Tuesday, May 13, 2014

Behind the Detroit Economic Crisis: Capitalist Austerity and Socialist Solutions
Abayomi Azikiwe, editor of the Pan-African News Wire, during
1999. (Photo: Dale Rich)
Implications of the local situation has national and international dimensions

By Abayomi Azikiwe
Editor, Pan-African News Wire

Note: The following remarks were delivered at a public meeting sponsored by the Detroit branch of Workers World Party held on Sat. May 10, 2014 under the theme “Behind the Detroit Crisis: Global Capitalist Austerity and the Socialist Solution.” This event was chaired by David Sole, a retired City of Detroit municipal worker, past president of UAW Local 2334 and an organizer of the Stop the Theft of Our Pensions Committee (STOPC). This gathering also featured Debbie Johnson of the Moratorium NOW! Coalition and Workers World Party, Cheryl LaBash, another retired City of Detroit worker and member of STOPC and Tom Michalak, organizer for Fight Imperialism Stand Together (FIST) socialist youth organization in Detroit.
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Since the beginning of this year our mobilizations have grown in strength and political impact. From the Dr. Martin Luther King, Jr. Day Annual Rally and March to May Day, the message is becoming clearer and the line is fortifying that the principal struggle being waged in Detroit is against the banks, international finance capital, and this is what has drawn global attention to the developments and outcomes of the situation here.

We have continued to wage a vigorous campaign for the interests of the working class within the majority African American population of Detroit and most other cities throughout Michigan that are under the dictatorial rule of emergency management. The municipal retirees have been struck first and the hardest, but these attacks are continuing against the workers in the Detroit Public Works and other City Departments.

The origins of the Moratorium NOW! Coalition to Stop Foreclosures, Evictions and Utility Shut-offs is within the fight to halt all home seizures and the denial of working people their fundamental human rights to housing, modern amenities and a guaranteed income. This is why we called for the declaration of an emergency based upon the social conditions of the working class and poor which has been dire for many years.

Detroit was hit early during the present economic crisis. In fact the beginnings of the Detroit crisis extends back decades with the initial re-structuring of capitalist industry during the mid-to-late 1950s extending through the mid-1970s. Between 1979 and 1987, hundreds of thousands of jobs in auto and steel were slated for elimination and the drastic decline in income and household wealth intensified during subsequent years.

Our program has been the most correct one in the demand for housing, jobs, public services, public education, public transportation, the maintenance of the right to vote and self-determination for the people of Detroit and other African American cities throughout the state. We have categorically rejected every scheme put forward by the bank-imposed EM and his consultants.

Over the last several days they have advanced the notions that any so-called “Grand Bargain” must include a 20-year oversight board for the City of Detroit. As one legislator said, to ensure that “this will never happen again.”  The capitalist system during the duration of its existence has been in periodic crises and over the last seven years, in a perennial state of decline.

We can make such a judgment not upon the statistics that are reported at the beginning of every month about how many jobs are being created, but through what is revealed by reading deeper down beneath the headlines. These facts reveal that the labor participation rate is the lowest in modern history and that many people are out of the so-called “labor market” because of the problems associated with job creation and low wages.

The campaign to raise the minimum hourly pay to both to $15 per hour and the $10.10 petitions are not just a question of low wages per say, but the important issues of social wages. If the capitalist system in this period cannot guarantee full housing, free quality education, free health care, an environment that is devoid of pollutants that endanger nature and our very lives, a basic household income and universal employment for everyone in need of a job, then problems of growing poverty will continue both for those who work as well as the unemployed.

The Role of the Banks

A decision rendered by Federal Judge Steven Rhodes on April 11 where he granted a motion put forward by Jones Day, who are illegally misrepresenting the City of Detroit, to pay Bank of America Merrill Lynch and the Union Bank of Switzerland $85 million dollars to terminate a bad interest-rate swap deal from 2005. What was raised by Atty. Jerome Goldberg was that the City of Detroit had already paid $300 million to these financial interests and has gained nothing from it other than more misery and underdevelopment.

Apparently reversing his earlier ruling on Jan. 16, where he rejected a deal proposed by Jones Day for $165 million, saying that not only was it too much money but that Detroit had grounds to take legal action against the banks for unjustly enriching themselves at the expense of the people, Rhodes appeared to have castigated the Moratorium NOW! Coalition and others who are opposing the re-structuring, compelling all to negotiate.

This represents the line of the ruling class in Detroit: that workers, residents and retirees should accept every scheme put forward at the aegis of the banks and corporations. That we should accept long-term administration on behalf of the capitalist class in order to receive a pledge of merely a small fraction of what even the state, let alone the banks, actually owes the City of Detroit. They want to convince us that Belle Isle, the Detroit Institute of Arts (DIA), the Detroit Water and Sewage Department (DWSD), Detroit Public Lighting (DPL), Detroit Public Works (DPW), as well as the land and other resources do not actually belong to the residents of the city and that these entities can be “better managed” by the capitalist system through their agents working on behalf of the banks.

Every asset that is public is viewed by the corporate media and the spokespersons for the emergency manager as units of production to be exploited for maximum profitably not for the people, but the rich. They have already done this with the schools through the “charterization” of public education. These efforts in education over the last two decades have been an abysmal failure yet it will not be exposed by the corporate media.

These same ruling class interests working at the aegis of the banks and corporations are behind this effort in the areas of public assets and guaranteed pension systems. The financial publication Bloomberg devotes a considerable amount of space in their news reports and analyses to the purported problems of legacy costs and “underfunded pension systems.” In fact Detroit and the State of Michigan have 18 other states that are categorized as embodying much more serious problems.

Therefore, why was Detroit first on the list for total political, economic and structural dismantlement? We cannot ignore the historic problems of racism and national oppression. Detroit has a legacy extending from the Underground Railroad and the Rebellion of 1833 right through the interventions in the labor movement of the 1940s through the 1970s, in addition to the origins of the Nation of Islam, the Republic of New Africa, the League of Revolutionary Black Workers, the wildcat strikes in auto, the largest Rebellion in U.S. history in 1967, and on the cultural front, Motown Records, and the most progressive African American municipal administration during the period of Coleman Young (1974-1994) in regard to affirmative action and Black empowerment, etc.

Consequently, we have a responsibility to articulate a counter-narrative to the banks, multi-national corporations and their agents in government. We must present a program that says the interests of working people and the nationally oppressed should be primary and not those of the criminal banks and corporations.

National Implications for the Struggle in Detroit

One area that we have been successful in is the projecting of the movement here into the national limelight. Moratorium NOW! Coalition and the Stop the Theft of Our Pensions Committee (STOPC) has placed others around the country on notice that they are next if the ruling class gets its way in Detroit.

Just this last past week on May 7, Bloomberg Brief Municipal Market carried a front page article entitled “Bondholders Debate Future of Chicago” which says that “The biggest holders of Chicago GOs are diverging on the city’s outlook as it stares down $590 million in extra pension payments. State lawmakers invoke Detroit as the consequence of inaction.” (May 7)

This same article goes on to say that “A month after Mayor Rahm Emanuel won the legislature’s approval of a plan to stabilize two of the city’s four pension systems, Governor Pat Quinn hasn’t signed the measure into law, objecting to the possibility that city officials would raise property taxes. The delay is reminiscent of the political gridlock that plagued Illinois for years as its credit rating sank.”

Such debates within the City of Chicago and State of Illinois political structures illustrate clearly the crisis of modern-day capitalism. The system is no longer prepared to honor even its own “constitutional guarantees” protecting pensions since such a position would interfere with the dictates of capital.

Similar to the State of Michigan, it is the governor and the attorney general who argues that the constitution that they were sworn in to uphold should be diminished as it relates to the protections for the deferred wages of the working class. Consequently, it becomes quite obvious that the politicians are not working for the people but the banks and the corporations.

Confirming what we have said over the last few years, this Bloomberg report also notes that “The uneasiness surrounding Chicago reflects the impact of Detroit’s bankruptcy in July and Puerto Rico’s descent into junk status. Speculation that pension underfunding, population loss and debt load, all present in Chicago, would cause Puerto Rico to default, prompted a flight from the Caribbean commonwealth’s securities starting a month after Detroit’s filing.”

As Bloomberg has pointed out on numerous occasions “Chicago has the largest pension burden among the most-indebted localities, according to Moody’s. The company grades Chicago Baa1, three steps above junk and the lowest among the 90 most-populous U.S. cities except for Detroit.”

This report also acknowledges the concern the financial institutions have in regard to the untenable economic situation facing such large municipalities saying “Of all state and localities, the combination of Chicago and Illinois probably cause the most investor anxiety after Detroit and Puerto Rico, said John Miller, co-head of fixed income at Nuveen, which oversees about $90 billion of municipal bonds. The company said it owned about $279 million of city GOs as of March 31. All the debt carries insurance, Miller said.”

It is quite interesting that Chicago and Detroit are combined with Puerto Rico which is actually a colony of the U.S. During the so-called Spanish-American War of the late 19th and early 20th centuries, the U.S. imperialists took over Puerto Rico, Cuba and the Philippines. With the city of Detroit being the largest African American populated municipality in the U.S., which has neo-colonized the people of African descent throughout the country, and with Chicago being a highly-concentrated African American and Latino populated city, these actions on the part of the banks and their collaborators take on both class and national oppression dimensions. The recognition of these factors should extend into the working class movement as a whole throughout the U.S. and the world.

Apparently three major entities in the U.S. recognize the implications of the actions being taken by the bank-imposed emergency management of Detroit has nationally. In another financial online publication called “Daily Ticker”, it says that “Just days before the latest development, many city workers and retirees marched in downtown Detroit protesting the city's plan to reduce retirement benefits (May Day), and the American Association of Retired Persons (AARP), CalPERS (California Public Employees Retirement System), the National Conference on Public Employee Retirement Systems and the Texas Association of Public Employees Retirement Systems filed amicus briefs opposing those cuts.” (May 7)

Hopefully such legal actions will awaken the trade union movement nationally. What is taking place in Detroit should also prompt political actions from leftists, social justice organizations and the religious community. The outcomes of the struggle for the preservation of pensions, healthcare and public assets have ominous implications for existing plans to cut Medicaid, Medicare and Social Security.  The reliance of working people and the poor on these government programs portends much for the survival of our class and the quality of life in general under capitalism.

International Implications in the Struggle for Detroit

Ten years ago the Michigan Emergency Committee Against War & Injustice (MECAWI) raised the slogan “Money for Our Cities, Not for War.” At present we are being threatened with another war this time against the Russian Federation. In fact a cold war has already re-emerged from over two decades ago and the overthrow of the elected government in Ukraine by fascists illustrates what the future of capitalism could mean for billions around the globe.

What has come to light in this escalating conflict in Ukraine where trade unionists were massacred on May 2 in Odessa and fighting is continuing in various cities in the southeast, the U.S. government has spent at least $6 billion in the destabilization of Ukraine, a sovereign state. When this figure is combined with the estimated $2 trillion in other costs of war in Afghanistan, Iraq, Libya, Syria, Yemen, Somalia, Sudan and other geo-political regions over the last thirteen years one can understand as well why there is a crisis of stability in the cities.

Austerity has been imposed throughout Europe where in the southern states of Greece, Portugal and Spain unemployment is rising to unprecedented levels of over 26 percent. Pensions have been drastically cut and poverty is increasing. In Cyprus last year, an ostensible bailout by the European Union (EU) entailed a “tax” on people’s savings where ten percent was designated to pay off the banks. This action caused a run on the banks forcing the EU to make modifications in the program of “debt repayment.”

All of the struggles being waged and conflicts taking place throughout Africa are economic in origin and require political solutions. The U.S. Africa Command (AFRICOM) is increasing its troop and naval presence on the continent to secure the tremendous oil, natural gas and mineral wealth that is coveted by the West.

Washington deployed intelligence and military personnel to Nigeria this week to assist in the search for over 280 high school girls who were kidnapped by an armed opposition group Boko Haram. Yet no mention is made of the fact that Nigeria is rich with crude oil and is the leading exporter in Africa of petroleum into the U.S. The designation of Nigeria as having the largest economy in Africa recently is more political and military than economic. As anti-imperialists we must uphold the right of African nations to self-determination and sovereignty.

The plight of African American girls in the U.S. who go to bed hungry every night, whose parents have no jobs or suffer from low-wage employment, whose schools are being closed, has never been a priority for the government in Washington. In fact Congressional and administrative policy has been designed to disempower children and further their impoverishment. As Dr. Kwame Nkrumah once said the only way Africa can be truly liberated is through a unified political system under socialism.

Was not the Afghan war partially sold to the U.S. public by falsely claiming concern for the well-being of the female population of this Central Asian country? Women inside the U.S. remain oppressed and it is they who have suffered the most from the economic crisis through the loss of homes, healthcare, educational opportunities for their children, family income and social services.

Socialism is the only solution for the world capitalist crisis. In Detroit if we could guarantee employment, housing, utility services, quality education and public transportation to all, it would resolve the problems of poverty and increasing social misery. In order for a genuinely democratic and just society to be built it is necessary to expropriate the expropriators. The banks must pay for the crises they have caused and the working class must exercise its control and ownership over all wealth within society. 

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