I am sure it’s just a coincidence that the Democrats have run the city of Detroit for eons

From The Wall Street Journal:

Detroit Files Biggest U.S. Municipal Bankruptcy

Emergency Manager Orr Seeks to Liquidate Assets to Satisfy Creditors
By Matthew Dolan | Updated July 18, 2013, 5:47 p.m. ET

The city of Detroit filed for federal bankruptcy protection on Thursday afternoon, making the automobile capital and onetime music powerhouse the country’s largest-ever municipal bankruptcy case.

The Chapter 9 case filed in U.S. Bankruptcy Court for the Eastern District of Michigan came after Kevyn Orr, the emergency manager, failed to reach agreements with enough of the bondholders, pension funds and other creditors to restructure Detroit’s debt outside of court. The final decision rested with Republican Gov. Rick Snyder, who had appointed Mr. Orr as Detroit’s overseer in March.

“This was a difficult and painful decision but I believe there are no other viable options,” said Mr. Snyder in a video on Michigan’s official website. “This is a situation that’s been 60 years in the making in terms of the decline of Detroit. From a financial point of view, let me be blunt, Detroit is broke.”

Mr. Snyder wrote in a letter dated Thursday to Mr. Orr and Michigan state treasurer Andrew Dillon that he knows that many will see this as a “low point” in the city’s history but he said he also thought that this will be “a chance for a fresh start, without burdens of debt it cannot hope to fully pay.”

More at the link. The bankruptcy filing was supposed to come on Friday, but the city rushed it through due to pending lawsuits trying to stop the bankruptcy filing.

Detroit was a great American city, and the “capital” of the American automobile industry. But the Motor City has shrunk from almost 2 million people in 1950 to around 700,000 today, and vast swaths are the abandoned homes of a larger, more vibrant city.

A vacant, boarded up house in the once thriving Brush Park neighborhood loomed large against the Detroit skyline, including General Motors’ headquarters, in March. The city, hurt by flight to the suburbs, state aid cuts and the real-estate bubble, filed for federal bankruptcy protection on Thursday. (Rebecca Cook/Reuters)

This photo was one of several on a slideshow in the JOURNALarticle, but it caught my eye. My eye sees a great house, well built, with first-rate urban architecture. There has been some (unfortunate) cosmetic remodeling done to the front of this house, but this is a home that is crying out for restoration . . . but there’s no one living there who wants to restore it, and it’s just plain not economically feasible.

Detroit lost people and lost businesses to the suburbs, because the city failed to keep them at home. Too much of Detroit was involved with one industry, and as problem hit automobile manufacturing, and as automation reduced the number of workers it took to build a car, Detroit began a slow, downward spiral. It isn’t the city’s fault that there were far fewer automobile jobs, but it was the city’s fault that they didn’t take action to reduce the burdens of government on the city when necessary. Detroit has been borrowing over $100 million per year, for several years, just to meet operating expenses, and had no realistic chance to pay those debts. The people and businesses who loaned money to Detroit are going to suffer, as they are going to see only a small fraction of what was loaned actually repaid, but they should have taken a harder look at to whom they were lending money.

The results? Some people who thought that they had great pensions will see little or nothing. Vendors who sold things to the city on credit will get paid pennies on the dollar for what they sold. Creditors who thought that they could make money investing in a failing city are going to lose much of it.

But the real loser might be Philadelphia. Investors are going to start to look harder at investing in the municipal bonds of cities which don’t have their financial houses in order, and if the City of Brotherly Love isn’t the next closest to bankruptcy, it is the next city so thoroughly dominated by labor unions. Municipal unions rule the city government, the public schools are in disarray and pushing bankruptcy, the Democrats’ unchecked control has led to a government that is nothing but cronyism, taxes continue to rise but still don’t balance the budget, and the stranglehold the unions have on construction in the city make things much more expensive for those people who’d consider building and starting businesses there. With the failure of Detroit, the image that municipal bonds had as being highly secure has been shattered, and interest costs for those bonds are now going to rise for cities like Philadelphia.

I can tell you this much: I would never invest my money in municipal bonds from Philadelphia!
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And a picture, which pretty much says it all:

15 Comments

  1. Pingback: LIVE AT FIVENINE: 07.19.2013 : The Other McCain

  2. Dems would fuc* screw up a one car funeral. The driver and the stiff would fight over directions to the cemetery.

    Now THAT’S funny!

  3. “Detroit lost people and lost businesses to the suburbs, because the city failed to keep them at home. Too much of Detroit was involved with one industry, and as problem hit automobile manufacturing, and as automation reduced the number of workers it took to build a car, Detroit began a slow, downward spiral. It isn’t the city’s fault that there were far fewer automobile jobs, but it was the city’s fault that they didn’t take action to reduce the burdens of government on the city when necessary.”

    The reason Detroit is depopulated is not because the auto industry, i.e., the American Big Three” as they were once called, has – in relative terms – shrunk.

    Detroit was filled with tens of thousands of well built and architecturally desirable housing units that could have been used by commuters regardless of the direction they were traveling. But your life and your property simply are not secure in Detroit. They became crack houses, and eventually were stripped of all metals and burned to the ground. Thousands upon thousands of them burned while the mayors and council fiddled.

    Those who have visited Detroit soon realize that the legal boundary between Detroit and the suburbs, nothing more than a line on the map, and the end of Detroit Government’s sway and jurisdiction is, generally the boundary of the ruin.

    The Dodge truck plant off 8 mile road is as easily accessed by a resident of Detroit living due south near six mile road as it is by a resident of Warren living due north off of 10.

    The primary factor in leading to the quality of life differential is in the state of law and order and social peace which varies between these two places. You can live a more or less normal life in Warren, but your property and your person are in constant danger in Detroit.

    Murder and shooting map of Detroit

    This is because the government of Detroit has in significant measure been run as an informal criminal conspiracy; or, has been in significant measure run by those engaging in criminal conspiracies, for decades now.

    There is too much to go into here. It would take a 10 volume set merely to discuss the many mysteries surrounding Detroit’s decades of budgetary mismanagement, the various city council members charged with corruption and crimes, the comic opera state of the police force.

    The short version is that Detroiters, through their willful choices have made Detroit into what it now is. It is the geographical expression of their souls, so to speak.

    In less metaphoric language, Detroit is simply an external and environmental reflection of the behavioral choices made and tolerated by the inhabitants of the city, as abetted by decades of uninterrupted liberal Democrat ideology and misrule.

  4. That, and the weather sucks.

    In the post Civil War years, that didn’t matter. All the heavy industry was in the North. If you wanted a job in those industries, you moved there or else starved.

    But now you can work anywhere. It’s no surprise foreign car companies are opening plants in the South. So northern cities have to work harder to attract employees. And Detroit hasn’t. Ditto Baltimore, according to York. People don’t want to live in a shithole, and left wing governance at any level tends to produce shitholes, the old East Berlin being a good example.

  5. DNW, I recall that some time ago, years ago, you attempted to point out the connection between leftist political policies and urban decay, crime, and corruption using Detroit as an example. I also recall the eruption of yelping, caterwauling, and bitter denunciations from the usual suspects accusing you of every hate crime from scapegoating to profiling and including as many racially motivated transgressions as would be impossible for any one individual to commit, short of the reigning Grand Wizard acting in his full capacity.

    So, you were right all along, as if that’s new news. And those who turned their heads and looked the other way only succeeded in delaying the inevitable collapse and in the process made sure the sum total of human suffering was greater than it would have been had they been willing to face Detroit’s growing problems head-on rather than pretending they didn’t exist, and that sounding the alarm was a benevolent act, not a example of cruelty.

  6. I’m an auto enthusiast, and most of Detroit’s problems are of their own making. From the days of Henry Ford to the mid-70′s, Detroit was King when it came to cars. And why not? As Dana has pointed out, for about 20 years after WW 2 our former allies and enemies alike were too busy rebuilding their industral base to be much of a threat. Foreign “Competition” in automobiles was pretty much limited to the Volkswagen Bug or (if you were an enthusiast), Triumphs, MG’s, and Jaguars.

    But times changed and Detroit did not. The Big Three insisted you could not make a profit building small cars. Honda, Datsun, and Toyota proved otherwise. The Big Three thought no one would pay extra for a well engineered car that was fun to drive. BMW proved otherwise. In the 70′s, gas prices doubled, then doubled again, yet GM, Ford, and Chrysler failed to build cars that got good gas mileage that weren’t also pieces of junk. Who wanted a Pinto or a Chevette when you could get a Civic or a Rabbit, cars designed and built by people who actually cared about quality?

    In short, the Big Three did fine when they had a monopoly. What they couldn’t handle was competition.

  7. ropelight says:

    Friday, 19 July 2013 at 12:29

    DNW, I recall that some time ago, years ago, you attempted to point out the connection between leftist political policies and urban decay, crime, and corruption using Detroit as an example. I also recall the eruption of yelping, caterwauling, and bitter denunciations from the usual suspects accusing you of every hate crime from scapegoating to profiling and including as many racially motivated transgressions as would be impossible for any one individual to commit, short of the reigning Grand Wizard acting in his full capacity.

    So, you were right all along, as if that’s new news. And those who turned their heads and looked the other way only succeeded in delaying the inevitable collapse and in the process made sure the sum total of human suffering was greater than it would have been had they been willing to face Detroit’s growing problems head-on rather than pretending they didn’t exist, and that sounding the alarm was a benevolent act, not a example of cruelty.”

    Yeah, while I focused exclusively on the effects of almost 60 years of unbroken and unimpeded liberal Democrat governance and sway, Messrs Mike Ganzeveld and Jeromy Brown contorted themselves and the exchanges in every way possible and impossible in order to try and make it appear to be about race, didn’t they.

    These are the same “Mr. Iowa Liberal” authors who Perry ruefully observes as having ceased posting on Dana’s sites.

  8. Eric says:
    Friday, 19 July 2013 at 15:25

    I’m an auto enthusiast, and most of Detroit’s problems are of their own making. From the days of Henry Ford to the mid-70′s, Detroit was King when it came to cars. And why not? As Dana has pointed out, for about 20 years after WW 2 our former allies and enemies alike were too busy rebuilding their industral base to be much of a threat. Foreign “Competition” in automobiles was pretty much limited to the Volkswagen Bug or (if you were an enthusiast), Triumphs, MG’s, and Jaguars.

    But times changed and Detroit did not. The Big Three insisted you could not make a profit building small cars. Honda, Datsun, and Toyota proved otherwise. The Big Three thought no one would pay extra for a well engineered car that was fun to drive. BMW proved otherwise. In the 70′s, gas prices doubled, then doubled again, yet GM, Ford, and Chrysler failed to build cars that got good gas mileage that weren’t also pieces of junk. Who wanted a Pinto or a Chevette when you could get a Civic or a Rabbit, cars designed and built by people who actually cared about quality?

    In short, the Big Three did fine when they had a monopoly. What they couldn’t handle was competition.”

    I think that you somewhat overstate the case, although the lack of small fuel efficient cars available off the shelf when the OPEC cartel embargo hit did have an enormous effect.

    That said, there were other problems with the auto company management apart from that particular lack of “foresight”.

    You mention quality. Detroit product was being actively sabotaged in numerous documented instances by sometime deliberate, but probably more often negligent and indifferent actions by the workers.

    Management bears a good deal of responsibility for this in not standing up to union enablers, as the cost of confrontational shutdowns over grievances was perceived as greater than the costs associated with bad workmanship.

    Plant conditions were in some cases very bad, which contributed naturally to the development of an adversarial grievance attitude. And I am not sure that either official party to the contract negotiations union or management, was really much interested in improving the work experience per se, as compared to either the grating or gaining of additional nontaxable fringes, or shutting the griping up with another “personal day” sop.

    The plants were also filled with large numbers of drug using incompetents who menaced good workers who performed “too well”.

    I don’t know what to say about Chrysler. If you read Iaccoca’s book, he says that Chrysler management didn’t even know what production inventory they had or what they were paying for it. Now that could not be anything but a management failure, I grant you.

    But by and large the auto companies shared in the social problems that confronted all of American society in the late 60′s and 1970s. Diminished work ethic, leftist infiltration, institutional subversion, and social disruption, hedonic social attitudes, and so forth.

    As I have many times mentioned before the auto companies regularly served as both scapegoat and golden goose for every disruptive Washington based progressive political policy maker and opportunist that has come along in recent decades.

    Worthless progressive males who wouldn’t recognize a piston if you bashed their teeth in with it, men who had never stepped in a metal cutting facility or seen a hydraulic press, suddenly began pontificating as if they were experts. And those who knew better, or should have known better, were too cowed by short term self-interest and a desire not to confront, to stand up. GM Presidents have for years been men with just a few years to retirement and the collection of their option packages. Why really rock the boat?

    And that, of course, was another management failure: one that included a failure of civic and personal courage in the face of a hostile press, government, and sometimes, populace.

    Our government also contributed to it by deliberately looking the other way as our trading partners engaged in mercantilist currency manipulations in order to make their products cheaper. Just another example of the United States State Department purchasing world peace and prosperity for the internationally deserving countries on the backs of the American middle and working classes.

  9. You mention quality. Detroit product was being actively sabotaged in numerous documented instances by sometime deliberate, but probably more often negligent and indifferent actions by the workers.

    The problem with this argument is Japanese companies started setting up plants in the US and THEY managed to turn out cars that were every bit as good as the ones from Japan. The worker wasn’t the problem, management was.

    To use a military analogy, if you see an army where the troops are slovenly and disinclined to follow orders, you don’t blame the enlisted ranks but the officer corps, whose job it is to whip them in line and instill discipline. And if the softies running America’s car companies didn’t have the guts to stand up to the unions and demand discipline and productivity, then they should have quit their jobs and taken up knitting for a living instead.

  10. Don’t forget my graphs showing the decline of Detroit and other cities, or my talk of Detroit schools. Unions and Leftists (but I repeat myself) are very clearly to blame. Tenth Commandment violators, the lot of them.

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