DETROIT – This city is running out of money, and by April of 2012 it may be out of cash and subject to takeover by a state-appointed financial dictator. Such “financial managers” have already replaced the people’s elected officials in majority black cities around the state, and made draconian austerity cuts to public workers and public health, welfare and safety services. This puts Detroit between a rock and a hard place, forcing the mayor and City Council to consider harmful cuts, but less than what a financial dictator would make.
Mayor Dave Bing is pushing for privatization of services and asking the city’s public unions to take a 10 percent cut in wages that non-union employees took a couple of years ago. The mayor is also seeking medical benefit and pension cuts.
Some on the council, worried the mounting debt will enable Michigan Republican Gov. Rick Snyder to appoint an emergency financial manager, talk of even greater sacrifices: laying off 2,300 public workers, closing recreational centers and eliminating subsidies to city museums, the health department and the Detroit Zoo. Last week the mayor volunteered himself to be the emergency financial manager, but that proposal was opposed by all.
The law regarding the appointment of emergency managers was changed by Gov. Snyder and the Republican-dominated legislature to give more powers to the financial dictator than the old law provided. A financial manager will now usurp the powers of democratically elected officials in order to give priority to financial and Wall Street interests over the interests of city workers and citizens’ city services.
If an emergency financial manager is appointed for Detroit, it will result in mass firings and harsh wage and benefit reductions for Detroit city workers. City worker jobs, government jobs, public jobs are real jobs. Losing jobs will add to the city’s deficit because of lost taxes from income and property. It will, of course, put more Detroiters into economic dire straights.
The appointment of an emergency financial manager to solve the city’s economic crisis would be profoundly un-American and undemocratic. It would be a violation of Detroit residents’ right to self-determination.
Who is to blame for this crisis?
Detroit’s financial crisis is rooted in the problems of the city’s automobile-dependent economy. While the auto industry is making a small comeback, it will never be what it was. Hundreds of thousands of good paying auto jobs, and the tax base they provided, were lost, never to be seen again.
We live in a private enterprise system. This means that private business leaders, not public officials, make the decisions that determine the ups and downs of our economy. The tea party and Republican story (pushed 30 years ago by former President Reagan) that “government is big and bad, and free enterprise is lean and mean,” has been exposed in the last several years as a big lie put forward by the system, threatening bankruptcies of the private sector’s largest corporations and financial institutions.
Where should the money come from to fix Detroit’s deficit? The federal government – and I say that without any hesitation. If Wall Street could be bailed out to the tune of $11 trillion (as once reported by the Financial Times; the amount is probably more than that by now), Detroit can be bailed out for $300 million or $400 million, or more.
Wall Street banks were more broke than Detroit, and they were bailed out by the mythically inefficient public sector, “Big Gov’ment.” Some of that federal money (that they gave the Wall Street banks) is our tax money, money from the people of Detroit.
Importantly, it is not Detroit officials’ corruption or incompetence that has led to the fiscal crisis, but the economic and financial incompetence and greed of banks and corporations. Whatever faults they have, these local public officials, largely African American and including many women, are no worse than the dozens of white men who exclusively ran Detroit city government for so many decades.
Detroit’s deficit is also due to the decisions by the private sector to move so much of the former robust Detroit business sector out of the city over the last 50 years. This is another way in which the private sector is responsible for Detroit’s plight. As I said, as this is a private enterprise system and Detroit public officials have essentially no power over this major trend. They have no authority to start city-owned enterprises that might substitute for the runaway plants, shops and businesses.
This city’s financial problems are not fundamentally due to city officials’ bad decisions, to but the disinvestment from and failures of corporate America in Detroit. The last thing the city needs is a “CEO thinking” emergency manager. It was CEO thinking that bankrupted Wall Street, General Motors and Chrysler! No exaggeration.
Given the revenue streams that go straight to Wall Street from Detroit, it is not far off to characterize any emergency financial manager as a Wall Street financial dictator.
I say “Occupy” Wall Street financial dictators.