THE SHAME OF IT ALL

The Detroit water problem is familiar to all. The basic facts require no repetition. The purpose of this column is to reveal some items unknown to most. A lets look at the whole picture writing.

Detroit is in bankruptcy. A big deal. The first major U.S. city to have entered into bankruptcy. A lot of what is happening therefore is in uncharted waters. Everyone is doing the right thing as they see it.

Detroit's water company, the Detroit Water and Sewerage Department, is $5.7 billion in debt. Unpaid water bills are humongous. The due and owing bills are residential and corporate. 

Michigan's Governor Snyder appointed Kevyn Orr as Emergency Manager of Detroit. It was Orr who decided to apply for bankruptcy protection. Orr calls all the shots on behalf of Detroit. Between the State law giving him his emergency authority and the Bankruptcy Law, his decisions are difficult to override. He is all powerful.

Orr decided the back water bills had to be collected. A water company/city cannot be run if the water it provides goes unpaid. He was confronted with the two classes of water debtors described, residents and corporate properties. He opted to pursue the residential water users.

He did it big time. He hired an outside firm to do the actual physical closing of the water boxes. The decision was made to close down the water supply to 3,000 residentials a week beginning in June. The actual June number turned out to be 7,210. Another 2,000 plus were shut down in early July.

Detroit in many respects resembles what a city would look like after a war has been waged there. Residents remaining are poor and generally African-American. Detroit is devoid of the many corporations that lined the streets during its hey days as the car manufacturing capital of the world. 

All of a sudden and dramatically, Detroit's people of color found themselves without water. The United Nations took note. The United Nations declared the shut offs were a violation of the human right to water. Makes sense. A person cannot live without water. The United Nations further stated that the course of conduct implemented in the shut downs against African-Americans might be discriminatory.

The corporations owe in the hundreds of thousands, perhaps millions. No one is turning off their water. The argument presented as to why is two fold. It is much more complicated to turn off a company's water than it is a resident's. Detroit did not have a trained force to turn off the non paying corporations. They would have to be trained. It was complicated and would be expensive.

America today! Go after the little guys and leave the big guys alone. The big guys also happened to be white. Caucasian. Complaints of discrimination have become rampant.

Residents who owe more than $150 or are more than two months behind get their water turned off. The corporations owing hundreds of thousands of dollars in many instances, do not.

Examples of who owes corporate debt are revealing.

Vargo owns two golf courses. Palmer Park Golf Club and Chandler Road Golf Course. Palmer Park is a high end club. Vargo owes $431,710 in water bills. Joe Louis Arena (home of the Detroit Red Wings) $80,000. Ford Field $55,000.

Even the State of Michigan owes the water board. $80,890.

Mishandling of funds has also contributed to the debt. Whether improper, I cannot say. However in 2011 and 2012, Detroit sold $1.16 billion in City bonds The proceeds were to be used by the water company. Half the money never went where it was supposed to go. The water company. $547 million was paid to Wall Street banks for interest and termination fees owed by the City.

The resident shut down problem only surfaced two months ago. In that short time, the Bankruptcy Judge has been made aware, the United Nations has become involved, Detroit residents have formed a non-violent civil disobedience group, and people are protesting daily by the thousands in the streets. The civil disobedience group intends to form human chains when and where locking of water boxes is attempted.

Last week, a 15 day moratorium was declared. No more shut downs for 15 days. Whether it will help is questionable. Orr says it will give people an opportunity to pay or make arrangements to pay. Then a return to the turn offs. It could be nothing more than a 15 day armistice.

Kevin Orr is a recognized expert in the areas of restructuring and bankruptcy. A lawyer, he led Chrysler's successful restructuring in 2009. He is considered one of the best at what he does. He considers himself a benevolent dictator. Whether so with regard to the Detroit water problem is questionable. 

Orr is African-American. There are those of his own race that perceive him an Uncle Tom. A participant in the oppression of his own people.

Detroit has become an American disgrace.

JOHN PAUL JONES

Part 2

In last week's Part 1, I shared that which is popularly known regarding one of America's greatest naval heroes, John Paul Jones. This week, Part 2 introduces the less well known John Paul Jones.

John Paul Jones was born John Paul in 1747 in Scotland. Jones would not become his last name for many years. He went to sea as an apprentice when 13.

Several years later, he served as a crew member on three slave ships to Africa and back. His services were well paid. However, he came to hate trafficking in human cargo and stopped after the third trip.

His first command was the brig John. He initially served as second mate. After the Captain and first mate died from fever, he assumed command.

On a voyage to the West Indies in 1770, he flogged one of his sailors for disciplinary reasons. The sailor died a few weeks after the flogging. The discipline was considered as unnecessarily cruel by authorities and Jones was arrested. He was imprisoned and then released on bail. Fearful of an adverse result at trial, he jumped bail and left the place of trial.

Another incident involving a crew member occurred in 1773. The place, the island of Tobago. Certain of his crew muntinyed. It was over advance pay. In  the fight which ensued, Jones killed one of the sailors with his sword. Again his fear of not getting a fair trial came into play. He escaped to Fredericksberg, Virginia.He changed his name. from John Paul to John Paul Jones to avoid capture and return to Tobago for trial.

His bother had died earlier while residing there. Jones' reasons for picking Fredericksberg as his destination were twofold. There was a need to settle his brothers affairs. Additionally, Jones had a great dislike for Great Britain who he believed had mistreated the Scottish people.

When war between the Colonies and Great Britain broke out, he volunteered his service in the new Continental Navy. He was awarded a lieutenant's rank. His naval talent was soon recognized and he was elevated to Captain and received his first command. The sloop Providence. He distinguished himself in that command by capturing 16 British vessels on his first cruise.

Jones accomplished a previously thought not possible act. He attacked the Town of Westhaven on the west coast of England. Actually landed his men and himself on land. Invaded the Town. Little damage was done. However he gave the British concern that a Colonial ship could actually invade England.

Jones was a proud egotistical man. He knew better than others. He was of the opinion his record proved it. He found it difficult to get along with his superiors, those in authority.

He feuded with Commodore Hopkins. His boss, in effect. Jones publicly complained that Hopkins was hindering his advancement and talking down his campaign plans. Hopkins retaliated by giving Jones command of a smaller ship and sending him off to France.

Paris was the perfect place for Jones. He enjoyed partying and frolicking with the ladies. He became immediate and best friends with Benjamin Franklin. Paris was their play pen. Jones was extremely proud that he and Franklin became members of a Masonic Lodge at the same time while in Paris.

In 1779, Jones took command of the Bonhomme Richard where he won his greatest battle and spoke words which resound to this day.....I have not yet begun to fight.

At all times while in the service of the Continental Navy, Jones had trouble not only with his superiors but also with his officers and men. His officers and crew felt Jones fought for his own glory and nothing more. He took them in harm's way for his personal benefit.

On the first trip with the Bonhomme Richard, Jones commanded a seven ship squadron. Five Naval ships and two privateers. Rank insubordination occurred. Two captains took their ships and left the squadron before battle.

One year after Bohomme Richard's glorious victory, the King of France honored Jones with the title Chevalier. France loved Jones! It was the biggest recognition it could give him.

In 1787, the Continental Congress was to give Jones a medal for his valor and brilliant services. He rankled many by insisting that the award include the title Chevalier prior to his name.

Interestingly, while France and the United States were honoring Jones, Great Britain viewed him as nothing more than a common pirate.

After the war, the Continental Navy was disbanded. Over Jones' objection. Congress felt it did not have sufficient monies to maintain a navy.

A Captain with out a ship. A warrior without a war. Somehow he and Catherine the Great of Russia got together. She was also known  as Catherine II. Russia was at war with Turkey. Russia was in need of a stronger and apparently better naval leader. Catherine said she wanted.....One more bulldog for the Black Sea. Jones was her bulldog.

In his acceptance, Jones wrote Catherine that he hoped his efforts on behalf of Russia would bring him great fame. He wrote her he loved glory and was perhaps too attached to honors.

Jones was designated a Rear Admiral and beat the hell out of the Turks.

Jones became a Russian hero. He did not enjoy the position too long. He had made enemies. Certain Russian elite disliked him. The reason simple. He again was the braggart, the man who could get things done. Glory and credit were not shared by him with anyone.

Intrigue came into play. Russian intrigue. Two Russian princes who were not fond of Jones had him recalled to St. Petersberg. They maliciously assaulted his private character.

Jones was accused of sexual assault with a 12 year old girl. He was charged with rape. He was arrested.

Jones' mouth got him into deeper trouble. He admitted he had often "frolicked with the girl" for a small cash payment. He denied however taking her virginity.

Fortunately, he had one friend in Russia. The French Count de Segur who convinced authorities that Jones had been falsely accused.

Jones departed Russia a bitter man.

Jones died in a third floor Paris apartment in 1792. He was 45 years old.

His burial procession was small. Nowhere near what a man of his distinction/accomplishments might be entitled to. A small group of servants and friends walked with his coffin four miles to his place of burial. St. Louis Cemetery. The place of repose of the French royal family. A placed of dignity and respect.

Not for long however. Four years later came the French Revolution. Louis lost his head and the cemetery its dignity. The beautiful cemetery became a place for the disposal of dead animals.and gamblers who had bet on animal fights. The bodies were merely thrown on the ground.

Years later in 1905, the United States desired the return of the body of their revered Naval hero. His body was difficult to locate and identify. After scientific investigation, his body was located. Jones was then returned with appropriate glory to the United States. His home since, the United States Naval Academy at Annapolis.

JOHN PAUL JONES

Part 1

John Paul Jones was a man. A man's man.

America recognizes Jones as the father of the U.S. Navy. During the Revolution, the Navy was known as the Continental Navy. His exploits and leadership in the War exhibited traditions of courage and professionalism which to this day are proudly maintained by the U.S. Navy.

In his first command against the British fleet, he captured 16 British vessels. His greatest victory was as Captain of the Bonhomme Richard in 1779. His ship and crew were in bad shape. The British commander recognized it. He offered Jones the opportunity to surrender. The term was struck. He was asked.....Have you struck? Jones' famous response.....I have not yet begun to fight. Three hours later the British commander surrendered.

U.S. Naval tradition perpetuates the following statement which reflects his fighting manner.

I wish to have no connection with any ship that does not sail fast for I intend to go in harm's way.

Jones died in Paris in 1792 at the age of 45. His body was subsequently returned to the United States aboard the USS Brooklyn accompanied by three cruisers. As the Brooklyn approached U.S. shores, seven battleships went out to greet and accompany Jones to shore.

Today, his body lies in a bronze and marble sarcophagus in the U.S. Naval Academy Chapel  at Annapolis.

Recall Marc Anthony's words to the people of Rome following Caesar's assassination.

The evil that men do lives after them, the good is oft interred with their bones.

It was not that way with John Paul Jones. His "good" has lived after him. Very few are aware of his other nature. I wish to share that unknown with you. However, it is lengthy and much too long to be concluded here. There will be a Part 2 to the Jones story. It will be published next week.

Let me leave you with the thought that John Paul Jones and World War II Generals Douglas MacArthur and George Patton were of the same ilk, cut from the same bolt of cloth. Each a supreme egomaniac. Each dashing, courageous, lacking in tact, arrogant, publicity seeking, personally flawed, and brilliant. Each with a conspicuous desire for glory. The comparison an inkling of Part 2.

Please return next week for Part 2. I guarantee you will find it interesting and surprising.

POLITICS AS USUAL

Eric Cantor was a big man in the House of Representatives. A Republican, he had represented his district in Virginia for many years. A hard worker, his influence as well as seniority grew. He was #2 in the House. Majority Leader.

He was considered unbeatable. A non-entity by the name of Brat was running a primary against him for the Republican nomination. Brat was a Tea Partier of the first class.

Cantor thought his seat was secure. He did not campaign that hard. He was a 40 percent favorite in the polls. He had raised millions of dollars to finance his reelection campaign. So secure did he think he was, that on election day Cantor was not visiting the polling places in his Virginia district. Instead, he was at a corporate fundraiser in Washington, D.C.

His opponent Brat had only raised $200,000. 

Cantor was decidedly to be the winner. He was not. He lost. Got his ass whipped. by 11 points.

Cantor lost because he forgot all politics is local. He did not spend enough time with his Virginia constituents. He forgot the Rotary lunches, school events, etc. He had become a big man. He was Majority Leader.

Brat hit hard in the campaign that Cantor was the tool of big business, that he favored special tax credits to billionaires instead of taking care of normal folks.

Brat was correct. His message got across. Cantor lost.

The day after the election, Boeing's stock tumbled. It dropped six points in a week. Though a big company, Wall street questioned Boeing's viability with Cantor not in office. Cantor was Boeing's biggest benefactor in Washington.

Boeing sells airplanes. To foreign purchasers. In big numbers. These deals have to be financed.There is a United States agency known as the Export-Import Bank of the United States (Ex-Im Bank). Ex-Im Bank makes loan guarantees and/or insures foreign purchases. The long and short of it was that Boeing could make a deal to sell planes to a foreign country and the financing was easily/already arranged via the Ex-ImBank. Makes business a hell of a lot easier to do.

In 2012, 82 percent of Ex-Im Bank's loan guarantees went to Boeing customers.The amount involved was $11.6 billion.

Boeing knew who their man in Washington was. Boeing was the biggest fund raiser for Cantor's primary campaign. $5.4 billion. The largest contributor  was Goldman Sachs. Cantor's wife works for Goldman Sachs. She also works for another bank, the New York Private Bank & Trust.

Boeing and Cantor were joined at the hip. No question about it. Married. Dependent on each other.

The Em-Ix Bank has to be authorized every three years by Congress. It was last authorized in 2012. It has to be authorized shortly for a new three year period beginning in 2015.

Cantor carried the ball for Boeing. His position as Majority Leader gave him great clout. Boeing was confident the Bank would be reauthorized. So was Wall Street.

Cantor is no longer the big man, however. Within days of losing, he resigned his position as Majority leader, effective as of a day certain. A new Majority Leader was elected. Kevin McCarthy, Republican of California.

McCarthy had supported the Ex-Im Bank's re-authorization in 2012. He announced however that he was not supporting it this time around. He said the private sector could handle the problem. The government was not required. Probably so. However from Boeing's perspective, why have its foreign purchaser go out and negotiate a loan when the United States could in effect provide for it easily.

McCarthy's change of heart did not come about because he thought non-authorization was the correct thing to do. It came about because he wanted to be Majority Leader. In order to be elected, he needed the support of Tea Party members in the House. A condition of their support was his not supporting authorization.

Tea Party members viewed the Ex-Im Bank as a form of corporate welfare. It was. They also viewed it as corporate cronyism. It was.

The Ex-Im Bank was Boeing's piggy bank. Without it, Boeing will survive. However, life will be a bit more difficult, deals a bit laborious to finance. That is why the stock market is concerned about Boeing. Some analysts even talk in terms of Boeing's viability. A life or death scenario. I doubt it will come to that.

It has been said truth is stranger than fiction. In this situation, it is. Who could have conceived of a plot involving a major political figure, untouchable, could not be defeated, who is defeated by an unknown. Add to it a major international corporation who is now facing economic problems because of the loss of the political leader who greased its way in Washington. Wall Street becoming nervous. Throw in the politician's wife who works for one of her husband's largest financial contributors. Top it off with the defeated leader being replaced with a man who does not support the underpinnings of the major corporation.

It happened.

I close with a question I have been raising of late. What happened to government of the people, by the people, for the people? Especially the .....for the people part.