Dispossession is insidious. It can take many forms, constantly shapeshifting to meet the needs of the dispossessor. Detroit’s municipal bankruptcy of July 2013, the largest in United States history, is a tragic illustration of this fact. Although then-Mayor Dave Bing and then-Emergency Manager Kevyn Orr blamed the crisis on laziness and an environment of entitlement among Detroit’s public employees (Petcoff, 2014), the reason behind the financial crisis, in my analysis, was in fact the systematic dispossession of resident voice via weakening trade unions, the acceptance of risky loans from Wall Street, and the implementation of arguably colonial policies at the state level that led to the city’s downfall.
At the time of the bankruptcy declaration, Detroit held an estimated debt of $19 billion, a dire situation for any city, much less one with only 700,000 residents remaining and 80,000 abandoned or blighted buildings (Fletcher, 2013). On top of these already enormous problems, the city also featured an aging population consisting of roughly 20,000 public retirees who needed pensions funded. Make no mistake, though, these problems the consequences of decades of disinvestment and corporate greed, not – as some would say – the moral failings of Detroit.
Beginning in the 1970s, a recession combined with a shift in dominant conceptions of fiscal responsibility to produce pro-management policies that weakened unions across the country. As Detroit was the birthplace of the modern union movement and home to working-class stalwarts like the United Auto Workers (UAW), this shifting policy landscape and zeitgeist meant its residents were uniquely harmed over time. Reduced bargaining power inevitably led to Detroit workers taking home less money, thereby compounding the city’s tax base problem that had worsened since white flight began in earnest in the 1940s (Clifford, 2017).
As time progressed, another deadweight on Detroit’s budget was the aging population of its pool of city employees. In the early 2000s, this considerable population and the bursting of the dotcom bubble - which lost the city money it had invested and thus made it contribute a higher percentage of its available funds to pensions - placed a huge strain on an already worsening municipal budget. As a result, 2001 saw the city’s first deficit in roughly half a decade, and when that figure climbed to a $95 million shortfall in 2004, then-Mayor Kwame Kilpatrick decided financial assistance from major institutions on Wall Street was a political necessity (Petcoff, 2014). This manifested as a $1.4 billion deal with Merrill Lynch and UBS to issue certificates of participation (COPs) to pensioned former employees; however, these tools were risky and complex because, under the terms of the agreement, the city would be forced to pay a fixed interest rate while the banks’ lending rate would vary. In other words, if and when the economy next plummeted, the lending institutions would be able to pay a rate that reflected the turmoil while Detroit’s repayment would be frozen in place at the same high interest rate. Consequently, when Wall Street exploded in the Great Recession just four years later, Detroit found itself on the hook for between $300 million and $400 million it did not have in the first place and it had not expected to pay.
As Michigan struggled to emerge from what is now called the Great Recession, Ann Arbor businessman Rick Snyder became the first CPA to be elected governor of Michigan. New legislation paved the way for emergency managers in financially struggling communities. When the legislation was rejected by voter referendum in 2012, the Legislature quickly re-codified it, paving the way for Orr, a former U.S. Department of Justice attorney, to become Detroit’s emergency manager in 2013.
In this history, we may see the steps of logical conclusion to a saga of devocalization 40 years in the making (Hanna-Attisha 2018). After all, a home helps working and middle-class people build the personal wealth necessary to have a powerful voice in the public sphere. In many ways, the housing dispossession crisis of recent years could not have happened without these, in my view, undemocratic, racist, and classist transformations. After all, if one is to remove a family from their home, one can expect them to use their voices to stop it. So to do so, one must take away their voices first.
Works Cited
Clifford, Carolyn. “White Flight and What It Meant to Detroit.” WXYZ, 12 July 2017, www.wxyz.com/news/detroit1967/white-flight-and-what-it-meant-to-detroit-....
Fletcher, Michael A. “Detroit Files Largest Municipal Bankruptcy in U.S History.” The Washington Post, WP Company, 18 July 2013, www.washingtonpost.com/business/economy/2013/07/18/a8db3f0e-efe6-11e2-be....
Hanna-Attisha, Mona. What the Eyes Don't See: a Story of Crisis, Resistance, and Hope in an American City. One World, 2019.
Petcoff, Aaron, et al. “Detroit's Grand Bargain.” Jacobin, www.jacobinmag.com/2014/06/detroit-s-grand-bargain/.
