Submitted by Roldo on Wed, 01/21/2009 - 10:41.

I was going through an overstuffed file that had been resting on a shelf in the cellar. The broken fake leather file held old letters, cards, complaints and even some compliments going back to the 1960s.

A note from 1989 that I can barely read said, “I hope you’re still around 20 years from now… Nobody else will monitor to see if the Jacobs brothers keep their promise to help the neighborhoods.”

Well it’s a surprise to even me that I’m still around.

But even if I were not I could have answered that message correctly 20 years ago. The answer: ABSOLUTELY NOT. Jacobs was never a giver but always a taker.

However, longevity gives real advantage in watching a community as I have done. I’ve remained a very local viewer of a narrow slice of Cleveland politics and history. I did it with intense persistency. Some would say obsession.

It has enabled me to have been around at historic times as this city declined. I’ve watched decisions made and how they were made. And who did what to whom. I tried to do it with a critical and non-conventional eye.

I’ll try to use my experience to trace back to see how we got where we are now. I’m going to use my limited knowledge to sketch out some of the actions that took us to where we now are. I’m not sure how this will work. I will use my writings of the last 30 years or more to try to look at the past as it has led us to the present.

Conventional wisdom would trace Cleveland’s downfall back to Dec. 15, 1978. At least that is a day of infamy, as they say. At midnight on that date, the city fell into default – not bankruptcy as some seem to think.

I believe one of the diseases that infected Cleveland – especially its politics – was in large part the irrational desire of the Cleveland Electric Illuminating Co. to relieve the city of its electric system. Pilfer would be a good description.

In April, 1976, I wrote in Point of View (During the discussion, I’ll be relying on POV heavily, a newsletter I published for 32 years, 1968-2000):

“The impending sale of the Municipal Light Plant to the gouging Cleveland Electric Illuminating Co. (CEI) may have less to do with Muny’s incompetence than with the fiscal irresponsibility of the (Ralph) Perk Administration.”

If you remember, Mayor Dennis Kucinich later refused to pay Cleveland banks some $15-million in city borrowings and thus the city defaulted. The condition was that he either pay up or sell the Municipal Light System, known as Muny Light.

The sale of the city’s electric system was always the crux of the matter.

Perk had been selling assets to keep the city afloat. In 1973, he sold the city’s sewers to the Regional District for $32-million and spent that sum in two years. Perk in this period also unloaded the city transit system, some parks, and its stadium and port facilities.

Muny was the key to prolonged fiscal survival for Perk. He was relying on the sale of the system to replace bond fund money he had misspent. He needed to sell another asset. I had crowned him Mayor Give-Away for his selling binge.

Just how dire Perk found the city’s financial state, I wrote in April, 1976, had been revealed in a report by Cleveland State University professors Edric Weld and John Burke.

“By 1973,” said the report, “Debt due for repayment or refinancing equaled 50 percent of the total tax receipts. As of Jan. 1974 debt due equaled 121 percent of total revenue expected from taxation during the year. And unless there is a major increase in tax rates in the near future, the problems that will face the city in 1978 and 1979 when the short term notes first issued in 1972 and 1973 can no longer be renewed will be severe, since the amounts that must then be repaid or converted to new bonded debt will approach 50 percent of the total tax revenue.”

In essence, the CSU report foretold Cleveland’s default. Perk had placed the city in a precarious fiscal position.

Perk was spending bond money to keep the city afloat. This could not continue forever.

Indeed, it has always been my contention that part of Perk’s solution to his problem was to sell the light system and grab some needed cash.
Perk’s need for cash coincided with a long-standing desire of CEI to put Muny Light out of business. CEI was pathological in its determination to put the city’s system out of business. Muny Light was an ideological craw in the throat of CEI executives. They felt the public sector had no business doing what the private sector should do.

In a 1970 inter-office CEI memo stated that a five-year plan’s objective was “To reduce and ultimately eliminate the tax-subsidized Cleveland and Painesville Municipal Electric Systems.”

The situation at Muny Light, said the memo, “is one which has undergone considerable and severe change during the past year. Outages have been frequent and often of major proportion. It has received ‘bad press’ because of this poor continuity of service…”

CEI should know since it and a major law firm helped cripple the city’s municipal system and cause numerous outages that damaged its reputation.

In future columns I’ll review how CEI tried to destroy Muny Light, a factor that has played a large part in the city’s default and decline.

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Thank you so much, Roldo, for everything and now!

First, let me pledge my support to putting your archives in the most useful formats and places possible, so they are digitally preserved and searchable and safe and available to all for free forever. I'm updating the tech plan for realneo, after a good 4 years of kicking this version around, and it will include capabilities to organize your content well. 

In the mean time, I treasure every bit of new insight you bring to the community and value the current value and historical memory of your work - you offer an on-line course in journalism, history, new economy activism and civic responsibility all rolled into brief lessons.

Now to really learn about the real history and current reality of realneo, while the caues of our problems are still within reach and may be eliminated. I want to help put an end to the work of the people who have hurt so many in this ciommunity over the past decades, and make certain the historical memory about them is correct. 

I've heard it said by good, old establishment sources in the know that past Jones Day Managing Partner and current Republican Party kingpin Dick Pogue was personally responsible for Cleveland's default - he orchestrated the whole thing. And look at the results for the Republicans.

It seems the Republican party has acted in many strong-arm ways to subvert our Democratic leadership and get their cake and eat it too, which is far from obvious from the outside, or through the Repoblican lens of the PD.

Disrupt IT