Two on Detroit Union Concessions

Dictatorship of the technocrats in Greece and Detroit

March 21, 2012 by William Rogers 1 Comment

http://leftlaborreporter.wordpress.com/2012/03/21/dictatorship-of-the-technocrats-in-greece-and-detroit/

Left Labor Reporter


More than 20 years ago, Lucio Magri of the now defunct
Communist Party of Italy observed that because of
capitalism's internal logic, which is to expand
privilege for the few at the expense of the many,
Capital from time to time runs afoul of formal
democracy. When this happens Capital's impulse is to
suppress democracy.

Post-industrial Capital's first choice for doing so,
according to Magri,  is neither an authoritarian
dictatorship nor fascism; instead, it prefers to endow
appointed experts with the authority to supersede
elected officials-a dictatorship of the technocrats if
you will.  Two examples are now underway on both sides
of the Atlantic.

In Greece, the European Commission, European Central
Bank, and International Monetary Fund last November
demanded and received the resignation of Prime Minister
George Papandreou after he suggested that Greeks should
vote whether to accept  austerity measures proposed by
the three institutions, which have become known as the
Troika. The Troika demanded the austerity measures in
return for loans to help Greece service its huge debt
obligation. Papandreou was replaced by an unelected,
MIT-educated banker with a PhD in economics.

Back in the US, Michigan's governor and Detroit's mayor
are negotiating an agreement designed to deal with the
city's heavy debt load. The agreement, called a consent
decree, would result in the appointment of a Financial
Advisory Board with the authority to reduce and
privatize city services, terminate contracts with
public service workers' unions, and ignore elected
officials on the City Council.

The Troika was reluctant to allow a vote on its
austerity plan. It would impoverish more Greeks and was
opposed by a nine to one margin. The Troika believed
that a popular rejection of its plan would lead to a
disorderly default on the country's debt, which would
jeopardize the worldwide banking system; consequently,
it had Papandreou replaced with Lucas Papademos, who
served as Vice-President of the European Central Bank
between 2002 and 2010.

Papademos then oversaw the imposition of the country's
second round of austerity measures in two years.
Meanwhile, the Troika organized an orderly default that
cost private bondholders dearly, but prevented, at
least so far, a general fallout.

Meanwhile, the austerity plan for a second time cut
pensions, slashed services, reduced pay for government
employees, and reduced the minimum wage. Annual
economic growth has been reduced to -7 percent and
business curtailed so badly that a strong economic
recovery that could alleviate the current misery is
unlikely.

Like Greece, Detroit, the US city hit hardest by the
nation's de-industrialization policies, is in financial
trouble. Only two auto plants remain in the Motor City,
and a population that once exceeded a million is now
about 700,000. As a result, the city's tax base and
revenue have shrunk leaving the city mired in debt.

Last summer, Mayor Dave Bing insisted that city
employee unions agree to concessions to help the city
service its debt. The unions were reluctant, but
eventually agreed. Michigan's governor Rick Snyder said
that the concessions weren't enough and prepared to
implement Michigan's Emergency Management Act, which
allows the governor to appoint financial managers with
broad powers to manage local governments in financial
distress.

Last week Michigan's state treasurer Andy Dillon
drafted a consent decree outlining how the Emergency
Management Act would be implemented. The draft calls
for the appointment of a nine-member Financial Advisory
Board and a chief financial officer, a chief operating
officer, and a chief human resources officer. The board
and the newly appointed officers would manage the
city's day-to-day affairs. The mayor would retain some
policy-making functions, but the City Council would be
reduced to a rubber stamp.

Negotiations between the mayor and governor over the
consent decree have faltered over details, but if an
agreement is reached, the first order of business for
the appointed advisory panel and the city's new
officers will be to reduce city services and
unilaterally break the city's contracts with its
workers' unions.

Al Garrett, president of AFSCME Council 25, which
represents 60,000 city workers in the State of
Michigan, said the purpose of the consent decree is to
make sure that the city does not default on its loans.
"There's no concern about services, or with the city
living up to its contracts," Garrett said. "It's about
making sure that bond holders are paid."

The bankers' coup in Greece will expire in April when
new elections are held, but Garrett says that the
consent degree contains no time limit for  how long the
Financial Advisory Board would run the city. "The only
people protected by the consent decree are the Wall
Street folks," Garrett said.



30 Detroit labor unions ratify concessions in hopes of averting emergency manager

http://www.freep.com/article/20120323/NEWS01/120323029/30-Detroit-labor-unions-ratify-concessions-hopes-averting-emergency-manager

Steve Neavling

Detroit Free Press

March 23, 2012

A key coalition of 30 labor unions representing city of
Detroit workers ratified new concessionary contracts
this week, less than a week before Gov. Rick Snyder is
expected to decide on appointing an emergency manager
or reaching a consent agreement with the city's elected
officials.

"We want to fix Detroit together," Ed McNeil, special
assistant to President Al Garrett, AFSCME Council 25,
who cochaired the coalition's negotiating team, said in
announcing the agreements today.

"This is not a short-term fix but a long-term process
to turn the city around."

Union negotiations are considered the cornerstone of
any plan to save the city from financial ruin.

City Council is expected to approve the concessions
next week.

But whether those concessions are enough remains an
open question.

Under the current agreement, the city would save about
$54 million a year in concessions -- less than half what
Mayor Dave Bing originally wanted.

Other savings include $14 million in layoffs and about
$100 million in new revenue by aggressively collecting
past due taxes and parking tickets, but those were
plans already under way before the negotiations.

Still, union leaders stepped up the rhetoric against
more state intervention, saying the concessions show
that city leaders and workers are willing to make big
sacrifices for the survival of the city.

"When the union members see a need, we step up each and
every time to meet that need," said Richard Mack, the
coalition's attorney who helped with the negotiations.
"We are going to make sure the city gets back in the
black within a year."

But even if council approves the new labor deals, the
state still says it has the authority to wipe out the
contracts under an emergency manager.

Bing's administration called the ratifications
"historic and precedent-setting."

"These ratified agreements, reached before their
existing contracts expired, reflect how labor and
management can work together in a fair and constructive
way," said Bing Chief of Staff Kirk Lewis. "The
agreements also provide checks and balances that hold
both unions and Mayor Bing's administration
accountable."

Contact Steve Neavling: [log in to unmask]

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