by: Charles Brown
December 18 2009
DETROIT - This beloved city is in danger of fiscal crisis.
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 for $7.8 billion by the Obama Stimulus.
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!
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