Public Thinker: Destin Jenkins on Breaking Bonds

“What if we identified the politics of municipal debt as circumscribing political horizons and futures?”

A leading historian of racial capitalism, Destin Jenkins published two extraordinary books in 2021. The first—The Bonds of Inequality: Debt, and the Making of the American City (University of Chicago Press, 2021)—is a detailed and damning account of how bond finance structures racial privilege in San Francisco and beyond. The second, coedited with Justin Leroy, is Histories of Racial Capitalism (Columbia University Press, 2021), a wide-ranging and interdisciplinary collection of essays on the intersections of capitalism and race. Jenkins is also a prolific public intellectual, writing for the Washington PostThe Nation, the New York Times, and beyond. He has served as capitalism series editor at Public Books, is coeditor of Just Money, and is currently assistant professor of history at Stanford University.

Hannah Appel is an anthropologist and activist whose work focuses on transnational capitalism and finance, debt and debtors’ unions, and the economic imagination. Most recently, she is a coauthor of Can’t Pay Won’t Pay: The Case for Economic Disobedience and Debt Abolition (Haymarket Books, 2020) and author of “Reparative Public Goods and the Future of Finance” (2020). Appel spoke with Jenkins about his current work, what it means to think in public, and what emancipatory finance might look like.

Appel and Jenkins both engage deeply with finance professionals in their work: Jenkins, with the bondmen, ratings agents, and municipal finance officers in his archival work in San Francisco; Appel, with mortgage-backed security underwriters, risk assessors, and the “quant jocks” of high-speed trading in her work on and with Occupy Wall Street.

Hannah Appel (HA): Let’s try to take seriously what Public Books has asked you and me to do here today. The magazine’s Public Thinker interviews seek to “metabolize academic expertise into knowledge that is useful to the public.” How does one do that?


Destin Jenkins (DJ): Big question. Now that the work is out, I get a chance to sit in this identity, and to think a bit more about what it means to be a public intellectual, public thinker.

First, it requires awareness of when to speak and when to stay quiet; it necessitates staying in my lane, deferring to those with whom I’m in solidarity but who know far more about a given topic, and sharing the stories I am best equipped to tell. To be a public intellectual is also to think strategically out loud.

I am a historian, but I am less compelled to show why “history matters.” Rather, to think strategically is to consider how historical analysis of a given phenomenon can help us make sense of the present and, hopefully, open doors to a more promising future.

I would never describe myself as an organizer. Nevertheless, there is a crucial relationship between being a public thinker along these lines and political organizing. I’m reminded of a training I participated in offered by the Center for Third World Organizing. One of the big lessons was to conceive of political campaigns in terms of “ones,” “twos,” “threes,” “fours,” and “fives.” Your ones are your stalwarts; they’re totally committed, in our case, to a progressive agenda. Your fives are on the total opposite end of the spectrum; you’re never going to move those folks. Since then, I’ve come to think about my role as an intellectual in those organizing terms. That is, to help turn threes, who are on the fence, into twos, and to help sharpen the analysis of the ones.

So that’s how I see my role as a public thinker. I’ve sat with some rather dry matters of finance, debt, revenues, expenditures, and so forth. I hope to deploy that knowledge strategically, to try to assist progressive campaigns, including those of which I am completely unaware.


HA: That brings us to The Bonds of Inequality, but also to all your op-ed writing, from the New York Times to the Washington Post to The Nation. In your public writing, you tell us again and again—which is what public intellectuals are supposed to do—that too often the municipal bond market disappears from discussions of inequality, racism and racial capitalism, urban governance, neoliberalism, or financialization. And yet, as your work so powerfully shows, the municipal bond market structures racial privilege, entrenches spatial neglect, and distributes wealth and power. American cities are dependent on financiers, rating agencies, and bond markets for nearly everything. You want clean water? Issue a bond. You want updated public schools or parks to play in? Issue a bond. You want accessible, affordable public transportation, public housing? Issue bonds.

You write for these broader publics—maybe the ones, twos, and threes in the organizing formulation—that care about race and racism, that care about inequality; people who are starting to use phrases like “racial capitalism.” What would it mean for these publics to take the consequences of the bond market seriously?


DJ: I slice the public into two sectors. The first are the folks who know what’s up but need some affirmation—who need to be made aware of some of the intricacies and specificities to confirm their suspicions about inequality, infrastructure, resource distribution. And the second is, believe it or not, a racially conscious group of folks within the world of finance—people who are in the financial sector who, for whatever reason, feel like there’s something that they can do.

For the first public, the goal is to challenge a set of presumptions in some cases and, in other cases, to help folks become more aware of the relationships between cities and lenders; between appointed technocrats and credit-rating analysts; between taxation, fees, and interest payments. I’d like to offer them a way to challenge a powerful and dominant narrative of fiscal crises. That narrative goes like this: such crises are due to the excessive demands of minorities, the contractual obligations to public-sector workers and pensioners that ultimately drain municipal coffers and can be remedied only through austerity or retrenchment.

But if we focus on the redistributionary aspects of municipal debt, on the demands of lenders, on the constraints on governing officials, what if we saw crises as rooted in fixed interest payments at exorbitant high rates? What if we identified the politics of municipal debt as helping to circumscribe political horizons and futures, as limiting the pot of funds on which cities rely, as exacerbating the squabbles among various constituencies within cities, as shaping who or what is worthy of investment and who is not?

To think about municipal debt and its relationship to race and inequality is to challenge that dominant narrative about the causes of a fiscal crisis, and the blame game that has been essential to the projects of privatization and retrenchment.

As for that second public, that racially conscious segment within the financial sector, there is a different goal. And that is to push them to see themselves as more than just intermediaries, as more than just channeling the savings of investors into the borrowing needs of municipalities, more than just intermediaries within some neutral bond market. Instead, the goal is to get them to actually see themselves—whether it be the regulators working for the Municipal Securities Rulemaking Board, folks working for credit rating firms, financiers, or asset managers—as having unique access, or access to unique levers of power; as political agents who can shape resource distribution along antiracist lines.

HA: You teach us that racism and racial justice organizing are central to bond finance. “The mere threat of a riot,” you write in Bonds of Inequality, “raised the cost to borrow.” Just over a year ago, protestors burned the Third Precinct in Minneapolis, and we can imagine that raised the city’s cost to borrow to fund public infrastructure or may have shifted the profit structure of bond financing to what’s called “user-funded” municipal services, something the bondman Alan K. Browne talks about in your book.

We see this in Ferguson, Missouri, too, where municipal fines and fees (for parking tickets, leaving a trashcan on the street, broken brake lights, court fees) led to 33,000 arrest warrants in the majority-Black city of merely 21,000 people in 2013, the year before police murdered Michael Brown. Yes, arrest warrants for fines and fees outnumbered the population of Ferguson that year. In 2014, the police murdered Michael Brown, and we witnessed uprisings and the birth of the Black Lives Matter movement in Ferguson. Shortly thereafter (and in the wake of Fant v. the City of Ferguson), the US Justice Department released the Ferguson Report, showing how the city was targeting residents with fines, fees, and arrest who were the least able to pay.

At the release of this federal report, which condemns the city for robbing its Black residents of both their money and their freedom, what happens? Is it a win for racial justice? No. Moody’s Investor Services downgrades Ferguson’s credit rating. When the ratings agency is asked to explain its decision, it refers explicitly to the Justice Department report citing exploding costs of litigation and the projected legal costs after months of unrest. So Moody’s uses these racist policing practices and the idea suggested by Alan K. Browne (proliferating fines and fees) as a pretext for cutting off bond funding.

That’s a long-ass story, but I’m going to use it to ask two questions:

First, I’d love to hear more from you about geographies of Black uprising and municipal debt. Where do those come together historically? You told us a little bit about San Francisco, but I’d love to hear a more expansive geographic and historical account. What are we looking at?


DJ: In 1995, local governments in Nevada were allowed to back municipal debt with so-called court administrative fees. By 1999, fees attached to misdemeanor fines were pledged as a revenue source for a muni bond issue in Clark County, Nevada. Back then, according to one Moody’s analyst, this was fairly uncommon. But, as you’ve just noted, this form of regressive extraction is now common practice.

Some have recently questioned whether reliance on criminal sanctions poses a long-term risk to investors. What does that mean in terms of cutting off funding for those municipalities who have plundered their most vulnerable citizens? To what extent can arguments about risk be used to pressure local officials to look elsewhere, perhaps in more progressive directions, for revenue sources to satisfy their obligations to bondholders? Perhaps it means that some of those municipalities may decrease their reliance on criminal sanctions. That’s an optimistic read on the ways in which financial markets might be used to compel officials to move away from fines and fees.

My book takes up your question of geographies of Black uprisings through a focus on mid-1960s San Francisco. But let me imagine my younger self zooming out to answer this question during a doctoral examination. How would I map the contours of that story?

For example, a crucial touchstone, perhaps the point of departure, is the Haitian Revolution, the pinnacle expression of Black rebellion. Think about what it meant for Black folks to overthrow slavery, only to be slammed with a hundred-year indemnity, which drained the coffers of Haiti.


HA: Yes, such an important example. It also calls to mind how, in the wake of Kenya’s independence fight, Britain—with the World Bank as intermediary—imposed a two-decade debt. This was to reimburse settler colonists for “lost property.” It’s a transnational geography of the debts of Black uprising, on the one hand, and the annuity stream of whiteness, on the other. It’s not just intergenerational Black debt; it’s also intergenerational white wealth.


The Arch of Injustice

By Steven Hahn

DJ: Exactly, exactly. So what if, from our discussion of 19th-century Haiti, we moved to consider the radical posture of Black parents after the Civil War. We could incorporate W. E. B. Du Bois’s argument about the “general strike” as a form of uprising that was decisive to the Civil War. We could think about the insistence among Black people that public school become a universal benefit funded by the state.

We could think about debt financing during the early part of Reconstruction. Some of it led to corruption, to be sure, but public financing during Reconstruction is not a story reducible to corruption. But just as we considered the indemnity on Haiti, we might consider the so-called Redeemers, the folks who overthrew Reconstruction, and how their decisions to repudiate debt haunted southern municipalities well into the 20th century.

So there is another play on, or different flavor of, what Black uprising looks like (a general strike; political governance), with implications for municipal debt. We’ve already gestured toward two other examples in the 20th century, which demands that we consider the relationship between decolonization and indebtedness, at one level, and the modern civil rights movement, the forms of Black protest in the ’60s, and its implications for indebtedness—to place, in other words, decolonization alongside the civil rights movement and to consider the fiscal consequences of those expressions of Black uprising within a transnational geography.

Your question about geographies of Black uprisings also made me think of Elizabeth Hinton’s new work, America on Fire (2021). She makes a persuasive case for the importance of semantics. It is political to see the uprisings of the 1960s and ’70s not as riots but as rebellions. She also explores those rebellions in smaller towns. So it’s not just Newark, Detroit, San Francisco, Harlem, but rebellions in smaller municipalities, too.

So what is the relationship between the problem of credit discrimination against smaller municipalities and subsequent uprisings in those municipalities? We don’t know the answer to that. What would it do to explore the fiscal dimensions of Hinton’s powerful story?


HA: My second Ferguson-prompted question is about Black rebellion. And I love you bringing in Du Bois here on the radicalization of parents and the general strike because that’s what I want to talk about. In Bonds of Inequality, you tell us that as San Francisco’s Black community radicalized during the civil rights movement, as the Black Panthers rose to prominence in the Bay, the San Francisco bondsmen didn’t want to “invest in radicalized Black children.” They intentionally declared that they would not resource revolution.

Now, they may not want to, but I’ll speak for myself here and perhaps make an assumption about you: I do. We do. We want to invest in the speculative dreaming and grounded world-making of radicalized Black children.

So, in the wake of these geographies we just discussed—Haiti, Reconstruction, Kenya, Ferguson—what could an emancipatory “Black bond politics” (another phrase of yours) look like today?

Here in California, we’ve had the Debt Free Justice Coalition, which folks should check out. They’ve had some really powerful victories abolishing a bunch of carceral-related fines and fees. People’s Budget L.A., down here in L.A., has been doing some interesting Black bond politics stuff. The Debt Collective has a new Abolish Bail Debt tool out and has just bought a bunch of private probation debt on the secondary market in an effort to build carceral debtors’ unions. So I guess my question here is: Is it possible to think about abolitionist or reparative bond politics? What do you think about when you think about the potential of Black bond politics?


DJ: There are different varieties of Black bond politics. One expression is through ownership of municipal bonds. Becoming a bondholder and acting as a lender to American cities might allow one to shape the terms of local governance that presumably benefits Black communities. Relatedly, as my colleague and dear friend N. D. B. Connolly has shown, Black folks made citizenship claims in the Jim Crow South in part by becoming holders of local government debt. I think the former is ultimately drawn from the ideology of Black capitalism, and the latter is indicative of the ways in which Black folks fought to secure city services by insisting they were property owners (and taxpayers).

A third expression of Black bond politics was through boycotts, and that is what I talk about in the book. During the mid-1960s, Black San Franciscans revoked their support for local bond referendums on the grounds that they had gotten so little in return. The Sun Reporter encouraged Black San Franciscans to torpedo local bond issues and, in effect, the city’s approach to debt-financed economic growth.

Those are three examples from the 20th century. But as far as what Black bond power would look like today, it’s a great question. And your idea about abolitionist or reparative bond politics is quite a provocation.

Here the distinction between individual and consumer debt versus municipal debt really matters. I am inspired by the efforts to abolish administrative carceral and student debt, inspired by efforts to scale up to abolish individual debts.

But how do you actually abolish municipal debt? Does that, for instance, look like repudiation? Does it look like bankruptcy? Does it look like municipal dissolution and redrawing the political boundaries of the indebted municipality? If abolition looks like repudiation, we should be prepared to think about and guard against the historical memory of creditors; how today’s violation of a debtor-creditor arrangement may become the basis of penalties well into the future.

I talk about this in my chapter in the edited volume, Histories of Racial Capitalism. During the late 19th century, creditors used The Nation and other financial outlets to demand the creation of a “Blacklist of Repudiation,” in effect, a way to track and sanction municipalities that shirked their obligations to creditors. Well into the 1920s, various stakeholders worked to explain away the “sins of the fathers.” So if abolition looks like repudiation, municipalities better think long and hard about that because of the historical memory of bondholders and market penalties.

If we thought about abolition through bankruptcy and/or municipal dissolution, this requires state legislative approval. And this leads to the classic questions: Reform or abolition? Is the state an essential terrain of struggle or an impediment? Could a debtors’ union become a way to secure state legislative power? And what about the challenges of abolition on a global scale, and given the particular institutional designs across nations, territories, and so forth?

I don’t quite know what an abolition looks like if it doesn’t look like repudiation or absorption. So, reparative bond politics could look like the federal government absorbing older debts, making creditors whole—if, of course, people agree that’s something that should be done. Federal absorption might allow municipalities to devote existing expenditures (earmarked for fixed-interest payments) toward human-centered, restorative investments. That brand of reparative bond politics would involve the federal government. Again, you can see my underlying assumptions: the state is crucial to all this stuff. But maybe I’m missing something.

HA: No, I didn’t have some answer in mind, but as you’re talking it inspires a bunch of thoughts. One of them is about your description of a reparative bond politics, which would mean the federal government stepping in and resourcing, making creditors whole, allowing that to be potentially a terrain of compensation and reparation, which would free up municipalities to devote resources that otherwise would have gone to interest and principal payments to reparative public goods, let’s say. To me that is a form of debt abolition. Debts can be abolished at the federal level in a way that they can’t be abolished at the municipal or state level.

That’s particularly true in the United States, as we know, having been hanging out in the outskirts of modern monetary theory, which we’re going to be talking about in a minute. Just as you were narrating what to you was reparative, I was like, oh, that’s interesting, especially for our work at the Debt Collective, where we are careful to reject the frame of debt “forgiveness” and take the frame of debt abolition seriously. (Shout out to Dylan Rodríguez at UC Riverside for pushing us in this direction.) In the student debt space, where our union has won over ten billion dollars of debt abolition for folks who hold debts from for-profit colleges, people will talk about forgiveness, but that’s never a word we’re going to use. That debt is not a sin of the debtor (in need of forgiveness), but a relationship of exploitation that needs to be abolished.


DJ: Yes, yes. That’s well taken. So the distinction between abolition and reparative perhaps turns on the extent to which you make creditors whole. To abolish municipal debt is to terminate long-term obligations to the lender, and to demand that we think about the life-changing consequences for marginalized communities. If you decide to make creditors whole, that seems to me to be more reparative; it removes the more radical abolitionist edge, an edge that is really a negation of private property rights.


HA: That’s a meaningful distinction. I hear you saying that what’s at stake really is the investment in private property, and that’s a profound insight. I guess there are two other things that are probably worth putting out there that this brought up for me.

One of them is a proposal from almost a decade ago by Saqib Bhatti at ACRE, Action Center on Race and the Economy, for cities indebted to Wall Street to form municipal unions, essentially, and bargain collectively for better terms. It’s an idea that we’ve thought about quite a bit at the Debt Collective because it asks: What can Oakland, what can San Francisco, what can Detroit, what can Ferguson do on their own in the face of such a well-networked national and international financial industry? Not much. On the other hand, as we know from your book and beyond, the accounts of any one of those municipalities, let alone multiple municipalities at the same time, actually make them very important customers for these banks. So, we could ask, which municipalities hold accounts at Wells Fargo? Which hold accounts at Bank of America? Those municipalities together could use their leverage to demand better terms, even (perhaps?) to refuse to be downgraded.

This is the intervention of Saqib’s piece we at the Debt Collective really appreciated: cities don’t have to go it alone. They have potential leverage over these financial institutions to set the terms: Are you going to put our pensioners first in line, or are you going to put the hedge fund first in line? I just wanted to lift up Saqib’s idea as a potential lever of power that municipalities have over these financial institutions that has not yet been explored.


DJ: I really appreciate that. I have to look into the idea of municipal unions. I want to just pull out a vignette from my book because it speaks to this question of leverage.

In June 1971, the San Francisco Bay Guardian offered a forensic account of San Francisco’s deposits with various commercial banks and compared deposit returns to those of other cities, such as Oakland and Los Angeles. What they found was that essentially San Francisco deposits were invested at remarkably low interest rates, and that it would have been better to put that money in other money market accounts or other financial instruments.

Here was a left-leaning publication playing on the terrain of finance, unknowingly imagining ways out of a fiscal squeeze through financialization. But there is also something striking about the changing forms of leverage during the 1970s. In August 1974, San Francisco mayor Joseph Alioto testified before Congress. He more or less said that the older forms of leverage cities had over commercial banks were beginning to crumble. He never explained exactly how, but he was basically saying that, back in the day, if the city didn’t have several competitive bids for its bonds offered for sale, city officials could pick up the phone and tell underwriting banks there “sure as hell better be a bid next week.” But by the early ’70s, with increased domestic and international investment outlets for commercial banks, that leverage was weakening.

I find fascinating the idea of municipal unions; I’m intrigued by cities acting as collective entities, organizing together to gain more leverage within the bond market. But are we not already operating within the market, and according to its rules that disfavor debtors? I also wonder if, especially when you think of hedge funds and the diversification of their portfolios, the theory of change underlying the idea of municipal unions is outdated (outdated in the sense of assuming that you can place leverage on financial institutions as a function of municipal deposits). In our present moment, are financial institutions that depend on short-term asset appreciation likely to respond to a potential loss of municipal deposits? But I do think that always the point is collective mobilization, in this case of cities, and considering the terms and basis of solidarity (i.e., municipal unions among cities within the “Rust Belt”). Indeed, cities collectively organizing to place leverage on financial institutions is a wise move.

HA: I’d like to end by continuing to talk about leverage, and how to use it to build alternatives. First we need to ask: How has the most recent wave of financialization in municipal governance changed relationships with commercial banks or other financial entities? Knowing this helps us to ask: Where are the potential leverage points? Banks? Hedge funds? Or, more likely, do we need an analysis of how financial instruments are spread across multiple institutions to spread risk, and so, how to know that financialized landscape in order to concretize leverage and strategy?

I’m asking these questions in our particular historical moment—2021—which offers us what I see as a potential-filled intersection of extended racial justice uprising and foment in heterodox economic thinking. What does it mean to bring the public banking movement together with the People’s Budget L.A. or M4BL? What does that look like?

My last question to you is precisely about that conjuncture of Black uprising and heterodox economic thinking: the Reconstruction Finance Corporation comes up repeatedly throughout your book, and of course Saule Omarova (just nominated for comptroller of the currency!1) and Bob Hockett at Cornell have reintroduced this in their recent work, which you’ve featured at Just Money. Or thinking about Darrick Hamilton and Sandy Darrity’s work on baby bonds, federal jobs guarantee—there are so many ideas popping in this moment. So the last thing I want to hear you speculate on, imagine around, teach us about, is your own thinking on alternative sources of municipal revenue, something you refer to in the book quite a bit—and what you also refer to as “political economic alternatives to finance.” I’m going to end this question with an amazing quote you give us from former mayor George Moscone, who once said that there were “no pots of gold, a secret cupboard, or some budget gimmick which ‘makes it all work out.’”

It’s such a crazy quote because to me there are pots of gold, there are cupboards, there are gimmicks, and they have existed in relative stability, as you show us, for nearly a century. But those cupboards belong to the bondsmen; those pots of gold belong to the ratings agencies. They built the motherfucking cupboard. So they have the cupboard, and all the gold just goes into their cupboards. What cupboards are we building? What do we build for our own gold? What does that look like?


DJ: In terms of alternatives, there are two things that come to mind. The first is that we know where “the bag” is. We know of People’s Budget L.A. and so many groups who have criticized tax abatements and subsidies and all these things that are allegedly designed to stimulate economic growth but which, for the past 50 years, if not longer, distributed the spoils upward. We may know the right questions to ask, and the answers to those questions. But how do you enforce, create a mechanism to actually secure—and not just tax theoretically but actually commandeer and secure revenues from corporations and wealthy individuals who have the power to shift their income and capital to offshore tax havens and other tax instruments, of which municipal bonds are an important example? How do you actually accomplish and defend a 21st-century vision of “abolition democracy,” to return to Du Bois?

As far as alternatives to the regressive extraction of fees, fines, forfeitures, and the stuff you talked about with regard to Ferguson, I’m thinking a lot about the work of Davarian Baldwin and his new book, In the Shadow of the Ivory Tower (2021). I think he’s right to consider PILOTS, or payments in lieu of taxes.

So one thing that’s very interesting about private institutions, and universities in particular, is that even as the NYUs expand to Abu Dhabi and elsewhere, these institutions are still place-based; they occupy land that is tax-exempt. These institutions offer payments in lieu of taxes. But if you take a Harvard University, with a massive endowment and one that just posted a stunning return on its investment, their PILOTs should be much greater. Since these institutions present themselves as contributing to the public good even as their campuses are private spaces inaccessible to non-Harvard or non-NYU or non-Stanford affiliates, there is an obligation of those private universities to the communities of which they are part. And the hope is, increased funds can obviate the excuse of local budget crises and attempts by local governments to plunder their most vulnerable residents.


This article was commissioned by Caitlin Zaloom. icon

  1. On December 7, Saule Omarova withdrew her nomination to head the Office of the Comptroller of the Currency, following contentious hearings where Senate Republicans issued personal attacks suggesting that Omarova held “communist” views.
Featured Image: Destin Jenkins. Photograph courtesy of Destin Jenkins.