Detroit Bankruptcy: Blaming The Victims

The once-great city of Detroit has declared bankruptcy, and the search for scapegoats has begun. Many are blaming the sky-high pensions of city employees for the debt of $15 billion. This theory blames the victims of the disaster. These teachers, policemen and firemen did not make the decisions that let Japanese automobile companies compete with Americans. The  city employees did not decide to spend millions promoting the auto industry's new cars as better, bigger, safer, and sexier than last year's models.

No, the people who made those decisions were the owners and managers of the automobile industry. They're mostly retired now, safely ensconced behind the high walls of privilege with their millions, or even billions of dollars in wealth. Now that Detroit is in receivership, Kevyn Orr, the state-appointed emergency manager, will not be looking for a piece of their profits because, you see, the 1% never pays for the harm they do.

Orr has his sights set squarely on the recipients of Detroit City pensions. The workers who earned these pensions by working at jobs that kept the city running for decades are being blamed for demanding too much money. The average pension is $1600 a month, hardly an amount that seems greedy.

The pensioners did not decide what their pensions would be. The city fathers did. Those people, the mayors and aldermen of years past, decided back in the 1950s to give the city workers increased pension benefits instead of raises. The workers had little choice but to accept the generosity of their bosses. Now their savings are exhausted, their homes are worthless, and their pensions are under attack.

The politicians who ran Detroit were not entirely to blame, either. The pensions they managed were toys for Wall Street to play with. Two pension systems lost $1.5 billion that they had invested in the stock market in the crash of 2008. Detroit and numerous other cities found themselves floundering in the wake of that catastrophe.

A large share of the blame for Detroit's troubles rightly belongs to the entrepreneurs of the late 1900s, who kept the price of oil low and kept Detroit's cars from needing to compete with the Japanese and European car manufacturers. These people made billions by selling gasoline for America's gas-guzzlers. The corporations who made money this way, like the billionaire Koch brothers, excuse themselves by saying their companies were just maximizing profits. This is not true. Their companies also bribed lawmakers with huge campaign contributions to keep the federal government from demanding higher gas mileage from American cars. They used their superfluous profits anonymously to convince people that burning oil in the atmosphere was healthy and global warming was a myth invented by liberals.

The people who made huge fortunes by selling oil and by gaming the stock market and by swindling investors in sub-prime housing now have the money that the city of Detroit should be using to pay the pensions of its workers. But emergency manager Kevyn Orr will not be looking for bailouts from them.

Another group of people, much larger than the others, also must share the blame for Detroit's decline. The white workers in the auto industry were frightened of the African-American workers. They decided to leave the city, first creating all-white suburbs, and then taking their wealth to retirement states like Florida and Arizona, where today they continue to infect the American people with their bigotry and racism.

Eighty-five percent of the people who remain in Detroit, about 700,000, are African-Americans. Since before World War II, white residents of Detroit have harbored racial animus against their neighbors. Other industrial cities, like Chicago, New York, and Boston, learned to thrive as multi-cultural communities. Detroit never figured out how to do that. Needless to say, Kevyn Orr will not be looking for bailouts from the millions of white people who fled from their neighbors instead of learning to live with them.

Kevyn Orr will look for money by taking it from poor people who earned their pensions by years of hard work in service to the community. He has even said he intends to sell off artworks owned by the Detroit Institute of Art (DIA). Some Detroit residents, who believe the DIA contains only works by European artists, favor this plan. But the most valuable artworks in the museum are not European at all, but murals painted by Diego Rivera, a Mexican artist. Rivera's murals celebrate the workers of Detroit, not ancient kings or white aristocrats. Detroit needs those murals to help keep its priorities straight. The workers are not to blame for the decisions of managers. The people of Detroit should not be punished for decisions made by the rich and powerful.

Note: My father was born and grew up in Detroit. He and my mother met while attending the University of Michigan. My despair at the fate of the city is real and heartfelt.