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Detroit is a mess. With this declaration for bankruptcy protection, the City can now get it's fiscal house in order and move forward.
I wonder what obama is thinking about this right now......and what mileage he and his advisors can gain by surfacing a plan to bail them out by loan guarantees whatever, even if they know it won't go anywhere to make some political hay....
I heard a comment that the average public employee pension in the U.S. is 35% of their pay...and that in Detroit its over 90%, and for Detroit to regain solvency, the ratio would need to be reduced to 10%.
Public Employee unions are bleeding out our cities with their greed.
I heard a comment that the average public employee pension in the U.S. is 35% of their pay...and that in Detroit its over 90%, and for Detroit to regain solvency, the ratio would need to be reduced to 10%.
Public Employee unions are bleeding out our cities with their greed.
Yes they are...and there will be more cities to follow Detroit for the same reason(s).I heard a comment that the average public employee pension in the U.S. is 35% of their pay...and that in Detroit its over 90%, and for Detroit to regain solvency, the ratio would need to be reduced to 10%.
Public Employee unions are bleeding out our cities with their greed.
http://www.newgeography.com/content/001171-detroit-urban-laboratory-and-new-american-frontierIts what Jim Russell likes to call Rust Belt chic, and Detroit has it in spades.
This piece also highlights the absolutely crucial advantage of Detroit. Its possible to do things there. In Detroit, the incapacity of the government is actually an advantage in many cases. Theres not much chance a strong city government could really turn the place around, but it could stop the grass roots revival in its tracks.
Can you imagine a two-story beehive in Chicago? In many cities where strong city government still functions effectively, citizens are tied down by an array of regulations and permits that are actually enforced in most cases. Much of the South Side of Chicago has Detroit like characteristics, but the techniques of renewal in Detroit wont work because they are likely against code and would be shut down the minute someone complained. Just as one quick example, my corner ice cream stand dared to put out a few chairs for patrons to sit on while enjoying a frozen treat on a hot day. The city cited them for not having a license. So they took them away and put up a bring your own chair sign. The city then cited them for that too. You cant do anything in Chicago without a Byzantine array of licenses, permits, and inspections.
In central Indianapolis, which is in desperate need of investment, where the city cant fill the potholes in the street, etc., the minute a few yuppies buy houses in an area and fix them up, they immediately petition for a historic district, a request that has never been refused, ensuring that anyone who ever wants to do anything will be forced to run a costly and grueling gauntlet of variances, permits, hearings, etc. Only the most determined are willing to put up with that.
In most cities, municipal government cant stop drug dealing and violence, but it can keep people with creative ideas out. Not in Detroit. In Detroit, if you want to do something, you just go do it. Maybe someone will eventually get around to shutting you down, or maybe not. Its a sort of anarchy in a good way as well as a bad one. Perhaps that overstates the case. You cant do anything, but it is certainly easier to make things happen there than in most places because the hand of government weighs less heavily.
Whats more, the fact that government is so weak has provoked some amazing reactions from the people who live there. In Chicago, every day there is some protest at City Hall by a group from some area of the city demanding something. Not in Detroit. The people in Detroit know that they are on their own, and if they want something done they have to do it themselves. Nobody from the city is coming to help them. And theyve found some very creative ways to deal with the challenges that result. Consider this from the Dowie piece:
About 80 percent of the residents of Detroit buy their food at the one thousand convenience stores, party stores, liquor stores, and gas stations in the city. There is such a dire shortage of protein in the city that Glemie Dean Beasley, a seventy-year-old retired truck driver, is able to augment his Social Security by selling raccoon carcasses (twelve dollars a piece, serves a family of four) from animals he has treed and shot at undisclosed hunting grounds around the city. Pelts are ten dollars each. Pheasants are also abundant in the city and are occasionally harvested for dinner.
This might sound awful, and indeed it is. But it is also an inspiration and a testament to the human spirit and defiant self-reliance of the American people. I grew up in a poor rural area where, while hunting is primarily recreational, there are still many people supplementing their family diet with wild game. Many a freezer is full of deer meat, for example. And of course, rural residents have long gardened, freezing and canning the results to help get them through the winter. So this doesnt sound quite so strange to me as it might to you. The fate of the urban poor and the rural poor are more similar than is often credited. And contrary to stereotypes the urban poor often display amazing grit and ingenuity, and perform amazing feats to sustain themselves, their families and communities.
As the focus on agriculture and even hunting show, in Detroit people are almost literally hearkening back to the formative days of the Midwest frontier, when pioneer settlers faced horrible conditions, tough odds, and often severe deprivation, but nevertheless built the foundation of the Midwest we know, and the culture that powered the industrial age. No doubt in the 19th century many of those sitting secure in their eastern citadels thought these homesteaders, hustlers, and fortune seekers crazy for leaving the comforts of civilization to head to places like Iowa and Chicago. But some saw the possibilities of what could be and heeded the call to Go West, young man. Weve come full circle.
http://www.comingeconomicdepression.org/25-facts-about-the-fall-of-detroit-that-will-leave-you-shaking-your-head/A while back, Meredith Whitney was highly criticized for predicting that there would be a huge wave of municipal defaults in this country. When it didnt happen, the critics let her have it mercilessly.
But Meredith Whitney was not wrong.
She was just early.
Detroit is only just the beginning. When the next major financial crisis strikes, we are going to see a wave of municipal bankruptcies unlike anything we have ever seen before.
And of course the biggest debt problem of all in this country is the U.S. government. We are going to pay a great price for piling up nearly 17 trillion dollars of debt and over 200 trillion dollars of unfunded liabilities.
All over the nation, our economic infrastructure is being gutted, debt levels are exploding and poverty is spreading. We are consuming far more wealth than we are producing, and our share of global GDP has been declining dramatically.
We have been living way above our means for so long that we think it is normal, but an extremely painful adjustment is coming and most Americans are not going to know how to handle it.
So dont laugh at Detroit. The economic pain that Detroit is experiencing will be coming to your area of the country soon enough.
http://www.policymic.com/articles/44725/this-is-what-budget-cuts-have-done-to-detroit-and-it-s-freaking-awesomeIf our public servants are right and wouldn't dare lie and try to scare us, then chaos, anarchy and lawlessness should reign in Detroit now, right? Well, not exactly.
Dale Brown and his organization, the Threat Management Center (TMC), have helped fill in the void left by the corrupt and incompetent city government. Brown started TMC in 1995 as a way to help his fellow Detroit citizens in the midst of a rise in home invasions and murders. While attempting to assist law enforcement, he found little but uninterested officers more concerned with extracting revenue through traffic tickets and terrorizing private homes with SWAT raids than protecting person and property.
In an interview with Copblock.org, Brown explains how and why his private, free market policing organization has been so successful. The key to effective protection and security is love, says Brown, not weapons, violence, or law. It sounds a bit corny, yes, but the results speak for themselves.
Almost 20 years later and Detroit's financial mess even more apparent, TMC now has a client base of about 1,000 private residences and over 500 businesses. Thanks to TMC's efficiency and profitability, they are also able to provide free or incredibly low-cost services to the poor as well.
The reasons TMC has been so successful is because they take the complete opposite approach that government agencies, in this case law enforcement, do. Brown's philosophy is that he would rather hire people who see violence as a last resort, and the handful of Detroit police officers who actually worked with Brown in the earlier years and have an interest in genuine protection now work for TMC. While governments threaten their citizens with compulsion, fines, and jail if they don't hand over their money, TMC's funding is voluntary and subject to the profit-loss test; if Brown doesn't provide the services his customers want, he goes out of business.
This means that Brown is not interested in no-knock para-military SWAT raids, "officer safety" as the highest priority, bloated union pensions, or harassing people for what they have in their bloodstream. TMC works with its customers on the prevention of crime as well rather than showing up after the fact to take notes like historians.
The heroic Brown and TMC are a great example of how the market and civil society can and do provide services traditionally associated with the state far better, cheaper and more in tune to people's wants and needs. I have always believed policing, protection and security are far too important to be run by the state especially in age of militarized Stormtroopers and Brown is helping show why.
Law enforcement isn't the only "essential government service" that the private sector is taking over and flourishing in. The Detroit Bus Company (DBC) is a private bus service that began last year and truly shows a stark contrast in how the market and government operates. Founded by 25-year-old Andy Didorosi, the company avoids the traditionally stuffy, cagey government buses and uses beautiful vehicles with graffiti-laden exterior designs that match the heart of the Motor City. There are no standard bus routes; a live-tracking app, a call or a text is all you need to get picked up in one of their buses run on soy-based biofuel. All the buses feature wi-fi, music, and you can even drink your own alcohol on board! The payment system is, of course, far cheaper and fairer.
Comparing this company's bus service to say, my local San Francisco MUNI transit experience, is like comparing the services of local, free-range, organic farms in the Bay Area to the Soviet bread lines.
Not surprisingly, the city government, which has no time to protect its citizens, does manage to find the time to harass peaceful citizens in this spontaneous, market order. Charles Molnar and a couple of other students from the Detroit Enterprise Academy wanted to help make benches for the city's bus stops, where long-waits are the norm, equipped with bookshelves to hold reading material.
Detroit Department of Transportation officials quickly said the bench was "unapproved" and had it taken down. Silly citizens, don't you know only governments can provide these services?
Of course there are opportunities. The city government has to be straightened out. Next the City has to attract private sector dollars to invest in properties. The most important aspect of this is the City MUST stay out of the way. Leave the investors and developers alone. Don't saddle them with overbearing regulations, quotas, set asides and all the other nonsense that chases private sector dollars away.So, everyone has had their say of what caused Detroits failure. Now, what happens to Detroit?
Will the buildings be raised and turned into farmland? Will gangs overcome what is left and wait until they kill each other off?
Can overseas companies come in and buy land pennies on the dollar and build factories, builders start building homes for new workers? Tax incentives for companies will be a sure bet for the first ten years just to get people coming to the city again to insure a tax base.
Seems opportunities for the companies to come in.