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Is the Best Location in the Nation Really the Mistake on the Lake?

By David Beach

Interstate 90 is a city-parting swath through the west side of Cleveland that permits white-collar suburbanites to move easily downtown to work. It was the Monday after Cleveland had become the first major U.S. city since the Depression to default on its debts, and I was on the road, driving downtown to buy concert tickets.

Music is one thing that Cleveland takes seriously. It has a world-renowned orchestra (You know the joke: What is the difference between Cleveland and the Titanic? Cleveland has a better orchestra.), and is an important center for rock talent. Tonight, the Talking Heads were in town.

As I drove by the steel mills, the latest Cleveland song was playing on the radio. Last summer the big hit had been "There's No Surf In Cleveland, USA," a 1950s rocker by a group called the Euclid Beach Band. Now it was Alex Bevan's "Have Another Laugh On Cleveland Blues."

After the song, Kid Leo, the gravel-voiced WMMS d.j., came on the air with an amazing announcement. It seemed that the mayor's brother, Perry Kucinich, had just been arrested and charged with robbing a local bank. It was hard to believe but it was true. The station had double checked.

The irony of the incident was that the same afternoon Dennis Kucinich, the mayor of Cleveland, had also been making withdrawals. Along with a crowd of reporters and television crews he had walked into the downtown office of Cleveland Trust, the city's largest bank, and withdrew all of his money. The gesture was designed to protest what Kucinich felt was the bank's lack of cooperation in the city's financial crisis. The week before, as the deadline for the payment of $14 million of city bank notes approached, it had been Cleveland Trust that led six local banks in demanding payment.

Needless to say, the Kucinich arrest took some of the sting out of the Kucinich protest. It ended up as just another Cleveland joke, and left people wondering what else could possibly go wrong.


Dennis's first year as mayor had indeed been trouble-ridden. In January 1978, during his first weeks in office he and the city's grossly ill-equipped service department had been greeted by some of the worst winter weather in the city's history. Months later, his firing of newly-appointed police chief Richard Hongisto sparked a recall election which eventually fell just 236 votes short of ousting him from office. His administration, staffed primarily by unusually young and inexperienced supporters whom the Cleveland business establishment and press continually charged with ineptitude and hostility, had to deal with the incomprehensible financial records left by the previous administration of Republican Ralph J. Perk. Then on Dec. 16, Kucinich's refusal to make political compromises and devise a financial package that the banks would accept plunged the city into default.

When he faced the city's financial crisis, Dennis J. Kucinich had won two elections for the office of mayor of Cleveland (the second being the recall election) by being a kind of urban populist in a city composed almost entirely of poor, working-class ethnics and blacks. His slogan was "Power to the People," and he waged war against the "establishment" that exploits the city for its own profit from its downtown offices and suburban homes.

Kucinich's symbol is the city's 64-year-old Municipal Light Plant (Muny Light), which provides low-cost electricity to thousands of Cleveland users. Although the plant is plagued with maintenance problems and must now buy its power from the area's commercial power company, Cleveland Electric Illuminating (CEI), Kucinich believes he can make the system profitable again. The city's creditors feel that Muny is too great a drain on city resources and should be sold to CEI. However, Kucinich refuses to sell, charging that CEI and the banks are conspiring to play politics with the city finances so that CEI can "steal" Muny Light and thus become Cleveland's only power company. (CEI's and Cleveland Trust's boards of directors overlap in two instances.)

The Cleveland banks are conservative banks. They are respected in the financial community and are highly profitable. But although they are sound investments, their actual value to the city is open to question. As one former Clevelander, now practicing law in Philadelphia, wrote in a letter to the Cleveland Plain Dealer:

The major banks of Cleveland have never had any commitment to Cleveland. If one examines their major loans you would find that most of their money is loaned to projects outside of the community. Any commitments inside of Cleveland are simply "cosmetic."

...As a person who pays more than twice as much for electricity here in Philadelphia than I ever paid in Cleveland, I strongly support the mayor in his fight against the forces which would make Cleveland a one-company electric monopoly.

During the week following the default, amid the prospects of mass layoffs of the city's safety forces and threats of strikes and civil disorders, Kucinich finally backed down on the Muny Light issue. He was forced to sit and watch at an emergency Cleveland city council meeting as fiery president George L. Forbes rammed through legislation that left the sale of Muny Light and a city income tax increase up to the voters in a Feb. 27 referendum.

This move satisfied the banks and they promised not to take any legal action against the city until after the referendum. But even with the banks temporarily placated the city's financial difficulties are far from being over. Cash-flow problems persist and other creditors are becoming restless.

Ultimately, Cleveland faces the same long-term economic problems that all the major cities of the Northern industrial belt face--problems such as shrinking populations and higher energy costs. And Clevelanders are able to take some consolation from the fact that although confrontation politics and eccentric personalities may have conspired to make Cleveland the first major city to default since the Depression, it will probably not be the last.

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