Thursday, March 28, AD 2024 11:57pm

Detroit: Canary in the Mine for Blue States

 

 

 

Detroit has been de facto bankrupt for a very long time and yesterday it became de jure bankrupt with a Chapter 9 bankruptcy for the former Motor City.  Hard to believe that during World War II Detroit was the heart of the American industrial machine that produced more military equipment than the rest of the world combined.  How did the city that helped this nation win a world war end up looking like one of the bombed out cities of Europe circa 1945?  There are many culprits involved but W.R. Mead at his blog Via Meadia knows who the chief villians are:

Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.

And now Detroit’s desperate request for a bailout has been turned down by the Obama White House.

Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate.

Go here to read the rest.  The Democrat party views private business as a milk cow to fund an ever growing welfare state.  Detroit is a warning of what happens when the cow dies and government tries to feed off a corpse.  Detroit is merely further along in a process that will eventually impact more of our major cities, I am looking at you Chicago, if the Democrats who control these cities continue to embrace policies that are hostile to business and which impose a crushing burden of government on the portions of their populations that pay, rather than live off, taxes.  The Detroit bankruptcy is the largest municipal bankruptcy in US history.  I fear it will not hold that distinction for long.  Time for some ironic videos to lighten the mood:

 

The last hilarious word goes to Moe Lane on this debacle.  Go here to read it.

 

 

 

 

 

 

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Anon
Anon
Friday, July 19, AD 2013 7:07am

How stupid an investor do you have to be to hold Detroit bonds, ie to be a Detroit creditor? Don’t they deserve pennies on the dollar?

T. Shaw
T. Shaw
Friday, July 19, AD 2013 8:18am

Obama in 2012 said, “We refuse to let Detroit go bankrupt . . . (under his breath)until after the Election.”

This is just one of the 50 or so disasters needing to be ignored causing the Zimmerman verdict to get 24/7 propaganda air-time.

Jay Anderson
Friday, July 19, AD 2013 10:05am

As I’ve long noted, Detroit exists so that Cleveland has some place to feel superior to.

Joseph
Joseph
Friday, July 19, AD 2013 9:25pm

Detroit’s population loss was second only to New Orleans, but N.O. has nature to blame. The blame for Detroit’s woes can be laid squarely on the shoulders of its residents for voting for the same people, the same policies and the same party for half a century, which is how long it’s been since it’s had a Republican mayor (Chicago, for its part, hasn’t had one since Herbert Hoover was president. Can it be far behind?)

Elaine Krewer
Admin
Saturday, July 20, AD 2013 12:11am

“Can it (Chicago) be far behind?”

Not so fast. Yes, Chicago does have some of the same problems in the form of pension liabilities, crime rates, population loss from the city (not nearly as drastic as in Detroit, but still significant), persistent cronyism and corruption, etc. However it has one significant asset that Detroit did not have: a more diverse economy not dependent upon one industry. A downturn or collapse in, say, the farm commodity market would not devastate the entire economy of Chicago the way that the collapse of the American auto industry destroyed Detroit. That said, there are certainly danger signs that bear watching, keeping in mind that if Chicago ever does go de facto bankrupt the entire State of Illinois would be dragged down with it (although a sovereign state cannot declare bankruptcy in the same fashion as a municipality).

Art Deco
Art Deco
Saturday, July 20, AD 2013 12:12pm

Just to point out, the ratio of population of Chicago to its suburbs is 0.47. That for Detroit is 0.21. The dimensions of the Detroit municipality hardly transcend (if at all) the dimensions of slums of the Detroit metropolis as a whole. The homicide rate in the Chicago municipality bounces around a set point of 16 per 100,000. That for the Detroit municipality bounces around 40 per 100,000. The public schools in Chicago are appalling, but there are broad swatches of agreeable neighborhoods and many urban assets. Chicago needs a decent and capable human being in the mayor’s chair. Detroit needs a conservator. Two quite different situations. (Both would benefit from the creation of a metropolitan authority and a redistribution of functions between states, encompassing authorities like counties, and municipalities).

Art Deco
Art Deco
Saturday, July 20, AD 2013 12:14pm

Dale Price lives in the area. I would be pleased to hear his take on this.

Art Deco
Art Deco
Saturday, July 20, AD 2013 12:21pm

As I’ve long noted, Detroit exists so that Cleveland has some place to feel superior to.

You know, though, Cleveland has was a punchline for Rowan and Martin. Detroit did not really hit the skids until the 1967 riots, although disquieting signs were manifest a decade earlier. By around 1976, the place was considered the country’s A#1 urban disaster.

I recall that around 1987 Irving Kristol pulled up stakes and moved from New York to Washington. He offered that in 20 years, New York would look like Detroit, and he would prefer to spend his old age in more agreeable surroundings. New York chose the right future, and that you would not have expected.

Art Deco
Art Deco
Saturday, July 20, AD 2013 12:27pm

Detroit’s population loss was second only to New Orleans, but N.O. has nature to blame.

New Orleans has a homicide rate which exceeds Detroit’s by about a third (i.e. about 53 per 100,000). Keep in mind that the New Orleans municipality encompasses more than 40% of the New Orleans metropolis. Jefferson Parish, suburban to New Orleans, has a homicide rate of 10 per 100,000. The Detroit suburbs have a rate of 2.4 per 100,000. Police forces in Louisiana tend to be understaffed, but their judges are quite happy to incarcerate people. Prison admissions per capita are half again the national mean (though mean time served is about average). Louisiana has most years the highest homicide rate in the nation; something is seriously wrong with the culture down there.

Phillip
Phillip
Saturday, July 20, AD 2013 1:15pm

“Louisiana has most years the highest homicide rate in the nation; something is seriously wrong with the culture down there.”

Louisiana has the second highest rate of single parent homes (MS has the highest.) In some areas of NO and Baton Rouge the number of single parent homes is in the 80’s. This alone is sufficient cause for a higher crime rate.

Throw in that the effect of single parenthood on delinquency increases as the number of single parents in the neighborhood increases, then I think we have a lead on a large part of the problem. For example, Baton Rouge has a high murder rate. Almost all of that is black on black crime in, if I recall correctly, three zip codes. These are all areas with 80+ per cent single parent homes.

Art Deco
Art Deco
Saturday, July 20, AD 2013 1:40pm

Hmmm.

I have had a look at the descriptive statistics for Louisiana. You have a background rate and then spikes at particular locales. The locales in question are New Orleans, Baton Rouge, Shreveport and three small towns (Bogalusa is one and the other two I forget). The excess over the background rate is far higher for New Orleans than for Baton Rouge and notably higher for Baton Rouge than for Shreveport and the three towns. (Shreveport has what would be a normal inner city homicide rate most places up north).

In New York, the background rate is between 1.3 and 2.8 per 100,000 and you see the spikes in dodgy inner city neighborhoods all over the state (worse Upstate than Downstate). That pattern is repeated in Louisiana. It is just that your background rate appears to be about 9 per 100,000. A post-industrial mess like Utica has a homicide rate on a par with what you would expect to see in the generic suburban or countryside locale in Louisiana.

WK Aiken
WK Aiken
Monday, July 22, AD 2013 10:32am

To hear my (now 84-year-old) father tell it, when the family lived in NOLA back in the early 60s, there was no 9th Ward to speak of. It was a swamp (like what it’s right next to now) which was drained under LBJ’s Great Society in order to ship in Democrat voters.

Little wonder the residents have stayed away in droves – the machine used them for a generation-and-a-half but utterly failed them when the tables turned.

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