Emergency Financial Manager Forced on Detroit

Mar 4, 2013

Michigan’s Governor Rick Snyder has declared his intention to appoint an Emergency Financial Manager to take control of the city of Detroit. That move is disgusting, for many reasons.

The people of Michigan just voted in November NOT to accept an Emergency Financial Manager law. No sooner were the votes counted than the legislature passed another law just like the one the voters had rejected, giving an EFM the power to gut budgets, cut services, sell off assets and rewrite union contracts wherever the governor appoints one.

Before the ink was even dry on the new law, the governor decided to use it on the biggest city in the state, Detroit. So much for the illusion of democracy in Michigan!

Snyder declares that Detroit’s elected officials have wrecked the city’s finances. He’s right—but he doesn’t say how.

For decades, Detroit’s officials have handed billions of dollars worth of tax breaks, land, and wealth to major corporations like GM and wealthy real estate investors like Matty Moroun.

Then, when the budget slid increasingly into debt, officials borrowed money from the biggest of banks in “creative” financial deals that caused that debt to balloon: In 2002, Detroit’s debt was less than five billion dollars; in 2011, it had more than doubled to more than 10 billion; and now state officials put that amount at 14 billion! Thanks to the “creative” deals, all state revenue-sharing money to Detroit and all of Detroit’s casino taxes go to pay the banks—for the next 20 years.

Then, in order to keep bailing out big business and the banks, the city has been progressively cutting services like public lighting, buses, police and fire protection, EMS, and health centers and clinics, letting the city itself fall to pieces. They’ve made large sections of the city uninhabitable. They have imposed 10% wage cuts on city workers and begun layoffs.

Concerned with that 14 billion dollars owed to the banks, Snyder has appointed an Emergency Financial Manager to act as a dictator and dismantle the city even further, leaving the population with less than the nothing they already have.

It’s a criminal attack on the population that deserves every bit of push-back the workers of Detroit can muster.

There IS wealth to meet the needs of Detroit’s population, but it has systematically been handed over to the banks and corporations. That’s why workers need to insist to Snyder and the rest of the politicians: “The banks and the corporations are responsible for the city’s debts. Get the money from them! And if they won’t pay it, expropriate it!”

For a more detailed exposé of how the banks, corporations and politicians have strangled the city of Detroit, read the article in the latest issue of the Class Struggle magazine.