This is the second installation of a three-part series connecting the dots of the global agenda behind Detroit’s bankruptcy. Read part 1 here.
If you want to fully understand the game at play in the bankruptcies and privatization of public assets in Detroit, Argentina, and Europe, play Monopoly.
The game of Monopoly was originally known as “The Landlord Game,” which was meant to show players the perils of unregulated capitalism. In the game, wealthy investors buy up property, including utilities like electricity and water, along with the railroad systems, with the end goal of owning everything. Monopoly inevitably ends with all the wealth accumulating to one player while the other is forced to sell off everything they own to pay off their debt. And if one plays the right card, they can even get out of jail free. The global game of Monopoly has now opened a board in one of America’s largest cities.
Detroit may have just made a deal to sell off enough public assets to satisfy Syncora, one of its top creditors. The bond insurer lays claim to some $400 million of insurance on Detroit’s bonds, and is demanding a bailout from the city’s taxpayers and pensioners as a result of its gambling loss. This week, Judge Steven Rhodes agreed to halt the city’s bankruptcy trial so Syncora’s ransom demands can be arranged. So far, it appears that Detroit will be selling off multiple pieces of land, as well as giving the bond insurer a stake in tolls collected from the Detroit-Windsor tunnel connecting the U.S. and Canada. A deal has also been brokered to restructure Detroit’s control over its water, potentially paving the way for privatization.
Detroit’s Water Department Gets New Owners
Under the deal made on September 9, the Detroit Water and Sewage Department would become a regionally-owned body called theGreat Lakes Water Authority. Two of the board’s members would be appointed by the mayor of Detroit, and the remaining 4 members would be selected by Oakland, Wayne, Macomb counties, and the governor. Major decisions like rate increases would require a 5-vote majority. Detroit’s surrounding suburbs would all pay $50 million for 40 years to lease the infrastructure, and the money would go toward new infrastructure for Detroit’s water pipes, some of which are close to a century old and pipe in water from the Detroit River and Lake Huron.
As I wrote previously for Occupy.com, one of the prospective private buyers in the Great Lakes Water Authority may be United Water out of New Jersey, a subsidiary of the France-based Suez company. If the deal approving the Great Lakes Water Authority doesn’t go through, Detroit’s unelected emergency manager Kevyn Orr, appointed by Governor Rick Snyder to unilaterally make all financial decisions on behalf of Detroit’s elected city government, is allowed to hand off the water department to unaccountable private buyerslike United Water. Some residents are cautious of a private takeover of their water system, as it could eventually lead to privatization of the Detroit River and the Great Lakes.
Still, the full weight of Detroit’s bankruptcy woes doesn’t really hit hard until zooming out and seeing how Detroit is just one of many dots to be connected in a global agenda aimed at the complete takeover of major cities and public assets, making them beholden to a few wealthy owners. The clearest example of this is process is taking place right now in Argentina.
Argentina: Victim of Economic Hitmen
In 2001, Argentina defaulted on $100 billion in debt. Some of the bondholders agreed to a restructuring of the nation’s debt, but others refused and insisted on being paid in full. Keep in mind, as Strike Debt showed the world, private debt collectors buy up distressed debt for pennies on the dollar, and aim to reap huge profits by collecting the full amount. When a U.S. court ruled that Argentina must pay all bondholders all the same despite some investors being willing to restructure, Argentina agreed to make new bond payments by July 31 of this year. After that day came and passed, Argentina still owed its creditors, triggering a default. But it’s critical to talk about how this debt came along – Argentina, like other Latin American countries, were victims of an elaborate scheme by U.S. companies to shackle less-well-heeled nations with permanent debt.
Much of this debt was taken on in the way described by bestselling author John Perkins, of the “Economic Hit Man” series. Perkins’ books describe how he spent his career as an economist at private consulting firm Chas T. Main, in which he was paid to make inflated economic projections of laughably high GDP growth if development projects largely benefiting the wealthy like airports, power plants, and shopping malls were approved. Funding for these projects demanded the host nation take on an unsustainable amount of debt from institutions like the World Bank and the International Monetary Fund, and the projects were built by well-connected contractors like Bechtel and Halliburton.
Governments that approved the deals quickly saw their debt turn into default and open their public assets up for grabs by private owners. Political Leaders who saw these deals for what they were and rejected them were mysteriously assassinated by operatives that John Perkins referred to as “jackals,” usually from the CIA. Perkins gives past examples of jackal-led assassinations like the midair explosion of Panamanian leader Omar Torrijos’ plane, and the highly-suspect plane crash of Ecuador’s Jaime Roldos.
If the jackals failed in their attempts at regime change, the U.S. military would finish the job with an invasion, like in the kidnapping of former Panamanian president and CIA informant Manuel Noriega in 1989. Problem politicians who were ousted, like Chile’s Salvador Allende on September 11, 1973, were then replaced with willing puppets, like brutal Chilean dictator Augusto Pinochet. Along with committing mass atrocities without repercussion, these new political leaders would happily approve agreements that would enrich U.S. banks and contractors while bankrupting the host nation.
The Billionaire Behind Argentina, Greece, and Detroit’s Woes
As Greg Palast recently exposed, much of Argentina’s distressed debt is owned by Paul Singer, whom his Wall Street colleagues refer to as “The Vulture” in a reverent tone. Singer’s hedge fund, Elliott Management, makes its billions by making terroristic threats on national economies. With the help of fellow billionaire investor Kenneth Dart, Singer previously threatened to pull the pin on a debt grenade that would shut down major financial institutions in Greece and throw the nation into economic turmoil unless he was paid off. While some of Greece’s other creditors agreed to cancel 80 percent of their loan principal to ease the burden on Greece, Singer and Dart insisted full payment despite buying the debt for pennies on the dollar weeks before. Greece was forced to pay off the two men, who already own more wealth than could be spent over several lifetimes, by cutting workers’ pensions and privatizing public assets. Palast wrote about one Greek pharmacist named Dimitris Christoulas whose suicide note lamented eating from garbage cans after losing his pension in the austerity agreement. Singer made a similar ransom demand of $58 million from Peru’s treasury in exchange for not detonating their economy. Singer’s greed affects not only foreign countries, but one of America’s largest cities.
Palast further explored how President Obama could, with a stroke of his pen, end Argentina’s debts to Singer by telling a U.S. court that only the president has the authority to conduct foreign policy. George W. Bush did something similar against Elliott Management, blocking Singer’s plans to seize the Congo’s U.S.-owned property, despite Singer being one of the Republican Party’s largest donors. However, Obama’s hands were tied as a result of the General Motors bailout. Singer had just bought up Adelphi Automotive, which is the largest parts supplier to General Motors. Unless Obama paid off Singer with $12.9 billion of the auto bailout fund, including $350 million in cash up-front, the billionaire investor threatened to shut down the supply line to Detroit’s auto industry, effectively torpedoing the GM bailout. The U.S. treasury quietly transferred the funds to Singer shortly after.
Whether it happens in Detroit or overseas, and whether it’s perpetrated by billionaire private investors like Paul Singer or Wall Street bond sharks like Syncora, there is a global game of Monopoly in play with the players scrambling to own as many properties as possible. The winners are the same small group of wealthy individuals, and the losers are citizens who become serfs to global lords, handing over tax dollars to owned governments that reward campaign donors and pay off investors.
Stay tuned for Part 3 of this series, which highlights the stories of people working to flip the board and end the Monopoly game for good.