Detroit declares bankruptcy (or tries to)

[TranaGreg]

Apparently the bankruptcy filing is being contested as unconstitutional.

The city owes $18 billion
9 billion of that is to pension funds
There are way more people drawing on the funds than contributing
The city's population has dropped from 1.7 million to 0.7 million

How the heck do you solve this? Any interim measures still don't address the core problem - providing any kind of reasonable city services is completely unsustainable. Do you just abandon the people left there? Bizarre scenario, which I find particularly interesting as I live in one of North America s most thriving cities just 4 hours down the highway.

[Moonlight J]

end white flight
return to the good old days of the 50's where you had everyone paying into the system and not sending jobs to places that line the executive pockets rather than the workers

this is part of the problem - http://www.nytimes.com/2013/07/14/op...enny.html?_r=0

Using government data on worker pay, the Economic Policy Institute has calculated that the ratio of C.E.O. pay to employee pay was 273 to 1 in 2012, or 202 to 1, depending on how stock options were accounted for. Either way, that is far higher than it has been for most of the past 50 years.

[Long John]

the rich get richer...

[Mithrandir]

Pension fund obligations are devastating so many cities and states....these need addressed ASAP...

[chancellor]

How the heck do you solve this? Any interim measures still don't address the core problem - providing any kind of reasonable city services is completely unsustainable.

They need to slash their debt through bankruptcy court, which means a whole lot of people are taking debt haircuts. At that point, they need to stop doing stupid projects - the Renaissance Center, the Fox Theater, Comerica Park, Poletown, the People Mover, and Ford Field are all examples of near-useless projects that were riddled with cost overruns and dripped with corruption. They also need to vote in competent leadership, instead of corrupt fools like Kwame Kilpatrick. They then need to get out of everything except that which should be basic city services - collecting the trash, fixing the city streets, police the streets, and so on. The state or the feds shouldn't give Detroit a dime (and to the Obama administration's credit, they did not) until they can prove they'll spend it competently.

However, given Detroit's pathetic history of poor and/or corrupt city management, the odds of any of this happening can best be described as "slim".

[Lucky]

"Detroit Slim" would be a good name for a blues artist. (Except I think that may be the name of a famous child pornographer.)

[bryanbutler]

what's the consensus regarding dave bing's job as mayor?

[Vecmizer]

Quote Originally Posted by Robert Reich
One way to view Detroit’s bankruptcy — the largest bankruptcy of any American city — is as a failure of political negotiations over how financial sacrifices should be divided among the city’s creditors, city workers, and municipal retirees — requiring a court to decide instead. But there’s a more basic story here, and it’s being replicated across America: Americans are segregating by income more than ever before. Forty years ago, most cities (including Detroit) had a mixture of wealthy, middle-class, and poor residents. Now, each income group tends to lives separately in its own city — with its own tax bases and philanthropies that support either excellent services or lousy ones. Detroit is a devastatingly poor, mostly black, increasingly abandoned island in the midst of a sea of comparative affluence that’s mostly white. Its suburbs are among the richest in the nation. But 1 out of 3 residents of the city is in poverty; more than half of all children in the city are impoverished. Between 2000 and 2010, Detroit lost a quarter of its population as the middle-class and whites fled to the suburbs, leaving it with depressed property values, abandoned neighborhoods, empty buildings, lousy schools, high crime, and a dramatically-shrinking tax base. More than half of its parks have closed in the last five years. Forty percent of its streetlights don’t work.

Much in modern America depends on where you draw boundaries, and who’s inside and who’s outside. Who is included in the social contract? If “Detroit" is defined as the larger metropolitan area that includes its suburbs, “Detroit" has enough money to provide all its residents with adequate if not good public services, without falling into bankruptcy. Putting the relevant boundary around the poor inner-city is roughly analogous to a Wall Street bank drawing a boundary around its bad assets, selling them off at a fire-sale price, and writing off the loss. Only here we’re dealing with human beings rather than financial capital. And the upcoming fire sale will likely result in even worse municipal services, lousier schools, and more crime for those left behind in the city of Detroit. In an era of widening inequality, this is how America’s wealthy and middle-class are quietly writing off the poor.------

Is this from the article by the guy saying that Detroit ought to consist of the 3 surrounding counties (Wayne-Detroit, Macomb and Oakland)? That would make Detroit something like the 5th largest city in the US. With the addition of Macomb and Oakland County services Detroit could be made whole again. Basically he is asking the suburbs to pay Detroit's bills and let Detroit siphon services off the other two Counties. The State and nearby counties have tried to help for decades and they (Detroit) turn their nose up at the thought. If ANYONE outside of Detroit offers help they are turned away. That City has it in their mind that any outside help is just an attempt to screw the city. It is very difficult to help someone if they will not accept it. They continue to elect the same officials year in and year out. Those folks robbed the city blind, cost the city millions in lawsuits and Detroit essentially has become one of the most corrupt cities in the US. The city government has known for years they were headed for bankruptcy and did nothing to remedy the problem. They refused to negotiate with vendors, unions etc. They have assets that they cannot manage the upkeep of yet the do not even consider selling of any assets. For years they made it extremely difficult for new businesses to build downtown. Politicians always wanted a kickback and then the companies went elsewhere.

I live in Oakland County and have only lived in the state for about 15 years. It is an absolute shame to see what that city is now. The city was built on the backs of hard working men and women. I was the jewel of the auto industry and it was something to be proud of. It was a great example of the american dream and what hard work could accomplish. Then came the riot, White flight, greed, corruption the list continues.

[Vecmizer]

what's the consensus regarding dave bing's job as mayor?

The consensus is that he is out of his depth. He came in with a business approach and a goal to get citizens basic services. While he was able to get some minor things done, he was over matched by the unions, the city council and other special interest groups. Very few blame Bing (who isn't running for another term). Whoever was elected was fighting an uphill battle. The next mayor will be in much the same position. The only hope is the city council is down three people and hopefully an infusion of new members can create cohesion with the mayor and bring a unified front to the massive uphill battle. Unless everyone including "outsiders" can work together with the common goal then Detroit may never recover.

[johnnya24]

Putting the relevant boundary around the poor inner-city is roughly analogous to a Wall Street bank drawing a boundary around its bad assets, selling them off at a fire-sale price, and writing off the loss. Only here we’re dealing with human beings rather than financial capital.

That's a great analogy.

Science fiction writers nailed our coming dystopia decades ago.

[Lucky]

I spent some time in Detroit about three years ago. It was an overwhelming experience.

The downtown area had some wonderful landmarks, like the famed Fox Theater and the new ballpark, but half a block away there would be a 30-story building abandoned and starting to fall apart.

We drove out of the downtown a ways, and it was a post-apocalyptic hell-scape. What looked like once nice neighborhoods were abandoned. Housing projects looked like neutron bombs had fallen.

Then, when we got outside the city, it was a beautiful and flourishing place. Michigan was really a nice place. I spent quite a while in Chelsea (home of Jeff Daniels), and it may have been the nicest small town I have ever visited.

There is a lot of money in that area, and a lot of economic growth. It seems there would be some way to save one of America's great cities.

[johnnya24]

What is the nature of the demographic shift in Detroit? Is it people moving into the suburbs or to other cities? Are certain demographics moving to the counties (wealthier), and other demographics (lower income expectation) moving to other cities/states? The State's population has risen while Detroit's has collapsed.

If the wealth has simply moved from the city limits to the counties, and the tax boundaries didn't shift with them, then the people who ran the city (and the State) have a lot to answer for. Even if these outlying towns are wealthy now, it is really bad for a region to lose it's only major cosmopolitan centre. Eventually this will have a knock on effect on these areas, even if now they are enjoying a boom. Apart from Detroit, there isn't another population centre in Michigan with a population that would allow it to be classified as a "city". For instance, I can't imagine that airlines are lining up to open new routes to Grand Rapids and Ann Arbor. This will surely have a long term impact on business.

I'm wondering how it could have been allowed to get to this state. There are many cities around the world who have lost their industry, adapted and then prospered. Why not Detroit, especially since the wealth of the State outside of Detroit seems to be blossoming. Practically every major city in the UK lost all their industry over the last 100 years. Some are better than others obviously, but all have adapted and survived. So I find it hard to blame everything on the loss of industry.

How much does race play a part in this? I'm finding it hard to get my head around the polarization of the Travyon / Zimmerman case. Reminds me more of the stupid pointless pre-election debates that dominated and polarized the country before the last election. It seems to be that, facts be damned, if I'm a liberal I'm supporting this side, and if I'm a conservative I'm supporting this side. I've only really looked at the facts of the case as presented in court, and the only issue I can see is the nonsense of allowing citizens to carry concealed firearms. No concealed firearms, no issue. All this racial element is for me just disguising the real core problem ... not "Stand Your Ground" or self defense, or a racial murder, or a "white" guy getting off ... it's citizens legal concealing firearms and the obvious consequences of this - people getting unnecessarily shot / murdered. Everything else about this case is just "shit that's gonna happen" if you allow citizens to carry guns for self defense.

The lack of reaction to the NSA revelations and the over-reaction to this is startling.

Edit: I'm assuming that Detroit collects its taxes independently from the surrounding counties, which may not be the case.

[Pogues]

Perhaps Detroit needs to redefine itself into something completely new and different. They could condense physically and otherwise, revamp what a "city" is, and go forward. It's probably a bit of Sim-City thinking of me, but it could be a phoenix type rising in the long run, but who knows...maybe Detroit will be a brand new example to growing cities around the world.

[Gregg]

I spent some time in Detroit about three years ago. It was an overwhelming experience.

The downtown area had some wonderful landmarks, like the famed Fox Theater and the new ballpark, but half a block away there would be a 30-story building abandoned and starting to fall apart.

We drove out of the downtown a ways, and it was a post-apocalyptic hell-scape. What looked like once nice neighborhoods were abandoned. Housing projects looked like neutron bombs had fallen.

Then, when we got outside the city, it was a beautiful and flourishing place. Michigan was really a nice place. I spent quite a while in Chelsea (home of Jeff Daniels), and it may have been the nicest small town I have ever visited.

There is a lot of money in that area, and a lot of economic growth. It seems there would be some way to save one of America's great cities.

I was in the Grand Rapids area last weekend. I could not believe how nice of a city that it is. Beautiful, vibrant, growing, alive. Lots of money already there and lots more coming in. Medical, and tourism are two major industries.

The last few years there have been a lot of television commercials touting vacation Michigan directed at Illinois. For weekend get a ways we target the North west area of Illinois (Galena), and many points in Wisconsin. We never really considered Michigan as a destiination. That is changing. We are planing at least one long weekend late summer and probably a second one during the fall colors.

I have no idea what the answer is for Detroit. It is really sad. It is like two different worlds.

[Judge Jude]

Unfortunately, attempts to raise taxes on those business executives by incorporating a wider area doesn't mean they won't just move outside the "tax district." I'd love to hear a solution, not sure there is one.

Seems like a lot of the left and right points of view on why this went south are liable to be largely correct...