Class Warfare in Detroit

                                                               From The Ramparts

                                                              Junious Ricardo Stanton

                                                Class Warfare in Detroit


“As part of the bankruptcy process officials hope to enact significant cuts to the benefits of 21,000 retired public employees. For perspective, the average public pension beneficiary in Detroit gets about $19,000 per year, and most aren’t eligible for Social Security. The city is paying the price for years of underfunding its pension system. It also overestimated the rate of return it would receive by investing the fund, and is facing an investigation over accusations that corrupt officials made investment choices in exchange for kickbacks. But it is the workers who will face the consequences of their leaders’ incompetence.”  POSTED JULY 24, 2013 IN GOVERNMENT YOUR JOB & THE LAW YOUR MONEY & THE LAW BY AARON KASE


Keep your eyes on the city of Detroit. The Motor City, “Motown” as most of us know it is about to take a devastating hit. Detroit is the new battleground of the ongoing class war in the US whereby the one percent gouges the ninety-nine percent and treats this once great city like a third world nation. 

Detroit is not alone facing fiscal challenges. Its difficulties are the result of numerous factors but the corporate media is spinning Detroit’s problems as the result of corruption during forty years of black political leadership as if corruption started when blacks gained control of city hall!? This is merely a disingenuous distraction to keep folks from realizing who the real culprits behind Detroit’s unraveling are. Yes there was political corruption, municipal and fiscal mismanagement; but the overarching culprits responsible for Detroit’s decline lie far from Detroit.

 While the spin apparatus does admit to deindustrialization and white flight; they fail to point out that deindustrialization was the result of decisions made at the highest levels of capital/banking and the federal government who are their puppets. When discussing Detroit’s woes, the media never mentions NAFTA or GATT the legislation pushed by Bill Clinton and his successors. NAFTA and GATT were touted as the vehicles for greater economic growth and prosperity here in the US. But that legislation really was the mechanism for outsourcing US jobs overseas. Those bills paved the way for massive and far reaching corporate imperialism better known as Globalization.

 Globalization is the rapacious monster that is devouring the US economy.  Globalization was fueled by international capitalists who wanted to make even more money but at the expense of the developed world’s working class. They bribed US politicians (with political campaign funds and perks) to go along with their nefarious program/scheme. Globalization meant increasing their attacks on and undermining US trade unions and organized labor which had been going on since the Reagan era. Remember the Air Traffic Controllers Union and what Reagan did to them?  Remember how no other major unions not even the supposedly super  bad Teamsters came to their aid? Well now the chickens have come home to roost. 

Ultimately Globalization meant consolidation of capital and turning the banking and financial centers of Wall Street, London and Brussels into multinational casinos. They exported fraud and trillion dollar hyper leveraged Ponzi schemes around the world. Ultimately the weight of this fraud collapsed the whole system. The 2008 global economic implosion was caused by fraudulent banksters and the fallout is impacting cites like Detroit. It is still impacting home owners around the country as their homes are underwater or in a zombie state where the house is worth far less than the money they owe.

 Due to corporate media disinformation and disingenuousness most people don’t realize the Wall Street bailout gave the investment banks a reprieve (they are still insolvent) but the collapse is still causing hardships on ordinary homeowners, Main Street, municipalities, counties and states in the US and countries in Europe and Asia.

During the past few decades Detroit experienced a massive loss of residents, sociologists call white flight. This exodus was the result of the corporations deciding to move jobs from the city’s core to the suburbs (and subsequently overseas). Meanwhile there was a simultaneous the influx of people of color into Detroit seeking a better life through factory employment they thought was going to be there when they arrived. When the jobs moved to the suburbs, blacks were not able to reach them and with deindustrialization came rampant unemployment which sounded the death knell for Detroit’s tax base. But the corporate media doesn’t tell this story.

Detroit’s woes like many communities both urban and rural were caused by: deindustrialization, a dwindling tax base, black and white middle class flight, lack of jobs, as well as mismanagement and corruption.  Within the heart of this situation lies the palm print of the international banksters and their corporate and government cronies. Yet the media makes it appear the unions are at fault or that poor people caused the bottom to fall out when it was decisions made in the corporate suites,Wall Street, the state house and city hall that caused and exacerbated these problems.

When Detroit’s fiscal situation became problematic, the governor of the state of Michigan used the situation to take over the city. He had already done the same thing in a few smaller towns facing the same problems.  Several months ago Detroit under a state imposed “emergency manager” made history by being the first major city to file for Chapter 9 Bankruptcy. Keep in mind the residents and citizens of Detroit did not vote to have the state of Michigan take over their city. In fact they overwhelmingly voted against the referendum supporting the take over! In March of this year Michigan Governor Rick Snyder appointed Kevyn Orr a Washington D.C. bankruptcy attorney as emergency manager. Obviously government of, by and for the people did not apply in Detroit’s case.

 Orr assumed the fiscal oversight and operations of the city. The mayor and council have been reduced to figure heads. Orr after a review of the city’s finances announced the municipality was “insolvent”; meaning it didn’t have the cash on hand or revenues to pay its operational bills or creditors. Unions claim the figures are inaccurate and the city failed to negotiate with them in good faith.

Orr conducted an audit and found (according to sources) the city’s pension fund lost $125 million on bad real estate deals. In addition to decisions by mayors, comptrollers and business managers not to adequately fund the pension funds to cover promised benefits, Detroit’s pension funds also lost money on real estate investments! Detroit is being ravaged by the banks and the one percent crowd. As Detroit looks down the barrel of protracted bankruptcy negotiations and litigation, it is the little people: the workers, retired pensioners and the poor who are left in the city who will be hurt the most. This is class warfare at its worst.

Detroit at one time was the fourth largest city in the country home to a vibrant manufacturing base including the auto industry and related manufacturing. Detroit like most US cities is suffering from deindustrialization, dislocation, outsourcing, government policies and international treaties that allowed US corporations to send jobs overseas to places where labor costs are far cheaper. Yet it is the workers, the unions and black politicians that are being demonized and blamed for the crisis by the media. Nothing is said about role the banks and hedge funds played in the city’s pension fund losses on real estate investments ($125 million). To add insult to injury the city fathers made the decision not to fund the pensions adequately. This means that even if Detroit wasn’t on the brink of insolvency, their pension funds still would not have enough money to pay for the pension and health benefits of their pensioners.

 Detroit is an example of the class warfare raging in this country and globally because Detroit is not the only city where the decision was made to underfund the workers pensions. Over 100 public pension funds around the country are underfunded collectively to the tune of trillions of dollars! Not only that, pension fund managers seeking higher returns on their members’ investments (the city and the employees contributed to the pension funds) invested in Wall Street and Hedge Funds and got burned when the bottom fell out in 2007-2008. So now not only are the pension funds underfunded, they lost billions during the financial implosion of 2008 due to the out and out white collar fraud and malfeasance by the banksters! Yet not one Wall Street investment banker, not one hedge fund manager, not one bond rating company official has been arrested, prosecuted, let alone gone to jail. Now these white collar jackals and vultures are lining up to fleece Detroit and take advantage of the bankruptcy to get their blood money. Meanwhile city services are being cut or eliminated, police and fire personnel are being laid off and pensioners may have their benefits severely cut.

Keep your eye on Detroit. The same thing is happening there that happened in Europe, the banks and their government flunkies are imposing austerity measures on the masses just so the banksters and corporations get their money. But the people are getting fleeced. The fix seems to be in and other state and local governments are watching Detroit drooling over the prospects of getting out from under their severely underfunded pension obligations via bankruptcy. Doing so means more workers and retirees will be fleeced of their promised benefits. This means the already shaky stander of living will go down even further and the income gaps and wealth inequality will widen even more.

Oh by the way this is not the first time this has happened in the US. The US steel industry, the airlines and auto industry CEOs and shareholders did the same thing but the Pension Benefit Guarantee Corporation picked up the tab for the worker’s pensions while they walked away Scott free. No such entity exists for public workers. Only the already overburdened US taxpayers can bail out the pension funds and that’s not likely to happen. This is class war in America and working class folks are losing!





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