I’ll bet a cool million that in America a higher percentage of private businesses went bankrupt in the past 20 years than city governments did.
If only we had businesses that operate more like governments do…
You have not heard of any bankruptcies in Georgia because city governments are forbidden by state law from borrowing money to make up budget shortfalls. Basically, it’s illegal for them to go into debt. Hence, no bankruptcies, though city services may suffer at times. (In fact, the cities and the state cooperated way back when to set up a lend-lease program whereby cities may lease vehicles like fire trucks and police cars and whatnot, without going into debt since the debt is essentially the responsibility of the fund.)
Point is, if such financial restrictions were placed on businesses, you’d have libertarians and conservatives screaming to the heavens, running around in circles, jumping off of tall buildings and maybe even setting themselves on fire at the INJUSTICE of governments placing such financial restrictions on a BUSINESS.
I do not think it would be appropriate for governments to set such tight restrictions on businesses (though I do like the idea of conservatives and libertarians jumping off of tall buildings and setting themselves on fire) but the marketplace just isn’t the solution for EVERYTHING, y’know?
How many of the private businesses that went bankrupt in the past 20 years had the power to levy taxes? Zero.
How many of the city governments that went bankrupt in the past 20 years had the power to levy taxes? All of them.
I’d argue that the automotive industry had very little to do with where Detroit is now financially, as a municipality. Most factories are not in the city proper, and haven’t been for decades. And only one of the Big Three is headquartered there, and has ever been headquartered there.
The Big Three stumbling in the past five years has done pretty close to NOTHING to bring the City of Detroit to bankruptcy. Detroit has never relied on the automakers as a tax base per se, other than maybe employees living and shopping there and paying taxes.
I mean sure, with people living in Metro Detroit suffering higher-than-normal job losses over the past half decade, there’s less money being spent *anywhere *regionally. But I’d say right now (and the past decade) Downtown Detroit has seen more activity (despite the downward economic turn) than it’s seen in the three decades prior.
A semi-new baseball stadium that fills up daily, a hockey stadium that fills up nightly, a new football stadium that fills up pretty good despite the team playing there; there’s a great entertainment district with bars, theaters, restaurants, night clubs, a booming shopping district downtown; young entrepreneurs are opening up shop in a variety of ways. Here’s my point: More people are putting more money into Detroit (at least downtown and neighboring neighborhoods) than they have in decades-- and this money going into downtown has been happening for about a decade, and continued right through the Big Three’s crash.
So my point I guess is to say that the downturn of the automotive industry had very little to do with the crash and burn of the municipality of Detroit.
The region’s economy is not the same thing as Detroit’s financial state. The city was struggling and heading toward financial ruin even when the auto industry and economy were booming.
And to add- I think looking to the future, the residents of Detroit have done something recently that will bring new life to the city: they switched from an at-large city council to a ward system.
This will force people in city hall to actually pay attention to every single neighborhood, because obviously if you only pay attention to downtown, only downtown benefits and the rest of the city crashes. If I know there’s someone on the council making decisions that will directly benefit a specific section of the city, I might be more inclined to move there. You might see more flight back *into *the city in the years ahead if neighborhoods begin to matter again.
[QUOTE=STATE OF MICHIGAN CONSTITUTION]
The accrued financial benefits of each pension plan and retirement system of the State and its political subdivisions shall be contractual obligations thereof which shall not be diminished or impaired thereby.
[/QUOTE]
Though, whenever black people are involved, the majority tends to temporarily forget about the Constitution, Rule of Law, and ethical principals. This is isn’t the first time for Michigan; case-in-point, a few years ago, Michiganders lapsed into temporary amnesia about the Voting Rights Act when voter fraud was used to put an Affirmative Action referendum on the ballot Here’s a gem from the decision, though I guarantee you never heard about this on the evening news or your local newspaper:
[QUOTE=Judge Tarnow, U.S District Judge]
All Michigan voters, whether supporters or opponents of affirmative action, should be concerned by the actions taken by MCRI in its attempt to place the proposed amendment on the November 2006 ballot. In particular, opponents of affirmative action should be concerned by what the MCRI has done while purporting to act in their name. If the proposal eventually passes, it will be stained by well-documented acts of fraud and deception that the defendants, as a matter of fact, have not credibly denied.
[/QUOTE]
Fast-forward to 2011:
The State of Michigan enacted an emergency manager law which was voted down by the people in a referendum. So, what did the Michigan Legislature do? They enacted the same damn law again and then rushed Detroit into bankruptcy. Even the Kevyn Orr admitted that “Michigan’s new EM law is a clear end-around the prior initiative that was rejected by the voters in November.” He continues: “So, although the new law provides a thin veneer of revsion [sic] it is essentially a redo of the prior rejected law and appeared to merely adopts the conditions necessary for a Chapter 9 filing.”
Which conveniently brings us to…
You’re 100% correct and the U.S will be worse off. Selling off Belle Isle, the art pieces at the Detroit Institute of Art, the Water Department, or large swaths of land to private creditors, corporations, and wealthy individuals is not the hallmark of a healthy democracy, but the birth pangs of fascism. Interestingly, President Jackson warned about this back in 1837, where he correctly pointed out that unless there is separation between politics and business interests that the U.S will find “that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations.”
While you may call me a conspiracy theorist, I believe this whole Detroit bankruptcy is a sham. It’s a wag-the-dog type ploy by the Governor to woo Oakland and Macomb county voters to vote for him in 2014. It’s a trick that’ll work because while Michiganders love their unions, the people of Oakland and Macomb (especially Macomb) hate Detroit more, so they’ll cut their nose to spite their face. The nature of this manufactured crisis did not escape Kevyn Orr’s lawyer, who surmised that if the Detroit bankruptcy “'… succeeds, there will be enough patronage to allow either Bing or Snyder to look for higher callings - whether Cabinet, Senate, or Corporate.”
The State of Michigan is not blameless, they altered the revenue sharing formula twice during the 90’s to specifically deprive Detroit of revenue. For example, in the mid 90’s, Governor Engler and Mayor Archer made a deal: lower the income tax and the State will give the city a one-time payout of $200 million for lost revenue. Well, Detroit kept its word and lowered the taxes but the State did not keep its word: Detroit. Never. Received. That. Money. To add insult to injury, the amount of revenue sharing has declined year after year, in fact, from 2011 to 2012 was $66 million. How do you fill in a $66 million hole in revenue in one year?
Finally, to keep afloat, Detroit basically used the municipal bond market to the tune of about $600 million. Well, the State of Michigan didn’t like the fact that Detroit was still surviving on dwindling revenue, so they held money from those municipal bond sales. Let me repeat that. The State of Michigan deprived Detroit money from their municipal bond sales, forcing the “need” for a financial manager. What other State does that? Wouldn’t be at all surprised if there was some indirect collusion with the State and a predatory municipal bond market to hasten the onset of the crisis. It should be obvious that the State never wanted Detroit to succeed, otherwise, they wouldn’t have sabotaged Detroit at every roadbend nor would they have deprived money that they were entitled to.
To those who are giving a standing ovation of schadenfreude, remember this: we’re penning a new chapter in American history where we sell our cities - piece-by-piece - to private creditors and corporations. What makes you think your city won’t be next? Further, what makes you think that in the future the U.S or individual states won’t be in a similar situation? Selling off bits of NASA, DMVs, NIH, or state/federal highway systems to creditors to stay afloat? Lastly, for those who believe private corporations can do a better and efficient job than a city government, I invite you to ask Chicagoans about Chicago Parking Meters LLC. You’ll likely get an earful.
- Honesty
It should also be pointed out that in many cases, particularly that of the DIA, that while these might be assets, they are income producing assets. People come to the DIA, from outside the city, and spend money, not just at DIA but in and around as well. Forcing the city to divest of such assets is like forcing a bankrupt individual to sell his organs and leaves the city worse off after such a sale rather than better.
The main point is: at the present, Detroit is not economically viable. So why keep wasting money on it? Why can’t it be broken up into pieces-have the immediate downtown become the new city of Detroit, have the outlying areas annexed to viable cities and towns around it.
I am afraid the Obama will give Detroit billions in economic aid, which will just kick the can down the road. The present city government is incapable of reform, and will happily go on spending money that id doesn’t have. The taxpayers are getting no services, or bad services-isn’t this sufficient grounds to put the whole mess under receivership?
If you think the Federal Government would go out of their way to help a city that’s >80% black, you have to be smoking. I can assure you that the Federal Government will not bail out Detroit or give Detroit any funds whatsoever.
In case you’re skeptical, the last time the Feds gave money to Detroit was during the Carter administration. Carter provided funds that allowed for the construction of Hart Plaza, Joe Louis Arena, the Renaissance Center, and a few others I can’t remember. The Carter administration was likely the last administration to engage in urban renewal, which is a pity, because the New Center, the Riverfront, and the inner core of Downtown Detroit owe their high (relatively) property values to federal investment.
- Honesty
Sure, Obama is going to unconstitutionally seize the congressional power of the purse to end-run the Republican controlled House in order to throw billions of dollars at Detroit.
He’s also going to postpone elections, make ACORN a Cabinet-level agency, and create a Homeland Security Corps made up of illegal immigrants that is trained to seize everyone’s guns.
Well, somebody has to man all those black helicopters and FEMA camps.
-
How does that make the city more economically viable?
-
How is that preferable to simply merging Detroit with all its burbs?
(A) what I said-except the suburbs do NOT want the incompetent Detroit city government ruining their communities. Kwame Kirkpatrick, anybody?
Maintaining the status quo is absurd-the city is dying, whatever hat can be salvaged should be.
But, it would no longer be the same government.
I commented on the following post in another thread, so may as well do so here “for the record.”
I don’t have the time or talent to research Honesty’s charges, but have enough sense of American politics to realize that, even if they’re exaggerated, they probably contain much truth. This is a hideous demonstration of the corrupt politics which are so prevalent today, and which vested interests use to exacerbate the gap between rich and poor.
Yet no one in the thread even addressed Honesty’s remarks, whether to support them, or to offer evidence in rebuttal.
This reminds me of Naomi Klein’s writings, which explore similar hypocrisy around the world, often by Friedmanists touting capitalism and freedom while actually just robbing from the poor to feed the rich. I mentioned Naomi Klein’s writing in one thread, receiving only a single comment: Ms. Klein is not an economics expert. Duh … of course not, nor does she claim to be.
Using the Search function I see Naomi Klein mentioned at SDMB once every 4 years or so, only to be ignored or poo-poohed.
This is one of the most intelligent message boards on the Internet, yet writers like Klein and Chomsky are ignored. Sad news for America.
You are talking about a city with a population of 700,000+.
Or less, within an area of 144 square miles. There are entire neighborhoods that are uninhabited-why not move the survivors into a smaller area?
Detroit’s population density is greater than that of Phoenix or Houston. Jacksonville, Florida is five times less dense than Detroit.
Well, that’s mainly because Duval-Jax has consolidated city-county government and there’s a lot of unbuilt countryside within the city limits.
Ralph124c,
Not to worry. Obama is “too smart to basil out Detriot,”
as they say in Washington.
Sir Honesty has the best policy. He is the only poster who calls it a race problem.
First the white democrats overspend and sanction lunatic pension plans for city
employees. Then the economy implodes in a great recession, and then there is
white flight.
Look overseas for your answer. When Robert Mugabe took power in Zimbabwe
(actually Rhodesia), the president of Mozambique (Samora Machel) warned him
“Don’t lose your whites.” Did Doctor Mugabe listen? No. He did everything in his
power to encourage white flight. Look at Zimbabwe today. It’s Robert Mugabe’s
corpse in a coffin.
This president of the US has roots in Africa. He is smart enough to know that
Detriot signed its death warrant when the great white wave of flight took wing.
Who knows? Next it might be California that will have a white migration.