Friday, April 29, 2011

Financial vultures are circling our cities and towns

Just when you thought Wall Street couldn't get any more avaricious, they do something so shameless it makes your head spin.

You'd think they'd be happy with a $4 trillion taxpayer bailout. But no, looting the federal treasury wasn't enough. Now they're figuring out how to plunder our cities and towns.

Wall Street's stooge in Michigan, Gov. Rick Snyder, set the stage by passing a financial manager law. The law lets appointees take over entire communities, override local laws, remove elected officials and abrogate union contracts. In the old days that was known as "taxation without representation." Today it's "value for money."

We've reported how Benton Harbor was stripped of its democratic rights. And we've reported how Snyder is building an army of emergency financial managers to take over municipalities across the state.

Today we learn what those eager beavers are thinking. Bloomberg Business Week, in a story called, "Financial Martial Law in Michigan," describes how one financial vulture views struggling municipalities: a chance to add to his loot.  Here a principal from accounting giant Grant Thornton describes a conversation he had with Michigan's treasurer:
"I told Andy Dillon: 'I want to copy your program and take it to other states.' We view this as a business opportunity. We can make a real meaningful difference for a lot of people. There's a nobility in that. If we can get paid for it, that's a good thing, too." -Michael Imber, a principal from the accounting and consulting firm Grant Thornton.
Here's more:
"This is the next wave of opportunity," says Scott Eisenberg, president of the Michigan Turnaround Management Assn "People are trying to figure out where the opportunity is. It may not be as emergency managers. It may be as consultants." And then Eisenberg says it—the sentiment that sounds reasonable to some and perverse to others: "This past recession brought forth a level of discipline and accountability and restructuring in the private sector that the public sector has not gone through yet. As a result there's no reason why you wouldn't use professionals to help. Good turnaround professionals will pay for themselves."
The emergency managers' salaries—which range from $150,000 for Stampfler to about $350,000 for Robert Bobb, the head of the Detroit school system—come out of local (or school) budgets. Consultants' fees could run about $150 an hour, estimates Eisenberg, a drop from what they're used to making but still lucrative.
Could it be any more obvious that this is about looting the middle class and not about solving our financial crisis.