Wall St hauled way more loot from Detroit than Kwame ever did.

Walter Russel Mead draws a typically broad-minded and even-handed picture of today's urban corruption in general, and Detroit's in particular.

During the long grim slide, much of Detroit’s population fled the implosion; those who remained suffered through declining city services. Schools, police, fire, infrastructure: all the vital services cities are supposed to provide have gone into steep decline. 

But while the city’s mostly low-income and mostly African-American residents struggled to survive civic decline, the ill wind from Detroit blew somebody good: well connected Wall Street firms have feasted on the Motor City’s carcass. 

I know the Wall St banks are in it for themselves but the scope of fees extracted from Detroit is shocking even to me.

Mead links a Bloomberg article that has more details on the banks, and on the breakdown for that near half billion dollar bill owed by broke Detroit...

Banks including UBS AG (UBS), Bank of America Corp.’s Merrill Lynch and JPMorgan Chase & Co (JPM). have enabled about $3.7 billion of bond issues to cover deficits, pension shortfalls and debt payments since 2005, according to data compiled by Bloomberg. Liabilities rose to almost $15 billion, including money owed retirees, according to a state treasurer’s review. 

The debt sales cost Detroit $474 million, including underwriting expenses, bond-insurance premiums and fees for wrong-way bets on swaps, according to data compiled by Bloomberg. That almost equals the city’s 2013 budget for police and fire protection. The largest part is $350 million owed for derivatives meant to lower borrowing costs on variable-rate debt. 

Municipal borrowers from the Metropolitan Water District of Southern California to Harvard University in Cambridge, Massachusetts, have paid billions to banks to end interest-rate swaps that didn’t protect them. In the bets, a municipal issuer and another party exchange payments tied to interest-rate indexes.

Yep, the same interest rate swaps which burned Larry Summers while he was screwing up Harvard University in between his stints screwing up the US economy in an official capacity.

The fact that Detroit was able to dig a hole so deep speaks to a city budgeting process which is delusional and criminally reckless at best.

And what about JP Morgan? The testimony of the JP Morgan employees at Friday's Senate hearing exposes Jamie Dimon as a mendacious thief, and a careless and arrogant one at that.

Who will be held responsible? Nobody. Who will profit? JPM. Who will pay? We will.

But you probably already knew that.