Wednesday, April 20, 2011

Corporate take-over of American cities and Republican led authoritarianism (Rachel Maddow)

Last night Rachel Maddow's show led off with a powerful piece using Benton Harbor Michigan as an example of authoritarian big government Republicans trampling on local government and overturning Democracy. The issue is a recent law passed by the Michigan state legislature giving their Governor the power to dissolve local governments that are in financial crisis, and replace the local government with a corporate-run management team.

While many such as myself has been pointing at corporatism as an abstract danger, this is a concrete example of corporate power replacing government power.

Her piece asks us to recall the Biblical phrase, "By their fruits ye shall know them". The Republicans have an ideological bias towards small non-intrusive government and personal freedom, but when they have official power they tend to become overbearing authoritarian neo-fascists.

There is an existing industry of Emergency Financial Managers who step in to governments in financial crisis. For that matter this has an analogue in corporate governance where there are people and organizations who specialize in corporate turnaround or dissolving corporations in the final throes of bankruptcy. Some people specialize as being the CEO of flailing companies. So, if there's a city who is in a similar near-failure case it would be useful to have people and organizations that specialize in assisting the financial turnaround of a flailing government.

But this is a little different. Taking cue from the "By their fruits ye shall know them" line, their first action under the emergency financial managers law is a doozy. Benton Harbor is a relatively poor predominantly black city neighboring a relatively rich predominantly white city, both straddling a river along the Lake Michigan shore across the lake from Chicago. Benton Harbor is slated to be the site of an exclusive Golf Course and high priced home development targeted at rich persons. The development is meant to encompass Benton Harbor's shore-side city park. The golf course enclave is obviously not going to benefit the citizens of Benton Harbor, and with their city government out of the way there's almost certainly zero defense against the planned development slated to take over land currently owned by the city.

In other words - the first official use of this law is to negate a local city government to make it easier to build an exclusive rich persons enclave and deny public access to yet another stretch of beach.

By their fruits ye shall know them.

What do you think? Let me know in the comment boxes below.

An earlier corporate take-over piece with video from Maddow's show: Corporations are not human, that's why we have government (Rachel Maddow)

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Visit msnbc.com for breaking news, world news, and news about the economy

Summary of the Local Government and School District Fiscal Accountability Act Process

http://www.michigan.gov/treasury/0,1607,7-121-1751_51556-198770--,00.html

Step One: If one or more conditions indicative of probable financial stress in a local government exist, the State Financial Authority (State Treasurer or Superintendent of Public Instruction) may conduct a preliminary review, after providing the unit of local government with specific written notification of the review.

Step Two: The State Financial Authority must inform the Governor within 30 days of commencement of the preliminary review whether or not probable financial stress exists.

Step Three: The Governor must appoint a review team if the State Financial Authority informs the Governor that a preliminary review has been conducted and a finding of probable financial stress was made.

A review team consists of the State Treasurer (or his or her designee), the Director of the Department of Technology, Management, and Budget (or his or her designee), a nominee of the Senate Majority Leader, a nominee of the Speaker of the House of Representatives, and any other State officials, or other persons with relevant professional experience selected by the Governor. The Superintendent of Public Instruction (or his or her designee) also is a member if a school district is involved.

Step Four: Unless the Governor specifies an earlier date, or grants a 30-day extension, a review team must report to the Governor within 60 days of its appointment and indicate whether specific statutory conditions exist or are likely to occur which constitute no or mild financial stress, severe financial stress, or financial emergency:

  • (a) No or mild financial stress exists in the unit of local government if any of the following occur:
    • -- The review team reports that none of the specified statutory conditions exist or are likely to occur.
    • -- The conditions may occur, but will not threaten the capability of the unit of local government to provide necessary governmental services.
  • (b) Severe financial stress exists in the unit of local government if any of the following occur:
    • -- The review team reports that one or more of the specified statutory conditions exist or are likely to occur.
    • -- The chief administrative officer of the unit of local government recommends that the unit of local government be considered in severe financial stress.
  • (c) A financial emergency exists in the unit of local government if:
    • -- The review team reports that two or more of the specified statutory conditions exist or are likely to occur within the current fiscal year that threaten the future capability of the unit of local government to provide necessary governmental services.
    • -- The unit of local government failed to provide timely and accurate in-formation to the review team.
    • -- The unit of local government failed to comply with one or more financial plans.
    • -- The unit of local government materially breached the terms of a consent agreement.
    • -- The unit of local government is in a condition of severe financial stress and a consent agreement was not adopted.
    • -- The chief administrative officer of the unit of local government recommends a financial emergency be declared and the State Treasurer concurs.

Step Five: Within 10 days after receipt of the review team report, the Governor must make one of the following determinations:

  • (a) The unit of local government is not in a condition of severe financial stress.
  • (b) The unit of local government is in a condition of severe financial stress, but a consent agreement containing a plan to resolve the severe financial stress has been adopted.
  • (c) A local government financial emergency exists and no satisfactory plan exists to resolve the emergency.
  • (d) The unit of local government entered into a consent agreement containing a continuing operations plan or recovery plan to resolve a financial problem, but materially breached the consent agreement.

Step Six: If the Governor determines that a financial emergency exists, he or she must provide written notification to the chief administrative officer of the unit of lo-cal government who may request, within seven days after receiving notice, a hearing conducted by the State Financial Authority or his or her designee.

Step Seven: After the hearing or, if no hearing was requested, after expiration of the opportunity for a hearing, the Governor must either confirm or revoke the determination of a financial emergency.

Step Eight: A local government, with a two-thirds vote of its governing body, may appeal the Governor's determination to Ingham County circuit court. The determination may be set aside only if found to be either:

  • (a) Not supported by competent, material, and substantial evidence on the whole record.
  • (b) Arbitrary, capricious, or clearly an abuse or unwarranted exercise of discretion.

Step Nine: If the Governor confirms the determination of a financial emergency, the Governor is required to declare the unit of local government in receivership and appoint an Emergency Manager who serves at the pleasure of the Governor.

Step Ten: Upon being placed in receivership, the governing body and chief administrative officer of the unit of local government are prohibited from exercising any of their powers of offices without written approval of the Emergency Manager, and their compensation and benefits are eliminated.

Step Eleven: Within 45 days of appointment, an Emergency Manager must develop a written financial and operating plan.

In addition to other powers, an Emergency Manager may reject, modify, or terminate collective bargaining agreements, recommend consolidation or dissolution of units of local government, and recommend bankruptcy proceedings.

Step Twelve: A unit of local government is removed from receivership when the financial conditions which were the basis for the underlying financial emergency are corrected in a sustainable fashion as determined by the State Treasurer in accordance with the Act.