Unfettered Greed, Media Silence and Propaganda

Nine Reasons Detroit’s Bankruptcy Is A Scam

July 30, 2013 | Filed under: Economy,Headlines | Posted by: Wendy Gittleson

 

Detroit, long known as one of the country’s most economically dire major cities, has filed bankruptcy. TV news is full of pictures of what an outsider might think is a war zone. Buildings are abandoned. Plywood boards are hanging off the windows and doors. Detroit is presented as so crime-ridden that law abiding citizens feel compelled to drive around Detroit rather than risking driving through it.
 

If courts allow the bankruptcy to go through (there are state constitutional questions), it could be devastating news for Detroit’s public employees and retirees. It’s true that the city of Detroit has been broke for a long time. The collapse of the manufacturing base has had a dramatic impact on tax collection for the city. There’s little hope that the city will pull out of its situation – at least without some serious intervention – or is that true?
 

The more there is to learn about Detroit’s bankruptcy, the more convincing it becomes that this last-straw legal maneuver is anything but necessary. Here are eight reasons that Detroit doesn’t need to and really shouldn’t go bankrupt:

1. Detroit (or any Michigan city) should never have been put in this position. Detroit was one of several Michigan cities that were deemed so mismanaged that the state’s Republican governor took all control out of the hands of the citizens of Detroit and gave it to a single city manager. The voters rejected the emergency manager idea and Governor Rick Snyder did it anyway. As Mother Jones writes, it was a hostile takeover.

2. Detroit’s city manager, Kevyn Orr, is a bankruptcy attorney. The first bill paid during the drawdown to the bankruptcy process was $1.4 million to Orr’s former law firm.

3. The emergency manager program is designed to keep cities out of bankruptcy, but emails have confirmed that Snyder may have planned bankruptcy all along.

4. Detroit’s unions have been in negotiation to help pull the city out of bankruptcy. Their efforts were snubbed.

“From the beginning, we have attempted to participate in discussions and offer a restructuring plan,” Dan McNamara, the president of IAFF (International Association of Firefighters) Local 344 of the Detroit Fire Fighters Association told The Detroit Free Press. “It is a shame that now we will have to be in front of a bankruptcy judge when all along we have been expecting to have meaningful meetings with emergency manager Kevyn Orr. These meetings never occurred.”
Ed McNeil, a special assistant to the president of Detroit’s largest union, the American Federation of State, County, and Municipal Employees Council 25, called the bankruptcy filing premature. He doubts that the city will have an easy time proving that it is eligible for bankruptcy. During negotiations, McNeil noted, “We’ve asked them for information, and they’ve never given it to us.”
Source: The International.org

5. Detroit’s economy may not be as dire as we are made to believe. The hotel industry is booming. In fact the Motor City’s occupancy rate is about 70%, which is higher than the national average:

Detroit might be in bankruptcy, but its hotel industry is on an upward trajectory. Three casino hotels have opened in recent years. A new Starwood Aloft hotel is set to open next year in a landmark building in Grand Circus Park downtown. And developers have proposed turning a historic firehouse across from the Cobo Convention Center into a boutique hotel.
The Cobo Center itself, home to the annual North American International Auto Show, is undergoing a $290 million renovation, which tourism officials hope will attract more conferences and business travelers when completed at the end of 2014.
Other private investment in downtown and midtown Detroit by such business leaders as Quicken Loans owner Dan Gilbert is also revitalizing those areas. Gilbert has snagged more than 7 million square feet of property downtown, with plans to develop cafes and other attractions. And through a public-private partnership, a new 18,000-seat arena for the Detroit Red Wings has gotten the green light in midtown, with an accompanying entertainment district.
Source: USA Today

6. Industry is moving into Detroit.

Tech start-up companies have also emerged on the scene, luring young employees and entrepreneurs. And General Motors, which is headquartered downtown, is also stepping up its hiring as demand for new vehicles grows. All the activity has led to a budding arts and music scene.
USA Today

7. The crime rate is going down. Despite the idea that crime is making Detroit unlivable, the crime rate has been on a slow but steady downward trajectory since its peak in 2006. Don’t get me wrong. It is still a dangerous city. In fact, it’s the second most deadly city in the country, but a budding entrepreneurial and arts scene is typically a precursor to a further drop in crime. Even that is beside the point. Bankruptcy cannot be filed because of a crime rate. Cutting necessary services does not help a crime rate.

 

8. Detroit’s gross domestic product has been rising despite the fact that the population has been falling. Granted, the city’s GDP is still low as compared to its population, but a rising GDP is another indication of better times to come. It’s not time to take money out of the pockets of the city’s residents – further damaging the tax base and lowering its GDP.

 

9. The feds could bailout Detroit. When Detroit’s key industry – the automotive industry – needed a bailout, the feds were there to the tune of over $80 billion. A bailout of the Motor City would cost just $18.5 billion, yet no one seems to have the stomach for helping people – just corporations.

 

About half of Detroit’s debt is in municipal bonds. Most of the rest is in employee pensions and future health insurance payments. Bond holders – generally the investor class – are worried. However, while bonds are typically considered a safe investment, they are an investment. There is an inherent risk.

 

Public employees, on the other hand, essentially loaned the city part of their salaries in exchange for getting it back when they retired. In other words, it was part of their salary package. If Detroit’s public employee pensions are cut, it will be a deep blow to public sector unions.

 

Is that what Detroit’s bankruptcy is about? Michigan is one of several states that has been actively trying to destroy the public sector. In April, an ALEC sponsored bill made its way to the Legislature which would make it illegal for the public sector to even bid against the private sector.

 

People are easily manipulated through crises. Detroit is a perfect example if not the perfect laboratory. As Naomi Klein demonstrates in the video below, the problem is not a lack of money. It is the distribution of money (begins at about 9:55).

Naomi Klein: Fake "Debt Crisis/Bankruptcy": We are NOT Bankrupt



Detroit is the largest American city to date to declare bankruptcy. If the court allows the bankruptcy to go through as planned, it will be a major stepping stone toward privatization of all government services – a proposition which is both expensive and exclusionary to those who can’t afford to pay.
Privatization does nothing but line the pockets of the already rich while robbing the poor and middle class.

What is the future of a bankrupt Detroit? A few miles south, there is a Detroit suburb named Ecorse.

They filed bankruptcy in 1986. 13 years later, conservatives profiled Ecorse as the standard bearer for the success of privatization, claiming that it had “saved” Ecorse.

Today, Ecorse is worse off than Detroit. Its population dropped by almost half. Its unemployment rate is a whopping 23.9% – as compared to Detroit’s 16.3%. In fact, Ecorse’s financial situation was deemed so bad in 2009, that Governor Snyder put it under emergency management – where even more cuts were made. It’s now under a Transition Advisory Board – sort of a middle ground between emergency management and sovereignty. Would conservative writers still laud Ecorse’s privatization?

Ecorse’s fall isn’t surprising. Privatization is one of the biggest lies ever sold to the American people. Privatization costs more. It’s less efficient. It can’t control costs. It’s inflexible and most importantly, it’s crony capitalism.

Detroit’s situation isn’t completely hopeless. Michigan’s Attorney General, Bill Schuette, is using the power of his office to fight the Governor’s office. Schuette is calling himself the “people’s attorney” and has filed to halt the bankruptcy, proceedings, claiming that it’s unconstitutional to “diminish or impair” public pension funds.

---

Wendy Gittleson grew up in a political family. Her passion is for social justice and fairness. She lives in a union household. In her rare downtime, you’ll find her hiking or exploring the shoreline with her dogs. Follow her on her Facebook page, on her Facebook blog page or on Twitter, @wendygittleson

http://thebigslice.org/eight-reasons-detroits-bankruptcy-is-a-scam/

The Koch Brothers Have Buried An Area The Size Of A City Block Under 30 Feet Of Oil Sands Waste

Robert Johnson May 19, 2013

CLICK ON LINK HERE to view original photos.

Ruth Germain/Petroleum Coke Awareness Facebook

Canada's oil sand mines will eventually produce up to 2 trillion barrels of oil and what that could mean for the environment has been debated for years. What's often overlooked though is a coke byproduct that results from refining the tar-like bitumen of the oil sands into oil.

Coke is a low-quality type of coal and the Marathon Petroleum plant in Detroit has made overlooking its role in the oil sands debate impossible to ignore. The refinery was built on the Detroit River more than 70 years ago but began refining Canadian oil sand deliveries just last November.

The coke waste started accumulating then. The New York Times writes that now the mound of coke towers three stories above the street, covers an entire city block, and is owned by Koch Carbon controlled by David and Charles Koch.

Petroleum coke generates up to 10% more CO2 than coal, and new permits allowing its use are no longer issued in the U.S.

Faced with hauling the stuff away and selling at a loss, Canadian mining companies have been piling it into massive man-made mountains of their own. The immense mound of coke in the pictures below were photographed during our trip to the oil sands last year.

While coke is used widely in countries like China and Mexico where emissions are less regulated than in the U.S., it sells for 25% less than coal. That means shipping the coke from Canada only makes sense if it's pumped out in the tar-like bitumen and refined closer to where it's eventually sold.

It makes sense then that one of the largest petroleum coke dealers in the world, delivering more than 11 million tons of fuel-grade coke every year, is Oxbow Carbon owned by David and Charles' brother, William Koch.

Oxbow drew media scrutiny in 2012 after donating $4.25 million to GOP candidates and spending another $1.3 million on lobbyists in the same period.

Oxbow would undoubtedly like to see piles of petroleum coke appear along the U.S. Gulf Coast when the Keystone XL pipeline gets up and running. Then Canada will pump its oil sand bitumen to refineries there far better positioned to ship the waste to Mexico and China.

How this potential concentration of coke could affect the U.S. has yet to be seen. The National Fire Protection Agency warns petroleum coke should be prevented from contaminating groundwater at all costs and any spills that have the potential of reaching a waterway are required by U.S. Coast Guard regulations to be reported immediately.

The Canadian Broadcasting Corporation, though, interviewed a professor who studied petroleum coke and the oil industry for 10 years, who says the immense pile adjacent to the Detroit River "is not a hazardous substance."

The following photos from our Alberta oil sands trip last year, shows the scope of the coke already backlogged in the region.

Robert Johnson/Business Insider

Robert Johnson/Business Insider

Robert Johnson/Business Insider

SEE ALSO: Our flight over the Alberta oil sand mines >


http://www.businessinsider.com/koch-brothers-oil-sand-coke-byproduct-along-detroit-river-2013-5