Editor, The Times
A few days ago the city of Detroit declared bankruptcy.
Oh how the mighty have fallen. Detroit, once the motor capital of the world, now is financially prostrate – broken, one might say beyond repair.
This has been a long, slow decline. As Michael Moore pointed out in Roger and Me, the closure of GM’s truck factory in Flint, Michigan, cheered on by the workers as the last vehicle rolled off the assembly line (boy, talk about a bunch of brain dead sheep) was just one small happening in this race to the bottom deindustrialization of the United States. Of course, the slack would be taken by high tech or just maybe Santa Claus and the Tooth Fairy would connect whatever went wrong. The triumph of free market capitalism indeed.
However, as Matt Taibbi pointed out a while back in Rolling Stone, it goes deeper. According to Taibbi, the Mafia would go green with envy about schemes at various financial organizations that were supposed to be handling countries’ and cities’ finances – investing the money to get the highest return. However, these money-handlers found a new way to gather some extra cash.
Let’s say the returns on the money was 5.5 per cent. Well, the financial entities would shave off the one-half per cent or one-quarter or one-eighth for their own pockets.
Now admittedly one-eighth of a per cent doesn’t sound like a lot but if it involves millions of dollars it becomes quite a tidy sum.
The end result was the various counties and cities in U.S. of A came up short of funds and had to declare bankruptcy.
There have been about 22 districts that has declared insolvency, including Stockton, California, one of the richest areas of the United States.
When this scheme was discovered there were minimum fines and, as I remember, little or no jail time. After all in this ‘too big to fail,’ ‘too big to jail,’ too much probing might just bring this termite infested house of ‘free market capitalism’ to its knees and bring in a need for real reform.
Now, wouldn’t that be something?
Dennis Peacock
Clearwater, B.C.
