Jun 10, 2013
The Detroit Institute of Art’s collection, the Detroit Zoo’s animals, Belle Isle Park, any other park or piece of land owned by the city, the city’s water and sewerage departments, its public lighting department, its buildings, its vehicles – it’s all up for grabs as the Emergency Financial Dictator works to satisfy the city’s creditors. A painting by Brueghel or Van Gogh, sure! An elephant and some polar bears, why not? A park in the middle of the Detroit River, add it to the pile! Profitable, money-producing departments, by all means! And throw in a fire engine or two, while you’re at it! The financial vultures circle the city, looking to see what they can pluck and sell off.
Supposedly, the city owes 17 billion dollars, give or take a billion. Supposedly the creditors must be satisfied.
Look at who some of those creditors are – many of them the big banks, hedge funds and other financial sharks that hold billions of dollars in Detroit city bonds. Part of the responsibility for putting the city deep in debt is on their shoulders. Holding the threat of a bond downgrade over the city’s head in 2005, they pushed the city into exotic financial scams that cost the city three and four times the amount the city realized from the sale of its bonds. They created the equivalent of sub-prime mortgages, with hidden exploding fees – fees that in some cases were larger than the whole amount borrowed.
Why should they get a penny? They ran financial scams on the city, that is, on its population. By all rights, they owe the city money.
But there are some creditors who should be paid – all those people who worked for the city and its departments for decades, people with modest pensions, only enough to live on, if they keep their medical coverage.
The city owes them money too – for decades it has not put enough money aside to pay for those pensions. Just like it didn’t put enough money in to running its bus system, or its parks, or the street lights, or the rec centers, the emergency services.
The money that should have gone to make the city’s pension funds secure, instead went as subsidies, tax credits, outright gifts to some of the biggest corporations in the country – General Motors, Chrysler, Ford, among others – and to so-called “developers,” that is, speculators. The money that should have gone to keep more people working for the city so its services could function adequately, instead went to clearing land and putting in the infrastructure for stadiums, factories, office buildings, casinos – all for the benefit of private, profit-making interests.
Well, if the city still owes debts, then take back what was given to those private interests who have lived fat on the city’s money for years. Take General Motors headquarters and sell off that building. Why not? The city paid for it many times over in the various tax breaks it gave to GM. Take the Compuware Building, take the Detroit Medical Center given to a for-profit company for peanuts. Take Dan Gilbert’s 20 or so buildings. Grab the Illich family’s and the Ford family’s stadiums.
If something really needs to be sold, then sell off the holdings of those whose tax breaks and subsidies put the city in debt.
It’s an outrage that a vast city can be put up for sale in order to squeeze even more wealth out of a population already impoverished for the benefit of those profiteers.
Detroit’s situation may be more extreme, what’s happening may be further along. But Detroit doesn’t stand alone. Jefferson County, surrounding Birmingham Alabama, has just been pushed into bankruptcy because of exotic bank loans for its sewer system. In 2011, five cities in California and 25 other cities in the country were pushed into bankruptcy. In 2012, dozens more followed. Across the country, cities have been pushed deeper and deeper in debt – debt that has been used as the excuse to cut city services to the bone.
This is capitalism at is best, destroying the very places we live, along with the jobs and pensions we depend on. It’s a system whose time has come and gone. Burying it so it can’t ever be found is the only reasonable answer.