Martin Berg

Martin Berg, WheresOurMoney.org editor, is a veteran journalist.

Aug 312013
 

"Tribute to an unknown pattern maker," Irving Berg

“Tribute to an unknown pattern maker,” Irving Berg

Detroit’s emergency manager called Detroit “dumb, happy, lazy and rich.”

What is that guy smoking?

How else can you explain such careless invective from Kevyn Orr, one of the country’s top corporate bankruptcy lawyers, the “expert” who holds the future of city’s 700,000 residents in his hands?

It took Orr a couple of weeks to apologize, ascribing his remarks to a “slip of the tongue.” What emerges when our tongues slip? Exactly what we really think.

I was born and raised in Detroit. So were my parents. I wonder what my father would have thought had he lived to hear Orr’s rhetoric. He and his brothers were teachers and small businessmen who started with nothing and worked hard to build a future for their families in Detroit.

My parents were part of the hardy, thriving creative class that has found inspiration in the tough, blue-collar city. Their lives were rooted in the belief that community trumped the bottom line. For them, the arts and creative process were not a luxury to be enjoyed only by the elite but a necessity that enriches everyone.

My own feelings about Detroit are rooted in my family’s deep connection to the place. My father was an artist and art teacher who rummaged through the industrial trash to find discarded tool and die molds, which he turned into sculptures. He told me that he created them as tributes to the beauty of those molds and to the memory of the men who created them, so that their craftsmanship could live on, seen from a fresh perspective.

For 35 years, my dad headed the art department at Cass Tech, a downtown magnet high school housed in a grand 1922 Collegiate Gothic building. It’s gone now, first abandoned, then neglected and finally torn down. But the soul of the place beats strong across the country in the lives and work of students who discovered their passions and vocations there. One of his students, Marie Tapert, an artist who now lives outside Detroit, recently wrote a letter to the New York Times. She was the daughter of a factory worker, and had never been to a museum until my father sent her to the Detroit of Institute of Arts to study sculpture. “I was changed,” Tapert wrote. “A transformative moment like this cannot be unique to me. As a kid from the East Side of Detroit, I was able to wander the galleries of my art museum. What a gift.”

My mother, a modern dancer and choreographer, started a company for women with families and kids who wanted to keep studying and performing. Later she became obsessed with the French origins of Detroit and the War of 1812, teaching about the history of Detroit through dance to schools and community groups.

She is a tireless Detroit booster with no patience for the endless parade of horrible publicity surrounding the city. Even the bankruptcy can’t dampen her enthusiasm for the city that’s so much a part of her blood.

Like many of Detroit’s residents, my family ended up there for work. My father’s father was a Polish carpenter turned away from the U.S. twice before he got in on his third try through Canada. He landed in Detroit during the boom years of the 19-teens, saving enough money to bring his wife and four kids over in 1920. My father was the first born in this country.  He grew up on Humphrey Street, in the working class neighborhood around Dexter Boulevard, which later became a black neighborhood and burned to the ground in the 1967 riots.

I never knew my father’s dad, who died before I was born. He was not a big talker. My father said he had never had a real conversation with him. He taught my father a love of working with tools and an appreciation of craft.

By contrast, my mother’s father was a looming presence in my family. The son of a Ukrainian innkeeper, he fled Ukraine when he was twelve to avoid arrest for distributing pamphlets for the anarchists in pre-revoluitonairy Russia.

According to family lore, he worked with the legendary cigar makers union in New York wrapping stogies and took turns reading the newspaper out loud. He came to Detroit to work as a milkman, helping to organize the first milkman’s union in Detroit before he started a frozen foods business.

My mother and father lived with her parents when they first married. My father told me about the time my grandfather came home late from work, summoned my father to the bathroom and told him to bring the vodka. His left pant leg was soaked through with blood. He took off his pants, revealing a bleeding gash in the leg. He’d been struck by a 5-gallon container filled with frozen eggs which had fallen from a shelf above his head. “We have to get you to the hospital,” My father said. My grandfather responded: “We’re not going to the hospital. Pass me the vodka.” He poured a stream of vodka to clean the wound, and took a couple of deep tugs from the bottle. My father, a World War II veteran, knew how to improvise first aid, and he cleaned and dressed the wound the best he could; the scar remained.

My grandfather didn’t tell stories about the good old days. When he heard that Ellis Island, where he had entered the country, was being turned into a museum, he said: “They should burn it down. The way they treated people there was a disgrace.”

What would my father and grandfathers have to say to Kevyn Orr, who wants to dismantle what’s left of the city they helped build? How would they respond to his stingy vision, blind to the lives of the city’s people through the boardroom window?

In the last few years thousands of people have moved to the city – artists, musicians, urban pioneers – unlike my own immigrant family decades ago, but similarly charged with vision and energy to join with those who remain to build a city we may not be able to imagine yet. They dream of reshaping Detroit into a much different place, filled with lush urban gardens, recycled art projects and sustainable business laboratories.

Are these people dumb, or lazy….or rich?

Orr needs to get off the corporate crack.

He needs to really understand that the Detroit is much more than its past, with its bitter racial divide, the tough fight for midlde-class wages, national policies that led to the collapse of the automobile industry in Detroit, abandoned buildings and crime. If what he wants to do is to save the city, he should stop selling it, and its residents, short.

He should get out more. Orr could take an outing on Saturday morning to the city’s sprawling Eastern Market for fresh produce, including fruits and vegetables grown in Detroit’s model inner-city community garden program. Over Labor Day weekend, he’s welcome to join me and thousands of others along the banks of the Detroit River, which plays host to a four-day-long free jazz festival, featuring sets by Detroit’s many acclaimed homegrown artists, including James Carter, Geri Allen, Sheila Jordan,  Cameron Brown and Joan Belgrave, as  as well as other musical luminaries such as Ravi Shankar, Joe Lovano, David Murray, Gary Burton and Danilo Perez, to mention only a few.

Before he starts selling off its treasures, he should visit the world-class collections of the Detroit Institute of Arts. If he listens carefully, he’ll hear my Dad’s spirit, holding forth in the DIA’s magnificent Diego Rivera Court, filled with the mythical murals that portray, not just the city’s history, but how that history fits into the fabric of our civilization. If Orr wants to know what my mother thinks, he can find her across the street, in the historic Park Shelton Apartments, where she’s lived for more than three decades. She’ll give him an earful.

 

 

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Aug 112013
 

President Obama’s latest effort to portray himself as the champion of the middle class has so far been long on rhetoric and painfully short of real proposals.

The problem is that if smooth rhetoric alone could do the job, the economy would be humming along right now, not sputtering.

To get this done, the president is going to have to harness all of our fabled American know-how . He’s also going to have to adopt a quality that’s been too rare in our politics: the ability to admit mistakes and abandon failed policies. Tweaking the status quo is not going to get us anywhere. This is not the job for a temp.

I know it’s not just up to the president. We’re all going to have get involved. So here are my seven suggestions to help the president start to fill in the details that could take “middle out” into the realm of reality.

Some of them should be easy: the president already said he’d do them, like create a robust jobs program raise the minimum wage. Some of these proposals are bound to get the president out of his corporate-friendly comfort zone. But we need to get real – and so does the president. We should demand that the president stop pursuing policies that will further erode what’s left of the middle-class. Here’s my summons to President Obama:

  1. Repudiate the Trans-Pacific Partnership: Take your pick: it’s either a “Free Trade Frankenstein,” as I described it previously, or “NAFTA on Steroids,” as it’s been labeled elsewhere. Either way it’s not free and has little to do with trade and everything to do with strengthening corporate rights around the globe and weakening protections for labor, the environment, local agriculture and generic drugs. We know from NAFTA that these phony deals kill jobs, not promote them. It’s the 2013 version of the Big Lie. You can’t be both for the middle class and the TPP. (If we let the president get away with this, our bad.)
  2. Do something about African-American unemployment: The rate is 13.6, twice the national rate. For African-American youth, the rate is an unbelievable 42.6 percent, and worse this year than last. This is a national disgrace. Mr. President, you can’t advocate middle out economics and tolerate 42 percent unemployment for African-American youth – and we shouldn’t let you. Yes, Republicans will stand in your way. It’s your job to develop a strategy that doesn’t allow them to stop you from taking action.
  3. Drop the loony “bipartisan” agreement that will allow student loan rates to float upward to an exorbitant beyond the usurious 8 percent range. Go back to the drawing board and lead an effort to reduce the cost of higher education, not just the relatively small portion that goes to paying the cost of a student loan.  In the meantime, put a moratorium on student loan payments until the unemployment rate has stabilized at 5 percent. (Hat tip to investigative journalist Dave Lindhorff for that one.)
  4. Push for your own American Jobs Act, the legislation you proposed in 2011 that would cut payroll taxes for businesses, double the size of the payroll tax cut for individuals, give aid to states to prevent public sector layoffs, and increase infrastructure spending. All together, the Jobs Act would create 1.9 million jobs. You haven’t mentioned it lately, but an updated version was recently reintroduced in Congress.
  5. Make raising the minimum wage a top priority. It was a good idea when you proposed it back when you ran for president in 2008 and it’s a better idea now that you’re president in full control of your bully pulpit.
  6. Dump Larry Summers as a candidate to run the Federal Reserve: You have a clear choice to make here. Summers is the Robert Rubin protégé who, under Bill Clinton, pushed the deregulation of high finance that led to the crash of 2008, and then helped craft the policies in your administration that propped up banks and bankers with unlimited amounts of nearly free cash but offered only the most tepid support to homeowners facing foreclosure and the unemployed.  As far as the middle class goes, Summers has never missed a chance to get it wrong. Since he left your administration, he’s taken a job with too-big-to-fail Citibank. Your other choice is the current No. 2 at the Fed, Janet Yellen, who was one of those ignored voices expressing concerns about the banks before the crash, and continued to push the Fed toward fulfilling its obligations towards those in the country who aren’t wealthy bankers. Americans know the difference between these two. You can’t be both for Larry Summers and the survival of the middle class.
  7. Don’t abandon Detroit: By standing aside, you are conceding the city’s future to the state’s right-wing governor, Rick Snyder, the banks and their lawyers to dictate the future of the city’s 700,000 residents. Snyder is downright hostile to the traditionally Democratic city and he’d like nothing better than to build his reputation with his conservative backers as the man who finally broke Detroit. The bankers have already done their best to pick the city clean. Detroiters would stand a much better chance with the resources and creativity of your administration on their side. You’ve shown that you know how to use federal authority to keep bankers afloat, now use it to help one of the nation’s great cities.
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Jun 272013
 

Bravo to the Public Banking Institute for suggesting an alternative vision of what banks are and for raising a basic question: what should a bank do, and who should it serve?

I attended the Institute’s recent conference, which drew activists and interested citizens from around the country to San Rafael, California, to hear about public banking and to brainstorm about ways to fund a new economy that creates a sustainable economy for all of us, since current government officials and bankers are doing such a lousy job at it.

The varied presentations included nuts and bolts sessions on the steps involved in developing a plan and pushing for a public bank, reports on worker-owned cooperatives across the country, as well as an eye-opening session on how the government has been selling off our most gorgeous post offices, many built as part of the federal government’s robust effort to get the country back to work during the Great Depression – the Works Progress Administration.

It’s the lack of any such effort now, either by government or the private sector, that made the public banking conference so key. While it’s fashionable to minimize government’s ability to do anything right, it’s hard to argue with the track record of the Bank of North Dakota, the sole publicly owned bank in the U.S., operating successfully in that state since 1919, when it started with $2 million in capital.The solidly Republican state started its bank as part of a populist wave of anger that swept the state against Wall Street and big city bankers who were denying North Dakota farmers a credit lifeline. Though the state may have turned Republican since then, its residents continue their strong support of their public bank. The state places its revenues from taxes and fees into the bank, which currently holds $2.7 billion in deposits. It has plowed more than $300 million into the state’s economy over the past 10 years, including emergency assistance, state and local government funding and support for small businesses (in partnership with local banks) over the past 10 years, and has enjoyed a 25-26 percent return on equity annually. During that same time, we know what the too big to fail banks were up to – they paid their bankers outrageous bonuses while sinking the economy with risky investments they didn’t understand and relied on taxpayers’ generosity to keep them in business, then improperly foreclosed on millions of homeowners with forged or otherwise fraudulent documents while illegally manipulating the key mortgage interest rate known as LIBOR.

In North Dakota, the public bank makes below-market rate loans to business – but they come with strings attached: every $100,000 in loans must result in the creation of at least one job.

And while the president and CEO of the Bank of North Dakota earns a handsome living by most people’s standards – $232, 500 a year, it’s a pittance compared to the money lavished on the kings and queens of Wall Street.

North Dakota’s success has attracted attention around the country in the last few years: 20 states are now considering legislation to either enable public banks or study their feasibility.

California, with the eighth largest economy in the world, is a particularly intriguing case. The Public Banking Institute’s Ellen Brown estimates, based on the Bank of North Dakota’s experience, a California public bank might generate $148 billion in deposits; with a 10 percent reserve requirement, that could generate $133 billion for credit.

In 2011, California’s legislature passed a proposal to establish a commission to study the feasibility of setting up a such legislation a couple of years ago but then-Gov. Brown vetoed it, saying if the Legislature wanted to evaluate public banking, it should do so with its existing resources. Even though both Assembly and Senate passed the measure Gov. Brown vetoed, two years later, California’s Democratic-majority legislature has yet to answer Gov. Brown’s challenge. That might have something to do with the political contributions from the financial industry, which lavished nearly $78 million to influence state politics last year, according to the National Institute on Money in State Politics. The question we’re going to have to answer is: just how long will stand for private bankers standing in the way of the progress for the common good? If these banks want to gamble with their own money and take the consequences of their losses, that’s one thing. But why should we continue to give them our money? Shame on us if we do, with better alternatives like the Bank of North Dakota staring us in the face.

Video of some of the presentations is available here, and more will become available as time goes by. I’ll be exploring some of the issues raised at the conference in greater depth in the coming weeks.

 

 

 

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Jun 012013
 

From Athens, Greece to Stockton, California and Detroit, bankers feast while citizens and workers starve.

The diet takes many forms. But the basic idea behind it is that the only way to save our government is to starve it, cut services to those who need them most, and above all, keep the big bondholders and wealthy political contributors happy.

Meanwhile, beyond the government halls and bankers’ offices, the austerity diet causes real suffering.

In Greece, the bankers have exacted a painful price, with tax hikes, and layoffs that pushed unemployment over 27 percent, including 50 percent youth unemployment, in exchange for $310 billion in aid from the European Union and the International Monetary Fund.

And of course the money doesn’t go to the Greeks. It goes to the too big to fail bankers who the Greek government borrowed from.

Meanwhile the health consequences of austerity-related cuts to the social safety net amid extended recession across U.S. and are widespread and dire. Oxford and Stanford University researchers found that the U.S. suicide rate jumped during the 2007-2009 recession, with 4,750 “excess deaths” – beyond what pre-existing trends would predict, with the highest increases in the states that experienced the most job losses.

In Greece, suicide rates have skyrocketed, increasing 26 percent over the past year. The Oxford and Stanford University researchers found that, with cuts to HIV prevention and a huge increase in youth unemployment and drug abuse, the rate of the infection has risen 200 percent, while the country has seen its first malaria outbreak in decades after mosquito-spraying programs were cut.

In the U.S., more than 5 million Americans have lost access to health care – including Stockton’s retired city employees. Millions of long-term unemployed Americans will see their unemployment benefits slashed or eliminated as a result of the congressionally-approved sequester budget cuts. Meanwhile, in England, austerity policies have thrown 10,000 British families have been thrown into homelessness.

“The harms we have found include HIV and malaria outbreaks, shortages of essential medicines, lost healthcare access, and an avoidable epidemic of alcohol abuse, depression and suicide,” David Stuckler, Oxford researcher and co-author of “The Body Economic: Austerity Kills,” said. “Austerity is having a devastating effect.”

With no end in sight. In the U.S. Senate, it’s not just Republicans who are enthusiastically getting behInd austerity. Democrats supported a $4.1 billion cut to the nation’s food stamp program, the Nation’s Greg Kaufman reported.

In addition, while debating the farm bill, Democrats supported a draconian measure that would bar the families of those convicted of certain violent crimes from receiving food stamps – ever.

For his part, President Obama himself who has advocated cuts to Social Security (which will do nothing to bring down the deficit) in his budget earlier this year. His supporters say the president is just trying to appear more reasonable in budget negotiations than intransigent Republicans, and that the president would never cut Social Security. But they ignore the fact that when President Obama appointed a task force to make recommendations on entitlements in 2010, he stacked it with austerity hawks from both parties bent on cutting Social Security, like former Clinton chief of staff Erskine Bowles and former Republican Sen. Alan Simpson. While that commission failed to agree on specific recommendations, the president has continued to pursue proposals that would reduce Social Security benefits.

Austerity’s proponents don’t even pretend that that the majority supports it. The bankers and the politicians assure us they know what’s best, then try to sell their noxious cutbacks through fear and demonization – of the undeserving poor, overpaid government workers and others characterized by losing Republican presidential candidate Mitt Romney as the “47 percent” who get assistance from the government.

Sanjay Basu, the Stanford researcher who worked with Stuckler, insisted that the negative health affects of recession are worsened by austerity. The researchers found the negative health affects and the anguish that accompanies them aren’t inevitable. The citizens of European countries that chose stimulus and maintained social safety nets, like Germany, Iceland and Sweden, fared much better than countries that imposed austerity, like Spain, Italy and Greece.

We don’t have to swallow the austerity diet. But we will have to fight to get a menu that doesn’t include it.

“Ultimately what we show is that worsening health is not an inevitable consequence of economic recessions,” Basu said. “It’s a political choice.”

 

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