Detroit's bankruptcy problem rooted in capitalism

uaw stop corporate greed

DETROIT - It is the "culmination of sixty years of downward decline," said Republican Governor Rick Snyder at the press conference today announcing Detroit's filing for bankruptcy. The 60-year part I agree with but the blame for that decline, and solutions Snyder and his appointed Emergency Manager Kevyn Orr proposed in today's press conference, left key players in that decline blameless.

Snyder said Detroit's "political class" is the last major obstacle to righting this city. He echoes Republican and Tea Party claims the Democratic Party (that has long governed the city) along with the city's labor unions bear the onus for the current situation.

Many criticisms of the city harbor a large unhealthy dose of racism that implies the city's main problem is a large minority population expecting government handouts.

Talk about living on the public trough. Exxon Mobil made $45 billion in profits in 2009 but paid zero in taxes. General Electric made $10.3 billion and received a $1.1billion dollar rebate; Wells Fargo had profits of $19 billion and received tax credits of $19 billion after the purchase of Wachovia Bank. The bank-caused, tax loss inducing foreclosure crisis resulted in a huge loss of tax base and population for the city. One could go on and on but those lost tax dollars could end Detroit's and other municipalities' problems once and for all.

It is no surprise Detroit has a financial problem. It is a one-industry city that went from twelve auto plants to one. Globalization, automation and the seeking of ever greater profits caused all auto companies, domestic and foreign, to move production. All contributed to Detroit losing almost 90 percent of its jobs and tax base. No city could survive such a loss.

If there is a political class to blame for corruption or dysfunction, Snyder should look no further than his own Republican Party and its endless list of extremist, authoritarian actions and anti-democratic policies.

Today, Emergency Manager Orr said "we can't kick the can down the road any further."

I agree with those words, but not Orr's intent. Instead of trying to reign in pensions and public spending, we should rein in corporate profiteering and tax evasion. The capitalist system, based on profits before people, has accumulated huge riches from the labor of people, Detroit's workers in the first place.

It is right to expect all elected officials to act in the public's interest. But the main problem facing Detroit, other urban, suburban and rural areas is not corruption or labor unions seeking decent wages and benefits.

The main problem we face as a nation is not a lack of money; it is too much money in too few hands. Growing inequality, not budget deficits, are the country's number one problem. Until that problem is solved, others will not go away.

Photo: United Autoworkers members protest extreme wealth gap and corporate greed. (PW/John Rummel)


Post your comment

Comments are moderated. See guidelines here.


  • I agree with this article, with one exception. What is missing is the issue of white flight, which certainly played a role in the city's demise. However, I think that the city was doomed even without the white flight given the industrial flight.

    Posted by Michael Arney, 08/08/2013 8:42pm (2 years ago)

  • Excellent article! In answer to Jim's question below, state revenue sharing with all Michigan cities, some of which is mandated by Michigan's constitution, has dropped $4.2 billion since 2001. Yet the Republican-dominated government saw fit to give $1.2 billion in tax breaks to corporations last year. Although Detroit has declared bankruptcy, money has been found to build a new $450 million hockey stadium for the Red Wings' billionaire owner: $284.5 million in property taxes as well as bond sales. Detroit is being pillaged. But this is how capitalism operates.

    Posted by Laura Dewey, 07/28/2013 8:46am (2 years ago)

  • Well done, John. Here in Arizona our city, Tucson lost almost a third of its revenue by severe cuts in State revenue sharing. The State Legislature, long dominated by Republicans have cut State income taxes by more than 30% over the last 30 years. Three years ago, they slashed revenue sharing and our Democrat dominated City Council has had to slash spending as a result.
    I am curious if Detroit also suffered from loss of state revenue sharing.

    Posted by Jim Hannley, 07/23/2013 6:30pm (2 years ago)

  • John, I think I agree 100% with what you are saying. Some way - some how, we have to light a fire under people and get them to stand up for what is right. Apathy is one of our biggest enemies. I am even more convinced that we need to unionize more workers. It is the counter force to corporate greed. And we need to educate women on how devistating to their liberties all these anti-women bills are that seem to be popping up all over the states.

    Posted by Micheal W Smith, 07/23/2013 3:37pm (2 years ago)

  • Massive reinvestment in our country's cities and "rustbowl" is what we need and what president Obama is talking about now. Thanks for the article John Rummel.
    This massive reinvestment of trillions is necessary to keep our country competitive with others, and to save the human element in the hundreds and hundreds of cities throughout the land.
    This will not come without massive demonstrations and protests.
    That the billionaires through their banks and large corporations, have taken and taken for the last 60 years, as they've been given a free ride at the cities' expense(including Detroit)the president, Obama seems not to really appreciate.
    That is why we must show him with massive protests for jobs, jobs, jobs, and freedom again, along with protecting peace and the environment. We must not forget the demonstration in Washington D. C. coming this August in this connection.
    We need to deplete the war spending and convert it to peace, jobs, and freedom, to protect our disinergrating, warming globe.
    Positive action to ensure that African Americans and women, along with all victims of past discrimination, should be taken to be sure they are the first hired and last fired, with union protections and benefits. This will protect the economy from patterns like those which have crystallized in scenes like Detroit, where racist patterns have injured both our peoples and our nation.
    We need these new priorities and redistributions of money and resources to protect our U. S. as a whole.

    Posted by E.E.W. Clay, 07/22/2013 12:17pm (2 years ago)

  • Oh by the way... thanks for the report, John and People's World.

    Posted by Wingnut, 07/20/2013 9:49am (2 years ago)

  • Hi
    So easily does a look at/for the REASON something happened... turn into blaming/bashing, eh?

    Ever notice that not a single other living creature on the entire planet... uses economies (money, ownership, price tags)? One could say that capitalism's problems are "rooted" in economy usage, huh?

    Ever try to lynch a "system". Its SO difficult to find a neck to put a noose around. And if bashing a SYSTEM like capitalism isn't unpatriotic enough, try bashing economy usage. You might just as well be burning the American flag or abusing children... for the amount of support/agreement you'll get.

    Capitalism is a competitive system. At age 18, Americans get the great policy reversal from share share share... to compete compete compete, and that is because... 18 year olds are forced to join the free marketeers (capitalism/competers church)... or starve/or die/or else (felony extortion and forced religion). Who is to blame for THAT? Everyone who hasn't taken a stance against such things. That's a very very large number of people... far too many to lynch. These people have gone "docilated" or "belly up" to a SYSTEM... or maybe more apropos... a tradition. In a way, its the tradition of NOT allowing childhood sharing policies... to continue past age 18. Sure there was some "do it or else" during our childhood years, but the "or else" never amounted to starving or removal of health or home. It was usually a much gentler "or else". The "or else" that capitalism/economy-usage imposes... is a much more deadly one... and many have said "that's life" or "that's just the way it is" to that extortion. Or how about the ultimate handwasher... "don't take it personal... its just business"? Well, when "business" takes away one's "wellbeing", well then guess what. Its taken VERY personal.

    Systemic problems. The pyramid scheme symbolk is right there on the back of the USA dollar. AND, most of us saw the childhood playground pyramid attempts collapse from "get a leg up" top-heaviness EVERY SINGLE TIME such a structure was tried. We all know from those playground lessons... that pyramid structures crush the kids on the bottom. We ALL KNOW that the pyramid/rat-racing system does not work. Yet they/we base our entire societal structure on such a system. We all know better. When will we own up to it?

    Economy usage has to go. Its used far to often... to put each other over a barrel with "or else". (Right about here is where I am accused of being nuts.) :)

    Wasn't it the Chicago mobs who put businesses over a barrel with "pay up or else" felony extortion? Yet we (you capitalists) do it to each other on a daily basis, and you parents of 18 year olds are likely to do it to your kids at some point, as well. Where is Elliot Ness when we need him most?

    We WERE seeking "roots" to things, correct? One serious root MIGHT be our (capitalist) condoning and
    promoting of giant pyramid schemes such as capitalism (caused by economy-usage). We actually ALL know ALL ABOUT rat-racing and get-a-leg-up and top-heaviness and crushed bottom layer kids. We do. Will we own up to it? Where's my noose? :)

    Best regards!
    Larry "Wingnut" Wendlandt
    MaStars - Mothers Against Stuff That Ain't Right
    (anti-capitalism-ists) (anti-economy usage)
    Bessemer MI USA

    Posted by Wingnut, 07/20/2013 9:44am (2 years ago)

RSS feed for comments on this page | RSS feed for all comments