“An emergency manager is like a man coming into your house. He takes your checkbook, he takes your credit cards, he lives in your house and he sleeps in your bed with your wife. He tells you it’s still your house, but he doesn’t clean up, sells off everything and then he packs his bag and leaves.” – Donald Watkins, Pontiac, Michigan city councilman, quoted in, “Lessons for Detroit in a City’s Takeover”, The New York Times, March 14, 2013.
March 2014 marks a grim anniversary. On March 14, 2013, Kevyn D. Orr was appointed Emergency Manager of the city of Detroit by Michigan Governor Rick Snyder. On March 28, 2013, Public Act 436 took effect in Michigan. This law gave the Detroit Emergency Manager extraordinary control over all Detroit financial matters. The law replaced a similar law that had been explicitly rejected by the voters of Michigan in the November 2012 elections.
This anniversary presents an opportunity to step back and examine the extraordinary crisis that has intensified in Detroit over the last year and its lessons for the entire country. In Detroit, the attack on local self-government, on political rights, is being used as the entry point for an attack on economic gains which were once relatively secure for many of the city’s workers.
This could clearly be seen in the bankruptcy proceedings. On July 18, 2013, Detroit filed for bankruptcy. This step was taken not by the elected mayor at the time, David Bing, or by the City Council, but by Emergency Manager Orr – a man who has never been elected by anyone. In fact, the City Council and many analysts said the move wasn’t financially necessary.
Orr made the decision as a way to attack the one major thing he could not unilaterally undo: the pensions of Detroit’s public employees. In Michigan, an Emergency Manager can throw out union contracts, can sell public assets, and can even abolish entire school districts. However, despite all the dictatorial power granted to him by the Emergency Manager law, Orr could not simply gut the pensions of Detroit’s public employees, because the Michigan State Constitution explicitly protects the pensions of those employees.
Court Ruling
On December 3, 2013, a federal judge ruled that Detroit could formally enter bankruptcy. The judge, Steven W. Rhodes, declared that public employee pensions were not protected in a federal Chapter 9 bankruptcy, even though the Michigan State Constitution specifically protects them. No bankruptcy court had ever ruled this before.
The judge went beyond asserting the supremacy of federal law over state regulations, ruling that the pensions workers earned were a mere “contractual obligation,” no different from any other bill that the city owes, but lacks the money to pay.
As one news source report noted: “In perhaps the most contested portion of the case, the judge made it clear that federal bankruptcy law trumps the state law when it comes to protections for public employees’ pensions, making the pensions of 23,000 retirees fair game for the city to include in the plan of adjustment.” (“Detroit Ruling Lifts A Shield on Pensions,” The New York Times, Dec. 4, 2013.)
The ruling was front-page news across the country. The constitutions of seven states bar any reduction to public pension benefits. As one lawyer said just hours after the ruling: “Last night, as a public employees’ union leader, you went to bed thinking, ‘My workers’ pensions have special protection.’ … This morning you woke up and found yourself in a new world.” (“In Detroit Ruling, Threats to Promises and Assumptions,” The New York Times, Dec. 5, 2013.) As Bruce Babiarz, a spokesman for the Detroit Police and Retirement System, said: “If this ruling is upheld, this is the canary in a coal mine for protected pension benefits across the country. They’re gone.” (“Detroit Ruling Lifts A Shield on Pensions, The New York Times, Dec. 5, 2013.)
While the “canary in the coal mine” analogy is true, it does not go far enough. The events in Detroit since March 2013 represent much more than an attack on unionized public employees.
Eerie Resemblance
When the judge sitting in the United States Bankruptcy Court for the Eastern District of Michigan declared that the pension rights of Detroit public employees were “not entitled to any heightened protection in a municipal bankruptcy,” he echoed one of the worst decisions ever rendered in an American courtroom.
Rhodes’ statement bore an eerie resemblance to an infamous passage in the U.S. Supreme Court’s notorious Dred Scott v. Sandford decision. In the 1850s, Dred Scott, an African American slave who had been taken by his owners into free states and territories, attempted to sue for his freedom. In a 7-2 decision, the Supreme Court denied Scott’s request.
On March 6, 1857, Chief Justice Roger B. Taney infamously declared that the authors of the Constitution had viewed all Blacks as “beings of an inferior order, and altogether unfit to associate with the white race, either in social or political relations, and so far inferior that they had no rights which the white man was bound to respect.”
In 1857, the U.S. Supreme Court ignored the fact that numerous states in the Union had passed “personal liberty” laws to protect escaped slaves and free Blacks settled in the North. These laws barred state officials from turning over individuals to slave catchers without a trial by jury. Instead, it ruled that its interpretation of the federal constitution trumped the attempts of states like Indiana, Connecticut, Massachusetts, Michigan, Maine, New Hampshire, and Ohio to protect their residents. In 2013 Judge Rhodes expressed the same disregard for the state constitutions of Michigan, Alaska, Arizona, Hawaii, Illinois, Louisiana and New York. (All have provisions protecting public employee pensions.)
Just as the Dred Scott decision declared that no African American living in any part of the United States had any legal rights whatsoever, so the decision in the Detroit bankruptcy case served notice that the working class of the United States has no economic rights that the ruling class is bound to respect. This should sound a death knell for the illusion that having a good-paying job somehow makes a person part of the “middle class.” Just as the Supreme Court’s 1857 decision meant that a slave master could take his slave anywhere in the United States with impunity despite what the laws of individual states decreed, the Detroit ruling declared that the ruling class can undo even those benefits to workers explicitly protected in the constitutions of individual states. Just as the rights of slave property were elevated over the rights of free men in 1857, today the rights of corporate property are elevated over the rights of people.
Sea Change
This elevation of the rights of corporate property is a sign of a sea change in the way society functions. If the pensions of once seemingly secure public employees can be ripped apart with one legal decision, what chance do other workers have? How far will this onslaught go? Can it be turned back? This raises more fundamental questions about class rule and class power.
Detroit’s year of living under dictatorship has harshly confirmed the stark truth that political power is merely the organized power of one class for oppressing another class. Over the last year, Detroit’s civic “leaders” have relentlessly attacked workers’ democratic rights in a calculated effort ultimately designed to destroy hard-fought economic gains and undermine the fight for economic wellbeing.
This move to utterly obliterate long-accepted gains — gains that have been understood by many to be actual economic “rights” — shows the profound shift underway in the relationship between labor and capital. No city in the United States more sharply illustrates the end of an era than the once-mighty industrial juggernaut of Detroit. Today, the factories are gone — or increasingly run with robotized production. A new class of the unemployed and the barely employed workers has replaced the stable work force of the city’s past. As a result, the old social contract is being torn apart. The unwritten agreement that proclaimed that if a certain section of workers simply worked hard and “played by the rules,” they would be rewarded with high wages, the possibility of home ownership, and secure pensions – is no more. Gone is the supposed guarantee of becoming part of some ill-defined “middle class.”
While the attacks on democracy by the Emergency Manager and the assault on the pensions of public employees are clear signs of this ripping apart of the social contract, they are hardly the sole indications. Over the last several years, Michigan has seen the systematic gutting of social welfare programs for the unemployed, including devastating assaults on welfare mothers. While Detroit’s elite had to go to court to batter the pensions of public employees, they were able to destroy programs for the unemployed much more swiftly, without the irritating judicial complication of a provision in a state constitution.
Given this, revolutionaries misread the situation in Detroit if they see it simply as an attack on public workers and their unions. The attack on democracy in Michigan is an orchestrated, well thought-out campaign by a class that has carefully chosen its political goals. This all-out assault is directed at the whole of the new class being created out of the crucible of the world’s new economic reality. The traditional methods of protest will not suffice as a response. Once the old institutions are closed to this new class and do not serve its interests, the struggle will inevitably step outside the old institutions. This urgent situation cries out for a class response, that is, a response from the class under assault, determined to build the political power to assert its class interests and to establish a true democracy for all.
Today’s crying need is for revolutionaries to step forward and help develop the class awareness among fighters in the day-to-day struggle that will lay the basis for a class political response. That will be an important first step in challenging the control of society by a ruling class which has shown so graphically that it is completely unfit to rule.
March.April Vol24.Ed2
This article originated in Rally, Comrades!
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