Home > #OWS, economics, rant > Detroit’s water problem and the Koch brothers

Detroit’s water problem and the Koch brothers

October 6, 2014

Yesterday at the Alt Banking group we discussed the recent Koch brothers article from Rolling Stone Magazine, written by Tim Dickinson. You should read it now if you haven’t already.

There are tons of issues that came up, but one of them in particular was the control of information that the Koch brothers maintain over their activities. If you read the article, you realize that the brothers are die-hard libertarians but at some point realized that saying out loud that they are die-hard libertarians was working against them, specifically in terms of getting into trouble for polluting the environment with their chemical factories, so instead they started talking about how much they love the environment and work to protect it.

It’s not that they stopped polluting, it’s that their rhetoric changed. In fact there’s no reason to think they stopped polluting, since they still had plenty of regulators going after them for various violations. Since their apparent change of heart they’ve also decided to be publicly philanthropic, giving money to hospitals, and Lincoln Center, and even PBS (see how that worked out on Stephen Colbert).

The problem with all this window dressing is that people are actually starting to think the Koch brothers may be good guys after all, and what with the fancy lawyers that the Koch brothers hire to control information about them, the public view is very skewed.

For example, how many economists have they bought and inserted into universities nationwide? We will never really know. There’s no way we can keep a score sheet with “good deeds” on one side and “shitty deeds” on the other. We don’t have enough information for the second side.

The exception to this information control is when they get in trouble with regulators and it becomes a matter of public record. And thank goodness those court documents exist, and thank goodness investigative journalist Tim Dickinson did all the work he did to explain it to us.

A couple of conclusions. First, we complain a lot about the bank settlements for the misdeeds of the big banks. Nobody went to jail, and the system is just as likely to repeat this kind of thing again as it was in 2005. But another problem with this out-of-court settlement process, we now realize, is that we actually don’t know what happened except in big, vague terms. There will be no Tim Dickinson reporting on big banks.

Second, the connection to Detroit. Right now there are 15,000 residents of Detroit whose water has been shut down, basically so they can privatize the water system with the best deal from Wall Street. They owe less than $10 million, on average a measly $540. The United Nations has called this water shutoff a violation of the human rights of the people of Detroit.

If you feel bad about that, you can donate to someone’s water bill directly, which is kind of neat.

Or is it? Shouldn’t Obama be declaring Detroit a state of emergency? Wouldn’t we be doing that in another city that had 15,000 residents without water? Why is this an exception to that rule? Because the victims are poor? Don’t we recognize Detroit as a place where it’s unusually difficult to find work? Are we going to allow people to shut off heat as well, once winter comes?

Once you think about it, the idea of a “private solution” to the Detroit water emergency seems wrong. In fact, you can almost imagine David Koch coming to the rescue here, as part of his “positive optics” campaign, and bailing out the Detroit citizens and then, for good measure, buying up the water system altogether. A hero!

And if you’re in that mode, you can think about the asymptotic limit of that approach, whereby a few very rich people gradually take control of resources, and then there are intermittent famines of various types in different cities, and the rich people swoop in and heroically save the day whilst scooping up even more ownership of what used to be public infrastructure. And we might thank them every time, because it was a dire situation and they didn’t really need to do that with all their money.

It’s frustrating to live in a country that has so many resources but which can’t seem to get it together to meet the basic human needs of its citizens. We need a basic income, at least for the people in Detroit, at least right now.

Categories: #OWS, economics, rant
  1. October 6, 2014 at 10:16 am

    You ask why Obama isn’t declaring a state of emergency in Detroit… maybe it’s because he’s OK with the privatization of public services. He seems to be OK with privatizing public education and his cronies in Chicago have privatized lots of public services… that may be his legacy: the privatization president…


    • DJ
      October 7, 2014 at 12:03 pm

      Obama is really a right-wing president. Civil liberties wise he’s a straight clone of Bush. His signature health-care law is copied from the Cato Institute’s 1993 position paper, which was the right-wing response to Clinton’s health care bill. We should not really be surprised that he shares the right-wing position on privatization.

      The enduring legacy of today’s Republican Party is that they are so far extreme lunatic right that they make Obama look leftist by comparison.


  2. mb
    October 6, 2014 at 10:17 am

    How did Detroit arrive at this situation? pretty much by following your “solution”. What is the saying they attribute to Einstein about doing the same thing and expecting different results? Much like the water problem in CA (subsidized water in a desert leads to shortages – who’d a thunk that?), if you look to the source of the problem, many “solutions” seem quite stupid. And if you look actual EPA violations Koch does very well, you should look up GE (a big crony capitalist) for all they have done for your area. I will also bring up, who is the SINGLE largest polluter in the US? The federal government (military bases, research labs, etc.). Who do you trust with the environment? Does that make sense? I will also add, most of the lawsuits the Koch brothers face are from private parties, not the EPA – since they follow EPA regulations – EPA regulations are licenses to pollute to a certain level, they also grandfather most exising companies with the old regulations creating a barrier to entry for cleaner newer companies. Private party lawsuits have done more to protect people than the EPA, and EPA with their grandfathering of old polluting industries has done a lot of damage.

    My work in the environmental field as well as a few other experiences led me to become a libertarian. I could detail countless examples of disgusting government behavior with regards to the environment (one job I was offered but did not take was at the Newport RI naval base – basicly look up the regulations for toxic waste and decide if it was cheaper to dump in the bay and pay a fine or dispose of it legally – my work on the big dig in MA was just as bad). I do not think government is worse than private sector, but I do not have unicorn dreams that just because a person works for “government”, they are better. I would like to Tim Dickson turn his investigative prowress on the feds and compare to the Koch brothers – that would be funny.


    • Min
      October 6, 2014 at 6:42 pm

      How did Detroit get into this situation? Well, it has been a long time coming. But the acute problem, IIUC, came as a result of taking out complex loans that they did not understand and getting in trouble with them after the financial crisis.


  3. October 6, 2014 at 10:34 am

    Cathy —
    The links on Detroit in your piece are a couple of months old. Here’s a current one (from yesterday) about the ongoing problem.
    — Ernie


  4. Min
    October 6, 2014 at 12:32 pm

    “Shouldn’t Obama be declaring Detroit a state of emergency? Wouldn’t we be doing that in another city that had 15,000 residents without water? Why is this an exception to that rule?”

    IANAL, but I think that, since the water problem in Detroit is the result of administrative action, Obama could only respond militarily. He could do so if Michigan did not have a republican form of government. Detroit itself does not, but that’s a hard case to make against Michigan.

    “Because the victims are poor?”

    Anglo-Saxon culture has discriminated against the poor since the Black Death.

    “you can think about the asymptotic limit of that approach, whereby a few very rich people gradually take control of resources, and then there are intermittent famines ”

    That has been happening for some time, hasn’t it?


  5. Michael L
    October 6, 2014 at 10:49 pm

    It’s interesting that at the end you call for a basic income after discussing privatization of public or collective resources. Alaska has what some think of as a basic income which is financed by a tax on the gains of oil companies. The idea seems to be that oil in the ground is a natural resource which belongs to all Alaskans and if private interests are allowed to profit from this resource then all Alaskans are owed a “social dividend” in return. I have some real concerns about water and similar resources being privatized. But if that is going to happen it seems to me that doing something like what Alaska has done is the only way to more fairly privatize such resources.


  6. Huj
    October 7, 2014 at 11:33 am

    I love how you just shrug off the fact these people haven’t paid their water bills for a long time, and instead fantasize about conspiracy theories involving the Koch brothers. It may be inhumane to shut off their water, but in most cities in the US, if you don’t pay your water bill the same thing has happened, and it has been that way for years.

    The actual problem is that Detroit is an economic basket case, with many poor people who can’t pay their bills. 25 percent of the city fled in the decade between 2000-2010 alone and this keeps continuing. The city is bankrupt (literally) and will look for any source of money they can find. They were even talking about selling off their art museum for a while. So yes it’s not very nice to shut off people’s water, but not everything bad that occurs is immediately ascribable to your political enemies.


    • October 7, 2014 at 11:37 am

      Not at all, I don’t claim that the Koch brothers _caused_ the problems in Detroit. If you think I claimed that, I suggest you read my post again.

      And yes, I agree, Detroit is a basket case, and there are huge numbers of poor people who can’t pay their bills. We agree. I am using this as evidence that we shouldn’t wait for private solutions to this problem. We need to step up to addressing this as a nation.


      • Huj
        October 7, 2014 at 11:54 am

        Maybe a solution would be to have “water stamps” or something similar, in analogy with food stamps. This way the government money would be guaranteed to go to the restoration of their water.


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