“Make no mistake, Detroit is exactly what the Republicans want. They outsourced manufacturing jobs, attack unions, cut public services, and this is the result.” — Ed Schultz, MSNBC and radio personality
“The agonizing death of Detroit is cause for celebration. It’s the first of the liberal-run big cities and states to fall, and we should welcome its collapse with glee.” — Kurt Schlichter, conservative columnist
THE COLLAPSE OF THE CITY OF DETROIT has resulted in both ends of the political spectrum aligned, in circular firing squad fashion, to place blame on their counterparts.
Ed Schultz, the former failed conservative talk show host turned opportunistic leftist extremist, echoes the thoughts of even lesser principled people. Kurt Schlicter, unattractively, takes delight in pointing out one obvious aspect of the city’s implosion.
In December 2010, Investor’s Business Daily reported: “The next default could be a major city like Detroit, or it could be one of hundreds of small cities that are on the brink.” The article went on to discuss 16 other cities approaching financial collapse, including California’s Los Angeles, San Jose and San Diego. This of course follows Vallejo, Stockton, Half Moon Bay, Mammoth and San Bernardino.
It is worth “low”-lighting some facts regarding Detroit:
• The unemployment rate hit 27.8 percent in 2009.
• Even as the population fell 63 percent since 1950, the municipal workforce fell by just 40 percent.
• Detroit’s crime rate is five times the national average.
• 40 percent of the city’s street lights don’t work.
• 78,000 structures and 66,000 lots are abandoned.
The problems of Detroit represent issues beyond corruption, which has a long history in the city, from mayors to council members, state senators to members of Congress. But those placing blame exclusively on one side are being simplistic.
Conservative columnist Charles Krauthammer best summed up Detroit as “a classic example of a city that once was at its peak and as its economic success began to go away, it was unable to adapt.”
The Founding Fathers, recognizing the potential for damage to the nation if power were held in one place too long, established a system of checks and balances: the division of Congress into two legislative arms, for example, or the Senate offset with the president’s veto power or executive actions of the president.
Unfortunately this system is not perfect. It is still the case that our nation functions best when neither side has too strong a role.
The checks and balances exist in another area as well: When we talk of the proper role of government at local, state and national levels, there needs to be a balance between the people, the government and private enterprise. And when that balance is missing we see economic, legislative and executive calamities. Detroit represents a perfect storm in all three categories:
Private enterprise — In 1970, GM had a 60-percent share of the U.S. automobile market; today that figure is about 20 percent. During the heyday of the auto industry the “Mad Men” of Detroit were sailing along, fat, dumb and happy. Business was great, profits were good and union demands were the cost of doing business. They awoke from this stupor too late to make corrections.
The “people” — In this context there are two parties who share in the blame: the voters and unions. As to the unions, as long as management met their demands, they would always ask for more. By 2008 average annual salary in the automotive industry in Michigan was $65,000. In neighboring Indiana and Ohio it was $47,000 and $44,000, respectively. The unions, having no accountability for profit, overplayed their hand. As to the voters, the people of Detroit continued to vote overwhelmingly for those who promised the most. The people elected to office in the city of Detroit fell into the same trap as GM management: failure to respond to changing circumstances.
The government — The Detroit ineptocracy was long in developing, taking 30 to 40 years to reach the current state of disarray. You had a political machine long run by a combination of big spenders and big takers. Their spending assured re-election and their taking put many of them in prison. Their policies played a major part in the demise of the city.
On the national level, the law of unintended consequences caught up to Detroit when, in response to the oil shortage, legislation known as CAFE established industry-wide mileage standards. Prior to the passage of CAFE, Detroit’s domestic auto industry held better than an 80 percent market share; by 1990 that share was 70 percent and today it is about 47 percent. In trying to meet the CAFE standards, Detroit fell on its collective face.
After the election of 2008, President Obama attempted to save Detroit (the industry, not the city) and invested billions of our dollars. His strategy worked exactly as planned: the ploy resulted in huge payouts to those deemed worthy, while the unworthy (creditors, shareholders) were stiffed.
Had GM and Chrysler pursued legal bankruptcy, the tax dollars doled out would have been divided equitably. But that was not to be. Today, GM is still in trouble, while Ford, which received no bailout, has flourished.
In the sad story of Detroit there is blame enough for all to share. To those who would point fingers of blame at others, it would be wise to look back and examine more closely the collective failures of all involved. If we do not, then Detroit, rather than serve as an example, will merely be a predictor of the destiny of other cities.
Dennis Lund is a mechanical engineer who lived in Benicia for more than 20 years.
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Another look at Detroit for the community to consider…
“Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.
Derivative claims are considered “secured” because the players must post collateral to play. They get
not just priority but “super-priority” in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as “unsecured” claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.”
http://www.globalresearch.ca/the-detroit-bail-in-template-fleecing-pensioners-to-save-the-banks/5345099
Another look at Detroit for the community to contemplate…
An excerpt from the article below:
“Detroit as a sovereign public entity no longer exists. It is completely powerless, having been taken over by the “lords of capital” personified in this case by emergency manager Kevyn Orr. There is quite literally no one in Detroit’s government with the power to stand up to the Kochs, Orr, or to anyone else who can do the city harm.
It is a sad tale indeed. Detroit residents near the pet coke pile have the toxic dusts in their homes and invariably in their lungs too. Despite assurances to the contrary, the dust cannot be contained and video footage showing a dark cloud blowing to Windsor, Ontario gave the story new urgency to the public but less so to elected officials.
Michigan Senators Carl Levin and Debbie Stabenow could only muster enough energy to ask for an EPA study of the health effects of petcoke. The Department of Environmental Quality doesn’t even pretend to protect the health of residents and has consistently downplayed the possibility of any health threat. What better place to dump a pile of poison than a city on the ropes which can no longer defend itself?”
http://www.commondreams.org/view/2013/08/09-4
Is Detroit really broke? There is always two sides to a story.
The Comprehensive Annual Finance Report of the city of Detroit gives the community and the reader a much more detailed analysis of what is really happening in the Motor City.
Just -a-thought…
Since the editor of the Herald is from Detroit, I believe this may be a story he may want to follow up on. Contacting the author of this article might make for an interesting interview.
An excerpt from the article below:
Clearly, the CAFRs need an independent audit, not from an emergency auditor who specializes in bankruptcy filing, but from a team of unbiased forensic accountants out to measure and present a realistic picture of Detroit’s assets, liabilities, and projections for both in the future.
http://www.opednews.com/articles/Detroit-is-Not-Broke-by-Scott-Baker-130805-986.html
I blame Ted Nugent.
Detroit is a conservative mecca…the result of what happens without tax revenue. Every conservative should move there.
Yeah, it’s all the problem of voters and unions. Michigan has had Republican governors. What have they done? The current governor’s solution is to eliminate democracy, bringing in emergency managers throughout the state to pillage cities, handing the valuable resources to the private sector. How American! Detroit’s problems couldn’t have anything to do with the outsourcing of manufacturing jobs and trade policy, could it?
In re Ed Schultz, if you defined ‘failed’ as a growing number of stations and audience as ‘failed’…sure, he failed. If you mean he didn’t foment hate and fear like Limbaugh and Klannity, I’m sure he would be proud to be labeled a failure. In re ‘leftist extremist’, please explain why you call him such. His big issue is worker’s rights. Is that what you call ‘leftist extremism’? At a time when income inequality is greater than ever, it’s the loss of worker’s rights that has most exacerbated the problem.
What workers right are you talking about?
“The agonizing death of Detroit is cause for celebration. It’s the first of the liberal-run big cities and states to fall, and we should welcome its collapse with glee.” — Kurt Schlichter, conservative columnist
This is a sad, sad statement…to celebrate, with glee, the hardships of millions of people, no matter what the cause (and I hope we can agree that EVERYONE involved in Detroit and Mighigan has to take some responsibility for what has happened there, NOT just one end of the political spectrum) is simply too awful, and reminds me of Rush’s hopeful statement, 6 years or so ago, that the administration would fail miserably in its attempts to bring us back from the brink we were facing then. Let’s have a bunch of people, whom we don’t know and whom we watch from our comfortable, well-paying office, fall into a pit of misery so we can celebrate? REALLY? How can people who are supposed to be observers of our lives be so empty and why in the world would ANYONE quote such an assinine statement to prove a point?
There is a German word that there is no direct translation to in English. Schadenfreude. It seems this word well defines the conservative thinking of Mr. Schlichter and his cohorts.
J.furlong asked: why in the world would ANYONE quote such an asinine statement to prove a point?
Thank you for asking.
And: EVERYONE involved in Detroit and Michigan has to take some responsibility for what has happened there, NOT just one end of the political spectrum
I do appreciate the opportunity to offer a clarification to the original piece. I do think you and I are on the same page , as testimony I offer the following :
those placing blame exclusively on one side are being simplistic.
there needs to be a balance between the people, the government and private enterprise. And when that balance is missing we see economic, legislative and executive calamities. Detroit represents a perfect storm in all three categories
And
In the sad story of Detroit there is blame enough for all to share. To those who would point fingers of blame at others, it would be wise to look back and examine more closely the collective failures of all involved.
All of the above are taken from the original piece. I am not sure how I could have made my position more clear.
As to the original question regarding the “asinine statement” I would say:
Both quotes were asinine. They were selected to illustrate just that point as both sides are being asinine on this matter.
I’m often at odds with Dennis (DDL), but his input just above is quite correct. But, I must say, that anyone celebrating Detroit’s bankruptcy is the sort of person described as resident of the Space Environment in the movie, ELYSIUM, which I saw Sunday evening. It presents baldly the situation I’ve surmised for years as an end objective motivating the stratospheric Upper-Crust of this country which would like to live in healthy wealth in space, carelessly leaving the masses of humanity behind on an increasingly hellish earth. Hail Koch! Inhale pet-coke! Take the money from carbon fuel up and away and leave the biosphere cooking!