Wall Street Crimes: Assault on Cities Proceeding--Pontiac, Harrisburg, et al.

August 1, 2013 • 10:15AM

On the sidelines of the Detroit crisis, the same Wall Street killer-machine is rolling against other towns and local government entities. By Friday in Pontiac, Michigan, the Pontiac School District is to hear back on its fate, from Gov. Rick Snyder's state review board under the "Local Emergency Financial Assistance Loan Board," on whether the Pontiac School District is to be judged hopelessly insolvent (with a deficit of $37 million), and if so, will it be taken over by the state to be dismembered, or handled some other way. The City of Pontiac, itself, has already been smashed by such a state-supervised, "restructuring" process, to drive people out, and kill off the stay-behinds.

The Pontiac School District has 5,000 students. It has unpaid vendor bills, including long overdue bills for food services, busing, and janitorial services, but also $12 million owing for worker health insurance, and $4.2 mil for employee pensions.

In Harrisburg, Pennsylvania, the City Council has now set the date of Aug. 14 to start legislative hearings on dealing with the impossible $600 million local public debt. The 7-member panel is to take up, as its City Hall online site describes it, changes to local law and policy, in order to deal with the debt. The state-appointed receiver, axeman William Lynch, has said he will file his own austerity proposals two weeks before such a City Council meeting, which would mean tomorrow.

These cities are two among many such situations cross country, of local entities providing vital functions of all kinds — schools, hospitals, water districts, etc., laid low from their economic base being destroyed by Wall Street, plus, the added factor of specific bilking through swaps and other financial swindles. Harrisburg, for example, was preyed upon in swaps deals involving the Bank of Canada.

In terms of announcing outright bankruptcy, entities run the gamut. In Nebraska, 10 sanitation/water districts have declared bankruptcy since 2010. In Oklahoma, the Pauls Valley Hospital Authority filed for bankruptcy in March this year. In January, 2012, the Cherokee County Rural Water District No. 1, at Ft. Gibson, filed for bankruptcy.

Thousands of local entities have avoided receivership or bankruptcy filing so far, only by self-administering poison-pill austerity.