Detroit bankruptcy ‘exit plan’ latest attack on African-American majority
As the corporate-controlled media in the city of Detroit continue to champion the massive theft of health care programs, pension funds and public assets totaling over $6 billion, the majority African-American population is being completely disenfranchised by the bank-led “plan of adjustment.”
Despite claims of a “rebirth” of the municipality through a forced and illegal bankruptcy proceeding, the overall conditions in Detroit have declined over the last 20 months since the appointment of Kevyn Orr as emergency manager. Public transportation, lighting, water resources, education and emergency medical services have suffered.
The ruling-class interests have praised two select areas in the city as prime centers for investment. In downtown, billionaires Dan Gilbert, owner of Quicken Loans, and Mike Ilitch, owner of the Detroit Tigers, Detroit Red Wings and other corporations, are attempting to reshape the development agenda for the entire city.
Efforts have also been underway to encourage people to move into the Midtown district, which includes Wayne State University, the Detroit Medical Center and the Institute of Arts, for both residential and business purposes. Meanwhile, the working class, poor and senior residents of Midtown are being targeted for removal through astronomical hikes of rent and police sweeps.
The increasing demand for rental units in Detroit has much to do with the impact of the foreclosure crisis, which has plagued the city for nearly a decade. Whole neighborhoods in the east, west and southwest districts of the city have been devastated by the predatory actions of banks, insurance firms, the monopoly utility company DTE Energy and the deeply distressed Water and Sewerage Department.
A moratorium on bank foreclosures could have saved tens of thousands of households from bank seizures of their properties and therefore stemmed the precipitous decline in tax revenues and public school enrollments. But state and local governments declined to consider this.
Massive electrical, heating and water services shut-offs have also served to drive people from their neighborhoods, since it is almost impossible to live in homes without these necessities of modern life.
Court endorses draconian bank policies
The Moratorium NOW! Coalition and other organizations made two major efforts to bring the questions of predatory bank lending and water shut-offs into the considerations of how the plan of adjustment would be structured. During the bankruptcy trial, hundreds of rank-and-file workers, retirees and homeowners filed legal objections to both the eligibility for municipal bankruptcy as well as the plan of adjustment.
The Jones Day law firm, which misrepresented the interests of the city through the emergency manager and Gov. Rick Snyder, rejected any mention of the role of foreclosures and evictions in relationship to Detroit’s financial ruin. To ignore such an obvious fact of history and its effect on population decline, destruction of housing stock and municipal services is a clear recipe for disaster.
A class action lawsuit, filed by victims of the massive water shut-offs that have impacted over 30,000 households since January, sought to bring attention to the usurious bond issues and loans that have drained at least $537 million from the city treasury over the last two years. But Federal Judge Steven Rhodes refused to impose a moratorium on the termination of water services.
Can capitalists rebuild Detroit?
Even though the ruling class is saying they will rebuild the city of Detroit in their own image, is enough investment capital actually available to make a significant dent in the blight and underdevelopment?
A key element of the city development plan is building a new hockey arena and entertainment district by Ilitch Holdings. A Woodward Avenue light rail system from downtown to the New Center area is being built. However, similar efforts during the late 1990s and early 2000s when two stadiums and three casino hotels were opened, failed miserably to ensure financial stability.
Anywhere between 60,000 to 150,000 tax foreclosures could take place by the spring of 2015. Unemployment in Detroit and the surrounding region of southeast Michigan remains high. The only real jobs being created come with low wages and no benefits or stability.
Since the financial crisis of 2007 to 2009 and the bailing out of the banks, insurance firms and auto companies, the corporations have failed to reinvest their trillions of dollars in job creation or infrastructural improvements — because they would not guarantee the rate of profit these entities are demanding. The phasing out of quantitative easing could prompt a rise in interest rates and further stall growth, spurring a renewed decline in the overall economy.
When these plans fail to create the desired results, the ruling class and their agents in government will initiate a new round of austerity measures through layoffs and further drive down wages, creating additional hardships for the majority African-American working class in Detroit. Only a program of development that empowers the working class can provide any realistic hope of improving the conditions of the people.
Such a shift in policy will only come from mass struggle and anti-capitalist organization. The only real solutions to the problems facing the people of Detroit will come through a direct challenge to the banks: demanding payback of the billions they have expropriated from the people through seizures of homes, jobs, pension benefits and public assets.