Pastor, St Peter’s Episcopal Church – Detroit
This article will appear in the January issue of the Catholic Worker.
Christ drove the money lenders out of the Temple. But today nobody dares to drive the money lenders out of the Temple…because the money lenders have taken a mortgage on the Temple. -Peter Maurin, Easy Essays
Let me tell you about a new form of urban fascism, one which is the template for direct corporate rule. Though it comports fully with what is happening in most of the global south, this despotism called emergency management is being deployed in Michigan, and Detroit is its major test ground. Since March of 2013 we have been living under a non-elected government thoroughly allied with the banks and corporations.
Start with the political structure: an Emergency Manager appointed by the Governor over a municipality or school district holds in his person all the powers of government plus more. In a city, the EM immediately supplants the mayor and city council, eliminating as well even those checks and balances. So an Emergency Manager can write laws with the stroke of a pen, repeal ordinances, fire employees, set budgets, sell assets, privatize services and departments – and, two further extraordinary powers, can unilaterally break contracts whether union or otherwise and may even rewrite the city charter.
I know. Though Detroit is much in the news, you are not likely get this from broadcast media, from reading the Detroit dailies, or the Times for that matter.
In the fall of 2013 organizers got 250,000 signatures to put on the ballot repeal of the EM law, but it had to go to the State Supreme Court to over-rule the board of canvasser’s decision that the type-face of the title was microns too small. It was repealed by 2.3 million citizens, including 81% of Detroit, but the lameduck Republican legislature turned around and re-passed a ballot-proof version. I’m not making this up.
This legislation comes full blown out of the right wing think tanks and Michigan is the Arizona of emergency management. As the cover of Time Magazine put it over an image of the Detroit skyline: “Is Your City Next?” They were referring to municipal bankruptcy, but it applies equally to emergency management. Most of my adult life I’ve lived under Phil Berrigan’s adage, “If voting could change anything, they’d make it illegal.” Now here I am resisting the big assault on local democracy.
Race and Devastation
How is this happening? Because so far it’s being done almost entirely in African American cities. In fact, at this point every major black city in the state but one are under emergency managers. Over half the African American population of the state is under non-elected governments. And three quarters of the black elected officials in the Michigan have been replaced by this process. Even if many of the Managers are black, as in Detroit, the exercise is fundamentally racist. Constitutional and Voting Rights Act suits have been filed in federal court, but as of this writing they are stayed from going forward.
When one of the Detroit Dailies publishes an editorial entitled, “Can Detroit Govern Itself?” decoding the subtext is simple: “Can black people rule themselves?” White folks outstate shake their heads and shrug indifference. Problem is, once the mechanisms are perfected and the precedents are set, emergency management will be coming to a white city near you.
Even many black folk in Detroit, steeped in news mainly from our broadcast media, buy into the view. This black majority city just elected its first white mayor in nearly fifty years. He lived all that time in Livonia, known as “the whitest city in America;” moved into Detroit last year too late to be properly on the primary ballot, but won by a landslide as a write-in candidate (Right, think about it. Me either). Running as an outsider with connections to turn things around, he won the final with so much corporate money he didn’t know where to put it all.
Detroit’s financial crisis has structural causes to be sure, and no surprise that race is a factor there as well. With de-industrialization, job flight and capital flight have long eroded the tax base. In the last decade over a quarter million auto-related jobs have disappeared from the metro area. But beginning in the 50’s, white flight decimated the city’s population. A million people left. Even before the foreclosure crisis nearly one third of the housing stock had been lost to flight. This you can read in Time or the Times. Now Detroit has gone from being the city with the highest rate of homeownership in the nation, to become the city with the highest foreclosure rate. As elsewhere, predatory mortgages were heavily targeted in black neighborhoods. This figures into losing another quarter of the population in just the last decade.
Add that, by state decree, folks in the suburbs working in Detroit do not have their city taxes taken out by employers. They stiff the city to the tune of $140 million a year. Cash flow is affected. The corporations in Detroit also stiff the city on taxes and fees. City Councilwoman JoAnn Watson estimates the amount in arrears to be some $800 million. One noteworthy tax scoff is the owner of the Tigers and the Red Wings, who owes tens of million by himself. But he’s getting a bond measure to build a new hockey rink and given the land to boot. Emergency Management makes that work.
Oh the contradictions of my life. Here I am a lifelong, conscientious war tax resister bemoaning tax refusers (though neither conscientious nor honorable). I’ve always paid local taxes, but now I even think, “Taxation without representation?”
Disaster Capitalism and Financial Emergency
We are at a moment when late capitalism, reaching certain limits, may be seen turning inward to devour basic institutions like public education and now municipalities. What’s been done globally is coming home.
If Detroit were an indebted third world nation, what is being imposed on us (privatization of assets and services, deregulation, and austerity budgets) would be called “structural adjustment.” The economists out of the University of Chicago who hatched this formula decades ago, discovered that the quickest way to impose it was in the wake of a natural disaster (tsunami, earthquake, hurricane). Devastation is opportunity. Then it dawned on them that disasters could also be created. Think of Detroit as New Orleans with a different kind of “storm.”
Privatization. In Detroit public education under emergency management is being dismantled and replaced with for-profit cyber school charters. Private security roams downtown looking like cops; their surveillance cameras feed a wall of monitors not at police headquarters, but in a corporate office. The mayor wants a big downtown firm to serve as the “law department.” The bus system and lighting are in private hands, as is the Health Department. A few weeks ago the Worker soup kitchen at St Peter’s got our first visit from Not the Health Department. We knew the old inspector by name and face. The new contractor thinks we are a restaurant. New sinks have gone in – one just inside the kitchen door so guests can wash their hands before crossing the threshold to use the phone.
Detroit does have a cash flow crisis, roughly $200 million per year. But that has also been partly manufactured. Governor Snyder, a right-winger who ran as a Nerd, had to declare the emergency in order to appoint the manager. With help from his Republican legislature, he worsened the crisis under review by cutting $67 million in state revenue sharing with the city. Last year Detroiters passed a bond measure of $137 million to address cash flow but through the period in which he was weighing whether Detroit was in crisis, the Goverrnor held the moneys in escrow. The city unions negotiated with the mayor a package which would have saved Detroit over $100 million, but the Governor effectively prevented it from coming to the Council for approval. Add in the corporate tax scoffs. Emergencies are made not just found.
Which leads to the moneylenders, as Peter would say. He would be amazed, well perhaps not, at the extent to which debt is aggressively marketed to students, homeowners, consumers, institutions, and, yes, municipalities. In ancient Israel and in the time of Jesus, debt bondage was the path to slavery. Peter’s vision, like that of the Jubilee kindom, involved release of debts and an end to interest lending – foundational for a new society in the shell of the old. Jesus took the jubilee movement straight to the Temple – which was the bank of his day. Run by Sadducees, the absentee landlords, the pro-Roman 1%, it was the place where the “records of indebtedness” (think mortgages) were kept, as Galilean peasants lost their farms to predatory taxes and interest. He takes the Passover march and direct action straight to the currency exchange, the money changing tables which represent the intersection of the local and imperial economies. He drives them out and occupies the temple court for a day, beginning to teach. When the disciples look up and see the beautiful stones, Jesus notices not only the rich, but the poor widow putting “all she has to live on” into the Temple treasury. It’s all coming down, says he.
In Detroit, the same banks (Bank of America to name one) which have been “devouring widow’s houses,” eating out housing stock with predatory loans from below, have managed predatory loans from above as well. I won’t try to explain “interest rate swaps” here, but suffice it to say that at a time when banks get their money at near zero interest, Detroit is paying the banks at a rate of 6% or more. As insiders to the bubble and crash they knew the day was coming and were even able to manipulate the international base rate, so the decks were stacked.
Couldn’t we get out this deal? Or some of it? The city could seek charges of criminal fraud (like Oakland did). Or an honest bankruptcy could reduce or renegotiate it. But instead the Emergency Manager has put forward a criminal alternative: borrow $350 million from Barclay’s of London; use $250m of that to buy out Bank of America out of the deal (they’ve already gotten $800m); the other hundred million is roughly the cost of legal fees for the bankruptcy. Simple. What would Barclay’s get from the deal? If it goes through, Detroit is on the hook for the 350 and interest (20% of the city budget for the next six years) and they get first dibs on major city assets to be sold, like the Water Department that serves the three county urban sprawl, or tracts of land, perhaps even the city’s jewel of an island park so long coveted by developers. And then, As Glenn Ford notes:
To ensure that the city can never escape the clutches of capital, the contract would allow Barclay’s to immediately declare Detroit in default if Emergency Financial Manager rule is ended for any reason – that is, the corporate plan calls for the permanent cessation of democracy in Detroit.
Detroit Has Not Declared Bankruptcy
Make no mistake. Though they are referred to in court and the media as “the city,” it is the Governor and the EM who have filed for bankruptcy. When a city files, the Judge puts a stay on any suits against the city. However, in this case he has put a stay on the constitutional and Voting Rights challenges to the state’s Emergency Management law in federal court. The logic is this: first we’ll do the bankruptcy, then they can figure out if the EM had the legal standing to even file it.
If the city filed for bankruptcy, and was arguing in its own interest, the banks and the pensioners and the unions, would all be on a level playing field. Instead the banks have been dealt with up front, offered 80 cents on the dollar. The city pensioners were offered 10 cents. Pensions are actually protected by the state constitution, but the judge has rule that is trumped by US corporate law.
Though he’s running the entire city, Emergency Manager, Kevyn Orr, is a bankruptcy lawyer. He oversaw Chrysler’s chapter 11. Back channel emails uncovered last summer show him being courted before the Financial Emergency was even ruled. He expressed concern that it appears the EM law was written expressly for bankruptcy. But he takes the job. He resigns as a partner of Jones Day, third largest law firm in the world, among whose primary clients are, you guessed it, Bank of America/ Merill-Lynch – bigger clients for them than the City of Detroit. Just days before Orr’s appointment was announced, Jones Day is named by the city as the law firm to restructure the city’s debt. Actually to restructure the city. They are now the lawyers in the Governor’s bankruptcy case. They bill us at $1000/hour. The firm will make about $100 million.
The Last Vestige of Democracy and Creating Our Own
More accustomed to arrests at SAC bases, White House gates or missile factories, my last was in City Council Chambers. It was the morning they ratified the Jones Day contract and also the 50th anniversary of Martin King’s letter from a Birmingham Jail. We held up the vote. We blocked isles and sang, We Shall not be Moved. As spectators and speakers joined us the crowd swelled and the harmonies turned rich and deep. But only two of us were arrested. The other, an elected member of the School Board cried, “Shame!” while being hauled away. The police, whose jobs and pensions are on the line thanked us at the precinct. Come trial, their testimony will be of interest. We have asked for jury trial and it’s scheduled for January 27. A jury is the last vestige of democracy in Detroit. We will remind them so. That is, the last vestige other than those we create ourselves, participatory and from below. Everything we do these days must build community and democratic practice.
Kairos and Opportunity
A local campaign (with a development plan) is named Opportunity Detroit. It sees the city as a housing space, a high tech corridor, and a destination for sports and entertainment and that is how the city is being restructured not just financially but spatially. Certain areas, like along the riverfront or major transport spines are being resourced for corporate development, while outlying neighborhoods are having the plug pulled on lights and infrastructure. When the archdiocese was preparing last year for another wave of top down church closings, the cardinal first met with the mayor to find out which neighborhoods had no future. The foundations and their ancillary non-profit agencies are in on the mapping (they were recently called into a closed door meeting with the bankruptcy judge on a similar premise). People lose their homes and neighborhoods not to eminent domain, but simply because the resources – schools, churches, police, fire, lights and water are being pulled from under them. Land empties and spaces open up. The forested gated communities of the future are being designed.
The neighborhood of my church, St Peter’s, is one being resourced. Hip destination restaurants pop up. Downtown corporations pay employees to move in here. The new street lights will have surveillance cameras built in and networked. Meanwhile, the worker soup kitchen is a liability to be closed or harassed out. Our guests are stopped for frisking, ticketed and criminalized, driven out of town in police cars, suffer violence. They are to make way for opportunity.
We know that it is a moment to resist displacement, emergency management, gentrification, corporate occupation. It is also a moment, exiled in our own city, to build and plant and marry. To make real community and practice real democracy. But that’s another story to write and to tell.