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Detroit Bankruptcy Bankrupts Democracy

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Source: The Nation

A man rides his bike past graffiti in Detroit after the last hurdle to municipal bankruptcy was cleared on December 3, 2013.
(image by (Reuters/Joshua Lott))

Detroit elected a new mayor November 5 and he will take office in less than a month. But the future of this great American city and its citizens isn't being defined by decisions made by voters on Election Day. It is being defined in federal bankruptcy court -- and by an "emergency manager" who has no democratic legitimacy.

With a ruling Tuesday by US Bankruptcy Judge Steven Rhodes, Detroit officially becomes the largest US city ever to enter Chapter 9 bankruptcy. Despite a determination that negotiations with creditors outside of bankruptcy court had not satisfied good-faith requirements, the judge cleared the way for the emergency manager and his law firm to advance a "plan of adjustment" that is likely to include deep cuts in pension guarantees for retired city employees and a "fire sale" of city assets that could result in public utilities and the Detroit Institute of Arts collection being bartered off to private bidders.

What Judge Rhodes has done is not the end of the bankruptcy process. It is merely the beginning. But the process has been framed in a manner that runs the risk of undermining the city's long-term recovery by taking money away from the most vulnerable residents of Detroit. As Jordan Marks, executive director of the National Public Pension Coalition notes, "In the bankruptcy, the modest pensions of Detroit's firefighters, police officers, and other city employees could be all but wiped out, even as Wall Street banks continue to extract hundreds millions of dollars from the city's economy. This is a dark day for people of Detroit who worked hard, played by the rules, and are now at risk of losing everything."

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John Nichols, a pioneering political blogger, has written the Online Beat since 1999. His posts have been circulated internationally, quoted in numerous books and mentioned in debates on the floor of Congress.

Nichols writes about politics (more...)

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I detailed the wrongful calculations used to make ... by Scott Baker on Wednesday, Dec 4, 2013 at 2:08:59 AM
Bankrupting democracy? More like bankrupt democrat... by Bill Johnson on Wednesday, Dec 4, 2013 at 8:31:08 AM
Poor innocent people Do Not deserve to be robbed a... by Poor old Dirt farmer on Thursday, Dec 5, 2013 at 2:22:51 PM
The voters in Michigan need to throw out the Repub... by BFalcon on Wednesday, Dec 4, 2013 at 11:41:23 AM
I don't understand what the alleged play is here.W... by Steve Consilvio on Wednesday, Dec 4, 2013 at 12:04:54 PM
This is a land grab.  See my comment above, a... by Scott Baker on Wednesday, Dec 4, 2013 at 1:46:12 PM
More on the phony bankruptcy, from Democracy Now!:... by Scott Baker on Wednesday, Dec 4, 2013 at 2:00:40 PM
I don't doubt that there are those who want to cap... by Steve Consilvio on Thursday, Dec 5, 2013 at 1:04:41 PM
This is nothing new - its friedmanite economics as... by Poor old Dirt farmer on Thursday, Dec 5, 2013 at 2:31:33 PM
   It's the ART.  It was always abo... by larry on Wednesday, Dec 4, 2013 at 12:25:29 PM
Thank you, John Nichols, for this informative and ... by b. sadie bailey on Wednesday, Dec 4, 2013 at 6:55:04 PM
Agree with Scott Baker about the fact that it's a ... by b. sadie bailey on Wednesday, Dec 4, 2013 at 7:03:20 PM
It's time it Admit that a government that simply d... by Poor old Dirt farmer on Thursday, Dec 5, 2013 at 2:40:10 PM
An Alternative to Capitalism (since we cannot... by John Steinsvold on Wednesday, Dec 4, 2013 at 10:56:33 PM
Your link does not work, so we're back to TINA&nbs... by Scott Baker on Thursday, Dec 5, 2013 at 1:45:43 AM
Oh those big bad Republicans - Where the heck is t... by Poor old Dirt farmer on Thursday, Dec 5, 2013 at 2:15:34 PM
Wow! What an eye-opener. You have to give it to th... by John Rachel on Saturday, Dec 7, 2013 at 1:39:08 AM
I am still amazed that although the total cost of ... by Neal Chalabi Chambers on Sunday, Dec 8, 2013 at 6:24:43 AM
It's not the money, which is a trifle even for ALL... by Scott Baker on Sunday, Dec 8, 2013 at 12:12:55 PM