Bankruptcy Attempts
As we move through these next few months of uncertainty, some things are clear. At least 12 million working people are likely to face the New Year without unemployment benefits. Another 30 to 40 million people are facing the possibilities of eviction. As many as 54 million people are facing food insecurity. These crises are most acutely felt in our cities, among Black, Indigenous, people of color, and children. They represent human trauma on a scale we have not experienced since the Great Depression. Long standing structural injustices have been accentuated by this global pandemic and the ineffectual responses of the current administration.
Into the vacuum of leadership at the federal level, many state and local government officials stepped forward to protect people and provide some measure of safety and security. In most cases, these efforts have been attacked by the Trump administration and right-wing forces that he encourages. They have done everything from mounting court challenges to plotting to kidnap and execute state officials.
Now right- wing extremists have decided to use bureaucratic maneuvers to withhold badly needed revenues that Congress has already allocated for state and local government relief. Recently, Treasury Secretary Steve Mnuchin announced that he is planning on putting $455 billion of unspent coronavirus relief funds into an account that requires congressional authorization to access. The intention is to put these funds out of the reach of the incoming Biden-Harris administration and to slow down or stop funds from getting to state governments and people who are increasingly desperate. After initially objecting, it seems the Federal Reserve will go along with the plan, although Democrats are mounting challenges to the legality of shifting these funds.
The human cruelty behind these actions is hard to grasp. But they are more than the maneuvers of sore losers, attempting to box in a new administration. They are part of a larger effort by Republicans seeking power to diminish the capacities of state and local autonomy and to use financial crisis to undermine democracy.
In the early spring, as the coronavirus was just beginning to take hold in the country, Senate Majority Leader Mitch McConnell was running around giving interviews about how to address what was then recognized as a looming crisis in State finance. Everyone agreed that more than 25% of state revenues had evaporated do to the virus, and economists were projecting a half a trillion dollar budget gap for the states.
McConnell’s solution was straightforward. He told the Hugh Hewitt Show that he was opposed to giving federal aid to states. Rather, he thought states should cut their spending and declare bankruptcy. Later, on Fox News he said, “We’re not interested in solving their pension problems for them. We’re not interested in rescuing them from bad decisions they've made in the past, we’re not going to let them take advantage of this pandemic to solve a lot of problems that they created themselves [with] bad decisions in the past.”
This line of reasoning is hauntingly familiar to Detroiters. It was the same sort of thinking that led to our own bankruptcy in 2013. Detroit was cast as an overspending, corrupt, incompetent, bloated government, providing big pensions to lazy people. Bankruptcy was the solution, pushed by corporate powers and right-wing legislatures. Bankruptcy became a way to attack pensions, privatize city assets and services, and set aside all democratic decision making. The racial antagonism was clear.
Such a process directed at predominantly democratic states has long been a desire of right-wing republicans. Bankruptcy is a federal process, run by federal courts, now largely in the hands of republicans. In this process, pension funds and State owned assets evaporate.
We, in Detroit know what bankruptcy really means for people. And we understand that driving people out of homes, living with children going hungry, or suffering from poisoned water, lack of health care, poor schools, and constant insecurity are all acceptable costs for the protection of corporate power and privilege.
If we believe in different visions of lives that are nurtured and protected, we need to understand just how broken the current systems are. Creating self-determining, loving communities are our only choice for a future.