Get with the program Detroit!

[Pliny]

Obama and Bernanke have brought the economy back from the brink - Detroit is purposely trying to give the administration a black eye. I think the DOJ should be investigating this, it sounds racist to me? I think there should be some sort of regulations and maybe someone should go to jail.

Or is this still a remnant of the failure of the Bush Administration?

Seriously. it's a sad day as Detroit files for Chapter 9 bankruptcy. It's the largest city in the US to have ever filed for bankruptcy. San Bernardino,CA, Stockton, CA, Jefferson county, Alabama who's next as the economy mends?

http://www.cbsnews.com/8301-201_162-57594436/detroit-files-for-bankruptcy/

[GostHacked]

Neither Obama nor Bernanke brought the economy back from the brink. If anything they are getting closer to it.

Scale it up to the country level, and things are run exactly the same there. How much debt can a nation take on before they are drowning in it?

Wall street gets bailouts, cities do not.

[Shady]

Neither Obama nor Bernanke brought the economy back from the brink. If anything they are getting closer to it.Scale it up to the country level, and things are run exactly the same there. How much debt can a nation take on before they are drowning in it?Wall street gets bailouts, cities do not.

Actually, some of the stimulus money went to cultures to keep from laying off workers. But that money doesn't come continuously. If cities don't make the appropriate changes, it's on them.

[GostHacked]

Actually, some of the stimulus money went to cultures to keep from laying off workers. But that money doesn't come continuously. If cities don't make the appropriate changes, it's on them.

What kind of change could Detroit make? What kind of changes has Wall Street made since they had issues and continue to have issues? Two of The Big 3 got bailouts and Detroit still is going belly up?

[Topaz]

Detroit will come back, New York City had the same problem and they got through it and so will Detroit. http://www.clickondetroit.com/

[Shady]

What kind of change could Detroit make? What kind of changes has Wall Street made since they had issues and continue to have issues? Two of The Big 3 got bailouts and Detroit still is going belly up?

Bailing out GM and Chrysler is essentially bailing out Detroit, on top of the money they received from the stimulus. Yes, Wall Street was nailed out, and have repaid all monies with interest. Detroit could and now will have to scale back unsustainable pension and benefits of its city workers. 20,000 of which are retired and collecting from the city every year.

[GostHacked]

Bailing out GM and Chrysler is essentially bailing out Detroit,..

Not the same. But if we go with that notion, obviously that was not enough to save Detroit.

on top of the money they received from the stimulus. Yes, Wall Street was nailed out, and have repaid all monies with interest.

Negative. Remember the last one was 'QE Unlimited' where the US gov/fed was dumping money into the 'economy' until further notice. I have not heard that it stopped. So no they have not paid back all the monies. I do recall GM or Chrysler apparently paying all the money back and interest, but maybe that was a lie as well.

But scale this up to the country level and that is where the US is heading if the spending/stimulus is not brought under control. And the same problem regarding retirees and pensions are going to come into play.

Detroit could and now will have to scale back unsustainable pension and benefits of its city workers. 20,000 of which are retired and collecting from the city every year.

Apparently the filing is unconstitutional because it cuts back on those pensions that will be paid out.

http://money.cnn.com/2013/07/19/news/economy/detroit-bankruptcy-order/index.html

A Michigan Circuit Court Judge ruled Friday that Detroit's bankruptcy filing is unconstitutional and ordered the case be withdrawn from federal bankruptcy court.

But Michigan Attorney General Bill Schuette said in a statement soon after the decision that he intended an immediate appeal to the Michigan Court of Appeals and would seek to block this latest order from taking effect while the appeal is heard.

The order came in response to motions by lawyers for retirees and pension funds for city workers, who argue the state constitution prohibits cutting pension and retirement benefits, as has been proposed in the bankruptcy case.

If there is no money how do they expect to have their pensions paid out regardless of the constitutionality of the bankruptcy?

[GostHacked]

Detroit will come back, New York City had the same problem and they got through it and so will Detroit. http://www.clickondetroit.com/

The city has lost 25% of it's population in the last decade. Entire neighborhoods are completely gone. Unemployment is more than 40% from what I have read. IF Detroit comes back, it will be a radically different.

[Icebound]

The next few decades will be interesting for cities. Detroit is but the first.

How will cities get the money to replace their crumbling infrastructures? (The short answer is that somebody is not paying for their free ride)

And if cities don't get the money, they will become unliveable. And if they become unliveable, what will happen to the people?

Is it far-fetched to foresee riots in the (potholed) streets?

[Bob Macadoo]

Bailing out the Big Three didn't do much for Detroit; for Pontiac, Dearborn, or Ft. Wayne it did wonders. No way anyone making union money is living in the crime pool that is Detroit. If Toronto lost a quarter of its pop. they'd be hat in hand too.

[Bonam]

If there is no money how do they expect to have their pensions paid out regardless of the constitutionality of the bankruptcy?

A lot of people seem to think that reality is subject to the their whims and decrees. Pretty soon, they will have to wake up.

[Shady]

A lot of people seem to think that reality is subject to the their whims and decrees. Pretty soon, they will have to wake up.

Yep. It's why public sector unions are a bad idea.

[kimmy]

Bailing out the Big Three didn't do much for Detroit; for Pontiac, Dearborn, or Ft. Wayne it did wonders. No way anyone making union money is living in the crime pool that is Detroit. If Toronto lost a quarter of its pop. they'd be hat in hand too.

That is the only comment in this thread that matters.

People trying to make Detroit's bankruptcy into some kind of referendum on the automaker bailout do not understand the reality of the situation.

The reality of the situation is that everybody who can afford to has left Detroit and moved to its suburbs, leaving Detroit itself with a fraction of the tax base it used to have, but massive financial obligations to keep up.

[Wild Bill]

The reality of the situation is that everybody who can afford to has left Detroit and moved to its suburbs, leaving Detroit itself with a fraction of the tax base it used to have, but massive financial obligations to keep up.

That's part of it, Kimmy, but not all.

Detroit grew up with a much larger population all making a good income, based on the automotive industry. Its public sector workers were also paid good wages, all based on income and taxes on an industry everyone believed would last forever.

Of course, the easy ride came to an end. The auto industry no longer employs anywhere near the numbers of decades past.

So people didn't leave Detroit for nice homes in the suburbs. They left because they no longer had jobs in Detroit!

It would seem that Detroit did not have much of a diversified economy. People had no employment opportunities - so they left. As the job cuts deepened so did the revenue losses to the city.

Cities are run by politicians. Politicians don't keep getting re-elected by telling people they are going to get less services than they did before. They also have to negotiate contracts with their unionized workers. Those workers are going to rabidly resist any cuts in pay or jobs.

So everyone goes on for some years as if things are able to be sustained, but of course they aren't. Everyone hopes for a miracle - the automotive jobs will all come back or some new technology will take its place, hiring all those who had lost their jobs banging bumpers on cars.

Finally, the chickens come home to roost. The whole house of cards falls down.

Then everyone says to each other "How could this have happened?".

It just seems to human nature to fool ourselves. Not everyone, of course. The smart ones got the hell out of town!

It's sad, but oh so predictable!

Edited July 20, 2013 by Wild Bill

[socialist]

That's part of it, Kimmy, but not all.

Detroit grew up with a much larger population all making a good income, based on the automotive industry. Its public sector workers were also paid good wages, all based on income and taxes on an industry everyone believed would last forever.

Of course, the easy ride came to an end. The auto industry no longer employs anywhere near the numbers of decades past.

So people didn't leave Detroit for nice homes in the suburbs. They left because they no longer had jobs in Detroit!

It would seem that Detroit did not have much of a diversified economy. People had no employment opportunities - so they left. As the job cuts deepened so did the revenue losses to the city.

Cities are run by politicians. Politicians don't keep getting re-elected by telling people they are going to get less services than they did before. They also have to negotiate contracts with their unionized workers. Those workers are going to rabidly resist any cuts in pay or jobs.

So everyone goes on for some years as if things are able to be sustained, but of course they aren't. Everyone hopes for a miracle - the automotive jobs will all come back or some new technology will take its place, hiring all those who had lost their jobs banging bumpers on cars.

Finally, the chickens come home to roost. The whole house of cards falls down.

Then everyone says to each other "How could this have happened?".

It just seems to human nature to fool ourselves. Not everyone, of course. The smart ones got the hell out of town!

It's sad, but oh so predictable!

When the bond holders get told they'll have to settle for 8 cents on the dollar and wait 2 years to collect, other cities will have a tough time getting loans if their finances are not in order. This could indeed get a domino effect going.

[socialist]

The Ten Poorest City’s
City, State, % of People Below the Poverty Level
1. Detroit , MI 32.5%
2. Buffalo , NY 29..9%
3. Cincinnati , OH 27.8%
4. Cleveland , OH 27.0%
5. Miami , FL 26.9%
5. St. Louis , MO 26.8%
7. El Paso , TX 26.4%
8. Milwaukee , WI 26.2%
9. Philadelphia , PA 25.1%
10. Newark , NJ 24.2%
U.S. Census Bureau, 2006 American Community Survey, August 2007
Detroit,MI (1st on the list) hasn't elected a Republican mayor since 1961.
Buffalo,NY(2nd) hasn't elected a Republican mayor since 1954.
Cincinnati,OH (3rd) hasn't elected a Republican mayor since 1984.
Cleveland,OH (4th) hasn't elected a Republican mayor since 1989.
Miami,FL (5th) has never had a Republican mayor.
St. Louis, MO (6th) hasn't elected a Republican mayor since 1949.
El Paso,TX, (7th) has never had a Republican mayor.
Milwaukee, WI (8th) hasn't elected a Republican mayor since 1908.
Philadelphia, PA (9th) hasn't elected a Republican mayor since 1952.
Newark, NJ (10th) hasn't elected a Republican mayor since 1907.

However, it's been republican presidents and governors who have caused the most damage to these cities.

Edited July 20, 2013 by socialist

[socialist]

Detroit has been unable to get itself out of the hole dug by the Bush administration.

Edited July 20, 2013 by socialist

[socialist]

[Shady]

The Ten Poorest City’s

City, State, % of People Below the Poverty Level

1. Detroit , MI 32.5%

2. Buffalo , NY 29..9%

3. Cincinnati , OH 27.8%

4. Cleveland , OH 27.0%

5. Miami , FL 26.9%

5. St. Louis , MO 26.8%

7. El Paso , TX 26.4%

8. Milwaukee , WI 26.2%

9. Philadelphia , PA 25.1%

10. Newark , NJ 24.2%

U.S. Census Bureau, 2006 American Community Survey, August 2007

Detroit,MI (1st on the list) hasn't elected a Republican mayor since 1961.

Buffalo,NY(2nd) hasn't elected a Republican mayor since 1954.

Cincinnati,OH (3rd) hasn't elected a Republican mayor since 1984.

Cleveland,OH (4th) hasn't elected a Republican mayor since 1989.

Miami,FL (5th) has never had a Republican mayor.

St. Louis, MO (6th) hasn't elected a Republican mayor since 1949.

El Paso,TX, (7th) has never had a Republican mayor.

Milwaukee, WI (8th) hasn't elected a Republican mayor since 1908.

Philadelphia, PA (9th) hasn't elected a Republican mayor since 1952.

Newark, NJ (10th) hasn't elected a Republican mayor since 1907.

However, it's been republican presidents and governors who have caused the most damage to these cities.

Not at all. Democrats have themselves to blame. It's not Republican governors or presidents that handed out unsustainable pensions and benefits to municiple workers decade after decade after decade. By 2017, without any changes 65% of Detroit's city budget would go to financing the pensions and benefits of workers no longer employed with the city. That has nothing to do with Republicans. Hey, I know what Democrats in Detroit should do to make up for the shortfall. Raise taxes right?

[Shady]

Wow, I never thought I'd hear of something like this...

the judge told assistant state Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”

From The Detroit News: http://www.detroitnews.com/article/20130719/METRO01/307190099#ixzz2Zcp4UUvC

Yep, a judge in Michigan has put a hold on bankruptcy procedings because they don't "honor Obama" and his auto bailout.

[Guest Derek L]

That's part of it, Kimmy, but not all.

Detroit grew up with a much larger population all making a good income, based on the automotive industry. Its public sector workers were also paid good wages, all based on income and taxes on an industry everyone believed would last forever.

Of course, the easy ride came to an end. The auto industry no longer employs anywhere near the numbers of decades past.

So people didn't leave Detroit for nice homes in the suburbs. They left because they no longer had jobs in Detroit!

It would seem that Detroit did not have much of a diversified economy. People had no employment opportunities - so they left. As the job cuts deepened so did the revenue losses to the city.

Cities are run by politicians. Politicians don't keep getting re-elected by telling people they are going to get less services than they did before. They also have to negotiate contracts with their unionized workers. Those workers are going to rabidly resist any cuts in pay or jobs.

So everyone goes on for some years as if things are able to be sustained, but of course they aren't. Everyone hopes for a miracle - the automotive jobs will all come back or some new technology will take its place, hiring all those who had lost their jobs banging bumpers on cars.

Finally, the chickens come home to roost. The whole house of cards falls down.

Then everyone says to each other "How could this have happened?".

It just seems to human nature to fool ourselves. Not everyone, of course. The smart ones got the hell out of town!

It's sad, but oh so predictable!

Very well said Bill, I would hasten to add that this trend has been apparent for decades……….long before Obama, Bush or even Reagan. With a singular economy like Detroit, any blame needed to be placed is best divided up between the contributing players of said economy, in Detroit’s case the automotive industry, and more specifically, the “Big Three’s” failure to contend with Japanese and German imports, coupled with the inflexibility of the UAW in both contract demands and the refusal to accept automation early.

[Guest Derek L]

Not at all. Democrats have themselves to blame. It's not Republican governors or presidents that handed out unsustainable pensions and benefits to municiple workers decade after decade after decade. By 2017, without any changes 65% of Detroit's city budget would go to financing the pensions and benefits of workers no longer employed with the city. That has nothing to do with Republicans. Hey, I know what Democrats in Detroit should do to make up for the shortfall. Raise taxes right?

I wouldn’t take the above statistics as gospel with each city in those above rankings…….For instance, El Paso’s lower numbers can partially be explained by the biggest single employer within the city being the United States Army, coupled with the proximity to the Mexican border and the integral part illegal workers play into the economy. Both factors will play on the stats portion in lowering household income compared to the national average, as will the direct impact of having an enormous lower paid citizenry.

[kimmy]

Very well said Bill, I would hasten to add that this trend has been apparent for decades……….long before Obama, Bush or even Reagan. With a singular economy like Detroit, any blame needed to be placed is best divided up between the contributing players of said economy, in Detroit’s case the automotive industry, and more specifically, the “Big Three’s” failure to contend with Japanese and German imports, coupled with the inflexibility of the UAW in both contract demands and the refusal to accept automation early.

If "the Big 3" were more successful and more people worked for them, it would just mean that more people would live in Detroit's suburbs. Most people who can afford to leave Detroit leave. That's not the fault of "the Big 3" or the UAW. Detroit has many successful and prosperous satellite communities. Those communities exist because people work in the Detroit region but they sure don't want to live in Detroit.

Entire neighborhoods have just vanished. Schools, hospitals, municipal services, law enforcement, just vanished from areas of the city. Homes just boarded up. People left and couldn't sell, so they just walked away. It's kind of like Chernobyl, except instead of nuclear radiation, it's just urban decay.

-k

[Bonam]

It's kind of like Chernobyl, except instead of nuclear radiation, it's just urban decay.

-k

It's not "just" urban decay. Cities don't just decay for no reason. The course Detroit followed has its causes.

[kimmy]

Yep, a judge in Michigan has put a hold on bankruptcy procedings because they don't "honor Obama" and his auto bailout.

Actually she is putting the bankruptcy proceedings on hold because the Michigan state constitution prohibits retirement benefits from being curtailed.

-k