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Detroit: The Laboratory of Neo-Liberalism

Neo-liberalism has entered a new phase. If Washington DC is its theatre, Detroit is its laboratory. In Motown, the former capital of modernity, new ways of transferring wealth from the poorest to the richest via the decayed apparatus of the state are being enacted daily. The autocracy of the Emergency Manager has created a classic charismatic leadership in which everyone else is reduced to guessing what he will do next. The population has been declared redundant. Rumor runs rife, reality proves worse. There is resistance, short- and long-term. But it’s not easy to live where there is no rhyme or reason.

It’s hard to overstate how messed up things are in Detroit. The city is no longer part of the State of Michigan or the United States. It is a colony, subject to the whims of one person, the so-called Emergency Manager, Kevyn Orr. National media coverage has shown the many financial complexities of Orr’s proposed Chapter 9 bankruptcy for the city, which will be determined at a legal hearing on October 23. What is not so apparent from outside is how the autocracy has transformed the former everyday into an emergency in which nothing can be assumed certain.

Thomas Stephens has the detail on the Emergency Manager in his Tidal post:

Under Emergency Management:

          1. There are no rules, only the unconstrained will and discretion of the state;

          2. The government doesn’t follow any rules, not even the Emergency Management statute itself; and

          3. There are no remedies for any government abuse of people forced to live under Emergency


The world is upside down and inside out. The key is to understand that these rules now apply to all of us. Detroit is simply where they are being worked out, extended and extrapolated. They apply to New York State employees, furloughed 9 days this year for no reason other than that the Democratic Governor Andrew Cuomo decided to do so. They apply to graduate students, now paying 8.4% on their loans from the moment they take them out. They apply, as they have for fifty years, to the disenfranchished and dispossessed of Palestine, Soweto and the hinterlands of all the global cities so beloved of the neoliberals. They apply to Greece, Ireland, Spain and the other formerly developed nations that have become newly dispossessed.

Each situation has its own particularities, viciousnesses and violences. But the overall pattern is clear: a consistent acceleration of the upward transfer of wealth, a disdain for the “surplus populations” left behind by automation, outsourcing and redundancy, and a centralizing of power that disdains even the vestiges of democracy.

The particular intensity of the Detroit situation is, it seems to this outsider, to be the last: the open contempt for any sense of participation, the public, the common good, let alone the commons.

In downtown Detroit, rebranded as Midtown, buildings stand empty along the notorious and often-photographed Cass Corridor.

cass corridor

The Cass Corridor in downtown Detroit

What’s less known outside the city is that the entire area has been purchased by a redevelopment company owned by Mike and Marian Ilitch’s $2 billion Detroit business empire. Anchored by Little Caesar’s pizza and the Detroit Tigers baseball team, the Ilitchs plan to build a $450 million stadium for the hockey team, the Detroit Red Wings in this space, as the anchor to a retail/entertainment district. Incredibly, property taxes will pay for $261.5 million (58 percent) of the building’s construction cost. The allegedly bankrupt African-American city has all that for a stadium for possibly the whitest sport in the entire world.

Temple Hotel

The Temple “Hotel”, sold for an estimated $3.4 million last week.

Last week, DTE Energy paid out an estimated $3.4 million for a ruined three-storey SRO known as the Temple Hotel. At least that was less than the asking price of $3.7 million. So energy consumers just footed a huge bill for a property worth next to nothing in order to ensure that there’s enough local electricity to freeze the ice in the new hockey rink. This contrasts notably with the power outages that frequently shut area schools (31 days lost last year). On September 11 (of all days) with temperatures at 91, power was deliberately cut to courts,universities and other institutions, including City Hall by the Emergency Manager’s office. COO Gary Brown was quoted as saying:

We did start calling our customers prior to taking them down and asking them to turn off air conditioners, but they weren’t responding as fast as we would like them to so we had to send them a strong message by turning the power off.

In the TV report, he clearly seems to be enjoying this assertion of power.

There are two Detroits in the making. One connects downtown with sports facilities, outdoor markets, and good restaurants to the residential suburbs with good schools. Imagine a bull’s eye in a circle. In between these spaces is the other Detroit, 85% African-American, abandoned and ignored but still footing the bills for the new development. No one in this Detroit gets to vote any more in a way that matters or have any recourse over how the new developments are built. If the bankruptcy is approved, as most expect it will be, and the constitutional challenge rejected, then there will be a new colony in North America.

Caught in the middle is the Detroit Institute of Arts (DIA), which has generated perhaps the only visible media controversy over the crisis. In August, voters passed a “millage” (a Michigan term for property tax) which will generate $23 million a year for the DIA. But the catch is, as The Detroit Free Press reports, that won’t generate:

the $400 million to $500 million that Detroit emergency manager Kevyn Orr’s office has repeatedly told the museum it wants to extract from the city-owned art at the DIA to help strike a deal with creditors

DIA has proposed having the State take over the museum–although much of the art was given to the city–and using the collection to leverage city debt. The latter idea seems poorly thought out because what happens if and when the debt that is being leveraged defaults? The newest conceit seems to involve leasing the art on a long term basis, which again carries risk if it is used as collateral for other loans. Nonetheless, the auction house Christie’s is currently evaluating the collection.

Orr himself has made it clear that Christie’s will report on so-called Tier 1 art by the end of October–the best stuff–and on Tier 2 by the end of November. What art might actually be sold remains unclear. The Detroit News illustrated its column on the issue with Diego Rivera’s iconic murals. I can’t see that happening, just because it would involve so much work to remove them.

The whole affair is a classic neo-liberal bait-and-switch. If Orr decides to leave DIA alone, he wins plaudits from mainstream media for his, what will they say, “statesman-like approach.” If he chooses to push the position that it’s preferable to raise revenue from art rather than already-impoverished Detroit, any counterargument sounds whiny and elitist. Of course, the third option is the one refused by the State: to reschedule, re-regulate and refuse the debt.

By stoking the DIA controversy, Orr distracts us from the sleaze of the likes of the Temple Hotel and indeed his whole regime. Take one of many examples: his bill to stay in a $4000-a-month penthouse apartment in the Westin Book Cadillac Hotel is being paid by an anonymous slush fund set up by Michigan Governor Snyder that uses the acronym NERD. Today Snyder straight-facedly claimed that he has no idea who contributes to the $1.7 million fund. The hotel and its management company have borrowed $24 million from the city’s pension funds to rehab the building but have not made a single mortgage repayment. Since 2008. Ironically, today former mayor Kwame Fitzpatrick was sentenced to a 28 year jail term for his kickbacks, including the use of a slush fund. He should have done his research better: the Orr/Synder arrangement is apparently perfectly legal.

This hall of mirrors is why mutual aid is the politics of the present, a necessary rebuilding in the ruins of the old system, mandated by the absence of any other options. It turns out that Occupy was a crash course in getting ready for a world once again designed in Detroit. This time no one is trying to sell you a car. They want what you have. However little that is.

This piece was originally posted on

Nick Mirzoeff

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