The Struggle for Detroit Provides Lessons for the Future of Democracy in the United States

Emergency management, forced bankruptcy and privatization provides no solution to the urban crisis

On Mon. July 21, Deputy Director Darryl Latimer of the Detroit Water & Sewerage Department (DWSD), under the administrative control of an unelected emergency manager Kevyn Orr, announced a 15-day suspension to the massive water shut-offs which have victimized tens of thousands throughout the city.

This proclamation by the DWSD took place in federal bankruptcy court where the future of the re-structuring of the city is being decided by Judge Steven Rhodes. At an objections’ hearing on July 15, over 80 workers, retirees, homeowners and community residents submitted statements to the court decrying what they perceived to be a draconian “plan of adjustment” ostensibly designed to provide an economic roadmap for exiting the largest municipal bankruptcy in U.S. history.

Kris Hamel, a Detroit homeowner and member of the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shut-offs, spoke out forcefully before Judge Rhodes saying that as the overseer of the bankruptcy process he should take immediate action to halt the thousands of water shut-offs taking place per week. Rhodes later requested that Jones Day law firm, which is effectively administrating the City of Detroit since the appointment of EM Orr in March 2013, ensure that someone from the DWSD appear in his courtroom that afternoon.

Later Rhodes indicated that the shut-offs have created adverse publicity for the city worldwide. He also stated clearly that the policy of mass termination of water services was indeed “bad for the bankruptcy.”

In the June 26 edition of the Detroit Free Press, Orr’s spokesman Bill Nowling told the daily newspaper that the termination of water services to thousands of households in Detroit was an integral part of the re-structuring. This statement revealed even further the real agenda behind the emergency management and forced bankruptcy of the city: it is designed in fact to terrorize and subjugate the people of Detroit to undemocratic and dictatorial rule against the will and interests of the majority of the population.

National and World Outpouring of Solidarity for Detroit

Although the United Nations agencies concerned with access to water resources have stated unequivocally that the policy of large-scale terminations enacted by the EM was inhumane, the real struggle for a moratorium on water shut-offs is taking place in the streets and the bankruptcy court. The weekly “Freedom Friday” demonstrations, modeled somewhat on the “Moral Mondays” in North Carolina, have been picketing the DWSD headquarters on Randolph in downtown Detroit for nine weeks.

A blockade of the entrance to Homrich, the firm hired by the EM to engage in the water shut-offs, was carried out on July 10. Ten people were arrested and the issue was pushed out into the media once again. Those arrested were charged with disorderly conduct and faced an arraignment hearing on July 21 where there was no real legal documentation to support the continuation of their prosecution.

Nonetheless, the most profound manifestation of solidarity from around the country took place in conjunction with the recently-held Net Roots Nation Conference at Cobo Conference Center. Through the efforts of National Nurses United (NNU) and other organizations, the Moratorium NOW! Coalition and a several leading community groups, brought thousands into the streets for a march and rally through the financial district.

A broad spectrum of labor and community organizations endorsed the July 18 actions. These included the local affiliates of the Amalgamated Transit Union (ATU), the Communication Workers of America (CWA), Detroit Metro AFL-CIO, People’s Water Board, Michigan Welfare Rights Organization (MWRO), Stop the Theft of Our Pensions Committee (STOPC), Concerned Citizens and Retirees of Detroit, UAW Local 600, among others.

The NNU, representing 188,000 healthcare professionals across the U.S., declared a public health emergency in Detroit at the July 18 rally due to the water shut-offs. Even though the State of Michigan under Snyder refuted the NNU declaration, they provided no alternative plan to turn the water services for hundreds of thousands in Detroit back on.

One of the key slogans advanced by the Moratorium NOW! Coalition and picked up by other organizations is “Make the Banks Pay!” This slogan grew out of the devastating impact of predatory lending in housing and municipal finance that has left the city in financial ruin.

Urban Growth Without Sustainable Development

Detroit has paid billions to banks for bad loans and termination fees. Many of the financial institutions now holding the city liable such as Bank of America, JPMorgan Chase, Union Bank of Switzerland, Barclays, etc. have been cited on numerous occasions for unscrupulous and illegal activities. Yet the emergency manager has failed to take legal action against these banks while forcing the termination of healthcare coverage and proposed pension cuts to over 32,000 retirees and their families.

The repeatedly stated $18 billion in debts owed to banks by the City of Detroit is unsustainable. Gov. Snyder as a former venture capitalist views the municipal crisis as he would approach financially distressed corporations.

Orr and Snyder embody ideas which revolve around the breaking up of public institutions and there privatization. This is the underlying reason behind the attacks on the Detroit Public Lighting, Belle Isle, the Detroit Institute of the Arts, the Detroit Water & Sewerage Department, public pension funds and healthcare programs for retirees, etc.

Balancing the budget on the backs of seniors, working and poor residents of an already impoverished city due to a process of deindustrialization which extends back decades, cannot provide solutions to the crisis in Detroit. All of these decisions are being made without any consideration of the popular will of the people.

What is lifted up as a model for “development” is more of the same “prestige” projects such as stadia, arenas, entertainment districts and exclusive housing complexes where the rents and mortgage payments are far out of the range of the median income levels of the majority of the people who currently reside in the city. Yet this approach is by no means original and has failed repeatedly just over the last two decades to revive the city and its population.

During the 1990s Detroit residents were encouraged to approve bond proposals for the construction of both Ford Field, home of the Lions football team, and Comerica Park, where the Tigers play their home baseball games. In addition to these monumental initiatives, voters approved the development of three casino hotels: Greek Town, Motor City and MGM Grand.

However, despite these achievements, the city continued to lose jobs and income. The wave of predatory mortgage lending during the late 1990s and the first decade of the 2000s, drove 237,000 people from the city.

The much trumpeted tax revenues from the casino hotels are now caught up in the bankruptcy proceeding as Syncora Guarantee Inc., a bond issuer, has laid claim to the revenue even prior to any of the money being deposited in the city’s general fund. Since the first-tier capitalist of bankers, land-owners and business magnets take priority in the bankruptcy trial, Syncora has threatened to file additional legal actions against the municipal pension funds which were the alleged focus of a 2005 interest-rate swap deal involving Bank of America and UBS.

Through the efforts of Atty. Jerome Goldberg representing retiree David Sole in the current bankruptcy trial, the interest rate termination costs were reduced from nearly $300 million to $85 million as a result of a series of hearings in late 2013 and early 2014. Yet what Goldberg argued was that these financial institutions should actually be sued for the return of over $300 million paid to them by the City of Detroit which benefited the municipality in no apparent way.

In the July 20 edition of the Sunday Free Press, a macabre and utopian blueprint for an entertainment district between downtown and midtown engineered by multi-billionaire Mike Ilitch, the owner of Comerica Park and Joe Louis Arena, the home of the Redwings hockey team, was plastered on the front page as the lead story. Ilitch has already gained a rubber stamped approval by the Detroit City Council to construct a new arena for a stated $650 million, while the city is in bankruptcy.

City tax dollars will be utilized for a substantial portion of the construction. The land was turned over to Ilitch Holdings for one dollar. There are no real guarantees that the hundreds of thousands of unemployed and underemployed Detroit residents will have any hope of acquiring meaningful jobs from this project.

In short it is more of the same obsolete approach to urban development. It will only benefit the rich and drive even more working and poor people from the core of the central city and continue the decay of the outlining neighborhoods and local business districts.

What is actually needed in Detroit is the rebuilding of neighborhoods and the creations of tens of thousands of reliable and well-paying jobs. This can only be done through the taxing of corporations and banks which are at the root cause of the current crisis, forcing them to pay for the damage done through a decades-long process of de-industrialization and predatory financial schemes.

Nonetheless, these programs are not being advocated by the current political leadership within the mayor and city council offices. Under emergency management, the political officials work at the pleasure of the un-elected dictator who represents the interests of the corporations and banks.

Consequently, a new democratic movement based among the working people and the poor must take the lead in forging a popular response to the urban crisis in Detroit.

An alliance of popular forces committed to decent employment, guaranteed incomes, access to utilities and water services, quality housing and education, the democratic governance of public institutions and their management, is at the core of the struggle for a livable future not only in Detroit but across the U.S. With the national and international focus being placed on the social conditions in Detroit, numerous lessons for other municipalities who are facing similar problems can be gained in order to build a nationwide campaign against the ever-growing corporate dictatorship over the lives and institutions of the majority of the population which resides in the cities.


Mr. Abayomi Azikiwe, Editor, Pan-African News Wire, is one of the frequent contributors for The 4th Media.

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