Exploitation of Detroit's debt [link]
As I recall, the Emergency Managers Act that has been used to place Detroit in the hands of predatory barracudas was knocked down resoundingly by a statewide referendum and then immediately reintroduced by Reptilian legislators and rammed through a second time using highly questionable legislative procedures. Since then, Black communities throughout Michigan have been systematically stripped of their legally elected governments and gutted for the benefits of the corporatocracies involved. Legislative remedies WITHIN the State of Michigan were similarly knocked down by a throughly corrupted judicial system built on family ties and cronyism. The perfect opportunity for our heroic liberal and theoretically black President and his equally heroic and black Attorney General to intervene with the full force of the Federal Government on the side of the common people who put them in power. One would think so if one were a naive true believer in the Democrat establishment. Instead? Not a peep from Washington. How Black America can continue to support these men is beyond me. They are skunks and traitors to everything that Martin Luther King and tens of thousands of Black men and women fought for so heroically in the Sixties. For shame. What appears to be contradictory is in fact completely in alignment with the ruling-class agenda to privatize and financialize everything. The QEs are corporate welfare to bankers and the city bankruptcy is corporate welfare to bondholders/bankers. The logical disconnect is between the surface and the reality, between the rhetoric of freedom and responsibility and the reality of servitude and theft.
2013-05-08 "Disaster Capitalism Strikes as Hedge Funds Circle Near-Bankrupt Municipalities Like Vultures; A troubling pattern emerges as private funds seek to profit from beleaguered cities"
by Jon Queally, from "Common Dreams" [http://www.commondreams.org/headline/2013/05/08-0]:
In Detroit, a once bustling city at the center of the US economy, the hedge fund vultures are circling.
But first, a moment of background, employing Naomi Klein's contemporary classic The Shock Doctrine, which tells the story of how purveyors of aggressive capitalism take advantage of crises and public vulnerability in order to push through neoliberal policies and profit-motivated financial arrangements.
Played out in various spheres before and after the book's publication in 2005, the idea of 'disaster capitalism' has been at the center of austerity politics on both sides of the Atlantic (and around the world) in the wake of the 2008 financial meltdown. And now, in places like Detroit, its taking place in US communities at the municipal level as towns and cities hit hard by diminished economies and the slashing of public services are struggling on the edge of bankruptcy.
But, as reporting by Reuters on Wednesday reveals, one city's pain is a possible hedge fund manager's gain.
As Reuters' Tom Hals explains, large private hedge funds, which once preyed on vulnerable companies ripe for liquidation and restructuring, are now taking aim at wounded cities and counties—with no place beckoning "more than Detroit." [http://www.reuters.com/article/2013/05/08/us-usa-detroit-funds-idUSBRE94704P20130508]
This sudden interest in the staid world of municipal debt comes as these so-called distressed funds are looking for new places to put their money. Lucrative corporate bankruptcies have dried up, thanks in part to the Federal Reserve's policy of low interest rates. [...]
But despite the risks, some are already betting hundreds of millions of dollars that there are big returns in cash-strapped governments.
In Detroit, where a previous ploy of the disaster capitalists has already taken hold in the form of an appointed "Financial Emergency Manager"—a position that strips out local government and puts city decision-making into unelected, bureaucratic hands—the people have almost no political avenue to resist the sale of public assets or the manipulation of city debt [https://www.commondreams.org/headline/2013/03/14-7].
And as Hals notes, "the hedge funds' interest in municipal debt reflects the divergent fortunes of Wall Street and Main Street." He continues:
Distressed debt funds love to jump in when most bail out. But with the coffers of U.S. companies overflowing with cash, there has been a dearth of the debt defaults, bankruptcies and liquidations that such funds normally feast on.
By contrast, a small but potentially growing number of U.S. cities and towns are struggling with pay and pension obligations that they took on in the boom years. As well as Jefferson County, the California towns of Stockton and San Bernardino have recently filed for bankruptcy.
And Detroit's fragile state—and the existence of the city's emergency manager Kevyn Orr—make the city enormously vulnerable and thus attractive to hedge funds.
Detroit was once America's fifth largest city and a thriving center of U.S. industry. Now, its population has plummeted to 700,000 from a peak of 1.8 million, a third live in poverty and basic services such as street lighting have broken down. Michigan Governor Rick Snyder appointed Orr, a corporate bankruptcy expert, in March to take over the city's finances.
Even if the city does not file for bankruptcy, its debt will likely be restructured, providing an opportunity for hedge funds to make a profit. [...]
Financial advisers, restructuring consultants and lawyers who work with the funds have told Reuters they have been fielding calls, digging through documents and even flying to Detroit as they try to pinpoint a profitable investment.
"Everyone is looking for ways into Detroit. It's new and unique," said Marti Kopacz, who founded Brant Point Advisors, which provides turnaround advice to municipal governments.
One of the normally secretive distressed debt fund managers confirmed the funds are circling the Motor City.
But what of the warnings? What does it mean to "liquidate" or "restructure" a city in the same manner you might a failed electronics company or an unprofitable factory?
According to Marti Kopacz, a financial adviser who offers guidance to municipal governments and was interviewed by Reuters for his expertise on the big-money interests circling Detroit: "I think it will be a period of time where the distressed investor community will come to an appreciation that these situations are so very, very different from a commercial bankruptcy," he said.
"Everyone points to the politics but it's even more fundamental than that. If you live in the north you have to take care of the snow and you have to have a police department and a fire department. You can't liquidate a city."
And then, of course, these questions remain: How long will "this period of time" be? And how much damage to the city might be done as the vultures gain "appreciation" whilst snacking on their scrumptious, municipal lunch?
2013-07-19 "Detroit Bankruptcy Takes Aim at Pensions"
by Jane Slaughter [www.labornotes.org/2013/07/detroit-bankruptcy-takes-aim-pensions]:
Detroit hit the Trifecta yesterday—the third in a series of body blows that politicians have landed on the city’s working people. The Michigan legislature passed “right-to-work” in December and gave the governor the right to impose “emergency managers” on cities two days later [www.labornotes.org/2012/12/ten-thousand-aghast-right-work-passes-michigan].
When Detroit’s emergency manager Kevyn Orr announced Chapter 9 bankruptcy Thursday, he was following a predicted trajectory that will lead to further impoverishment and privatization. The bankruptcy will enable an appointed judge to impose further cuts to city expenses and to void union contracts. A prime target for cost-cutting is the pensions owed to 21,000 city retirees and 9,000 active workers. The city estimates its pensions are underfunded by $3.5 billion, and wants to reduce payments to both workers and the bondholders who have lent the city money over the years: equality of sacrifice. Michael Mulholland, vice president of the city’s largest AFSCME local, said city workers are “in a state of somewhere between perplexion and total anger.
Everything they’ve been promised, both contractually and kind of a social contract, is being pulled out from under them. It’s morally indefensible.” Mulholland retired in February, after 29 and a half years in the Water Department. “I could have worked someplace else and made more money,” he said, “but I was told if I worked here I’d have a steady job and in my old age not be in poverty.” The bankruptcy of Detroit, which now has fewer than 700,000 residents, is the largest city bankruptcy in U.S. history. Orr sprung the hurry-up filing yesterday because union pension fund attorneys were scheduled to be in court on Monday, arguing for an injunction against bankruptcy. The state constitution appears to protect public employee pensions: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof and shall not be diminished or impaired thereby.”
But proponents of making city workers bite the bullet note that bankruptcy judges have wide latitude to break contracts.
Tag-Teaming with the Governor and the Banks -
Pundits said other states and cities would look to Detroit as a template for how to manage ailing city budgets. A recent law in Rhode Island specifies that in a city bankruptcy, bondholders must be paid first, before pensioners. Asked if the Michigan legislature could pass a similar law, Mulholland laughed. “If they proposed a law that Detroiters should all be shot,” he said, “some of them would get up at midnight to sign that one.” Governor Rick Snyder has guided the process of putting Detroit through a "consent decree," Orr's rule, and now the bankruptcy.
The Republican-dominated legislature has long been hostile to majority-black Detroit. In November 2012, the state’s voters passed a referendum that threw out a previous “emergency manager” law, which had been used almost exclusively to take over majority-black cities and school districts [www.labornotes.org/2011/03/michigan-law-would-overturn-local-democracy-shred-contracts]. A few weeks later the legislature simply passed the law again.
Although the law requires negotiations with affected parties before a city files for bankruptcy, Mulholland, who was in the talks, said, “It wasn’t negotiations, it was PowerPoint presentations about how bad the situation is. “Orr wouldn’t answer AFSCME’s requests for negotiations, so they went and taped a letter to the door of his office.” As an AFSCME member who had reached the top of the pay scale, Mulholland’s pension is $1,600 a month before health care contributions are taken out. He said exactly how much Orr intends to take from retirees has always been left vague, though union leaders were told health care would be slashed. Two years ago, he said, city officials encouraged workers to retire right away. Now active workers are told to “relax, we’re going after the retirees.” Local 207 is planning a demonstration in downtown Detroit July 25. Orr touts the bankruptcy as a way to improve city services—which often, in the world he comes from, is code for privatization. Water, garbage pickup, an island park called Belle Isle, and the Detroit Institute of the Arts have all been mentioned as potential saleable items. “The only thing they’re going to ‘improve’ is somebody’s bottom line,” Mulholland predicted. General Motors, which is headquartered downtown, said it wouldn't be affected by the bankruptcy. Apparently, with Snyder—who ran on his record as a businessman—in charge, business is going to be just fine.
2013-07-18 "In Detroit Bankruptcy, It's the Poor Who Lose City's rush towards bankruptcy spurs fears of further privatization, service gutting, poverty"
by Sarah Lazare by "Common Dreams" [www.commondreams.org/headline/2013/07/19-4]:
Update: Ingham County Circuit Judge Rosemarie Aquilina ruled Friday afternoon that Detroit's bankruptcy filing is "unconstitutional" and must be withdrawn [www.huffingtonpost.com/2013/07/19/detroit-bankruptcy-unconstitutional_n_3624518.html].
The ruling, came after lawyers representing the city's pension funds won an emergency hearing to block the bankruptcy filing.
Michigan Attorney General Bill Schuette said the state will now request a hearing with the Michigan Court of Appeals.
Earlier: The Detroit emergency manager's filing of city bankruptcy Thursday sparked fears that the impoverished municipality is set to go barreling towards more privatization measures that will further devastate the city's poor [www.commondreams.org/headline/2013/07/18-9].
In the largest Chapter 9 bankruptcy case in US history, the move will allow the city to decimate benefits and pensions for city workers and retirees—the city's 'unsecured' lenders— while gutting public services and diverting public dollars to pay off the big banks who own much of the city's debt [www.newyorker.com/online/blogs/johncassidy/2013/07/detroit-bankruptcy-filing-raises-big-questions.html].
Unions charge that emergency manager Kevyn Orr—with the support of Michigan Governor Rick Snyder—rushed into bankruptcy to subvert democratic process and avoid the Michigan constitutional mandate requiring municipal governments to keep their word on pension contracts with retirees [detroit.cbslocal.com/2013/07/19/union-attorney-pensions-in-jeopardy-after-detroit-bankruptcy-filing/]. American Federation of State, County and Municipal Employees president Lee Saunders declared in a statement released immediately after the decision [http://www.afscme.org/news/press-room/press-releases/2013/statement-by-afscme-pres-lee-saunders-on-detroit-bankruptcy-filing]:
"Governor Snyder’s plan to suspend democracy, drive one of America’s largest cities into bankruptcy and deprive workers of their hard-earned retirement security, moved dangerously closer to reality today when without a single negotiation with unions, workers or retirees, Snyder authorized Detroit’s financial manager to file for bankruptcy."
Orr—appointed by Governor Rick Snyder last March—has already been blasted for advancing a Republican-led state takeover of city government and pushing a corporate agenda of privatization that further devastates Detroit's poor and disenfrachises the city's majority African-American voters [http://www.commondreams.org/headline/2013/07/18-9].
The New Yorker reports that Michigan voters signaled their disapproval of bankruptcy filings for Detroit [http://www.newyorker.com/online/blogs/johncassidy/2013/07/detroit-bankruptcy-filing-raises-big-questions.html]: [begin excerpt] Last November, Michigan voters, fearing the possibility that Snyder would force bankruptcy upon Detroit, voted in a referendum to repeal the law that gave him the power to appoint an emergency manager such as Orr. Snyder subsequently used a lame-duck session of the G.O.P.-controlled state legislature to force through a new law giving him similar powers to those in the law that the voters had just struck down. [end excerpt]
The unelected manager, who is a former corporate bankruptcy lawyer [www.huffingtonpost.com/2013/07/18/detroit-bankruptcy-keyn-orr-federal-chapter-9_n_3619099.html], wielded his near absolute 'emergency' powers since taking up his position to push forward plans to cut off poor neighborhoods from essential services and privatize transportation, streetlights, and even garbage pickup throughout the city [http://detroit2020.com/2013/06/27/the-emergency-manager-and-the-neighborhoods/]. Nothing has been safe from his plan for rapid privatization: he was even considering selling off the city's esteemed art museum [http://www.economist.com/news/united-states/21580490-suburbs-and-city-disagree-motown-steps-degas].
Nearly 60 percent of Detroit children live in poverty and 33 percent of all land sits vacant in a city where more than 80 percent of all residents are black. Half of all streetlights are non-functional, and a majority of public parks have shut down [http://www.economist.com/blogs/democracyinamerica/2013/07/detroit-files-bankruptcy].
2013-03-23 "Detroit EFM Kevyn Orr to be welcomed with civil disobedience and mass protests"
by Gus Burns
DETROIT —Rev. Jesse Jackson on Friday called for mass protests in response to Gov. Rick Snyder's appointment of Emergency Manager Kevyn Orr, and it appears he may get his wish.
Rev. Charles Williams II, pastor of King Solomon Baptist church and the Michigan leader of Al Sharpton's National Action Network, said 657 people, according to the sign-in sheet, attended a emergency manager mobilization meeting at his church Saturday.
Reporters were excluded from a portion of the meeting, which leaders spent discussing civil disobedience tactics, training for activists and other topics Williams said participants didn't want public.
Williams called an incident involving a reporter who became angry after being told to leave "very unfortunate."
When Orr arrives at the Coleman A. Young Municipal Center Monday, he'll be greeted with a protest planned near the Spirit of Detroit statue at 11 a.m.
Another group that attended the mobilization are planning a "citizen escort" for Orr, Williams said, adding, "I'm not necessarily clear on what that is."
Williams said residents can expect more highway protests, what has been coined "the slowdown in Mowtown," where activists drive along Detroit Highways in processions, often with signs, at intentionally slow speeds to cause traffic jams.
On Monday, Williams said he'll be leaving town from Eastern Market on buses with hundreds of others destined for the Cleveland Office of Jones Day, the law firm Orr resigned from — and which has been selected as the city's restructuring counsel — for a protest.
Some, including Williams, are calling the close relationship — even though Orr was adamant that he pulled all of his assets and interest in the firm — a conflict of interest.
After the new emergency manger law takes hold on March 28, Orr will have the power to approve the lucrative legal contract with his prior employer. The contract was not presented to City Council for approval.
Or began working for Jones Day, one of the largest law firms in the world, in 2001. He planned to resign the day after he was announced as Detroit's emergency manager.
"Our thought is it's better to go to Jones Day," Williams said. "The reality is Jones Day is in charge of the restructuring and he works for Jones Day.
"When his time is up, he'll go back to Jones Day."
Perhaps the most meaningful portion of the activism is the filing of a federal lawsuit alleging the appointment of Orr and other emergency managers is unconstitutional.
A march beginning from 600 W. Lafayette to the downtown courthouse on Fort will accompany the filing, said Williams.
"We need federal intervention."
photo caption: "Emergency manager opponents mobilize at King Solomon Baptist Church in Detroit." from Rev. Charles Williams II
2013-03-15 "Detroit Emergency Manager Scheme Under Fire"
from "Institute for Public Accuracy (IPA)"
A nationwide consortium, the Institute for Public Accuracy (IPA)
represents an unprecedented effort to bring other voices to the
mass-media table often dominated by a few major think tanks. IPA works
to broaden public discourse in mainstream media, while building
communication with alternative media outlets and grassroots activists.
WASHINGTON - March 15 - On Thursday an emergency manager was named for Detroit, Kevyn Orr, a partner in the Jones Day law firm.
Available for a limited number of interviews with major media, Stampfler is former emergency manager of Pontiac, Michigan. He said: “I do not believe emergency managers can be successful — they abrogate the civic structure of the community for a period of years then return it virtually dismantled for the community to attempt to somehow make a go of it. The program provides no structure for long term recovery, and that is why most communities slide back into trouble, if they experience any relief at all — a vicious cycle. The Public Act is not sufficient and the state bureaucracy isn’t up to a performance offering any significant success — as can be noted from the communities repeating.”
General counsel for the Detroit NAACP, Hollowell said today: “The new emergency manger comes from a firm that represents Wells Fargo, which is the leader in forecloses in our state; which participated in one of the largest fraudulent robo-calling schemes — they’ve forced people out of their homes and then don’t pay property taxes on the properties. It represents the Amway corporation, which got ‘right to work’ through the legislature. It represents Bank of America and Lehman, whose actions sunk our economy and then got billions in tax-payer TARP funds. Where’s Detroit’s TARP bailout? The new emergency manager is the ‘diversity chairman’ at his firm and it’s a virtually all-white firm. …
“The emergency manager statute allows for dissolving the legislative body and this unelected official enacting statutes. So my vote in Detroit, Michigan does not equal the vote of someone in Grand Rapids. This violates the Voting Rights Act.”
Philo is director of the Sugar Law Center, which has taken legal action against Michigan’s emergency management model under Public Act 4 and that is exploring legal challenges to the emergency management regimes in Detroit and elsewhere in Michigan. He said today: “It’s significant that the emergency manager was picked before March 28, because that’s the date the new law kicks in. After that date the city would have the option of choosing alternatives, such as neutral mediation or bankruptcy.” Philo noted this was ironic since the new emergency manager, in his remarks Thursday touted the possibility of the city going into bankruptcy.
“Over a decade of experimentation has shown that the emergency manager model is undemocratic and it hasn’t worked. Where they have been in place, those cities and school districts have gone through several emergency managers. The stated goal is to balance the books and the emergency manager model fails to deliver that in the long term. What it does do is force privatization of public resources and guts the public sector unions. But that hollows out your tax base and the city continues in a downward spiral. The people of a city need to decide how to get out of a financial mess and how to prioritize necessary sacrifices. Do they want to sell a park or eliminate a tax break for some business? These are policy choices that residents, not technocrats, should decide.”
2013-03-15 "Detroit Protesters Plan Freeway Slow-Downs in Response to EM" by Marilisa Sachteleben from "Yahoo News" [http://news.yahoo.com/detroit-protesters-plan-freeway-slow-downs-response-em-165400172.html]:
It's been tense in Detroit recently. The city has a $327 million deficit and owes $14 billion, says the Detroit Free Press [http://www.freep.com/article/20130314/NEWS01/130314047/Rick-Snyder-Detroit-emergency-financial-manager-Kevyn-Orr]. Michigan Gov. Rick Snyder said in March that he would appoint a emergency manager to oversee city finances. Detroit's City Council had 10 days to file an appeal, which they did, says The Detroit News [http://www.detroitnews.com/article/20130313/METRO01/303130399/-1/METRO08/Kevyn-Orr-named-Detroit-EM-Thursday]. Then Thursday, the governor announced that Kevyn Orr, a Washington, D.C., attorney who handled Chrysler's bankruptcy, would take charge. Emergency management is a touchy subject in the Motor City; the appointment caused some local residents to protest a controller who will wrest city reins from elected officials.
Planned Traffic Slowdown Protest -
To express frustration and draw attention to state-appointed emergency management, planned traffic jams were organized in the city this week, says WWJ CBS Detroit [http://detroit.cbslocal.com/2013/03/11/emergency-manager-protest-slows-traffic-on-i-94/]. WWJ's Chopper 950, flying over the city on Monday, noted three cars on major highways crawling along (driving under 5 miles per hour). This caused traffic to back up. Slowdowns were staged on I-75, I-94, and the Lodge Freeway. State police arrived, angled their cruisers sideways to block traffic, and spoke to vehicle occupants. One car got around the police blockade and drove away. The vehicle wasn't pursued, but occupants of the other cars were questioned. One participant dubbed it a "freedom flash mob."
The Detroit Free Press reports [http://www.freep.com/article/20130314/NEWS15/130314052/emergency-financial-manager-protesters-freeway-traffic] that protesters have slowed down freeway traffic four times over the past week during morning rush hours. Lt. Michael Shaw of the Michigan State Police told the paper, "We're 100-percent right behind the freedom of speech and the right to protest, we just don't want people to protest on the freeway system."
Pastor D. Alexander Bullock, key organizer of the group Change Agent Consortium, which was responsible for the traffic protest, was one of the protest vehicle occupants yesterday. He says the point was to open eyes to the struggle for basic freedoms in Detroit. Bullock and another man were handcuffed and placed in a squad car. Both were later released with no arrests made or tickets written. The incident remains under investigation. I called Rev. Bullock to ask why they chose this method of protest. He said, "Rosa Parks sat down in the wrong seat on the right bus. And she broke the law. Because that law violated her human dignity. We slowed down to the wrong speed on right freeway. And we broke the law. Because emergency management violates our human dignity."
Other Protests -
Other demonstrations occurred at Detroit's City Hall and at the attorney general's office downtown in connection with the governor's EM announcement. I spoke with Detroiter Charles Brown, staff member of Krystal Crittendon for Mayor Campaign. He was at both protests. Of the mission, he explained, "Detroit voted 80 percent to repeal Public Act 4 [the emergency manager law]. This is strong evidence that Detroit electors don't want an EM in the city. The struggle continues; victory is certain. We are not going to give up the fight. We have a federal lawsuit prepared. This is taxation without representation."
2013-03-15 "Protesters Fight to be Heard in Dismantled Michigan Democracy" by The Rachel Maddow Show [http://www.commondreams.org/video/2013/03/15-0]:
Pastor David Bullock, national spokesperson fo the Change Agent Consortium, talks with Rachel Maddow about objection to Michigan's emergency manager law and "traffic slow-down protests" to raise awareness of the dismantling of democracy in Michigan.
[video at source website]
2013-03-01 "Michigan Naming Fiscal Manager to Help Detroit"
by Monica Davey from "New York Times" [http://www.nytimes.com/2013/03/02/us/michigan-appoints-emergency-manager-for-detroit.html]:
DETROIT — Over the fierce protests of this city’s elected leaders, the State of Michigan plans to send an emergency manager to repair the deeply troubled finances of Detroit, one of the largest cities ever to reach such a dire point or to face such a level of oversight.
“There is probably no city that is more financially challenged in the entire United States,” Gov. Rick Snyder said on Friday as he explained why he had deemed Detroit’s woes too fundamental, too lasting and too large to be solved by the city itself.
Mr. Snyder’s call for an emergency manager, who would wield sweeping powers to reshape the city, underscored a long, troubling arc for Detroit. Once the cradle of the American auto industry and the nation’s fourth most populous city, it is now less than half the size it was decades ago and has a public sector plagued by more than $14 billion in long-term liabilities and annual worries of cash shortfalls.
The notion set off a flurry of pointed and sometimes emotional reactions here, including an unavoidable racial and political component. Detroit is a mostly black city dominated by Democrats in a mostly white state where Republicans, including Mr. Snyder, control the capital.
At a time when many municipalities are struggling financially, five cities and three school districts in Michigan alone are already under supervision from a state-appointed emergency financial manager. But municipal finance experts pointed out that Detroit is on a different scale. “Detroit is a huge and prominent American city, so anything that happens with Detroit will set a much bigger precedent,” said Matt Fabian, a managing director at Municipal Market Advisors. “There isn’t a lot of precedent with the state taking control of a city this size.”
For decades, states have used a range of methods, including oversight boards and appointed receivers, to step in and stabilize cities that appeared to be headed toward bankruptcy or default. The methods — and the powers and roles of those charged with overseeing a troubled city — vary widely from state to state, as do opinions about whether they work. A financial control board helped New York City return from the edge of crisis in the 1970s, but such intense state involvement is more often needed in smaller cities.
For more than a year, Detroit leaders had raced to ward off an emergency manager. With a similar possibility looming last spring, city officials entered into a legal deal, giving the state some oversight as Detroit tried to cut spending and staff members and collect more tax revenue. It was not enough, said state officials, who re-examined the city’s books in recent weeks and said they found a pattern of overly optimistic revenue estimates, poor and conflicting record-keeping and endless borrowing to make up for shortfalls.
“There have been many good people that have had many plans, many attempts to turn this around — they haven’t worked,” Mr. Snyder said on Friday during a town hall meeting broadcast on local television, the start of a concerted state effort to sell the notion of an outside manager to city residents. “The way I view it, today is a day to call all hands on deck.”
While some Detroit residents saw state intervention as one more very public indication of a city crumbling, others hailed it as the first promising sign of real repair. The city’s business leaders lauded the plan, noting that Detroit’s private sector had experienced tangible signs of growth and reinvestment — including newly filled downtown offices and young entrepreneurs opening dress shops — even as the public sector had lagged.
“Bring it on,” Sandy K. Baruah, the chairman of the Detroit Regional Chamber of Commerce, said of state management. “This sends a positive message to business that Detroit is fixing its problems.”
But Detroit city officials, who have 10 days to seek reconsideration from the governor before a state board formally appoints a manager as early as this month, objected strenuously. Under a much-debated state law, an appointed manager would ultimately hold powers to cut city spending, change contracts with labor unions, merge or eliminate city departments, urge the sale of city assets and even, if all else failed, recommend bankruptcy proceedings. In an election year for mayor and the City Council, many candidates, incumbents and community leaders denounced the move as an affront to democracy and a state takeover, and called for legal action.
“For one individual to be able to wipe out the duties of our duly-elected officials, that’s more or less a dictatorship, and it’s against everything that America is supposed to be about,” said the Rev. Wendell Anthony, the president of the local N.A.A.C.P. “If you come into Detroit,” Mr. Anthony said, “you own Detroit. You own education. You own police and fire.”
Mayor Dave Bing, who has not said whether he would seek re-election, was more tempered than most in his critique, suggesting that while he opposed an emergency manager, there might be a way for the state and city to work together. “I will look at the impact of the governor’s decision as well as other options, to determine my next course of action,” he said.
Michigan’s emergency manager law — and the possibility that Detroit, the state’s largest city, might be affected by it — has been a matter of contention for several years. After Mr. Snyder became governor in 2010, he and the Republican-held Legislature approved changes to the state’s two-decade-old law, giving such managers more wide-reaching powers, including the ability to drop union contracts with cities. In November, voters rejected that new version of the law, but the Legislature quickly passed a third version, which also allows relatively broad powers to change the terms of labor contracts and which will take effect this month.
But many here wonder whether any emergency manager, under any version of the law, will be enough to solve Detroit’s woes, which are in some way a reflection of the city’s own story. Beyond the nagging budget questions and the mounting debt is a place that grew with the auto industry into a city of more than 1.8 million residents and 139 square miles, then shrank decade after decade even as the city’s boundaries and infrastructure did not. With a tax base of some among about 713,000 remaining residents, Detroiters complain of late buses, high crime and darkened streetlights.
2012-01-25 "Majority African-American city fights state takeover"
by Abayomi Azikiwe, Editor of "Pan-African News Wire" [http://www.workers.org/2012/us/detroit_0329/]:
new round of political assaults has been launched against the people of
Detroit with a threat by the state to impose a “consent agreement” on
both the mayor and the City Council. Two drafts of such a document have
been released to the public and sent to Mayor Dave Bing as well as the
nine-member City Council.
The consent agreement leaked on March
13 mandates the creation of a parallel nine-member “Financial Advisory
Board” (FAB), which would take over full operations of the
administrative and decision-making capacity of elected city officials.
This board, to be appointed by conservative Gov. Rick Snyder and totally
unaccountable to the city’s existing elected representatives, is
charged to enact draconian measures aimed at ensuring the full payment
of usurious debt service to the financial institutions, under threat of
Other instruments of authority embodied in the FAB
include the right to nullify labor and vendor contracts, the termination
of workers and managers, the privatization of city services and the
auctioning off of municipal assets. The $6 billion in workers’ pension
funds would be subject to seizure and “reinvestment,” along with the
outright theft of deferred wages in the form of unused sick days and
Detroit responds with anger & outrage -
of the consent agreement surfaced the evening of March 12. This new
initiative on the part of Gov. Snyder immediately sparked widespread
comment among city residents.
Debra Taylor, community activist
and organizer for the group “We the People,” wrote on Facebook that the
city’s acceptance of such an obligation would be tantamount to a return
to “sharecropping.” On the following day, the Detroit City Council was
flooded with requests for public comment.
Members and leaders of
municipal unions and community organizations staunchly denounced the
draft consent agreements. Attorney Jerome Goldberg, an organizer of the
Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility
Shutoffs, said that the city government should go after the hundreds of
millions of dollars owed to Detroit by the state.
Councilwoman JoAnn Watson has consistently raised the failure of the
state government to make good on a revenue-sharing agreement that, if
paid, would provide more than $550 million to Detroit. Addressing the
City Council, Goldberg stressed that “it is the banks which have driven
hundreds of thousands of people out of the city.” He noted that a
moratorium on debt service payments to the financial institutions would
provide much needed relief to this beleaguered city.
Bing, who was favored in the last election by the corporate community
due to his business background, rejected the proposed consent agreement.
Bing said he was handed the 21-page draft agreement by representatives
of the governor and told that he had one hour to sign it.
told a crowd of hundreds of students and community people at Wayne
County Community College Downtown on March 13: “Hell no, under no
circumstances would I sign such an agreement. I was elected to work for
the people of Detroit, not Gov. Snyder.”
Bing has been in
negotiations with municipal unions for several months over “cost-cutting
measures.” No agreement has been reached and no vote has taken place
among rank-and-file members.
Ruling class vs. people’s opposition -
draft consent agreement is the response of the bankers and bosses to
the months-long struggle of people in the city and around the state
against Public Act 4, referred to as the “Emergency Manager Law.” This
bill, passed one year ago by the State Legislature, usurps local
authority in the interests of corporate power.
There has been
widespread rejection of Public Act 4. Mass meetings and a statewide
petition drive that collected 226,000 signatures are aimed at repealing
the “dictator law.” A number of lawsuits have been filed on behalf of
Michigan residents challenging its constitutionality.
of a consent agreement mandating cuts and other austerity measures
would be merely a cover for the eventual appointment of an emergency
manager with total power to implement drastic political and economic
policy without the involvement of the population, elected officials or
If the petition signatures are ratified by the secretary
of state, that would nullify the existing law and lead to a ballot
referendum in November. Immediately after ratification of the petition
signatures, lawyers for opponents of Public Act 4 would seek an order
removing all emergency managers who have already been imposed on the
cities of Flint, Pontiac, Ecorse, Benton Harbor and possibly Inkster.
Contradictions within capitalist democracy -
maneuvers by the state government illustrate the contradictions within
this bourgeois democratic system. Even though the threat of consent
agreements and emergency management has been challenged in the courts
and through state-approved petitions, the ruling class through its
agents in Lansing, the state capital, are determined to thwart the will
of the people.
The imposition of emergency management and consent
agreements has nothing to do with improving the finances of distressed
cities. These measures will not restore municipal jobs and salaries,
public lighting, transportation, quality education and affordable
housing, or protect worker pensions.
In fact, these are
instruments of the ruling class designed to take back the concessions
workers have gained through decades of struggle. This is why the people
of Detroit have an inherent mistrust of such actions.
existing methods of resistance to the onslaught of austerity are
overlooked and subverted by the surrogates of capital, new and more
militant actions will come into being.
"10 Reasons Why Benton Harbor's Emergency Financial Manager Should Be Terminated Immediately"
Gov. Snyder and state legislature are trying to cook up another way to
continue the reign of emergency manager dictators now that the people
have voted them down.
The following list details how the Benton
Harbor EFM, Joseph L. Harris, has worked to take down the city. And
he's backed by the governor 100%.
Further details will be discussed at the November 19, 2012 Benton Harbor City Commission meeting.
Inaccurate & deceitful communications: Mr. Harris has repeatedly
proclaimed in public meetings, to the media, to elected leaders and
staff, and to state officials that the City of Benton Harbor had a
“Balanced Budget & Cash Surplus." The 2011 Audit recently
revealed that the city actually had a budget deficit of approximately
$565,000 dollars under Mr. Harris’ leadership in 2011. Meanwhile city
contractors and/or vendors are not being paid in a timely fashion. Mr.
Harris has either (A) intentionally deceived the citizens and stake
holders or (B) his ignorance regarding the true fiscal condition of the
city confirms his incompetence.
9. City sued due to
non-payment: Mr. Harris negotiated and executed a very poor contract
with Benton Township without input or conversation with city executive
senior staff, elected leaders, or key community stake holders and/or
customers. The contract (A) forfeited in excess of three hundred
thousand dollars of receivables due to the City of Benton Harbor from
Benton Township while (B) agreeing to make monthly payments to the
township that are not fiscally cost prohibitive based upon water
revenues. Mr. Harris signed this agreement and accepted a settlement of
approximately $300,000 dollars for a debt owed of more than $700,000.
He denied the monies were owed, then agreed to a meeting with Benton
Township officials to discuss the matter and at that meeting it was
disclosed that Mr. Harris had settled the matter for less than fifty
cents on a dollar. It was also disclosed that he accepted and deposited
a check from Benton Township that he did not remember. All of this
occurred while the he failed to increase the water rates in a timely
manner as required according to the City’s State Bond Agreement. Benton
Township is now suing for the unpaid portion of this terribly suspect
8. Gross Fiduciary Negligence: Mr. Harris
failed to exercise the City’s rights under the terms and conditions of
the HUD 105 Business Development Loan program contract to collect the
nearly $500,000 dollars in loan defaults accrued by three companies. Mr.
Harris failed to take any legal remedy to collect the unpaid loans
while agreeing to a settlement to pay the defaulted loan balances back
to the federal government 100% plus interest and penalties. As per the
HUD contract Mr. Harris could have (A) sued the companies in default,
(B) placed liens on the company’s property. There were other legal
remedies available under Michigan state law that Mr. Harris could have
pursued, yet refused to. Consequently because of Mr. Harris’ negligence
these companies were able to liquidate and sale real property and other
assets and keep 100% of the proceeds without repaying a single dollar
to the City of Benton Harbor on what is still a pending outstanding
obligation. One of the companies sold property to Cornerstone Alliance
for an amount sufficient to repay the City the outstanding 105 loan
balance in full.
7. Wasteful spending: Mr. Harris has
unilaterally decided to squander limited city resources during this
fiscal crisis on frivolous and unnecessary items such as (1) I love
Benton Harbor souvenir cups and T-Shirts, (2) Ice Rinks, (3) Ice skates,
(4) unused vehicles, (5) furniture, (6) remodeling, (7) playground
equipment (8) water fountains, (9) excessive raises and salary
increases, and much more. All though Mr. Harris is required by law to
provide financial reports regularly, City officials have been unable to
secure any aging reports that substantiate or confirm the magnitude
and/or depth of the wasteful spending and delinquent bill payment. Mr.
Harris' refusal to comply with Public Act 4 and provide the types of
period and critical financial reports is completely unacceptable and a
clear abuse of power.
6. Negligent Management of NSP
Grant Funding: Prior to Mr. Harris’ arrival the City was the recipient
of a NSP grant of nearly $4 million dollars. NSP was created to (A)
clean up blighted neighborhoods, (B) stimulate local & minority
small business contracting and (C) housing development and (D) create
jobs under the HUD Section 3 program. Mr. Harris abdicated,
relinquished and/or forfeited the City’s moral and contract obligations
to Harbor Shores, Cornerstone Alliance and/or Michigan Works. These
three entities are amongst the City’s wealthiest and most privileged
people and/or companies in Benton Harbor and surely were not the type of
people or organizations NSP was intended to help. Mr. Harris placed
the City grant in a “use it or lose it” situation regarding the NSP
funding by failing to administer, implement and obligate the grant funds
in a timely manner. Consequently, at the zero hour the decision was
made to grant the funds to the wealthy and to complete Harbor Town and
the Fire House developments both owned and managed by Corner Stone
Alliance. Neither project is expected to produce any meaningful
sustainable jobs or any significant affordable housing for the City of
Benton Harbor or it’s residents.
5. The Closing of 200
Paw Paw (Carl Brown Economic Development Center): It is unconscionable
that during the biggest economic boom the City of Benton Harbor has seen
in 50 years the city economic development center and incubator is
closed. There were more than one dozen small, local, minority
businesses prepared to lease 100% of the facility. The city is able to
provide Community Development Block Grant (CDBG) funding to each small
business sufficient to cover their annual budgeted rent requirements for
the year, thus making the facility operationally and fiscally viable.
Therefore, the City had the ability to incubate businesses, create jobs,
and sustain the operations of 200 Paw Paw 100% with city CDBG grant
funding, yet Mr. Harris chose to close the facility.
Failure to collaborate with elected leaders regarding the Community
Benefits Package (CBP) grant funding: Not only has Mr. Harris failed to
collaborate with the city commission, he has shirked in providing
transparency and accountability. The entire process has become
politically toxic. Mr. Harris' unilateral attitude has caused
embarrassment to Whirlpool Corporation and the City of Benton Harbor.
Political liability and antagonism: Mr. Harris is condescending and
confrontational in his communication style which has alienated critical
elected leaders, corporate leaders, tax payers and other key stake
holders in Berrien County. Mr. Harris has fueled a new era in Benton
Harbor’s fiscal and cultural isolation. The most recent evidence of his
alienating and antagonist style is his refusal to participate in the
Berrien County CEO monthly meetings. This forum is not only a critical
exchange of ideas and/or resources, it is an opportunity to mend the
social fiber of local municipal governments. Mr. Harris has caused the
relationships with other municipal leaders and elected officials in
Berrien County to become strained, divisive, and counterproductive.
Fiscal Failures: Mr. Harris has had a multitude of fiscal failures
since his arrival to Benton Harbor. The most recent and perhaps most
significant was his failure to post the city tax mileages on the
November 2011 ballot for resident vote and approval. This error of
omission will likely create an opportunity lost for the City of Benton
Harbor in excess of a million dollars.
Mr. Harris is now attempting to illegally impose taxes on the resident of Benton Harbor because of his gross negligence.
Does an Emergency Manager have the authority to impose taxes?
No. Neither an Emergency Financial Manager, nor the Local Emergency
Financial Assistance Loan Board, have the power to impose taxes, over
and above those already authorized, without approval at an election of a
majority of qualified electors voting on the question.
does not have the authority to impose a Special Assessment. This is a
classic case of Taxation without representation. The people already
voted NO to the mileage renewal. This is another colossal mistake being
executed as a result of horrific management.
1. Failure to prepare and/or train local elected leaders to competently manage Benton Harbor:
number one reason Mr. Harris is clearly not the professional for the
Emergency Financial Manager position is based upon his well-publicized
and absolute refusal to work with the City’s elected officials. How do
you profess your desire to put the city back on solid fiscal ground and
simultaneously refuse to work with the people tasked with sustaining the
operations after your departure? Mr. Harris has resorted to
unprofessional insulting remarks to elected leaders and staff.
Engaging, training and supporting local elected leadership should be a
mandatory responsibility of an EFM. Bringing the local leadership to
competency and consensus is on the City’s critical path to recovery.
Mr. Harris arrived in Benton Harbor the city operating deficit, list of
unpaid payable and pension(s) plan deficits have increased
significantly. Elected leaders, citizens, and stake holders are all
getting less information than they ever have received from the city
finance department. The information that has been received has proven to
be largely false and/or inaccurate.
Several lawsuits and unpaid
vendors have now surfaced. The staff morale is at an all-time low. Staff
competency and training is nearly non-existent. Relationships with
neighboring municipalities and corporate leaders have been severely
strained. Public procurements and new hires processes in city
government under Mr. Harris’ leadership have consistently violated state
and federal regulation. Mr. Harris has manipulated public procurements
and hiring by lowering standards and qualifications to justify his
personal preferences and selections. Many qualified applicants and
candidates for Senior Executive Staff positions have been ignored and/or
rejected due to Mr. Harris’ personal preferences.
officials in Lansing truly have Benton Harbor’s best interests at heart,
they must remove Joe Harris immediately for negligence, false
statements, federal & state procurement violations, increasing
the budget deficit, failure to act on correcting the pension deficits,
and default in duty.
Benton Harbor should return to the
power of democratic self-rule, just as "free" people the world over
experience government. Benton Harbor has had enough of a
governor-imposed, grossly incompetent dictator.
2012-09-29 "Guided by the Koch brothers, Republicans have installed czars to run Michigan's cities"
by Jim Hightower [http://www.opednews.com/articles/Guided-by-the-Koch-brother-by-Jim-Hightower-120929-629.html]:
a political storyline that might seem familiar to you: With economic
pain and political discord ripping across the land, he appeared to have
the ideal resume to become the Republican contender for the top job. Not
just another career politico from the dysfunctional Congress, he was a
son of heartland Michigan who had founded his own venture capital firm.
He looked like the image-perfect "job creator," and he'd achieved
notable financial success in the no-nonsense corporate world. That
success, he figured, would now catapult him to electoral victory, for it
demonstrates that he's a can-do fellow with the know-how to run
government like a business and fix the economy.
Mitt Romney? Yes,
but before him, Rick Snyder played the lead role in this made-for-TV
political drama -- and it hasn't worked out well at all for the people
of Michigan. Two years ago, this former corporate chieftain and founder
of two venture capital outfits stepped into Michigan's political arena,
snatching the GOP gubernatorial nomination from the grasp of a
congressman, the state attorney general, and a couple of other
experienced pols. The times were right for a Mr. Fix-it -- with
Michigan's key auto industry in the ditch and middle-class wages
decimated, working families were struggling, poverty was on the rise,
and whole cities were on the brink of broke.
Backed by bales of
corporate cash, Snyder won the general election by ceaselessly running a
series of "job creator" ads (never mind that he had been a top
executive and director of a computer corporation that relentlessly
shipped thousands of American jobs out of the country until 2007, when
the corporation itself was shipped to Taiwanese owners). Snyder said he
had a plan to "reinvent Michigan," the essence of which he expressed in
one of his campaign ads: "Eliminate Michigan business tax. Cut taxes on
job creators $1.5 billion. Slash needless regulations. Help small
That's not a plan, it's a scam -- essentially the same
ol' Republican same ol', now being regurgitated by the Romney-Ryan duo.
However, Michiganders were desperate enough for a way out of the state's
economic doldrums that 58 percent of voters cast their ballots that
November for the "Businessman with a Plan."
What they didn't know
-- because the campaign never hinted at it, much less spoke of it out
loud -- was that a cabal of corporate-funded, far-right extremists
behind Snyder would soon spring a secret plan on them. It was to be a
horrific "Spring Surprise" that literally would reinvent Michigan --
along with negating the very idea that the American people have a
democratic right to be self-governing.
Michigan goes berserk
of our nation's finest political satirists, cartoonist Garry Trudeau,
has created a buffoonish character named Trff Bmzklfrpz for his
"Doonesbury" comic strip. A caricature of despotic thugs everywhere,
Bmzklfrpz is presented by Trudeau as the ruler of the aptly named
Rick Snyder must've studied there, for he
had barely taken his oath of office before suddenly teaming with leaders
of the Republican-controlled statehouse and senate to ram into law an
astonishing measure of despotic rule. It only took two weeks in March of
2011 for the ponderously titled "Local Government and School District
Fiscal Accountability Act" to be rushed through both houses of the
legislature and signed by Snyder. Before the public knew it -- BAM! --
the governor was authorized to establish his own autocratic republic:
At bottom, the LGSDFA Act is a doozy of autocratic
mischief-making. It lets the governor seize control of any local
government he deems to be in fiscal trouble, suspend the people's
democratic authority, impose a corporatized version of martial law, and
install his own "emergency financial manager" to govern by diktat (like
some hybrid of Soviet czar and tinhorn potentate -- a Bmzklfrpz, in
The official rationale is that many Michigan cities
and school districts are in dire financial straits, requiring
extraordinary intervention to "save" them from their own people and
elected officials. "It's about helping communities," Snyder dissembled,
as he began installing EFMs.
Helping? This is the kind of "help" a fox brings to the henhouse:
* Emergency managers begin by usurping the power of all elected officials or simply "firing" them.
They can then rewrite the public budget without any public
participation, unilaterally eliminate various services, cancel
contracts, seize and sell off public assets, privatize government
functions, and dictate new laws.
* They can even dissolve a city's charter.
This isn't merely un-democratic -- it's aggressively anti-democratic.
there are some severe fiscal messes in Michigan's local governments,
but the big debts that have piled up are not caused by too much
democracy, bloated bureaucracies, or reckless spending by hometown
officials. That's just mendacious political claptrap spewed by those
wanting an excuse to impose their anti-union, government-shriveling,
privatizing, partisan agenda on vulnerable people. It's no accident that
the cities presently under state siege (including Benton Harbor,
Detroit, Flint, and Pontiac) are heavily populated with low-income,
union, African American, Democratic-voting households. While it's true
that these places are in deep budgetary holes, there are real reasons
for their fiscal woes, including:
* The implosion of the auto
industry that's central to these local economies, resulting in massive
joblessness and drastically downsized family incomes.
tanking of housing values, destroying the one source of wealth that
working people had, creating a sudden plummeting of property tax
collections that finance schools and city services.
* The grim (and largely successful) corporate campaign to crush unions and bust middle-class wages.
US trade policies and tax subsidies that encouraged Michigan
corporations to move manufacturing offshore, eliminating good jobs and
forcing a large number of former taxpayers to leave their cities in
search of work.
Oh, let's not forget another major cause that
Snyder & Company don't want discussed: His $1 billion cut in
corporate taxes. This increased the state's budget hole, which he helped
fill by slashing or eliminating state funds and tax credits that went
to local school districts, low-income workers, and seniors.
LGSDFA coup against local democracy does absolutely nothing to address
-- much less fix -- these actual causes of the financial crises that
mayors and other elected officials face. And by the way, since when did
self-styled, small-government "conservatives" become such gleeful
champions of using centralized governmental power to whack the
once-hallowed Republican tenet of local control? Indeed, to see the
irony of their governor trampling their democratic rights, Michigan
citizens need look no further than the website of the state Republican
Party. Right up front, it proudly posts a list of nine inviolate GOP
principles, including this gem: "The most effective, responsible, and
responsive government is government closest to the people."
Spawn of the Kochs -
corporate plutocrats rant about out-of-control government regulators,
they do not really hate big, invasive, authoritarian government -- as
long as they can own it and use it for their own needs. This is why such
multi-billionaire corporatists as Charles and David Koch have been
pumping truckloads of money into dozens of front groups like the
Mackinac Center for Public Policy in Michigan. Set up 25 years ago and
linked to a network of Koch-headed centers in nearly every state,
Mackinac is an idea factory and advocate for shrinking people power and
enhancing corporate control.
While it refuses to name its
super-wealthy individual backers on the absurd grounds that disclosure
"would be a tremendous diversion," the Center does have to report
donations from "charitable funds," which includes money from a host of
corporate foundations tied to the Koch brothers -- Domino's Pizza,
Amway, Coors, GM, ExxonMobil, JPMorgan Chase, and Walmart, among others.
2005, one of Mackinac's grand ideas was put forth in an essay written
by a privatizing enthusiast named Louis Schimmel, who was the Center's
director of municipal finance. Noting that Michigan already had a
limited program for sending state managers to aid cities engulfed in a
fiscal crisis, he argued that the law should be radically expanded to
create an emergency financial manager with autocratic power to take
control of Detroit's troubled budget. Specifically, Schimmel's Mackinac
proposal called for four fundamental changes: (1) the financial overseer
would "replace and take on the powers of the governing body"; (2) have
sole discretion to alter the governing charter; (3) be immune from
lawsuits; and (4) have the power to alter and ultimately abolish union
After Snyder won and the GOP gained big majorities in
both legislative chambers in November 2010, the Mackinac Center moved
quickly to reprint and circulate Schimmel's paper. Lo and behold, the
governor's LGSDFA proposal, which seemed to come out of the blue three
months later, actually came out of the Koch boys' Mackinac machine.
Snyder's bill included all four of Schimmel's democracy-usurping
components, as well as other authoritarian add-ons presumably drafted by
With a solid, lock-step majority in both the state
senate and house, Snyder and Republican legislative leaders were able to
railroad the full extremist package into law. The GOP slapped down even
the most token gestures to local governance -- for example, a little
amendment that merely would've required EFMs to hold monthly public
meetings -- so locals could be told what changes their czar was making
-- got crushed in the senate.
Respect the rule of law? Ha! For
half a century, Michigan has had a constitutional rule that a new law
doesn't take effect until 90 days after the legislative session ends --
thus giving affected citizens time to adjust or try to repeal it. By a
two-thirds vote in each house, however, a law can be declared an
emergency and allowed to take effect immediately.
super-majority in the senate, GOP members easily rushed their EFM
measure into effect, but in the house, the party is 10 votes short of
the necessary two-thirds tally. No problem -- they simply cheated by
pulling a quick count and lying about the result. The presiding officer
of the house barked out the following in one breathless, three-second
believe that in only three seconds, he called for a vote, the members
got to their feet, he was able to count two-thirds of them standing in
favor, and he gaveled the law into effect. Magical!
Plutocrats in action -
go to Pontiac, a once proud city boasting that one of America's iconic
cars was named after it and made there, employing 23,000 auto workers in
the General Motors factory. Today, though, those jobs have been moved
out-of-state or eliminated, the Pontiac brand itself has been jettisoned
by GM, the city's population has dropped, property values have
plummeted, and the city government has been left in a fiscal wreck. To
add to its miseries, Gov. Snyder's cutbacks in revenue sharing mean that
Pontiac's funds have been slashed by a third.
The governor did
give something to the people of Pontiac, though: An emergency manager.
Appointed last September for an indefinite period (he's still there), he
promptly relieved the city council of their powers and salaries. Then
he fired the city attorney, clerk, and director of public works before
acting on his own to outsource the work of various departments. Next, he
offered up about half of the people's property in a fire sale of assets
-- including city hall, police and fire stations, the library,
water-pumping stations, a golf course, and two cemeteries. More
recently, he has issued five edicts undermining contracts with union
workers and retirees.
Who is this guy? Louis Schimmel, the privatizer man from Mackinac!
Asked last year if the EFM law made him a dictator, Schimmel conceded with a sigh: "I guess I'm the tyrant in Pontiac."
to Benton Harbor, the home of Whirlpool Corporation and once the major
producer of that giant's appliances. Whirlpool's executives, market
analysts, and other top-paid employees still are based in Benton Harbor,
ensconced in the corporation's brand-new, gleaming, tax-subsidized $68
million corporate campus in this town on the shores of Lake Michigan.
But, beginning in the 1980s, the bosses have steadily emptied out all of
their local factories, moving Benton Harbor's manufacturing jobs abroad
to cut labor costs.
This has decimated the local economy, cutting
the town's 20,000 population in half, destroying its tax base, and
leaving it with chronic unemployment. Benton Harbor is now the poorest
city in Michigan, with a per capita income of about $10,000.
town's major asset, a public park overlooking the lake, is being
absorbed into "Harbor Shores," a $500 million Whirlpool-backed resort
project that includes a sprawling, Jack Nicklaus-designed golf course.
Of course, impoverished locals can't live or golf there, but the
developers (who got government subsidies for the project) are hoping
that Chicago weekenders will make the two-hour trek to the place.
people are losing their park, but worse, a fellow named Joe Harris has
taken a more valuable asset from them: Their democracy.
Snyder's EFM and literally the Dictator of Benton Harbor. A former
Detroit auditor, he began by summarily stripping all power from elected
officials, decreeing that city commissioners can meet, but the only
action they can take is to approve minutes of their last meeting and
then adjourn. When commissioners made a mild (but clever) protest by
proclaiming this past spring that the city would observe Constitution
Week, Harris monocratically nullified their action. What perfect
symbolism! He then expressed surprise that this had upset townspeople:
"All I told them was, 'Hey, guys, you have no authority.'"
unfettered control, Harris has kicked elected officials out of their
city hall offices, fired the city manager and other administrators,
dismissed the planning commission and installed his own loyalists,
merged the police and fire departments, and sold the com-munity's public
radio station (which had criticized him). He also intends to privatize
the water system (after raising residents' water rates by up to 40
percent) and has jacked up annual garbage fees by about $300 per home.
is proud and happy to be a commissar for the Koch-Mackinac vision of a
privatized America with a neutered democracy, and he definitely likes
being in charge with no fussy checks and balances on his decisions: "I
don't have to worry about whether the politicians or union leaders like
what I'm doing. I love this job. I am the mayor and the commission, and I
don't need them."
Meanwhile, Benton Harbor is still deep in debt
-- and absolutely nothing has been done to address its real problems of
joblessness, poverty, inadequate education, inequality, and civic
depression. As for an actual plan to boost the economy, Harris points
excitedly to his idea of economic development: Selling "I <3 Benton
Harbor" bumperstickers, t-shirts, and souvenirs to tourists.
after city in Michigan -- including Flint, Highland Park, and even
Detroit -- are presently under assault by this mind-numbing, right-wing,
ideological stupidity. Dangerous stupidity -- Detroit Mayor Dave Bing
had to surrender control of his city's finances this year to a Snyder
austerity czar, who has sought to increase the number of students in
each classroom to 61, and the czar's budget cuts are so severe that the
fire chief says if empty buildings catch fire, he'd have to let them
Is this America? It no longer will be if these
social-engineering autocrats prevail. But, good news: Michiganders are
in full rebellion! As always, though, battling the bastards is never
easy, because... well, they're bastards. And they're very well-funded.
And sneaky. Yet the people keep pushing, as we see in this chronicle of
the 2012 Michigan Rebellion:
Feb. 29--A broad grassroots coalition
(ranging from union workers to tea party members) that was organized
under the umbrella of "Michigan Forward" filed more than enough citizen
petitions to put the repeal of Snyder's EFM nonsense on the ballot for
this November's election.
April 19--At the last minute, just
before the repeal question would have been certified for the ballot by
the state board of canvassers, a complaint by Citizens for Fiscal
Responsibility is filed to stop certification. Reason? "The font size of
the [petition's] heading" is claimed to be too small to comply with
state law. Font size!
April 9-25--Legal jockeying takes place, and
digging by journalists and coalition members reveals that (1) CFR is
not a real group, but a creature of the Sterling Corporation, a GOP
political consulting firm -- same address, phone number, and staff; and
(2) a Sterling partner, Jeff Timmer, was a chief executive of the
Michigan Republican Party and now happens to be one of the four voting
members of the state board of canvassers. There are widespread calls for
Timmer to recuse himself from the board's petition decision, but the
secretary of state (a Republican) says no one can force him to do that.
26--Decision day for the board. Timmer does not withdraw, so the board
deadlocks two-to-two, which kills the repeal referendum.
June 18--Timmer resigns from the board.
June 29--Citizens coalition appeals the board's rejection to Michigan's Supreme Court.
3--In a four-to-three decision, the court majority (including one
Republican) rules that the font size does not disqualify the petition,
so the board must put the repeal question on the ballot.
victory means that American democracy literally will be up for a vote in
Michigan on Nov. 6! The Republican and Koch political networks are
going all out to win -- and if they do, your state/city could well be
next on their Berzerkistan anti-democracy agenda.