Appreciating the Bargain
Week 48 of the Occupation
by Shea Howell

Emergency Manger Kevyn Orr’s grand bargain is unraveling. His Disclosure Statement and Plan of Adjustment offer little of substance. For anyone familiar with Michigan politics, the Plan reads like a long-winded reiteration of the dreams of the Mackinac Policy Institute.

Commentators from the hallowed halls of the New York Times to the chilly rooms of Historic King Solomon Church on Detroit’s west side, agree there is not much to Orr’s Plan. The Times says the plan does not propose any structural change, and is little more than a rehash of outworn methods.  Reverend Charles Williams, of the National Action Network, said much the same at the press conference announcing the Peoples Alternative Plan, saying Orr’s proposal was based on “if-come.” If the foundations pay up, if the state legislature agrees, if the pensioners accept the cuts now.  Other commentary has simply said, there is no there, there.

Predictability, Orr and his team have launched a media effort to steamroll their plan through what they hope is a frightened and dejected group of pensioners.

They are following the usual pattern of catastrophe-driven rhetoric. They say, “We are in a crisis! We must act now! There is no alternative! Act now or it will get worse! Appreciate what we are offering you!

Kevyn Orr told the Free Press that he is “frustrated” at the lack of appreciation he is getting from the retirees for his efforts. If we don’t embrace what he is offering, we will face a “catastrophe,” he said.  In yet another of the linguistic turns of phrase that mark all of Orr’s efforts, he said, “You’re not at the penny-ante table, you’re at the high-stakes table.”

He warned that he hasn’t used “hardball” tactics because he is trying to be “compassionate and give more money.”

Does Orr think that comparing the effort to protect pensioner’s income is like a game of cards? Does he not recognize that when you reduce someone from a modest income of $19,000 a year, to $12,500 you are forcing people into life and death choices? This is no game. Orr’s solution is not appreciated because it is not survivable.

While he talks about compassion for pensioners, it is the corporate powers that get his protection. No where in Orr’s document does he explain the role of the banks in creating our current financial crisis. Nor does he discuss the deliberate role of the right wing state legislature in defunding Detroit.

These are serious omissions. Orr’s silence on them is one of the main reasons his actions are “not appreciated.” They are not balanced or put in any context of the actual power dynamics that brought about this crisis. Nor do they address the fact that 60% of the so-called legacy costs undergirding the budget shortfall are directly related to questionable financial practices by the banks.

In fact, Orr’s report is silent on suing Bank of America, Merrill Lynch and UBS over the swap deal. Instead he announced a separate negotiation this week, offering $85 million to them and claiming this as a victory because it is not the $286 million he first offered them, and would have given them had Judge Rhodes not intervened. Orr said, “We appreciate the banks willingness to work with us to reach a solution.” The banks will walk away with millions, rather than being forced to pay for an illegal deal and the devastation they caused.

Meanwhile, Orr sanctioned one of the worst deals ever struck in any city. In return for nothing but appreciation, Orr has given billionaire developer Mike Illitch, $261 million in public money for a hockey rink.  He has given up the city’s claim on ticket sales, concessions and parking, about $7 million annually. He will take between $12 and $15 million from schools annually, to pay on the bonds floated to underwrite construction.

Orr’s plan is another example of what Judge Rhodes called “hasty and imprudent financial decision-making.”  No one who cares about the future of the city appreciates this kind of bargain.