Thursday, March 29, 2012

Detroit's Last Stand

As you may have heard about or read here in a previous post the City of Detroit is broke. The Mayor and Council have been unable and unwilling to fix the problem. The state review board has certified that Detroit is a hot mess. This started the legal process for Governor Rick Snyder to seek either a consent agreement between the city and state or to impose an emergency manager. The consent agreement is "emergency manager lite". Under a consent agreement the mayor and council would still have some fiscal influence, just not very much. A financial board would be set up to run the city's finances. Members would be appointed by the governor, the mayor and the city council. Union contracts could not peremptorily be thrown out. Under an emergency manager law, the mayor's and council's authority to do anything would be eliminated, not trimmed and union contracts could be reopened or rejected. Detroit has just a few days left before the city is obligated to either be in an consent agreement or the governor must impose an emergency manager. 
As you might imagine, this being Detroit nothing gets done easily or on time. Although the governor has said he doesn't want an emergency manager, he has refused to rule it out. But the Detroit political establishment also doesn't want a consent agreement and has so far refused to sign the agreement offered by the state. They are working on a different document, which they call a financial stability agreement but is a consent agreement by another name. This could come out today. This document pointedly refuses to give any review board final say over finances. So this is, obviously a sticking point. City Council member Kwame Kenyatta said the state-city relationship was akin to a "master-slave" one.

There were public meetings on the process to declare a financial emergency and of course people showed up to comment as is their right. One such person who got some attention was local activist, gadfly and New Black Panther Party member Malik Shabazz who said, well, just listen:


As you might imagine this didn't go over very well with many people in or outside of Detroit. The general response from outside of the city about threats to burn it down seemed to fall into three categories:

  • Go right ahead
  • That's how we know you're insane
  • How would we tell the difference?

SE Michigan remains one of the more racially divided population tracts in the US. It is what it is.
So after all the shouting, moaning, and testifying is over Detroit is really stuck with a number of unpleasant choices

  1. Bankruptcy
  2. Consent Agreement
  3. Emergency Manager

That's it. Of course this being SE Michigan it is possible that the numbers are all awry and that Detroit actually has enough money to make it for another 3 months or another 6 months or more. It is possible that the state or federal government might create a bailout plan. 
It is possible that some liberal billionaire could write a check to bail the city out. 
It is also possible that I may win the lottery today.

But planning on such things is not how intelligent people organize their life.
There is of course no guarantee that a consent agreement or even an emergency manager will solve the problem. Detroit may be too far gone for that. The unfortunate truth is that there is not enough income and too much out-go. This spiral of higher costs and lower revenue has been obvious for at least the past decade. One needn't sign on to every last single right-wing austerity meme to recognize that unlike the Federal government, Detroit can't print money and can lose high numbers of citizens to areas that have better services, lower taxes and lower levels of crime.

Racism scars people. I understand that. It is extremely unpleasant for Detroiters to consider a future in which their elected officials have their authority trimmed or eliminated. But as I've said before, getting upset about such things now is like getting peeved when the bank decides to repossess the car that you haven't made payments on in 6 months. Sure, you can contact a bank rep and call her all out of her name if you like. It may make you feel better. But it doesn't change the underlying reality. Councilwoman JoAnn Watson can continue talking about what the state owes Detroit. But no one who cares is listening. It's EXACTLY like having a boss who promises you a raise but then the company runs into trouble and your boss leaves for greener pastures. The new boss tells you that not only are you not getting a raise but that pay cuts are imminent. I've been there. Ranting on and on about what you're owed doesn't make a dime's bit of difference. And for what it's worth it's not (just) a race thing. A predominantly white Detroit suburb may be getting an emergency manager as well. Things are tough all over.

1) If your city was at the brink, would you rather burn it down than accept an emergency manager/consent agreement?
2) Should the state of Michigan have refused to get involved?
3) Is bankruptcy a better option than state control?
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