Detroit: The Parable of the Banksters and the City
by Tom Stephens
The corporate takeover of Detroit is “a completely unprecedented spectacle” of infinite corruption and brazen bullying by the 1%. “Jones Day and its megabucks corporate client list are perfectly positioned to profit from Detroit’s ‘restructuring’ thru land speculation, privatization, and related neoliberal scams.”
Detroit: The Parable of the Banksters and the City
by Tom Stephens
“They are waging brutal class war on behalf of “the 1%” against Michigan’s most vulnerable People.”
The Scorpion and the Frog
A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, "How do I know you won't sting me?" The scorpion says, "Because if I do, I will die too."
The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp "Why?"
Replies the scorpion: "Its my nature...” – African American folklore
More than one wag has observed in the past that the phrase “legal ethics” is something of an oxymoron,1 especially when a lot of money is involved. The giant multinational corporate law firm Jones Day, its partner Kevyn Orr as Detroit’s new “Emergency Manager,” and Michigan’s Governor Rick Snyder have undertaken a relentlessly sleazy campaign of lies to demonstrate the truth of this observation.
Snyder loves “emergency manager” legislation. Its latest incarnation is Public Act 436. This replaced his first unconstitutional power grab via Public Act 4 in 2011. It was rejected by the voters in a popular referendum last year. “Emergency Manager” statutes vest all local government powers of the Mayor and the City Council in a single individual. This “Emergency Manager” is selected by Snyder. He is subject only to the unconstrained discretion of Snyder and State Treasurer Andy Dillon. Together they are waging brutal class war on behalf of “the 1%” against Michigan’s most vulnerable People.
Kevyn Orr was named Detroit’s Emergency Manager on March 14. Until then he was employed as a bankruptcy lawyer and partner in the 2,400 lawyer Jones Day global law firm, which likes to brag that it represents more than half of the Fortune 500. Coincident with Orr’s ascension to embody the government of Detroit, Jones Day was also offered a contract to serve as the City’s “restructuring counsel.”
“These corporate gangsters propose to balance Detroit’s budget, renegotiate its debt, and impose a savage and cruel new austerity regime.”
Jones Day’s elite client list includes Bank of America and its subsidiary the former investment bank Merrill Lynch, which collapsed in the crash of 2008 due to excessive predatory gambling in the subprime and derivative investment games that ripped gaping holes in neighborhoods of Detroit and every other major US city. Bank of America/Merrill Lynch (BAML) are key creditors of Detroit, as adverse “counter parties” on interest rate “swaps” – predatory Wall Street scams that consume a huge portion of the municipal budget. (Just reading these sentences demonstrates how hard it is for ordinary folks to understand what is being done to our city, but we have to try.) Even beyond this blatant conflict of interest, Jones Day and its megabucks corporate client list are perfectly positioned to combine their wealth and total control of the government to profit from Detroit’s “restructuring” thru land speculation, privatization, and related neoliberal scams.
Now these corporate gangsters propose to balance Detroit’s budget, renegotiate its debt, and impose a savage and cruel new austerity regime that, if successfully adopted, will likely serve as a model for future privatized government, eviscerated democracy and oppression of working People elsewhere. Their top lawyers expect to be paid more than $1,000 per hour to do so. The response of the People of Detroit to this series of political economic atrocities is a question of global as well as local importance.
“How do we know they won’t sting us?”
In evaluating any public policy proposal we should ask: “Who decides?” “Who pays?” and “Who benefits?” Presented just in the last month with the completely unprecedented spectacle of a giant corporate law firm in effect serving as the off-the-shelf, self-interested government of a major city, we should now add the unhappy frog’s allegorical question. EM Orr’s new subjects in Detroit must ask the corporate Frankenstein Monster government assembled by Snyder, with the incorporation of Jones Day’s unique expertise and insider trading opportunities inherent in Detroit’s governance and financial challenges: “How do we know they won’t sting us?”
It is in the nature of major capitalist corporations, banks and their law firms such as Jones Day, BAML and the firm’s A-list corporate clientele to seek maximum profits, and externalize costs on others. Governor Snyder’s political constituency, represented by such enterprises as the American Legislative Exchange Council (ALEC), the Mackinac Center for Public [sic] Policy, and the Greater Detroit Regional Chamber of Commerce, see no ethical problems or injustices whatsoever in saddling Detroit with such an unaccountable, greed-driven and totally unrepresentative government. Indeed, with the recent addition of Orr and Jones Day to the “Emergency Manager” policy, as applied to Detroit just in the past month, they are charting completely new ground in the abuse of executive powers. And note that for once in the course of this discussion I haven’t even raised issues of racial discrimination and injustice.
For the People of Detroit, these are momentous times.
Jones Day, Orr & Snyder are trying to hold off the inevitable collapse of their system.2 Casino capitalist oppression and injustice have wreaked havoc, and now offer their incredibly lucrative “solutions” for the mess they made. Like the scorpion in the fable, it’s simply their nature to do so, and they will certainly drown along with their many victims in the multifaceted global economic, political and environmental crisis of their own creation.
“They are charting completely new ground in the abuse of executive powers.”
Consider the layers of corruption: First, although voters in Detroit and throughout Michigan rejected PA 4 emergency management tyranny at the polls, Snyder acted swiftly to assert the same “emergency” powers via midnight legislation passed in a lame duck session that was a grotesque parody of the rule of law.
Second, a few months later Snyder used PA 436 to impose Orr/Jones Day and their fiduciary agent relationship with corporate capital as the city’s lawless, unaccountable and self-serving government.
Third, the impenetrable, unconstrained and utterly shameless Jones Day/BAML conflict of interest (probably just the one we know about, out of many), layered on top of these systemic abuses, underlines the extraordinary lengths such greedy banksters will go to have their way, regardless of any legal or ethical constraints, or of the consequences for the rest of us.
Can we find ways to get the Lords of Capital off our backs before their rancid system slips beneath the surface of the Detroit River?
Or by refusing to bear their lies, have we already taken the first tiny step toward building something different to replace it on our shores?
Thanks to Andrei Stephens for the fabulous application of the allegory.
Tom Stephens is a people’s lawyer in Detroit. He can be contacted at email@example.com.
1 A figure of speech that produces an incongruous, seemingly self-contradictory effect, as in “cruel kindness” or “to make haste slowly.”
2 Glen Ford made this point brilliantly: http://blackagendareport.com/content/detroit-cyprus-banksters-search-prey