Wayne O'Leary

Social Darwinism, Michigan-Style

Detroit has the Lions and the Tigers; it also has the hyenas — Gov. Rick Snyder and Emergency City Manager Kevyn Orr. Hyenas, so the dictionaries say, are large, carnivorous mammals that feed as scavengers and possess a howl often compared to fiendish laughter. Nothing more accurately describes Snyder and Orr in action.

Michigan chief executive Snyder is the lesser known, but more dangerous, of the two tea-party Republican governors (Wisconsin’s Scott Walker being the other) who have terrorized the Upper Midwest since the 2010 elections. The Wolverine State’s new emergency-manager law, which repeals local democracy in economically troubled communities, is his grim calling card — the ace of spades affixed to the remains of dead or dying cities and towns left in the wake of deindustrialization.

Snyder’s card has lately been pinned to Detroit; the Motor City has been selected for formal Chapter 9 bankruptcy proceedings by attorney Orr, the appointed dictator picked by the governor to replace an elected mayor and council after they failed in the impossible task of balancing the city’s books as required. Orr, who ironically represented Chrysler during the auto bailout, sees Detroit as less deserving of help than the carmaker; he wants its unfunded pension and healthcare benefits slashed by 90% and its municipal art treasures and other assets potentially auctioned off.

Orr’s boss is fully on board with this draconian budgetary solution. “We have a great city,” Snyder was quoted as saying (tongue-in-cheek, no doubt), “but a city that’s been going downhill for the last 60 years. This is an opportunity to say enough is enough.” Coincidentally, it’s also an opportunity for the Snyder administration to punish a Democratic labor city, diminish its political clout, and tilt Michigan permanently into the GOP column.

Snyder’s 60-year reference is particularly disingenuous. Sixty years ago (1953), Detroit was not embarked on decline; it was at its peak of economic influence and remained so for some time thereafter, led by a healthy auto industry and a United Auto Workers union under Walter Reuther that was in its heyday. The UAW sat in the councils of power, still able in 1962 to attract dignitaries such as President John F. Kennedy to address its annual convention.

What started Detroit on the downward slide were factors largely beyond its control: “white flight” to the suburbs following the racial upheaval of the late 1960s, which cut the local tax base; the oil shocks of the 1970s, which stunted car sales and raised unemployment; and the concurrent rise of tough overseas competitors, principally Japan, specializing in small, fuel-efficient vehicles.

Detroit, a one-industry town, was also willfully done in by the management of that one industry. The late 1970s and 1980s saw the Big Three automakers begin to shift production and jobs out of the city — first to venues elsewhere in the US and then to foreign locales as the offshoring and outsourcing process accelerated under free trade. By the latter half of the 1990s, General Motors had 50 international manufacturing and assembly plants employing 800,000 workers in 28 countries, while Ford, which had begun cutting its domestic workforce in the 1980s, maintained operations in 34 countries. A decade later, the Great Recession completed Detroit’s hollowing out.

But it’s easier and more congenial for unscrupulous politicians on the right and an intellectually lazy mainstream media to lay the blame on the workers. It’s the pampered unionized autoworkers, with their outrageous legacy benefit packages negotiated by the UAW, that are supposedly the cause of decline. Worse, it’s those spoiled municipal employees, also unionized, whose extravagant pensions and healthcare benefits have driven Detroit’s government to the brink. Extravagant? The average city retirement pension is just $19,000 a year; moreover, as The New Yorker’s John Cassidy revealed recently, the city’s public payroll is a third of what it once was, and it’s been cut by 20% since 2010.

Nonetheless, Rick Snyder and the Michigan tea partiers want those union-affiliated, Democratic-voting public workers, the enemies of upstanding Republicans everywhere, to bear the brunt of the criticism. What seems to annoy business-oriented GOP partisans most is that city workers are among the minority of Americans who still enjoy once-universal defined-benefit pensions — guaranteed retirement payments linked to their final salaries and not subject to stock-market fluctuations, as are 401(k) defined-contribution “pensions.”

The Economist reports that large private employers (a core Republican constituency) find traditional pensions “too expensive,” a hilarious notion in the era of record corporate profits; the GOP and its business allies love the concept of the 401(k), however, a large chunk of whose value goes toward Wall Street management fees over the life of an average plan.

It’s transparently obvious that the prime motivation of Rick Snyder and the Detroit-bankruptcy enthusiasts is to engage in an orgy of privatization and union busting as state proxies for the nationwide Republican war against government and public employees. In this regard, Gov. Rick is as subtle as a kick in the face. But what of Detroit’s purported friends, the Democrats, to whom Michigan was delivered on a platter in the last three presidential contests by the urban working class? Where is the loyalty and support for a constituency under siege? Apparently, it’s non-existent.

John Cassidy reminds us that the Obama administration provided $700 billion in bailout funds to the too-big-to-fail private banks and $80 billion to the too-important-to-fail private auto companies, whereas it cavalierly dismissed Detroit’s pleas for assistance in meeting its mere $18 billion public debt in late July with the bland comment that “this is an issue that has to be resolved between Michigan and Detroit and the creditors.” With friends like this, who needs enemies?

The administration’s attitude is of a piece with its increasingly conservative stance on economic policy, which is becoming more pronounced as the second Obama term proceeds and bipartisan austerity cuts deeper. Whether it’s chained CPI for Social Security COLAs, privatization of the TVA, an income-tax cut for corporate America, or placing federal GSEs Fannie Mae and Freddie Mac, along with their federal housing mandate, in the eager, loving arms of the Wall Street bankers, this is a “liberal” government that’s lost its way. Two corporate political parties is the last thing we need in Washington.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He is the author of two prizewinning books.

From The Progressive Populist, October 1, 2013