Good morning.

Friday in Whitewater will be partly sunny with a high of 47. Sunrise is 6:27 and sunset 5:45 for 11h 17m 53s of daytime. The moon is a waning gibbous with 70.8 percent of its visible disk illuminated.

On this day in 1917, the Zimmermann Telegram is reprinted in newspapers across the United States after the U.S. government releases its unencrypted text.

Most of the run-government-like-a-business rhetoric leaves this libertarian blogger cold. There are fundamental distinctions between public and private that the mantra about making both run the same way ignores. And yet, ironically, a description of how private corporate boards work, from Matt Levine, is a good starting point for a discussion of public municipal boards. Levine explains when The Board of Directors Is in Charge (and when it’s not): 

The basic rule is that the board of directors of a company is in charge of the company, and when they are faced with a decision, the directors are supposed to make the choice that they believe is best for the company and all of its shareholders. The shareholders don’t make the decision; the board does.[1] 

Now, the directors are elected by the shareholders, and when the company has a controlling shareholder, the idea that the directors are in charge can feel somewhat absurd. The controlling shareholder — say, a founder and chief executive officer who owns 60% of the stock — can come into the boardroom and say “I want you to sell all of the company’s assets to me for $1,” and the directors will say “no, in our independent judgment that’s a bad idea,” and the founder/CEO/shareholder will say “okay you’re fired,” and she will replace them with more pliable directors. And she can do that, because she has the votes.[2] But still: The directors are supposed to exercise their independent judgment and do what is in the company’s best interests, and if they conclude that the founder/CEO’s plan is bad, they have to say no and get fired. They can’t just say “well, ultimately she controls the company, so we have to do what she asks.” Exercising independent judgment is their job.

I cannot promise that every board of directors of every company sees things this way — I think some directors of private startups see their job as “advise and empower the founder/CEO” rather than “exercise independent judgment” — but the courts in Delaware, where most US public companies are incorporated, definitely see things this way.[3] 

(Levine is always worthy reading — insightful and artful.)

There’s much in this description that one can apply to public councils and boards. 

First, ordinarily, a council or board is, and should be, the primary authority in a public institution. 

Second, they are to make decisions in the public interest (as directors are to make decisions in shareholders’ interests). 

Third, just as some shareholders gain so much leverage over an institution that they become controlling shareholders, so in disordered communities special interests sometimes gain control over a council or board and misdirect its attention and efforts to their own selfish ends.

Fourth, the distinction between private and public action is fundamental: public institutions belong to all, while private institutions belong to those who have ownership interests. In the case of Whitewater, the answer to the question Who Owns Whitewater? should and must be Everyone and Yet No One.  

There should be, and must be, a large space for private activity, but just as all cannot be public in a productive society that necessarily depends on private property, so not all can be private in a society that respects equally the rights of individuals. 

While controlling shareholders may dominate and manipulate a private corporation and its directors, however risky that may be, private residents must not dominate public institutions in the same way.

Reasonable people are able to make relevant and material distinctions between private and public. 

Applied to Whitewater: recently the Whitewater Common Council and for many years the Community Development Authority were run as though this city had a few controlling shareholders who counted for more than others. These controlling shareholders were no better than others, if not in many ways worse. 

There is reason to be concerned that the same special interests (acting as though they are controlling shareholders) are even now plotting a return, first to capture again the CDA and then to capture again the Common Council in the years afterward.

About these scheming men, see The Special-Interest Hierarchy of a Small Town.

Repeated encroachments will only lead to an escalated campaign against their efforts; a campaign against them will not stop until they stop. 

While the city has had a problem with a few residents who have acted as controlling shareholders and catspaw directors, the school district has a different problem: the district has a board that simply will not listen to any shareholders, and is run with, so to speak, a CEO and weak board of directors that allows too much from the CEO and listens too little to the shareholders. 

The city has seen too much influence from a few entitled men; the district has seen too little influence from well-meaning ordinary men & women. 

This, it seems, is the least responsive school board and administration since FREE WHITEWATER began publishing in 2007. (Honest to goodness, I never thought a board and administration would be less responsive than when Steinhaus was administrator, but never say never. See Dr. Steinhaus’s Glass House and Dr. Steinhaus vs. Student: Student Wins!)

I’ll offer a series next week on how we got here, and how to set the district on a better path. 

Jet suit pilots compete in first-ever race: