Michigan’s multimillionaire Gov. Rick Snyder on March 14 appointed Washington lawyer Kevyn Orr as “emergency manager” over the city of Detroit. This has become the latest majority African-American municipality in Michigan to fall under the dictatorship of the state, which is serving as an agent of the banks. The banks claim the people owe them approximately $16.9 billion in long-term debt.
The Detroit City Council filed an unsuccessful appeal on March 12 against the state takeover, but Snyder went ahead with the seizure just two days later.
As Snyder introduced Orr at a press conference at the state office building in the New Center area, demonstrators picketed outside. They condemned the governor’s act of dictatorship and total abrogation of the democratic rights of voters, who just in November had voted down the emergency manager law in a statewide ballot initiative.
Orr, who was involved in the Chrysler bankruptcy restructuring in 2009, immediately warned the city unions that they would be a target of his efforts. “Don’t make me go to the bankruptcy court. You won’t enjoy it,” he said at the press conference. (miamiherald.com, March 15)
“Bankruptcy’s been my stock and trade,” Orr stated. “I’m very comfortable in bankruptcy courts. You can do everything by consent. … When I say consensual, I mean … let’s get at it and work together because we can resolve this.”
The bankruptcy of Chrysler led to massive layoffs of tens of thousands of workers, freezing wages and institution of a two-tier wage structure. Before that, Orr worked for the international Jones Day law firm which specializes in “turnarounds” for private corporations.
Detroit city workers have already been forced to take up to 20 percent pay cuts and see the erosion of their health care and pension benefits. Since corporate-oriented Mayor Dave Bing took office in 2009, some 4,000 city jobs have been eliminated.
The city is facing a monumental economic crisis. Public transportation is in an abysmal state, lighting is out in large sections of the city, and streets are in gross disrepair.
The emergency manager’s main role, however, is to guarantee that debt service is paid to the banks. All existing labor contracts and other measures can be thrown out based upon the interests of capital.
‘Make the banks pay!’
Jerry Goldberg, of the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shutoffs, spoke to the protesters at the press conference on March 14. Goldberg, who said the appointment of Orr is designed to enrich the financial institutions, was met with great applause and people chanting “Make the banks pay!”
In response to the declaration of a “financial emergency” by Snyder on March 1, the Moratorium NOW! Coalition issued a statement pointing out that the banks and corporations are responsible for the city’s economic and political crisis. The statement was widely circulated online and prompted Bloomberg News to interview coalition leader and retired Detroit city worker David Sole.
The Moratorium NOW! statement read in part: “Snyder along with the corporate media is blaming the people of Detroit for their current plight, yet the situation … in the city is a direct result of racist and exploitative practices of the financial institutions and the corporations. Over the last decade more than 237,000 people were forced out of the city due to home foreclosures, utility shut-offs and the elimination of jobs.”
Regarding the debt, the statement continues: “Piled on top of this massive loss of employment and fraudulent mortgage lending, the city government was forced into credit default swaps (cds) and other questionable municipal loans which have rendered the people to indebtedness that can never be paid off. In addition, the bond rating agencies such as Moody’s, Standard & Poor’s and Fitch have continued to lower the creditworthiness of the city and [are] therefore driving up interest and penalties where the banks can now claim all tax revenues that should be utilized to pay for municipal services and education.”
Banks’ racism in action
The emergency manager imposition is also the denial of voting rights to nearly half of the African-American residents of Michigan, who live in cities under emergency management. The emergency manager, referred to by many as the “dictator law,” harkens back to the Jim Crow era. So too does the use of banks in targeting African-American households and communities as sources of avaricious profitmaking and usury.
The existing political structures in Detroit and other cities with majority African-American populations in Michigan are being strangled by the banks and corporations. The threat of bankruptcy by Orr and Snyder is designed to force even greater austerity measures upon the people of Detroit.
The Moratorium NOW! Coalition calls for “an immediate halt to all debt-service payments to the banks which would immediately provide enough revenue to operate the city. The banks must then be held accountable for their robbery and consequent destruction of Detroit.”
The coalition also calls for “mass demonstrations, rallies, press conferences to protest and denounce the actions of Snyder and his collaborators. These protests should expose the criminal nature of the banks and the corporations who are at the root of the financial crisis in Detroit and throughout the state of Michigan.”
Meanwhile, the first batch of some 2,700 documents has been released by the city of Detroit as part of the Freedom of Information Act lawsuit filed by Moratorium NOW! in February. The organization is setting up a people’s review board to analyze the documents and expose that the existing crisis is the direct result of the banks’ usurious policies.