Who’s to blame for city’s crisis?

DetroitCityWorkersRESIZED

DETROIT - This beleaguered city is in danger of running out of money. The city's accumulated budget deficit is said to be greater than $300 million. Now it is threatened with being placed under the financial management of a person appointed by the governor. But city officials, mayors and council members of recent years are not to blame for the City of Detroit's fiscal crisis.

We live in a private enterprise system. This means that private business leaders, not public officials, make the decisions that determine the ups and downs of our economy. Detroit's financial crisis is rooted in the problems of the city's auto-dependent economy.

The news media ignores this fact. Most recently, it has successfully promoted a big lie in much of the public's minds: that City Council members' alleged dishonesty and incompetence are the cause of the city's deficit. This finally had a significant effect in this November's election. The canard that the City Council is or was largely unfit caught on with more voters than in the past. The result was five new Council members, and a new mayor. But they are facing exactly the same problem as their predecessors. And so will any "financial manager."

Where should the money come from to fix Detroit's deficit? The federal government. I say that without any hesitation. If Wall Street could be bailed out to the tune of $11 trillion (as reported by the Financial Times several months ago; the amount is probably more than that by now), Detroit can be bailed out for $300 million or $400 million, or more.

Let me see if I can get the math precisely; check my decimal points. I get that $400 million is around one 20,000th of $11 trillion.

Uh, can you spare one 20,000th of what you gave the rich bankers? And you gave it to them, so we want it as a gift, not a loan. Bail out Detroit as Wall Street was bailed out!

Notice that the biggest boys in the private sector were more broke than Detroit, and they were bailed out by the mythically inefficient public sector, Big Gov'ment. Some of that federal money (that they gave the Wall Street banks) is our tax money, money from the people of Detroit.

On another aspect of this mess, the main adverse effect of an emergency financial manager in Detroit will be mass firing and wage and benefit reductions for Detroit city workers. If I might be allowed a little poetic license I'd channel former Mayor Coleman A. Young: Bump that! If they can give the motherscratchers who bankrupted Wall Street mega-bonuses, they can continue to pay basic wages and benefits to Detroit workers, who provide average Americans with services at least as important as financial services.

Following the logic of the Wall Street bonuses being handed out to those who bankrupted the banks, if our City Council were responsible for Detroit's deficit, all of its members should have been re-elected and given bonuses.

City worker jobs, government jobs, public jobs are real jobs. Detroiters need jobs especially right now, decent jobs with good benefits. Detroit workers losing jobs will add to the city's deficit because of lost taxes from income and property. It will, of course, put more Detroiters into economic dire straights.

Part of the big lie that the private sector is more efficient and competent than the public sector is that public jobs, Detroit city worker jobs are not "as worthy" or "legitimate" in some sense as private sector jobs.

Many categories of city workers are "bureaucrats" or paper-pushers or non-productive workers, the myth goes. This Reaganite story that "government is big and bad, and free enterprise is lean and mean" must be countered in the mass American consciousness. The "system threatening" bankruptcies of Wall Street and General Motors should put an end to the notion of private enterprise's superiority to public enterprise. The trouble is that the Press (oh ye, of Bill of Rights fame) is privatized.

Speaking of "privatized," a big portion of the City of Detroit's work is done in privatized contracts, a whole other can of worms by which a larger percentage of taxpayers' money goes to private profits rather to than workers' wages and benefits. Many of these contracting companies are outside of Detroit, so that this adds to deficit problems.

By the way, the State of Michigan got a big bailout from the feds for its deficit.

Detroit's deficit is also due to the decisions by the private sector to move so much of the former robust Detroit business sector out of the city over the last 50 years. This is another way in which the private sector is responsible for Detroit's plight. As I said, as this
is a private enterprise system, and Detroit public officials have essentially no power over this major trend. They have no authority to start city-owned enterprises that might substitute for the runaway plants, shops and businesses.

As evidenced by many of the letters to the editor in Detroit's newspapers, the city's deficit is aggravated by the many years of suburban and outstate racism directed at Detroit, and "Englerism" (former Republican Gov, John Engler passed 32 tax cuts giving tax breaks to corporations and the wealthy).

Since becoming majority Black due to white flight, Detroit has been the victim of a virtual blockade, something like that on Cuba or Haiti. As I discussed in an earlier article, Detroit is unforgivably Black to the powers-that-be, headed for impoverishment like Haiti.

Yes Detroit has corruption but no more than Wall Street or any city, state or the federal government.

Importantly, it is not city workers'or officials' corruption or incompetence that has led to the fiscal crisis, but the economic and financial incompetence and greed of banks and corporations.

Given the revenue streams that go straight to Wall Street from Detroit, it is not far off to characterize any emergency financial manager as a Wall Street financial dictator.

I say, "Hell no" to that!

Photo: PW/John Rummel

 

Post your comment

Comments are moderated. See guidelines here.

Comments

  • thanks john for the insightful anaylsis of our Detroit woes. I agree with you that its private enterprise more than public officials who are at fault, and that the federal government should bail us out like they did Wall Street. But I'm sure you also agree its a systemic problem and no amount of money will ever solve the major problems caused by private enterprise. As long as big business is in the drivers seat, we'll have woes.

    and that's why we probably find ourselves together on this page.

    Posted by bill meyer, 12/21/2009 11:40pm (5 years ago)

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