Water Crisis In Flint, MI

Opinion: The economic origins of Flint’s turmoil — why austerity has failed

On Tuesday night, Michigan Gov. Rick Snyder addressed the ongoing catastrophe in Flint, a city that has been ravaged by economic collapse, by drugs and most recently through lead poisoning on a truly massive scale.

It was a speech that deftly interwove personal responsibility with self-exoneration, and repeatedly laid into the third parties that Snyder alleged are really to blame for contaminating the city’s water supply. What he failed to mention was the heedless austerity that led to this situation in the first place and how much it will cost to recover from those short sighted budget cuts.

In the wake of the financial crisis Michigan was hit harder than most. The auto bailout helped forestall total collapse, but as tax bases sagged statewide, debt became an increasing problem for many communities already teetering on the edge.

So Gov. Snyder announced that any city in too deep a hole would have its local government taken over by a state-appointed emergency manager, one whose overriding mandate would be to get the local budget under control. In and of itself there’s nothing wrong with telling a community to get its fiscal house in order, but the emergency manager program created a culture that emphasized short-term budgets above all else.

It was a speech that deftly interwove personal responsibility with self-exoneration, and repeatedly laid into the third parties that Snyder alleged are really to blame for contaminating the city’s water supply. What he failed to mention was the heedless austerity that led to this situation in the first place and how much it will cost to recover from those short sighted budget cuts.

In the wake of the financial crisis Michigan was hit harder than most. The auto bailout helped forestall total collapse, but as tax bases sagged statewide, debt became an increasing problem for many communities already teetering on the edge.

So Gov. Snyder announced that any city in too deep a hole would have its local government taken over by a state-appointed emergency manager, one whose overriding mandate would be to get the local budget under control. In and of itself there’s nothing wrong with telling a community to get its fiscal house in order, but the emergency manager program created a culture that emphasized short-term budgets above all else.

Austerity has run amuck on the right wing over the past several years, with politicians of every stripe taking the stage to demand that America must not and can not spend another dollar. “We are broke,” crows Donald Trump, as he and other Conservatives list the programs that the country simply can’t afford any longer (all of which, coincidentally, are favored Leftist priorities).

Snyder hasn’t spared Michigan from this during his time in office, emphasizing cost cutting no matter what the … well, cost. This philosophy has led to statewide reductions in K-12 education, university grants, infrastructure investment, public assistance and much more, with real short term results. Recently the governor announced a $575 million state surplus, money that the state badly needs to address critical issues in both its largest cities and hard-hit rural populations — except that most of it will probably go to the victims of Flint.

Because this is the problem with careless austerity: It ignores the value of long-term investments.

Per se, there’s nothing wrong with spending cuts. Although conservatives have been supremely reckless to abandon revenue as a legitimate tool of public policy, a Liberal’s worst instinct is to throw money against the wall and see what sticks. (Or, in a more sympathetic light, to just try programs and see what works.) The best of all worlds is smart accounting that balances fiscal responsibility with American investment in its own infrastructure and human capital.

The problem is that there’s little evidence either in word or deed that right wing politicians have actually thought through the consequences of their actions. When you cut food stamps, real people go hungry. Gutting funds for higher education consigns a generation to debt and smaller dreams. Eliminate funding for health care, and cancer victims die.

13, 2016 at a fire station in Flint, Mich. The first seven Michigan National Guard soldiers are on the ground at fire stations throughout the city, assigned by Gov. Rick Snyder on Tuesday to help distribute water and relieve residents in relation to the Flint water crisis.Safe drinking water has not flowed from many Flint faucets for almost two years after the state-run city switched its source to the highly corrosive Flint River and failed to treat it properly to protect lead from leaching into it. (Jake May/The Flint Journal-MLive.com via AP)

© Provided by Associated Press 13, 2016 at a fire station in Flint, Mich. The first seven Michigan National Guard soldiers are on the ground at fire stations throughout the city, assigned by Gov. Rick Snyder on Tuesday to help distribute water and…

From a purely financial standpoint, the outcome looks just as bad. Long-term investments make sound policy, because it’s cheaper to repair a bridge than fish bits of I-94 out of the water after it falls down. Nevertheless, infrastructure is one of the first things to go in a political cycle dominated by an allergy to spending, which is why it took Congress nearly a decade to get around to passing a highway bill.

Budget cuts for their own sake take important services as collateral damage. Snyder’s administration is about to experience that firsthand as it oversees one of the most expensive failures of leadership since Hurricane Katrina. Already, he’s had to ask for $28 million in emergency funds to rush out bottled water, make immediate repairs and mobilize police and national guardsmen.

That’s enough money to hire 50 teachers into the Detroit school system for the next decade, and it’s just the beginning. Flint Mayor Karen Weaver estimates that the long term damage could cost the state between $1 billion and $1.5 billion.

Frankly, her numbers might be conservative.

It’s not just the infrastructure damage that will cost Michigan big. The lawsuits are coming, some are already here. They’ll allege negligence and reckless endangerment. They’ll seek medical reparations, property damages, emotional damages, punitive damages and attorneys’ fees, and will show up in massive class action suits filed on behalf of entire postal codes. One case already filed has employed three of a lawyer’s favorite weaponized words: the government’s action “shocks the conscience,” which is code for triple damages.

Cases of Legionnaire’s disease, and associated deaths, have been tentatively linked to the water borne pollutants. That’s another crop of lawsuits right there, and expensive ones.

They’ll plaintiffs will. There’s nowhere for Snyder’s administration to hide, and the state will have to foot the bill for his careless cost cutting.

Yet even that will still be nothing compared to the first parent suit over a developmental disorder. Lead poisoning is a terrifying diagnosis that forces families into years of waiting for the other shoe to drop. Virtually undetectable at first, its stamp on a child is a life sentence of behavioral issues and cognitive impairment. Michigan’s government will be caring for some of these children for the rest of their lives, and the fallout, measured both financially and in human suffering, may last for a generation. A billion dollars will be cheap.

In fact several of the officials involved will be lucky if they don’t end up on the hook personally. Government officials get what’s called “qualified immunity” for their actions, and piercing it is an incredible remedy, but these are also incredible circumstances.

Resolving this will mean money that’s not spent on badly needed infrastructure, schools and development to help rebuild flagging Michigan economies.

Flint is far from the only case of penny-wise-pound-foolish policies shoveled out under the guise of fiscal responsibility. This is a crew of wise men who would advise their neighbor to spare the credit card by throwing a tarp over the soft spot in the roof, while ignoring how much more it will cost when the shingles fall in. When that happens, they’re usually nowhere to be found.

From infrastructure to education to global warming, the right is always ready to borrow from tomorrow to fund a tax cut today. Flint shows the pitfalls of that philosophy and more broadly the bankruptcy of America’s CEO zeitgeist. For years, business leaders have pitched themselves as ready and worthy for politics, because of their backgrounds in the C-suites. They want to run America like a business, but a government isn’t Google.

Companies exists to make money and provide services as a means to that end. American companies do this outstandingly well, but let no one mistake those things. Comcast lays just enough cable to keep from losing customers just like airlines give just enough legroom to sell tickets, because their primary function is not and never will be to provide 30 Rock reruns and travel to Greece. Their primary function is to generate wealth.

Capitalism is the greatest humanitarian achievement mankind will likely ever know, but the private market can’t do everything efficiently. It’s notably poor at adjusting for negative externalities and diffuse, long-term benefits such as those provided by education. That’s why government doesn’t function like a business’s mirror image. Where a company uses services as a means to generate revenue, a government uses revenue as a means to generate necessary services.

Which is why the right-wing ferver to run government like a business and slash budgets to the bone always seems to provide such malicious results. We keep jamming fighter pilots behind the wheel of a supertanker.

America needs clean drinking water, infrastructure, education and more. None of those things are good for the quarterly bottom line, and they all make for pretty crappy movies (not that Michael Bay wouldn’t give it a try), but they’re critical for peoples’ health and the economy’s long term development. We’re short changing those critical investments.

In Flint the first bill came due, and it’s a doozy.

It’s also just the tip of the iceberg.

Source: msn.co

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