Thursday, December 5, 2013

How I feel

I have so many mixed feelings about Detroit and my personal position I really do not know how to express them all. With the pronouncement of a few sentences a federal judge allowed the financial bankruptcy to move forward and took away the only protection Civil Servants in 6 states specifically and 44 others through precedent had as protection of an earned, deferred payment called a pension.

In that ruling the court not only gave all government entities a way out of not funding their pension shortfalls he also said that pensions currently being paid could be reduced through negotiation. In Detroit it is particularly heinous for those that retired from being police and firefighters. They were not given the right to pay into the FICA tax which would have given them Social Security and Medicare. Which means the city medical plan and their pension is their only monthly income that was by the state constitution guaranteed to be stable. Their average pension is $30,000 before monthly deductions for medical & life insurance.

Here's the worst of it for retirees, the pension shortfall for both grunt workers like me and police and fire is 3.5 billion dollars but the healthcare shortfall is 5.8 billion both equally roughly half of the debt the city is trying to bankrupt out of. The reasons for the shortfall is not because we, the workers, did not pay into the system, we did. We worked for roughly 1/3 less than a skilled tradesman or clerk in the private sector, taking 1-2% raises spread over the life of a contract or giving back 10% during the lean years with the understanding that city would make a yearly contribution to cover pension fund shortfalls.

About 15-20 years ago was the last time the city paid a dime into the fund, diverting the owed money instead to tax abatement's for developers, securing bond sales, and just outright theft through the pay to play scams that Kwame Kilpatrick went to jail for 28 years over.

Now that the judge has ruled that Detroit is not only eligible for bankruptcy but the government should have done it years ago before the problem turned into an 18.5 billion dollar elephant. As it has always been in every governmental fiscal need the workforce past and present are the low hanging, easiest to reach fruit, so we will be plucked first. Just like when Wall Street crashed the economy the banks responsible after Lehman Brothers was allowed to be the sacrificial goat for Goldman-Sachs theft through manipulation; the banks got paid back their losses dollar for dollar.

You learn so much in life. The court also ruled that pensions were contracts but unsecured by anything of value, but the banks had cut deals with the city to market the bonds that secured them with different revenue streams. What that means is that some of the money that exists currently in the two pension funds (about 5 billion dollars) will be taken from current and those ready to retire within 5 years or so and it will be used to pay those creditors as opposed to using the tax stream they were secured by.

Now here is the real kicker, the Emergency manager who is literally a one man government, a man who does not have to answer to anyone has said Detroit is insolvent but that we are going ahead to fund a new hockey arena and district around it with 434 million dollars of public money. No money for police, firefighters, workers, pensioners, lights (50% of which do not come on at night) but money for anew place for the privately owned Red Wings to play.

Exactly in the area where the least expensive housing is for them who, once pushed out (happening as I write this ), will not even be able to afford an apartment in one of the other slum districts because the 50 year plan has those most impoverished areas being bought up and primed for gentrification to draw young urban college educated whites back to live in Detroit. But those souls who have been pushed out of their $300 per month rooms in apartment buildings now are moving into the non targeted areas around me and others in the ring neighborhoods to live in houses wih no heat or lights and in some cases no doors or windows.

People tell me it has to be this way, that I am insane if I think this is some kind of state government plan. I may be insane but as soon as the court made it's ruling the state of Illinois which also secured it's pensions with the constitution and not an insurance policy both houses of their legislature sent two near equal bills to committee for reconciliation and Governor Quinn a democrat will cut all public pensions and wipe out $100 BILLION of pension and retiree healthcare costs owed to them who worked in the state for the state.

The governor of Michigan, former investment/hedge fund player who dismantled Gateway computer piece by piece selling the proprietary technical information and the name to the Chinese. If you are reading this on an ACER computer that technology in it was built on the information Snyder sold them. Furthermore he leveraged the pensions of the workers with debt, took those loans as profit for his investment firm and used the employee pension fund to be split up in Gateway's bankruptcy among the secured creditors. Of course before entering bankruptcy he sold off the physical property gateway owned which was one of the few American manufactured computers and took that money as profits.

Most of the howling to sell off our wonderful 122 year old world class art collection has stopped now that the auction house, Christi's, appraised the pieces that could be sold at less than 1 billion dollars. The judge cautioned against doing that  in his 146 page statement as not wanting to de-culture the city that will rise from the ashes of bankruptcy.

i was born in this city and have lived here my entire life except for my military time and Walking Man time. I was born while it was still at peak population and the nations 5th largest city. Not the loss of manufacturing, the rising taxes, crime, murders, falling services and depopulation and everything else has ever been enough to make me want to leave, but now i don't want to leave but then i do not want to pay some of the highest by percentage property taxes in the nation and certainly the highest in Michigan to this city.

And there is the rub, it could easily become to expensive to leave here and too expensive to stay.

Detroit may look like Mogadishu, that is a fact but it is an American city abandoned by America. We lent Israel 300 Billion dollars and are holding it in our central bank (The Federal Reserve) and allowing them to use the interest to pay back the principal. But Detroit, Cleveland, Montgomery county Al, Illinois---and all the others going down this uncharted path Detroit is now on---encouragement from the Federal Government and a "they're your boots pull 'em up on your own."

I am tired of holding onto my bootstraps. My back hurts and my city is dead.


  1. I saw this on the news and read it in the paper, thinking about you. I wish that there could be a class action lawsuit against some entity to help the workers, but you can't get blood out of a stone. Seems like Detroit has bled out. I'm sorry, Mark.

  2. Syd the money in the two pension funds is enough to keep them fully funded for 10 years. The 3.5 billion is an IOU the city owes for the future employees. That is what bothers most of us, even if the get to bankrupt out of the 3.5 we still will pay a huge portion for the malfeasance of 30 years of a few elected or appointed officials. But I am not thinking about myself primarily, we, my wife and I have saved enough to "cover the bills" for a number of years. Our last child graduates in about 10 more days with his Electronics Engineering degree and is already working. The earned medical benefits may become a costly ($10-$20,000 per year) problem if they negotiate my wife out of hers. BUT the thing I am disappointed in is that there is money for Hockey but none for 60-80 year old police and fire retiree's.

    I have from the first expected to take a hit, maybe even as much as 1/4 but the offer last made was 84% reduction with no medical support. Those guys, especially the firefighters are just as damaged and physically worn out as I am, some of the older cops may be able to get security work but even then, after years of being prohibited from holding 2nd jobs, will they live long enough to accrue the required 45 months to qualify for the base amount of SS.

    There is money here Syd and this i have been harping on in the Newspaper comment section for two years, not only are the franchise owners (Lions, Tigers, Red Wings and Cleveland Caviler) been buying Detroit's downtown property at rock bottom prices, they have also been given decades long tax abatement's on their properties and cuts to their business taxes.

    People, the apologists for them, say the breaks are necessary for these men to develop that small section of the city, where the wealth is truly concentrated and if you stayed in that area you'd never know my Detroit even exists, that if the government does not give them the money and pay for the infrastructure improvements right to the front door they will have no reason to stay in Detroit.

    Personally I doubt that seeing as Detroit even in the leanest of times, in the most murderous days of the late 70's put these men on the path to becoming billionaires. I do not begrudge a man who is smart enough to build wealth and capital for himself. The owner of the Red Wings and one of the casinos in Detroit started with one Pizza shop that became Little Ceasers, Dan Gilbert who started and owns Quicken Loans who only needed a 5% bail out in the mortgage debacle, started small as well, and William Ford, well he's grandson of Henry who at one time was the worlds richest man, his wealth in previous generations did a lot of good for the city through Edsel his son, but also a lot of bad by trying to keep the unions out of his plant (roughly 10 deaths and countless injured back then).

    I do not regret working for the city, as a mechanic i could see the pumps i repaired working every time I turned on the water tap, the turbines, every time a street light came on, the Art Museum, I can go and see paintings that at one time i had the honor to handle and hang, and finally the police cars I fixed i could actually once or twice watch them chase down and without breaking down catch a thug or two.

    1. But my pension due to the broken back and disability (forced) retirement gives me a pension of $1000 per month before $400 in deductions for medical. I have worked in good faith as did the other 23000 retirees. You are correct you can not squeeze more blood from a gutted and drained doe but you also do not have to compound the does situation by letting the meat rot while only using the skin to build a hockey/another entertainment district with money owed to them who at one time made this a functioning city. Governence did not make this city function, it was them who repaired all of the nuts and bolts, wh put out the fires, who made the arrests those were the people who made the city function and for doing that for 25 -in some cases near 50 years these men and women are now told you did not create the problems of government but you will pay the heaviest price for them so Detroit will once again thrive.

      Syd I do not have that much time left in my life to see this city begin to vibrate with vitality again. That is a simple fact f age. My wife and i have no place right now to go to, we may just skip our taxes for 3 years and force them to force us off land we bought and paid for. BUT always in the front of my mind is the elder retirees who have no way to fight back or get a social security check to help them, They in essence have been told (verbally told) that the 23000 retirees are compared to the 600000 residents, expendable.

  3. It's scary how the actions of so few can detrimentally affect so many. It's tragic and it's sad. Not surprising, somehow, but certainly a reflection on our times when concerns overseas always seem to trump any real and pressing needs in the back yard.

  4. ugh. too expensive to leave, too expensive to save...and that it is what you have known for so long...i have been in places where the coal mines pulled out and what they left of workers there..the way you describe it makes me think of them...

  5. We're all screwed. Fortunately, I have a skill where I can still work regardless of age. If not for that... don't know what I'd do.

  6. OMG! Mark, you write with such clarity and such depth. Thank you for sharing all the intricacies that most of us would never understand otherwise.
    Did you share this on Facebook?
    Did you send this to Rachel Maddow/MSNBC?
    People all over the country need to know.

  7. Mark-you explain this travesty clearer than anything I've tried to read. I'm so sorry you are in the middle of this shit. Hang tuff, Babe. xo

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So Walking Man I was thinking...