Who Sank Detroit – the “Hip Hop Mayor” or Wall Street?

[논둑길맨발로]

Who Sank Detroit – the “Hip Hop Mayor” or Wall Street?

By Glen Ford

Global Research, October 19, 2013

Black Agenda Report

Region: USA

Theme: Global Economy, Poverty & Social Inequality

 12

 5 2

 

 24

“The Times might as well have run a riff on the old Dixie headline: ‘Black Buck Runs Amuk: Major City Destroyed by Negro Rule.’”

Kwame Kilpatrick, Detroit’s former “Hip Hop Mayor,” emerged from behind bars last week, just long enough to be re-embedded in the public mind as the burly, 6’4” personification of all that is wrong with “urban” – i.e. Black – America. The judge sentenced him to 28 years [11] on two dozen counts of racketeering, extortion, bribery and fraud that may have cost the city some tens of millions of dollars during his eight years in office. Yet, the mega-swindle of his career, the $1.4 billion derivatives deal that that could cost Detroit twice that much over the next two decades and represents one-fifth of the city’s total obligations to creditors, appears nowhere in the indictment or sentencing.

In the twisted world of finance-dominated, late-stage capitalism, the 2005 ultra-complex interest rates swap-plus-loans monstrosity that Kilpatrick arranged with Wall Street banks was perfectly legal – as is the convoluted derivatives scheme that Emergency Financial Manager Kevyn Orr plans to submit to a bankruptcy court on behalf of Detroit’s unwilling residents, next week – a formula for the banks to swallow Detroit’s assets whole.

Kilpatrick’s greatest crime against the people of Detroit was committed in league with – or rather, under the detailed and exquisite direction of – Wall Street, and was, therefore, not deemed to be a crime, at all. But the resulting insolvency of a major city requires a Black villain – a Wanted Poster Child, if you will. Kilpatrick fits the bill, the self-made stereotype of Black political venality, perfectly crafted for white supremacist consumption.

“The insolvency of a major city requires a Black villain.”

On the day of his sentencing, the New York Times ran an article that skillfully blurred the relatively more minor crimes for which Kilpatrick was convicted, with the fiscally fatal 2005 derivatives deal, for which he and his Wall Street co-conspirators remain legally blameless. The Times might as well have run a riff on the old Dixie headline: “Black Buck Runs Amuk: Major City Destroyed by Negro Rule.” The story gives the impression that Kilpatrick was finally facing the music for his interest rate swap sins in “a corruption scandal so vast that prosecutors say it helped accelerate Detroit’s march toward bankruptcy.” Nothing could be further from the truth. The ex-mayor won’t serve a day for his financial instruments chicanery (for which he was feted on Wall Street and given an award – see the picture at top). Eight years later, Kilpatrick’s derivatives pact with the devils of Wall Street is slated to morph into Kevyn Orr’s derivatives deal and payout to the same parties – leaving a foreign bank in line for possession of everything of value in the city.

In the United States, racism has always been the bankers’ best friend. Mass white supremacism is what put Euro-Americans to “flight” from perfectly good housing in places like Detroit, two generations ago, creating vast “economic development” possibilities in the farmlands surrounding the urban core. The advent of (white) suburbia changed the relationship of housing to the overall economy in the United States, with the banks as the primary beneficiaries.

White racism also allowed Wall Street to impose a subprime mortgage regime on virtually every Black neighborhood in the United States, across the whole spectrum of African American income earners. Years before the housing bubble finally burst, Detroit, by far the Blackest big city in the country, had been irreversibly stripped of its tax base. The Black Buck didn’t run amuk – white men in lower Manhattan and the City of London did.

However, the Black Misleadership Class are perfect foils for the Lords of Capital. Deeply in thrall of power and money, they become helplessly drunk in the presence of banksters. Jefferson County, Alabama, commission president Larry Langford, the former mayor of Birmingham, sank the county in a cesspool of derivatives deals, finally resulting in bankruptcy in 2011. Langford was sentenced to 15 years in prison, not for his scheming with the likes JP Morgan, but for other scams involving criminals of only middling wealth.

“The Black Misleadership Class are perfect foils for the Lords of Capital.”

Langford and Kilpatrick were no more capable of fashioning the fiscal time bombs that blew up their jurisdictions than were Miami’s Liberty City Seven capable of bringing down the Sears Tower. Derivatives are creatures of Wall Street, designed by the bankers that market them for sale to other bankers or to whatever non-banking fools that can be lured into the instruments’ deadly coils, where the victims marinate. The Lords of Capital are preparing for a feast, such as the nation has never seen. But the feeding frenzy cannot begin in earnest until the supporting political narrative is firmly in place. This being America, the justification is ready-made: The irresponsible, profligate, corruption-prone Blacks, with their ghetto pathologies, are the problem. Austerity is the answer – especially in those localities where African Americans are too tightly concentrated – under the firm fiscal management of Wall Street.

A specially selected Negro corporate lawyer, Kevyn Orr – who craves the good life as much as Kwame Kilpatrick and lives in a $5,100 a month penthouse; a gift, he claims, of a rich admirer – will next Wednesday submit to a bankruptcy judge a proposal to restructure Detroit’s debt. The $350 million scheme, financed by Britain’s giant Barclay’s bank, would pay off the Wall Street banks that ensnared (a very willing) Kilpatrick and other Detroit leaders in a web of derivatives and loans. With the original corporate conspirators now made whole, the Brits would then “move to the head of the line,” as people’s lawyer Tom Stephens explains, as Detroit’s super-priority creditor – meaning, Barclays gets paid first when the city’s assets are liquidated or otherwise dispensed.

This is the real crime against the people, and only the people can stop it.

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com /* */

http://www.globalresearch.ca/who-sank-detroit-the-hip-hop-mayor-or-wall-street/5354837

From Detroit to Cyprus, Banksters in Search of Prey

By Glen Ford

Global Research, March 22, 2013

Black Agenda Report 20 March 2013

Region: Europe, USA

Theme: Global Economy

 210

 70 19

 

 518

“Detroit and the people of Cyprus share the same enemy.” The Lords of Capital, who are preparing to snatch chunks of cash straight out of ordinary people’s accounts in Cyprus, to pay for a bank bailout, are the same class that has “deval‎ued the franchise of the 49 percent of Michigan’s Black population that live in municipalities and school districts under the thumb of outside financial managers.”

“Either we liquidate the banksters, or Wall Street will liquidate us.”

From Nicosia, Cyprus, to Detroit, Michigan, the global financial octopus is squeezing the life out of society, stripping away public and individual assets in a vain attempt to fend off its own, inevitable collapse. The bankers “troika” that effectively rules Europe prepares to reach into the individual accounts of ordinary depositors on the island nation of Cyprus to fund the bailout of their local banking brethren. Across the Atlantic, a corporate henchman makes arrangements to seize the assets and abolish the political rights of a Black metropolis. The local colorations may vary, but the crisis is the same: massed capital is devouring its social and natural environment. Either we liquidate the banksters, or Wall Street will liquidate us.

The proposed seizure of a big chunk of every ordinary Cypriot depositors’ accounts, in the guise of a one-time “tax,” was shocking even by the standards of the Euro Zone’s overlords: the International Monetary Fund, European Central Bank and European Commission. The original diktat to finance new lines of credit for Cyprus’s over-extended banks called for snatching 6.75 percent of the cash of customers with balances below 100,000 euros ($129,500), and 9.9 percent above that threshold. When the public went berserk, it was proposed that depositors with 20,000 euros or less be spared – but Cypriot lawmakers balked. The banks are now closed, to prevent people from withdrawing their money. But Europe’s ruling triumvirate at the bankers’ lair in Brussels continues to demand that the public-at-large pay to keep the global criminal financial enterprise humming, or be starved out. “In the absence of this measure, Cyprus would have faced scenarios that would have left deposit-holders significantly worse off,” they said – disaster banksterism.

A rapscallion Black lawyer for the notorious corporate law firm Jones Day delivered the bankers’ ultimatum to Detroit. Emergency financial manager Kevyn Orr, anointed by Michigan’s Republican governor, is a bankruptcy specialist whose mission is to liquidate the assets of the 82 percent Black city, especially the revenue-producing Water and Sewerage Department. Orr’s firm’s clients – which, according to their website, include “more than half of the Fortune 500 companies” – have plenty of experience at liquidating in Detroit. Butch Hollowell, general counsel for the local NAACP, says Wells Fargo has “done more foreclosures in Detroit and the state of Michigan than any other firm,” and is Detroit’s number one property tax scofflaw. Jones Day also represents Bank of America, JP Morgan Chase and CitiGroup.

“These are firms that not only got billions in TARP bailouts, but they’re also the same ones that defrauded people into signing these predatory leases which cause the crash of the housing market,” said Hollowell. “Detroit has been hit harder than anyplace in the country on that score” – hugely aggravating the city’s money problems. Financial manager Kevyn Orr’s job is to extract more booty from Detroit for the bankers’ vaults.

To facilitate the theft of the city’s property, its citizens must first be stripped of their political and civil rights, through the neutering of their elected officials. Orrlooks forward to the project. “While I understand there’s a lot of concern and emotion behind the concept that I’m depriving people of certain rights,” he said, “actually it’s very consistent with both the history of this country and specifically in this state.” What he’s about to do “is democracy in action.”

This corporate concept of democracy has already deval‎ued the franchise of the 49 percent of Michigan’s Black population that live in municipalities and school districts under the thumb of outside financial managers, a violation of both the Voting Rights Act and the one man-one vote rule embodied in the 14^thAmendment, says the NAACP’s Hollowell.

Black Baptist pastors and the AFSCME and UAW unions will join the NAACP’s planned legal action against the “hostile takeover” of Detroit – which is fine, as a civil rights response. But this is a much bigger battle.

Detroit and the people of Cyprus share the same enemy, a class that is beyond the reach of simple civil rights suits. The Lords of Capital on Wall Street and the City of London and the Federal Reserve in Washington and in the “troika” at Brussels confront their own existential crisis, which compels them to liquidate the public sector so that it can eventually be transferred to their own balance sheets. There are many ways to accomplish this, through privatization of existing public institutions, or by simply blowing a hole in public services and allowing privateers to fill the void, subsidized by public funds. However, nothing can save the banksters from inevitable, and increasingly imminent, collapse. Ever-increasing profit margins must be achieved, somehow, or the system implodes. Hundreds of trillions of notional dollars in derivatives must be serviced and fed by a class that makes nothing and can only survive by chicanery and coercion by governments under their control.

In Cyprus, they are prepared to brazenly snatch euros directly from working and retired people’s accounts to fund a bank bailout, without even bothering to construct a convoluted pathway from the victims’ accounts to their own. They have reached the point of outright confiscation, and will not stop until they have stripped society of the potential to save itself from the ruins.

We have no choice but to confiscate them – to destroy them utterly as a class.

BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com /* */ .

http://www.globalresearch.ca/from-detroit-to-cyprus-banksters-in-search-of-prey/5328079

A Financial Dictator for Detroit

By Joseph Kishore

Global Research, March 15, 2013

World Socialist Web Site

Region: USA

 0

 0 0

 

 New

With the appointment of an emergency manager on Thursday, Detroit became the largest city in US history to be taken over by the state government. The new manager, bankruptcy lawyer Kevin Orr, will have vast powers and one essential task: to carry out a brutal assault on the jobs and living conditions of the working class.

What is taking place in Detroit has national and international significance. The Financial Times of London cited one person involved in the discussions on the imposition of a financial manager as saying, “This will be the best case study of what it means to restructure a city.” In an editorial, the newspaper called for “radical—and unpopular—action” to address Detroit’s financial woes, a position shared by virtually every mass circulation newspaper in the US.

The “restructuring” of Detroit is a euphemism for a slash and burn policy of destroying city jobs, cutting wages and pensions, gutting social services from sanitation and firefighting to health care and education, and handing over city assets to private bankers and speculators. The very social forces responsible for the city’s present state are utilizing the crisis of their own making to step up their plundering of public resources and further redistribute the wealth from the bottom to the top.

Exhibiting the ruthlessness that is a hallmark of American capitalism, the ruling class, in the pursuit of its program of social counterrevolution, is dispensing with the trappings of democracy and imposing a bankers’ dictatorship over the city.

The broad consensus within the political establishment for these measures was on display Thursday. At a press conference announcing the decision to appoint Orr, a lifelong Democrat, Republican Governor Rick Snyder stood side by side with Detroit’s Democratic mayor, David Bing, who pledged his support. The formal decision to hire Orr and set his salary at $275,000 was made by the state’s financial board, headed by Michigan Treasurer Andrew Dillon, also a Democrat.

As for the Democratic Party-controlled City Council, it has opposed the appointment of a financial manager on the grounds that it can more effectively impose the sweeping cuts demanded by the banks and auto bosses.

Among the considerations in naming Orr is, no doubt, the fact that he is African American. For decades, the Democratic Party establishment has employed racial politics to divide the working class. To the extent that there has been any opposition to the emergency manager from within the political establishment, it has been framed in racial terms, summed up in the charge that “white Lansing” is seeking to control “black Detroit.” Yet Orr, like Bing, is no less ruthless a representative of the ruling class than Snyder and Dillon.

Behind these local and state officials stand the Obama administration and the Wall Street financial interests that it represents. The administration views Detroit as a model for its plans nationwide.

The identity of the person chosen to fill the position of emergency manager indicates what is in store for the vast majority of Detroit residents. Orr played a critical role in the 2009 bankruptcy of Chrysler, part of the Obama administration’s restructuring of the auto industry, which was carried out with the full support of the United Auto Workers union. This involved the closure of dozens of plants, the elimination of tens of thousands of jobs, the halving of the wages of newly hired workers, cuts in benefits, and a ban on strikes.

Orr will have a similar agenda for the city of Detroit. Already, Bing and the City Council have imposed a 10 percent wage cut and laid off thousands of city workers. Basic social services have been slashed.

By the end of the month, under a new law passed at the end of last year, Orr will have the power to rip up labor contracts, cut social programs and sell off city assets. The possibility of throwing the city into bankruptcy is being actively considered, since such a move would provide a legal fig leaf for cutting the pensions of current retirees.

The all-purpose justification for these measures is the claim that there is no money to provide for basic social services. The population of Detroit, more than a third of which lives in poverty, has supposedly been “living beyond its means” and stubbornly refusing to make the “hard choices” dictated by the crisis, which is inevitably presented as something akin to an impersonal and socially neutral act of nature.

The “no money” pretext is a lie. The deficit of Detroit stands at $327 million. In comparison, a handful of billionaires in the state have a net worth of $24 billion, close to 75 times the budget deficit. A mere ten percent surtax on the wealthiest nine individuals in Michigan would cover the city’s deficit 7 times over.

The Wall Street investors seeking to make a killing off of Detroit’s municipal bonds pull in hundreds of millions or billions of dollars every year. Wall Street giants such as Bank of America, JPMorgan Chase and UBS have extracted more than $474 million from the city in fees related to the sale of debt, according to a report from Bloomberg News.

Among those who stand to benefit most from the emergency manager are Mike Ilitch (net worth $2.7 billion), the owner of Little Caesars Pizza, and Daniel Gilbert (net worth $1.9 billion), the founder of Quicken Loans. Both have been buying up land at bargain basement prices, betting that an emergency manager will “revitalize” the city center.

The Big Three auto companies, to which Obama has pointed as an example of a resurgent Detroit, made over $11 billion in combined profits last year, thanks to the imposition of poverty-level wages. The top executives have awarded themselves tens of millions of dollars.

The fate of Detroit epitomizes the process by which vast sums of money have been accumulated by the financial elite through the dismantling of industry and neglect of the social infrastructure.

Since the crisis of 2008, hundreds of billions of dollars have been used to bail out the banks and push stock prices to record highs. The Federal Reserve prints $85 billion every month, 260 times the deficit of Detroit. This money is handed out to the banks and used to fuel new speculative bubbles.

Cities and states throughout the country are implementing similar measures to those being carried out in Detroit. At the national level, after trillions of dollars in budget cuts, the Obama administration is conspiring with Republicans to slash trillions more from the key federal health care and retirement programs.

This program of austerity for the working class and record profits for the corporations is international. In Greece, Spain, Italy and other European countries, governments installed by the banks are imposing depression conditions to ensure that national treasuries, bled dry to bail out the banks, are able to pay off major investors and bondholders.

There is no resolution to the crisis facing the working class that does not begin with a frontal assault on the wealth and prerogatives of the corporations and the rich. Their stranglehold over the political and economic system must be broken through the nationalization of the major corporations and the expropriation of the wealth they control.

The power of the modern-day financial aristocracy can be broken only through a united struggle of the working class, transcending all racial, geographic and national divisions. In opposition to the dictates of the emergency manager, the working class of the Detroit metro area should establish its own fighting organizations—completely independent of the Democratic Party and the right-wing trade unions—and counterpose its own social and political program.

Against the demands of the billionaires, workers should advance a program in defense of basic social rights—the right to a job at a decent wage, the right to education, health care, housing, a secure retirement–which can be secured only through the reorganization of society to serve social need, not private profit.

http://www.globalresearch.ca/a-financial-dictator-for-detroit/5326888