope people pick up on it in the book, is what the school district of Tredyffrin/Easttown, Pennsylvania did in the early 20th century. You had two municipalities: one predominantly white and the other predominantly black. They entered into a jointure to build an integrated high school in 1912. It survived multiple attempts at segregation but these communities got together across race and class lines and said, “we’re going to invest in one another. We’re going to take on this risk together through the jointure and we’re going to build this high school and we’re gonna take on this bond.” It’s a debt that they took on, but they took it on together across these very potent lines of the fortresses. When I tell people like, “well, what if you got what if you got people together across the school district lines in your region and said, let’s do jointures all together to finance each other’s infrastructure?” That would cause riots, right? The wealthy people don’t want to be financing the infrastructure for the non wealthy people that are even their neighbors. They might even be the same sports team fans. In the jointure, I think there’s a lot of possibility.

Billy Saas

Yeah, so this book’s coming out December 2nd, one day after the podcast. So listeners, go grab a copy. But there’s obviously a lot going on. I imagine some of this was on the horizon as you were putting finishing touches on it and in the introduction you addressed the second Trump term.  Also we have what you mentioned as the fortuitousness of your move to New York and, of course, you got Zoran Mamdani elected by moving there.

David Backer

I hate how my retelling of it lends itself to that.

Billy Saas

No, no, I think it’s awesome. It’s good storytelling. We like a little magical realism now and then. Obviously, it wasn’t just the Mandoni campaign. There were a series of wins across the Democratic Party and some are calling it-

David Backer

Katie Wilson in Seattle too.

Billy Saas

Right, right. Some are more exciting than others. Katie Wilson, Mamdani and then, you know, some former CIA people as well. Some are calling it a blue wave and we’ve heard it said that education — and I guess we should shout out Jennifer Berkshire’s post.

David Backer

Which everyone should read. Her substack is called “The Education Wars.” She wrote another book with Jack Schneider called The Wolf at the Schoolhouse Store. She’s great.

Billy Saas

Absolutely. Yeah, so a blog post recently or a substack post basically crediting education with this recent blue wave win. We wanted to just close out by letting you offer your two cents on that.

David Backer

Yeah. Well, I tend to agree with Jennifer. What Jennifer’s picking up on is the fact that this rush on the right to dismantle the public school system as I’ve described it is a threat to the local control that I described. These districts, and particularly in the wealthy areas, predominantly white areas, but not all white, but predominantly, have done generations of work to fortify their worlds, their schools. The fortresses are activated. The fortresses are there. The Trump administration and the voucher movement are coming for those fortress walls. They’re coming for the charter schools. People in these rural areas where there are no private schools want their public schools. They don’t want them to go away and these governments, in their rush to appease the leader, are dismantling the systems that their own constituencies hold very dear. I think she’s picking up on that. 

She has an ear to the ground across the country. I would just say that, if there was anything I was gonna add to that, we’re in a time of great uncertainty. It’s what Adam Tooze calls the polycrisis. While I don’t entirely agree with his conception of it, I do think that his remarks in a lecture last year are helpful, in that, all previous theorizations and concepts come from times of lower parts per million carbon in the atmosphere. Even the very idea that the new is struggling to be born while the old is dying, that idea is too optimistic for what we’re undergoing right now. You know, the time is greatly uncertain. It is very unstable. There are dislocations happening everywhere. I feel like this system that we’ve been talking about is some version of an ancien regime, thinking about the history of revolutions, like Mike Duncan’s podcast. 

We’re getting to that point where this thing is shaking and it’s definitely falling apart. What that presents is a danger and an opportunity. There’s also these other forces that we have to account for in that instability, in terms of inflation, supply shock, pandemic shock, artificial intelligence. These are exciting times. “May you live in exciting times.” The thing is, we have to get together, we have to understand the terrain, and we have to figure out what policies we want when our turn comes to try to steer the chaotic ship through the chaotic sea. I think it’s not just that education will sort of underwrite a blue wave, but actually the waves themselves are very chaotic and the old color schemes are all over the place. 

Zoran getting elected, and Katie Wilson and all these people doing things that you could never have imagined are all on the bingo card. The things that are not on your bingo card are on the bingo card. It’s all the more important to study this stuff very carefully to figure out what we can do to transform the structure and take advantage of the moment.

Scott Ferguson

Well, Dave Backer, thanks so much for joining us. Everybody go out and get the book As Public as Possible:Radical Finance for America’s Public Schools.

* Thank you to Zachary Nosbisch for the episode graphic, Nahneen Kula for the theme tune, and Thomas Chaplin for the transcript.