Posted on November 11, 2013

Detroit’s Bankruptcy Brings Up More Than Finances

Alana Semuels, Los Angeles Times, November 9, 2013

Sheilah Johnson was a building inspector for the city for 28 years, a college graduate who passed up jobs that paid more because a city job offered stability and the promise of a good pension.

But the city’s recent plunge into bankruptcy — overseen by an outside emergency manager answerable to the state government, not the citizens of Detroit — makes her wonder whether she and other African American residents of the impoverished city will be able to stop Wall Street creditors from seizing what’s left of a municipal treasury they paid into for most of their lives.

“When my 9-year-old grandson asks me, ‘Grandma, are they trying to make us slaves again?’ how do I answer that child?” Johnson said, breaking into tears during court hearings over the city’s bid to launch the nation’s largest-ever municipal bankruptcy. “We do not need a slave owner, and I am not a slave.”

Much of the trial to determine whether this onetime powerhouse of the American economy is eligible for bankruptcy has focused on such nuts-and-bolts issues as debt structuring and pension liabilities. But the issue of race has hovered persistently around the trial, which wrapped up Friday. The move to secure and sell off remaining assets — including art museum treasures and valuable real estate — was portrayed by many African American residents who showed up in court to try to halt the bankruptcy as neocolonial plundering.

They said possible cuts to public pensions would disproportionately target black workers who were left with nothing but government jobs after industry fled, along with most white residents, to the suburbs. {snip}


In Detroit, which last week elected its first white mayor in four decades, it is nearly impossible to escape discussion of race. The city’s population is 82% African American, in a state that is 79% white.


“You can drive around now and not see a white person all day long,” said the Rev. Charles Williams II, who watched much of the trial and was one of nearly 1,000 protesters outside the court last month.

Demonstrators argued that the bankruptcy should be halted and Detroit residents left to determine a way to rescue themselves from debts that now total an estimated $18 billion.


Many in Detroit would strongly disagree with the race narrative. After all, statistics alone highlight just how much Detroit needs help, from wherever it comes: The city, whose population has declined 63% since its postwar peak, has the highest violent crime rate of any big city; 40% of its street lights don’t function.

Without state intervention and bankruptcy, say those advocating the process, Detroit would not have been able to reorganize its finances or continue to function.