Home

A federally-registered independent political party

Follow the CEC on Facebook Follow @cecaustralia on Twitter Follow the CEC on Google +


Follow the CEC on Soundcloud












New Document
Detroit Requests Congressional Hearing; Swaps Costs May Be Worse
July 31, 2013 • 12:06PM

On July 30, the Detroit City Council unanimously approved a resolution calling for a Congressional (House Judiciary Committee) hearing on the "strategic" use of bankruptcy filings across the nation, and whether Detroit is using this to cut pensions and retiree healthcare. The resolution backs a call for hearings by Judiciary Committee ranking member Rep. John Conyers of Michigan.

City Councilwoman JoAnn Watson proposed the resolution last week.

Some experts are now estimating that the payments to the megabanks UBS and Bank of America, which Detroit faces on the "interest-rate swaps" derivatives it was conned into buying, may even be considerably larger than the $225 million reported in EIR's "Detroit Facts". According to both the Financial Times and columnist Yves Smith's Naked Capitalism blog, the city may face immediate looting of $700 million, on top of more than $100 million a year lost to the city for the past eight years on these derivatives bets. The appointment of Kevyn Orr as emergency manager by Gov. Rick Snyder on March 14, was itself a "credit event" potentially triggering a $400 million derivatives payment by the city, one which Orr and the banks may be "not bringing up" until bankruptcy court hearings start.

Detroit's rapid indebtedness — going from about $6 billion in debt in 2005 to $18 billion now, is in fact not unusual, except for the size of the city. The national total of municipal debt outstanding doubled from $1.9 trillion to $3.8 trillion in the same period of time, because of the impact of debt and interest-rate derivatives looting, and then the overwhelming economic effects of the 2007-08 global banking crash.

- Governor Snyder Pucks Poor Children -

According to the agreement announced Tuesday by Michigan Gov. Rick Snyder and Detroit billionaire capo Mike Ilitch of Little Caesar's Pizza, the bankrupt city, while cutting off its pension and retiree health payments, will pay Ilitch about $300 million to help him build a new, $650 million hockey arena in the city for the Detroit Red Wings. Ilitch owns both the Red Wings and the Detroit Tigers baseball team (he's already gotten a new stadium from the city for them).

Snyder said, "This is part of investing in Detroit's future..." In fact, it is directly opposed to investing in the knowledge, skills, productivity, and wages of the area's residents, their children, and their productive businesses, which urgently requires a new national credit system for infrastructure and manufacturing development. Ilitch's proposed new arena is as flagrant a looting of the city as the "interest-rate swaps" of Bank of America and UBS.

Detroit's actual future, its children, are now living in official poverty at the near-unbelievable rate of 60%, triple the already outrageous rate of poverty of children nationally; this, according to a new national report by the Annie E. Casey Foundation. Projects like this new hockey arena reliably create urban poverty, by proliferating low-wage, unstable, part-time employment and monopolizing city services and infrastructure revenue.

Snyder and Ilitch evidently feel that Detroit's children should eat the leftover popcorn off the arena floor.


Citizens Electoral Council © 2016
Best viewed at 1024x768.
Please provide technical feedback to webadmin@cecaust.com.au
All electoral content is authorised by National Secretary, Craig Isherwood, 595 Sydney Rd, Coburg VIC 3058.