DETROIT, WATER, BANKS & HUMAN RIGHTS

 

Anyone following the Detroit water crisis will have learned a valuable lesson this week: living a healthy life has nothing to do with human rights—at least not when paying for clean, running water is concerned.

I’ll tone down my heavily-opinionated approach today and let you reach your own conclusion about US Bankruptcy Judge Steven Rhodes’ denial of a motion by community advocates to issue a six-month moratorium against the City of Detroit’s water shutoff to 100,000 residents who can’t afford to pay for the service.

In Judge Rhodes’ own words, as he referenced the city’s obligations to banks and bondholders:

Detroit cannot afford any revenue slippage.

The city has a water revenue shortfall of nearly $90 million.

But…the judge notes that he gets the point about how the lack of clean water can prevent the diseases you would normally see in underdeveloped countries. He also says that he understands how Detroit’s percentage of residents living below the poverty line—which is at least 44 percent but could be over 50 percent mark—means that many people cannot afford water.

As a reminder, I write in a stream-of-consciousness style, and I’m beginning to see that it’s hard to not inject a strong opinion here…

This problem looks a lot like a death spiral.

Detroit has lost about one million residents during the past 60 years. This means the remaining residents will have to pay for infrastructure that has been built to accommodate a larger residential base.

A smaller city also means a reduced water revenue stream.

And Detroit’s high poverty rate makes the revenue picture even worse.

It’s hard to imagine that the city would have money to maintain the existing water infrastructure, so it’s no surprise that the virtually impoverished customer base is hit with water rate increases.

Which means water’s inaffordability, and its resulting service shutoffs, will continue.

I’ll remind you that Detroit’s financial problems were exacerbated by the 2007-2008 financial crisis, where banks made outrageous bets and nearly destroyed the world financial system.

US banks sought relief from the crisis they created by requesting a bailout. The US government responded by authorizing more than $700 billion TARP, plus provisioning billions more in the form of cheap funding and loan guarantees through the Federal Reserve.

The City of Detroit sought relief from its financial troubles by filing for bankruptcy.

Detroit’s most vulnerable residents—the poor and the elderly—sought relief from its water bills by asking the city government to keep the faucets running and requesting a two-year repayment plan to resolve any arrears.

The request was denied.

No one seems to think poor folks are important like the banks, or the city which owes these institutions money.

I’m sure that some of you don’t think Detroit is your problem.

Do you think Detroit is the only financially-strapped city in America with creditor obligations, service infrastructure issues and a large population of poor people in need of these services?

It will be interesting to see what the United Nations has to say about the crisis when representatives visit Detroit in a few weeks…

song currently stuck in my head: “come get to this” – nancy wilson