Bankruptcy Consequences
For many Detroiters, Senator Mitch McConnell’s comments that states should consider declaring bankruptcy was as frightening as that of the President’s pushing bleach to cure Covid-19. Certainly, it is as ill-informed.
McConnell’s support for state bankruptcies came in the midst of an interview with conservative radio talk show host Hugh Hewitt. McConnell argued that the reason states are facing financial problems is because many of them, controlled by democrats, have been overspending all along.
In response to congressional efforts to increase funding to states and cities to fight costs of Covid 19 McConnell said, “There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.” Singling out Democratic-led states such as New York, California and Illinois, he said, “We’ll certainly insist that anything we’d borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension programs.”
Just to be sure his position was clear, after the comments, McConnell released a statement entitled “Stopping Blue State Bailouts.”
“I would certainly be in favor of allowing states to use the bankruptcy route,” he said. “It saves some cities. And there’s no good reason for it not to be available.”
No one really thinks state governments will face bankruptcy. Nor are people blind to the partisan politics at play here. But for most Detroiters, these comments are very familiar. They are the same ideas that were used to drag Detroit into bankruptcy proceedings against the will of the City Council and the people. Always at stake was the argument that our “pension funds” were the real problem. Our retirees living too beyond what we could afford. In 2013 the newly appointed emergency manager Kevyn Orr commented to the Wall Street Journal that “For a long time the city was dumb, lazy, happy and rich."
It was this way of thinking that ultimately resulted in the 80% of the Detroit bailout being borne by Detroit retirees. As investigative reporter Curt Guyette concluded after a careful analysis of the results of the bankruptcy, “The real story of Detroit's bankruptcy is the unprecedented hit retirees are taking.”
As McConnell spews hatred toward elders, unions, and states that have attempted to protect people and policies with some intergenerational responsibility, it is important for us to recognize the ripple effects of ideas held by men who put profits before people. Ideas that lead to decisions steeped in racism and illusion.
For those decisions are now finding their ultimate expression in hospital beds around our city. They are surrounding our elders, dying alone after life times of giving to families, neighbors and communities.
Make no mistake. One of the main reasons our elders are so vulnerable is that their lives were made immeasurably more difficult by this so called “comeback” of our city.
Everyone knew this was the real cost of bankruptcy. It was clearly reported that “The biggest hit comes in the form of health care cuts.” Retirees saw their insurance costs “skyrocket.”
At the time, long time activists Cecily McClellan, who spent 18 of her 23 years with the city working at the health department, said her health care costs jump to about $500 a month.
"If nothing changes," McClellan warned, "this will be devastating. Many people who thought they had a decent nest egg are going to find themselves living in poverty."
Since the bankruptcy the devastation of poverty has been the slow erosion of life. Evictions, water shut offs, heat interruptions, choices made between medicine and food. Step by step our elders endure the conditions that allow this virus to spread.
Comments have consequences. The ideas of austerity and limited government, of dehumanization and devaluing essential city workers, have found their final extensions in the bodies stacked in refrigerator cars.
We need very different values as we move beyond this crisis. We can see the consequences if we continue the ideas that brought us here.