the corporate take-over of America — state by state

As the government at home begins exploiting our own budget deficit, using it as a pretext to raise taxes on lower and middle-income groups, whilst at the same time making drastic cuts to public services, still more stringent “austerity measures” are already underway across America. A few states, such as Michigan, Wisconsin and Ohio, run by Republican governors Rick Snyder, Scott Walker and John Kasich respectively, are now using the financial crisis not merely to slash spending and raise taxes on the poor and middle classes, but also to abolish union rights and, with new laws in place, to supplant locally elected officials by bringing in appointed corporate “Emergency Financial Managers”.

As The Michigan Messenger reported on 24th February:

“Reinventing Michigan could mean voiding labor contracts, removing elected officials from office, and even dissolving whole cities, according to legislation that is moving quickly through the legislature.

On Wednesday the state House approved a sweeping expansion of powers for the officials who will be appointed by the governor to take over towns and school districts that can’t pay their bills.

Under current law the state can appoint Emergency Financial Managers to temporarily take over the finances of local governments that have become insolvent…

The new law, which was requested by the governor, redefines these officials as Emergency Managers and gives them the power to end existing contracts, take over pension plans, reorganize departments, enter into agreements to restructure debt and dissolve or consolidate fiscally troubled towns and schools. ” 1

To read full article click here.

Then on 3rd March, The Michigan Messenger reported:

“Because the bill establishes no process for how appointees can carry out their new powers and specifically lays out that Emergency Managers need not consult with a community’s elected representatives, some worry that corporate managers, appointed by the governor, could liquidate community assets to cover debt and leave towns no better off than they were. What values will guide these individuals or firms as they work to balance budgets? How will a manager decide whether to sell off an ice rink or a library?

The Treasury Dept. is in the process of training potential Emergency Managers, so the Messenger asked for some details of the training in hopes of better understanding the motivations and priorities of the folks who may soon take over our schools and towns.

It turns out the training itself was mostly outsourced to the law and accounting firms — Plante & Moran, Plunkett & Cooney, Miller Canfield, Foley & Lardner — already involved in emergency financial management of Michigan towns.

The training was not conducted by Treasury, spokesman Terry Stanton explained. ‘It was administered by Dr. Eric Scorsone at Michigan State University, in conjunction with the MI chapter of the Turnaround Management Association, with support from the department.’”

Eric Scorsone, who coordinated the event, and also gave a presentation on the basic roles and responsibilities of an Emergency Financial Manager, is a former senior economist with the state Senate Fiscal Agency. As it happens, he is also working on a Mott and Ford Foundation-sponsored research project about chronic fiscal stress in shrinking cities.

With regards to such potentially extreme measures as dissolving a town, Scorsone said:

“It’s unclear to me how that would actually work. How services will be provided. Unlike in a corporate liquidation, the citizens don’t just go away…

In April or May we may get into questions like how does one dissolve a town.” 2

To read full article click here.

Rachel Maddow explained on her MSNBC show, how Governor Rick Snyder’s new regulations are stripping local communities of their union rights, and dismantling local democracy on the grounds of its inefficiency. She said “your elected local government can be dismissed at will” and replaced by an Emergency Manager who is empowered to “disincorporate or dissolve entire city governments”:

“Republicans in Michigan want to be able to unilaterally abolish your town and disincorporate it – regardless of what you as a resident of that city think about it. You don’t even have the right to express an opinion about it through your locally elected officials, who represent you, because the Republicans of Michigan say they reserve the right to dismiss your measly elected officials, and to do what they want instead, because they know best…

You still want your town to exist?” she asks, “[well] take it up with your board of directors of this corporation that will be overseeing your future now. Or rather, don’t take it up with them – frankly they’re not interested.”

Meanwhile, Governor Scott Walker passed a bill to end the collective bargaining rights of public workers in Wisconsin. Here is Ed Schultz reporting for MSNBC on March 9th. He speaks to some of the fourteen Democrat senators who had fled from Wisconsin in a last ditch attempt to leave the Senate one vote short of the number needed to pass Walker’s proposed budget: 3

Film-maker Michael Moore has also joined the protests in Wisconsin. He spoke with Rachel Maddow about Republican attempts to usurp democracy in Wisconsin, Michigan and elsewhere. He told her:

“This is a class war… and at some point people are just going to have to stand up and say, non-violently, this is enough — we’re not taking it any more!”

Moore said that the protests and strikes were already beginning to change public opinion, claiming that “the American people have woken up”:

And then there’s the story in Ohio where Governor John Kasich is also undermining union rights. Ed Schultz spoke to State Senator Joe Schiavoni about protests taking place against the bill:

The fights in these three states are still very much on-going. Here are three of the headline stories from Democracy Now! for Monday 18thApril:

Report: Walker to Propose Emergency Management Bill

Wisconsin Gov. Scott Walker is reportedly preparing a new effort to further weaken the public sector in his state. According to Forbes magazine, Walker’s camp is drafting legislation that would allow for a takeover of local municipalities that fail a financial stress test. Walker could then appoint emergency managers empowered to cancel union contracts, dismiss elected officials and school board members, and take control of entire cities and towns. Walker would also have unchecked authority to cancel government services, including safety net assistance. A high-powered Wisconsin law firm is said to be drafting the plan. The plan would mirror a law enacted in Michigan last month.

Michigan Emergency Managers Target Elected Officials, Teachers

Last week in Michigan, an emergency financial manager appointed by Gov. Rick Snyder issued an order taking away all powers of elected officials in the town of Benton Harbor. Meanwhile, the financial manager for Detroit’s public school system has sent layoff notices to all the city’s teachers—more than 5,000 people.

Bid to Repeal Ohio Anti-Worker Law Approved

Organizers in Ohio have won approval to begin an effort to bring the state’s new anti-labor law to a referendum. The Republican-backed measure bars strikes and limits collective bargaining for more than 350,000 public sector workers. The group “We Are Ohio” has been certified to begin collecting the 231,000 signatures needed to put repeal of the law on the November ballot.

And yesterday’s Democracy Now! headlines included this:

Michigan City Takeover Plan Criticized as Attack on Democracy

Residents of Benton Harbor, Michigan, voiced outrage Monday night after the city’s elected mayor and city commissioners were stripped of all power by an unelected emergency financial manager appointed by Michigan Gov. Rick Snyder. Last week, the emergency manager issued an order saying the city commissioners have no power beyond calling meetings to order, approving minutes and adjourning meetings. City Commissioner Dennis Knowles compared Benton Harbor to a dictatorship. He said, “For the people we represent, they are truly being disenfranchised.” Meanwhile, Rev. Jesse Jackson toured Michigan on Monday to help build a coalition against Gov. Snyder. Jackson said, “We don’t like one-man rule, except in Benton Harbor. We are setting up here what we are fighting there. Your vote for elected officials doesn’t count, and that is decimating democracy.”

So the big question is really this: if the protests fail in Michigan, Wisconsin and Ohio, then what will prevent the rest of America also falling into a corporate dictatorship?

1 From article entitled “Constitutionality of emergency manager powers questioned: Critics say new law gives dictatorial powers to appointees” by Eartha Jane Melzer, published in The Michigan Messenger, February 24th.

2 From article entitled “Bill offers few guidelines for use of emergency managers’ powers” by Eartha Jane Melzer, published in The Michigan Messenger, March 3rd.

3 For a report on the “Wisconsin 14” published in The Washington Post click here.

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Filed under austerity measures, campaigns & events, Uncategorized, USA

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