Learning Lessons
Week 20 of the Occupation
As the process to decide whether or not Detroit can be declared bankrupt grinds on, a number of things are becoming clear.
First, Governor Rick Snyder and Emergency Manager Kevyn Orr are neither truthful nor transparent. Secret dealings between the Governor and Orr were uncovered by one of the many court cases filed to challenge the bankruptcy. Long before any public announcement, the Governor had been in steady communication with Orr and his law firm, Jones Day. The Governor considered Orr as an “agent of the state” in negotiations with the city, giving Orr and his firm undisclosed and unfair advantages, positioning them to benefit from a bankruptcy filing. Ethical concerns, raised by many that Jones Day and Orr also represented corporate-bank creditors, were swept aside in the rush to bankruptcy.
Second, the financial emergency used to justify the rush to bankruptcy is unsubstantiated. There is a growing consensus that it was overstated at best, manufactured at worst.
The Governor, his appointees, the mainstream media, and corporate elite insisted that bloated pension funds, corruption, and thoughtless investing had brought Detroit to the edge of a financial catastrophe.
Now it seems that the media are less enamored with the Michigan powers that are providing clearer assessments of the crisis. Analysts for financial journals have raised serious questions about the claim by Emergency Manager (EM) Orr that pensions are underfunded. Orr’s claim of a $3.5 billion dollar deficit has been unsubstantiated. Many believe it is unsupportable. The union claim of a manageable $640 million seems more likely.
Whatever the ultimate agreement, it is unconscionable that EM Orr has waited until this week to seriously talk with unions about pension funds. His earlier efforts were marked with a kind of bullying that seems endemic to Emergency Managers, staging meetings with slide shows and demanding confidentiality agreements.
Efforts to control and distort the public dialogue about such an important issue harm all of us. They squander the opportunity to clarify the values behind our collective decision as a state to protect pensions for those who have served us over the years.
Even Attorney General Bill Schuette, who rarely agrees with anything advocated by labor, felt compelled to lodge an objection to the bankruptcy filing. Acknowledging the heart of the lawsuits filed by a number of unions, Schuette said, “Throughout this bankruptcy process, protections enshrined in the Michigan Constitution by the citizens of our state must be honored, respected and followed.”
Third, the lie behind the right wing image of bloated union pensions has exploded. Extreme right wing forces and their propaganda machines have encouraged people to believe that public employees have become rich at taxpayers expense. Such demonizing is hard to uphold as story after story makes clear that there are less than 30,000 people receiving pensions in Detroit, most are less than $1,900 a month. To ask these elders to now take 10 cents on the dollar, while guaranteeing banks 75 cents on every dollar, violates almost everyone’s standard of fairness.
Along with contesting the claims about pension funds and the dimensions of debt, the role of the state legislature in withholding revenue sharing and bond funds has come under increasing scrutiny.
Third, a lot of money will be made in the bankruptcy filing. Experts have estimated that the effort could cost the city $100 million. This cost becomes the profit of lawyers, accountants, consultants, and public relations firms. Even the firm hired to oversee the spending will make a handsome profit.
Resistance to this travesty is growing. Artists are finding new ways to frame the strength and resilience of our city. Organizations are holding forums and public education. People in kitchens, barbershops, and churches are beginning to demand another way to determine our future.