Apr 16, 2012
Detroit has been put in the deadly grip of a “consent agreement,” aimed at stripping the city bare.
For decades, city politicians have given away subsidies and tax breaks to the auto companies, one after another. And the city has gone deeper in debt to the big banks linked to these giants.
Chrysler had schemes going for decades, getting tax breaks that lasted for 14 years every time Chrysler “modernized” a very old plant. A skeleton work force kept them open – just long enough to wring every last penny out of each of those tax breaks.
Ford got big tax breaks when it built the Renaissance Center on the Detroit River. It benefitted from large city reconstruction in the area surrounding the RenCen so upscale shops could move in, making the RenCen more valuable.
Ford got more aid when it wanted to vacate the RenCen, in a four-way deal that had Ford sell the RenCen to GM for its new headquarters, while the state freed GM from the expense of its old headquarters, paid to update it, then moved state offices into GM’s building. The city got stuck not only with paying for lots of infrastructure improvements near both buildings, but with heavy tax breaks to GM and for the big-money real estate company that bought up GM’s old headquarters and parking garage.
GM got tax breaks for building a new plant in the city, while it paid nothing for leaving old plants vacant and decrepit, destroying the surrounding neighborhoods, and draining tax rolls.
Max Fisher – his billions came from GM – got a tax break for putting up luxury housing on the waterfront, and another tax break when his son-in-law got the city to clear out large sections of housing near an area Fisher and friends wanted to gentrify.
William Clay Ford, one of the Ford family, got the city to take title on land, clear it for him – and then give him tax breaks for the downtown stadium he wanted for his football team.
Pizza king Mike Illich got the same treatment for his new baseball stadium. And his scheme went so well, he’s asked the city to pay for a new hockey arena – replacing the one the city had built earlier.
Peter Karmanos ended up with a big spot of very expensive property, cleared by the city, which also dug up and changed the routing of downtown streets to accommodate Karmanos who wanted to put the headquarters for his Compuware company right on that very spot.
Oh, and that’s only the beginning of the story, the very tip-top of the iceberg that is sinking Detroit today – an iceberg of tax breaks that fed every major corporation in Michigan out of the public treasury, and construction that ripped out vibrant working class neighborhoods in the city.
Every one of these deals put the city’s finances in a tighter hammer lock. Every one meant either cuts in city services or new bonds floated with the big banks. Or both. And the banks made out like bandits on every one of the loans they floated for the city – most of them so twisted they could only have been invented by a criminal mind.
The city has been in a crisis for 40 years, because the country has been in an economic crisis for 40 years – and Detroit, just like other cities, has taken the brunt of it.
Every one of these deals, and many more, was carried out with the express purpose of putting money in someone’s pocket – someone already filthy rich – to prop up their profits during this long-lasting economic crisis.
Now, these villains say, Detroit is nearly bankrupt. The bill has to be paid. And – according to them – the population and city workers should pay it: eliminate parks, neighborhood centers, bus service, fire service, emergency services, lighting, water lines, sewer lines; get rid of city workers, cut their pay, eliminate medical care and pensions.
The politicians try to pretend this is only Detroit’s problem. No, it’s not. This is the problem of all the cities. Detroit’s may be a little worse, the consent agreement a little more draconian, but most other big cities are trailing right behind.
The population of Detroit didn’t create the problems. The capitalists did, searching for ever more ways to put their hands on a buck, just like the banks did. And they didn’t do it only to Detroit. They are doing it everywhere, throughout the country.
Detroit may be the first major city to go. But you’re next. No end in sight until the working class pulls its forces together and refuses to bow down in front of these attacks.