Lessons from Bankruptcy
This week marked the 10th anniversary of the imposition of bankruptcy on the city of Detroit. The anniversary coincides with the passing of our beloved JoAnn Watson, who vigorously resisted the idea of bankruptcy. She consistently maintained that Detroit did not declare bankruptcy, but that it was imposed upon the people and our elected government by the state legislature and the courts, in service to corporate powers.
She helped us understand that the ploy of bankruptcy was a fundamental assault on democracy. This understanding has escaped many of those who are celebrating the “rebounding” of the city. A recent New York Times article captures the dominant media narrative explaining that Detroit now “has money for basic government functions like park maintenance and commercial code enforcement that long festered out of reach in the municipal hierarchy of needs.”
The article proclaims, “The city has defied the most dire predictions. Budgets have stabilized, basic services have been restored, home values have increased and pockets of development have taken root.”
Along with explaining the city now has money for parks and blight removal, the Times applauds the progress on the city bond ratings. It says nothing of the plight of the pensioners who struggle with reduced income, increased healthcare costs, and “clawbacks” of benefits.
Nor does it mention that without effective democratic oversight, the city overcharged many of these same people with unjust property taxes of $600 million through that decade. Many of our neighborhoods lost people, homes, and community ties through this process.
For those of us who resisted this rush to bankruptcy, who did not consent to the rationale or the process, the most important lessons are how fragile our democratic process is when faced with a fundamental challenge by the forces of racialized capitalism. The struggle against bankruptcy and its implications has deepened our understanding of the need to create new methods of governance to meet basic needs and obligations.
We have learned that constitutional protections of pension funds can be set aside. We learned that state legislatures violate their own rules to establish a legalistic framework to impose anti-democratic, authoritarian controls in the name of financial responsibility. We learned that petition drives, clearly expressing the will of the people of the state, can be overturned with a trick of the legislature. We learned that union contracts, especially those that express a moral compact among generations, are not worth the paper they are written on. We learned that public assets can be seized and sold to the highest bidder. And we learned that resistance to these forces becomes a justification for increasing police, surveillance, and technologies of power and control.
We also learned that the use of manufactured financial crises becomes a means by which corporate powers increase their private wealth. This past year we witnessed the emerging luxury high rise on the site of Joe Louis Arena, a site the city lost in bankruptcy but paid to demolish. And we have seen the consolidation of properties along the riverfront by Dan Gilbert and his Bedrock corporation.
We have learned that the Mayor Duggan’s word that the city would maintain control over the water system, was not true. We have endured a decade of increasing costs, continued shut offs, the refusal to acknowledge water as a human right, and a disdain for public health and safety.
We have seen the tools developed by corporate interests to set aside democracy in Detroit used across the country. And we have seen them imposed brutally on the people of Puerto Rico.
In this coming decade, the questions of how we live together, how we make basic decisions to sustain life, and whose interests we serve and protect are critical. But the Detroit Bankruptcy offers us lessons about how deeply we must change our democratic processes.