The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Emergency Financial Manager

May 2, 2011

With a few amendments, the Michigan legislature has turned the old “Emergency Financial Manager” (EFM) into a lethal weapon. It allows the governor to decide to underfund cities, counties and school boards, and then declare them “in danger of bankruptcy.” And it lets him then appoint an EFM.

The EFM is given the power to make all decisions concerning a city, county, or schools. He can override or set aside all elected officials, issue edicts just like laws; cancel union contracts; cut wages, benefits, working conditions and jobs; eliminate social programs or public services; sign very profitable contracts.

The EFM is a dictator, charged with imposing the wishes of capital without having to go through any of the cumbersome steps of the legislative process. And the EFM can’t be voted out in the next election.

We’ve already had a taste in Michigan of what that means. The day after the new law went into effect, the Emergency Financial Manager for Benton Harbor, Michigan handed over a public beach to a private developer – something that had been blocked for three years in the City Council. He then handed over the Water Department to another private company to run. And he is merging police and fire, making firefighters try to answer burglary calls, and police try to put out fires.

The Emergency Financial Manager for Detroit schools ordered 45 schools to be transformed into charter schools – giving them only a few weeks to find themselves a charter company to run them – or they would be closed. He made it clear that union contracts would not be respected, salary schedules not respected, seniority not respected. And he sent out layoff notices to every single teacher in the whole Detroit school system. He made it clear that tenure and seniority will not determine which teachers are brought back, and that their wages will be cut.

In the same week, the mayor of Detroit said that if city unions wouldn’t give him the concessions he wanted in wages, health care and pensions, he would ask the governor to appoint an EFM. And the governor let it be known that he would appoint the Detroit mayor himself as the EFM.

Wisconsin Governor Walker, noting what a great idea Michigan’s new governor had, is right now preparing his version of an Emergency Financial Manager. He calls it “financial martial law.”