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Cannibalizing Capital (The City of Detroit intends to knock down 10,000 homes and buildings)
American Thinker ^ | 05/18/2010 | John F. Di Leo

Posted on 05/18/2010 10:32:09 AM PDT by SeekAndFind

Mitt Romney's boyhood home, which sold for $645,000 as recently as 2002, is in the news:  It's slated for demolition this summer. This fine old house, situated in a once-vibrant upper-middle-class neighborhood of Detroit, is one of 10,000 homes and other buildings that Detroit intends to knock down as soon as possible.

The city fathers have decided to accept the city's continued decline as unalterable fact, and since the current economic environment cannot fill those 10,000 homes with eager buyers, they assume that the future economic environment won't, either. So they may as well just knock them all down to "right-size" the city. Houses worth $100K, $200K, $500K, and more will be destroyed in support of this prevailing vision of irreversible defeat.

At the very same time that these wrecking balls start to swing, hundreds of miles north on Mackinac Island, a painter will be eyeing a tranquil scene. This artist will take $10 worth of paints, brushes, and canvas, and he'll capture that scene for posterity...producing a painting he can then sell to a tourist for a hundred, or two hundred, or maybe even a thousand dollars.

Elsewhere, as those same wrecking balls swing, a jeweler will take a shiny compressed carbon rock that his supplier pulled out of the ground in South Africa, and he'll cut and polish it until it shines, mount it in a metal band, and sell it as an engagement ring to some lovestruck young man for his fiancée to wear. From chunks of gold ore and diamond rock underground, human artistry will produce jewelry worth (as his jeweler hopes and the diamond supplier recommends) a good "two months' salary."

Also at that same moment, a master carpenter will walk through a lumberyard, perusing timbers that only a month ago were towering trees. They were cut, milled, and finished, stacked and ready to be selected for this craftsman's next project. Twenty dollars' worth of tree trunks and branches have become $100 in lumber, soon to become $1,000 worth of customized built-in cabinetry in the carpenter's capable hands.

What converts these worthless plants and minerals into paintings, furniture, and jewelry? What made it possible for our artist, our jeweler, and our craftsman to make a living out of processed plants and minerals? Hint: It's not government.

These artists may not have heard about the 10,000 homes being destroyed and the economic nihilism that inspired the project. These artists just do what they do, taking a few dollars' worth of raw materials and transforming them into goods worth ten, twenty, thirty times as much, all because of their ingenuity, their creativity, and the rewards dispensed by the invisible hand of a free market.

It happens every hour of every day, as manufacturers literally create wealth by creating valuable goods seemingly out of thin air. 

Wealth isn't created by the Fed's interest rate structure or by the Bureau of Engraving and Printing's massive currency printing presses. The free market creates wealth, as the painter transforms raw materials into something that can be sold for much more than the purchase price of its parts. The market creates $90 if he sells those $10 in materials for $100; it creates $190 if he sells the painting for $200...and it creates $990 if he sells his masterpiece for $1,000. 

But if fewer tourists visit the island, there's less demand, less competition to drive up his prices, so he'll sell for less, and less wealth will be created. If fewer people get married, fewer will buy those engagement rings...and if the grooms don't have jobs or budding careers to inspire wild purchases due to our stagnant job climate, then they certainly won't be risking two months' salary on that fancy ring.

And if you knock down 10,000 homes in Detroit, that's 10,000 fewer homeowners to remodel their basements, finish their attics, or renovate their kitchens with those custom cabinets.

Economies aren't based on building things, destroying them, and starting over again from scratch, time and time again. Economies are based on continued growth.  Build a factory, then use it to produce things. Build a house, then add additions and improvements when you can...always adding, always decorating, filling the closets, the knickknack shelves, and the garages.

We have entered a new and frightened age, in which our government knocks down 10,000 homes rather than take the well-known steps that encourage economic growth. Our government pays people to destroy hundreds of thousands of perfectly good used cars (calling them "clunkers") in order to replace them with cheaper Japanese and Korean imports. We order our nation's car companies to close dealerships, throwing hundreds of thousands of mechanics, salesmen, and accountants out of work, rather than simply correcting the tax and regulatory burdens and destructive union contracts that caused those carmakers to be unprofitable.

Over the past year, we have seen an explosion of new startups, at strip malls and corner storefronts across the country: Every town now has a "Cash for Gold" franchise, or two, or three. Nothing against this franchise or its cousins, of course -- it's a legitimate business, meeting a perceived need -- but this explosion has a pernicious aspect to it. These shiny shops' principal tool isn't a paintbrush, or a machine tool, or a drafting board, but a simple scale. No matter how much talent originally went into an article of jewelry, how much value was added by the jeweler or artisan who conceived the necklace, ring, or brooch that a desperate debtor brings in, it is to be sold and melted down for the value of its raw materials, and nothing more.

How much wealth has been lost in the stock market in this recession? At least stocks can come back if the companies survive...the certificate that plummets from $100/share to $50 can recover it all in a year or two when the credit market recovers or taxes are cut or the right administration change occurs. But that $500 necklace that's melted down for its $30 worth of gold value isn't coming back. That $470 difference isn't just in limbo; it's been destroyed forever.

The unstable house, no longer structurally sound, must certainly be destroyed to start over. But the perfectly good house that's destroyed just because failed politicians have given up on their town -- pulverizing a $645,000 home to free up a $10,000 lot for a park or farm -- those hundreds of thousands of dollars in losses are avoidable, and are therefore unforgivable.

We live in sad times, in which economically illiterate politicians promise to deliver job creation and prosperity from the wanton destruction of currencies, real estate, and personal property, large and small.

This conflagration of willful demolitions must stop. There's not much the Republicans can do to slow it down (though they must of course continue to try). If our country is to make it to the next election with anything to wear besides a barrel, the president's own majority party needs to start standing up to its leadership. Amazingly, despite the blatantly obvious wreckage of current policies, even despite the worst polling in the history of polling, there are no signs that the Democrat rank and file have any such inclination to save themselves and their country. 

They seem happy to sit by as their leadership makes empty promises that job creation will climb in the wake of business closures, that "green shoots" will arise from the broken windows of fallacious economics.

Today's Democrats have based their entire prayer of economic growth on the idea that if they cremate a phoenix in a funeral pyre, a new and healthy phoenix will magically rise from the ashes. Unfortunately for us all, that legend is a myth.

John F. Di Leo is a Customs broker and international trade compliance trainer. A former county chairman of the Milwaukee GOP, his articles regularly appear in the Illinois Review.



TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: capital; detroit
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1 posted on 05/18/2010 10:32:10 AM PDT by SeekAndFind
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To: SeekAndFind

Detroit has lost it’s mind.............


2 posted on 05/18/2010 10:39:40 AM PDT by Red Badger (When you see Jerusalem being surrounded by armies, you'll know that its desolation is NEAR. Luke 21)
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To: SeekAndFind
Economies aren't based on building things, destroying them, and starting over again from scratch, time and time again.

This guy has never heard of Joseph Schumpeter.

3 posted on 05/18/2010 10:41:43 AM PDT by C19fan
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To: SeekAndFind
When there are no good solutions in sight, the least bad option is the right choice.

A long series of mistakes got Detroit to where it is. Tearing down these empty buildings might be a good sign. It shows a belated connection with reality. Left empty, these houses would just attract squatters. It also costs too much to continue serving a neighbourhood, where most of the buildings are vacant.

4 posted on 05/18/2010 10:42:56 AM PDT by USFRIENDINVICTORIA
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To: SeekAndFind

I’ll always wonder now if the ‘Homesteading’ proposed by Jack Kemp for these blighted areas would have worked.
Ah, well, the Socialists find another way to misalocate resources and blame the capitalists!


5 posted on 05/18/2010 10:43:08 AM PDT by griswold3 (Immigration solution: Tall Fences, Wide Gates)
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To: SeekAndFind

Good article about a great teachable moment.

Only fools believe you can cut your way into prosperity.


6 posted on 05/18/2010 10:45:24 AM PDT by bigbob
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To: SeekAndFind
I don't get it. Why don't they let the owners sell the houses cheaper? Or if for some reason the city holds title, auction them off to the highest bidder?

Surely they're not being influenced by friends in the real-estate business who hold lots of inventory that they bought too dear. Government-induced scarcity? Impossible, pardon my leaping to conclusions.

7 posted on 05/18/2010 10:46:13 AM PDT by SamuraiScot
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To: SamuraiScot

You can buy a house in Detroit for less than a car.


8 posted on 05/18/2010 10:47:17 AM PDT by C19fan
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To: griswold3
It's simply amazing how quickly a frame and fiberboard house can turn into a piece of junk when it's not occupied.

Best that Detroit get cracking and knock down the 100,000+ surplus pieces of trashboard they have scattered around the area.

Detroit jumped the gun on the Interstate highway race back in the 1950s and 1960s and didn't take long enough to plan what they'd like to get rid of.

Not too late though.

9 posted on 05/18/2010 10:48:05 AM PDT by muawiyah ("Git Out The Way")
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To: SeekAndFind

The Philosophy of “Deconstruction” made concrete.


10 posted on 05/18/2010 10:48:20 AM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: SamuraiScot
I don't get it. Why don't they let the owners sell the houses cheaper?

Who do you sell it to ? No one wants to buy. Who wants to live or start a business in that city ? Some houses have their prices slashed to less than $10,000 already (Yep, less than the price of a second hand Toyota) and still no takers.
11 posted on 05/18/2010 10:50:10 AM PDT by SeekAndFind
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To: SeekAndFind

This is the end result of Socialism. The productive economy disappears. No one is left to pay for the hand outs that 3/4 of the population get. You have a ghost town filled with buildings with nothing going on in them. No one wants to buy even a nice house in the area because there is nothing to do there to make a living. People just flat out forget how to be self-sufficient. The land reverts to its natural state. The standard of living declines rapidly to the point of a Third World nation. Its scary how quickly parts of America can revert to Third World status.


12 posted on 05/18/2010 10:51:28 AM PDT by Opinionated Blowhard
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To: SeekAndFind

Somebody have a brother-in-law in the demolition business? Just another way to redistribute wealth into the thugs pockets.


13 posted on 05/18/2010 10:52:08 AM PDT by Stentor
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To: SeekAndFind

So, did PONTIAC finally win his war against Fort Detroit?

For those out of the loop, read THE CONSPIRACY OF PONTIAC by Francis Parkman.


14 posted on 05/18/2010 10:52:49 AM PDT by Ruy Dias de Bivar (VIVA LOS SB1070)
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To: Springman; sergeantdave; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; ...

If you would like to be added or dropped from the Michigan ping list, please freepmail me.


15 posted on 05/18/2010 10:54:33 AM PDT by grellis (I am Jill's overwhelming sense of disgust.)
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To: SeekAndFind

I’ve no idea of the condition of these 10K buildings but Detroit is full of homes that would cost more to properly renovate than they would ever be worth.

While knocking down the homes alone won’t make things better it is a sign that, finally, Detroit get’s just how much trouble they are in. Right now Detroit needs some seriously good urban planning if they want to save the city

1) Getting rid of the homes that can not be salvaged and *giving* the land to the adjacent homeowner (if the owner lives there) on the condition that the property is properly cared for (landscaped/maintained) for a decade

2) If the lot(s) are big enough give the land land to small businesses or corporations who will serve the neighborhoods with near by jobs and services. This can and should include corporations that have small footprint shops and stores.

3) Forgiving all real estate taxes on the property given to business that employ people who live in Detroit.

4) Reduce the size of government by reducing council seats

5) Increase the number of charters granted for charter schools that are neighborhood based to reduce the cost of busing.


16 posted on 05/18/2010 10:56:15 AM PDT by N3WBI3 (Ah, arrogance and stupidity all in the same package. How efficient of you. -- Londo Mollari)
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To: SeekAndFind

as soon as they’re done knocking down 10,000 homes they’ll be screaming for more Federal Aid for the Homeless


17 posted on 05/18/2010 10:56:39 AM PDT by Buckeye McFrog
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To: SamuraiScot

Some houses cant be given away, quite literally...

A house abandoned for a year needs a lot of repair... A shoddy house abandoned for a decade is beyond salvage.


18 posted on 05/18/2010 10:57:13 AM PDT by N3WBI3 (Ah, arrogance and stupidity all in the same package. How efficient of you. -- Londo Mollari)
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To: N3WBI3

60 years ago, the city of Hiroshima was a total wreck with no buildings left standing and people starving everywhere.

60 years ago, Detroit was one of the world’s most thriving cities and the industrial engine of the USA. 80% of the world’s automobiles and engines were made in Detroit. The city had a vibrant, thriving cultural scene as well.

Now, 60 years later, as we look at Hiroshima vs Detroit, we might as well ask ourselves -— who the heck won the war?


19 posted on 05/18/2010 11:00:46 AM PDT by SeekAndFind
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To: SeekAndFind

I like the article, but I wouldn’t take the author at face value:

“Houses worth $100K, $200K, $500K, and more will be destroyed.”

So, he would pay 1,2 or 5k right now for them? Really?

Uh huh...


20 posted on 05/18/2010 11:02:00 AM PDT by Pessimist
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To: SeekAndFind

Get off I-75 at 8 Mile go east and look at the homes there. Abandoned decrepit empty home after home. A wrecking ball will be an improvement. It is very sad but these abandoned homes are past renovation. It would be best to knock them down and start over.


21 posted on 05/18/2010 11:02:19 AM PDT by A message
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To: SamuraiScot

I think they’re actually worth 0, despite the author’s claims.


22 posted on 05/18/2010 11:02:54 AM PDT by Pessimist
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To: SeekAndFind

If the homes are decrepit, dangerous and vacant (as many in Detroit are), I don’t see any other option.


23 posted on 05/18/2010 11:04:45 AM PDT by ScottinVA (RIP to the country I love...)
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To: Red Badger
Detroit has lost it’s mind.............

Yeah, but on the bright side, think of all the demolition jobs Obummer will claim to have created from this action......... ;-)

24 posted on 05/18/2010 11:05:34 AM PDT by OB1kNOb (When injustice becomes law, resistance becomes duty. - Thomas Jefferson)
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To: SeekAndFind

There are houses on Realtor.com going for 500.00 in Detroit.
In the meantime, that house is amongst the burnt out and decaying houses in a block. They are not even salvageable.

The reason the city wants them torn down is so that they don’t have to provide services to the one or two houses on a block. No trash collection, minimal fire and police.

Hellsbells we are 40 minutes north of Detroit and there are empty houses in our suburb. Tons for sale, tons for rent. You’re right, no one is buying those houses in Detroit proper. Just squaters who hook up illegal electricity and scream that the city didn’t help them when the buildings burn.


25 posted on 05/18/2010 11:05:56 AM PDT by netmilsmom (I am inyenzi on the Religion Forum)
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To: A message

“Get off I-75 at 8 Mile go east..”

I spent a few days working there several years back, and I was actually surprised it wasn’t worse than it was - given all that I had heard about the area.

FWIW, we have areas at least as bad as 8-Mile here in beautiful Cleveland.


26 posted on 05/18/2010 11:06:20 AM PDT by Pessimist
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To: Red Badger

The parasites killed the host.


27 posted on 05/18/2010 11:06:21 AM PDT by Frantzie (McCain=Obama's friend. McCain/Graham = La Raza's Senators)
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To: SeekAndFind

“And if you knock down 10,000 homes in Detroit, that’s 10,000 fewer homeowners to remodel their basements, finish their attics, or renovate their kitchens with those custom cabinets.”

...sheeeit!..you ain’t ever been to the inner city!...ain’t nobody there gonna renovate, remodel or finish...they’re too busy trying to survive being shot at...I worked on a Habitat house in Baltimore...what a mess that street was!...on a bright day the gutters sparkled with empty crack vials...there are places in this country where everyday life looks like something straight out of “Escape From New York”...uninhabitable by any standard.


28 posted on 05/18/2010 11:08:56 AM PDT by STONEWALLS
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To: USFRIENDINVICTORIA

A long series of mistakes? Are you insane? It was liberalism, Democrats and unions that did this not mistakes.


29 posted on 05/18/2010 11:09:44 AM PDT by Frantzie (McCain=Obama's friend. McCain/Graham = La Raza's Senators)
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To: SeekAndFind

http://online.wsj.com/article/SB10001424052748703950804575242433435338728.html?KEYWORDS=romney


30 posted on 05/18/2010 11:10:18 AM PDT by GOP_Lady
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To: SeekAndFind

Some of them would be worth nothing. Some would be worth salvaging. Pity that people cannot homestead them and have the trashed ones eliminated so each standing house can homestead the land around them too.

Unfortunately there would have to be a shoot to kill policy for the thugs who would prey on the homesteaders and the subsequent businesses.


31 posted on 05/18/2010 11:10:27 AM PDT by Chickensoup ("A corrupt society has many laws" - Tacitus)
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To: SamuraiScot

“Homes” require responsible owners that have jobs plus some sort of economy that is not totally based on govt jobs.

Detroit has none of the above criteria. It is a moonscape or wasteland. This is what liberalism, unions, Democrats and race guilt can do.


32 posted on 05/18/2010 11:12:35 AM PDT by Frantzie (McCain=Obama's friend. McCain/Graham = La Raza's Senators)
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To: Pessimist

I just finished two weeks business in the area and to avoid the construction at 9 Mile I got off the freeway at 8 Mile to go over to Mound. I was stunned by what I saw. Home after home empty, windows out or boarded up, gutters falling off. I’ve never seen anything like it,not even a couple years back when I passed through some neighborhoods between Telegraph and Woodward.


33 posted on 05/18/2010 11:13:07 AM PDT by A message
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To: Frantzie

Are you saying the liberal, Democrat, unionists didn’t make a long series of mistakes? I think we’re trying to say the same thing here.


34 posted on 05/18/2010 11:13:12 AM PDT by USFRIENDINVICTORIA
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To: SeekAndFind

http://justgetthere.us/blog/archives/US-Cities-May-Have-to-Be-Bulldozed-in-Order-to-Survive.html

Not just Michigan, if Obama has a say...

“Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic “shrink to survive” proposals being considered by the Obama administration to tackle economic decline.”

If recall serves, Obama was thinking this needed to happen in new York, too.


35 posted on 05/18/2010 11:13:43 AM PDT by Irenic
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To: SamuraiScot
In many cases, the owner of the home is the City itself, or Wayne County. Former owners abandoned them when they were unable to sell. The houses stood vacant and became targets for vandals and all sorts of criminal activity. This led to more people abandoning their homes. Now there are streets in Detroit that are less than 20% occupied--there are even streets that have been entirely abandoned. Detroit has to maintain sewage lines and other utilities to these areas, has to plow the streets in the winter (Detroit gets snow every now and then, who knew?), and the City's first responders--police and fire--have to spend a putrid amount of time taking care of business in these areas...abandoned homes burning, criminals seeking refuge from the law, etc...

This is NOT a shot at government-induced scarcity. This is a city coming to grips with reality. The "Romney home" is making headlines because of its association with the family and its recent price tag. Most of the homes scheduled for demolition are worth--literally--zero. A home is worth what the market will pay. Most of these homes failed to garner a single bid at auction. They are not only worthless, their continued existence is a financial drain on a bankrupt city.

This is not the kind of solution I would like to see used anywhere but in the most desperate situations. That's Detroit.

36 posted on 05/18/2010 11:14:02 AM PDT by grellis (I am Jill's overwhelming sense of disgust.)
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To: SeekAndFind
A few houses still stood within the skeleton of what had once been an industrial town. Everything that could move, had moved away; but some human beings had remained. The empty structures were vertical rubble; they had been eaten, not by time, but by men: boards torn out at random, missing patches of roofs, holes left in gutted cellars. It looked as if blind hands had seized whatever fitted the need of the moment, with no concept of remaining in existence the next morning. The inhabited houses were scattered at random among the ruins; the smoke of their chimneys was the only movement visible in town.

Welcome To Starnesville.

37 posted on 05/18/2010 11:16:22 AM PDT by Tribune7 (It is immoral to claim the tea parties to be racist)
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To: ScottinVA

http://www.youtube.com/watch?v=1hhJ_49leBw&playnext_from=TL&videos=5meyqxTwmM0

Steven Crowder tours Detroit.


38 posted on 05/18/2010 11:18:38 AM PDT by netmilsmom (I am inyenzi on the Religion Forum)
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To: SeekAndFind

Thank you, Labor Unions, Leftist Democrats and Affirmative Action...

Your Liberal Paradise has been achieved, step back and take in all the splendor.


39 posted on 05/18/2010 11:20:35 AM PDT by wac3rd (Prepare for the November 2010 Tsunami)
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To: Pessimist

I’m from Cleveland and live in Detroit.

http://www.youtube.com/watch?v=oZzgAjjuqZM

Make sure you watch this until the end. I LOL’d.


40 posted on 05/18/2010 11:22:40 AM PDT by netmilsmom (I am inyenzi on the Religion Forum)
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To: SeekAndFind
But it creates lots of demolition jobs! Don't you care about the working man?

(see The Broken Window)

41 posted on 05/18/2010 11:24:24 AM PDT by TChris ("Hello", the politician lied.)
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To: Tribune7; Frantzie
The talented people left Detroit as the city died, killed by its union parasites. What remains is a collection of misfits, moochers and malcontents on the governent teat, unable to function in a capitalist society.

Detroit no longer has a reason to exist. Its single best destiny is to be plowed back into the farmland from which it arose a century ago.

Sic transit gloria.

42 posted on 05/18/2010 11:24:44 AM PDT by Publius (Unless the Constitution is followed, it is simply a piece of paper.)
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To: All
Check out this video: Detroit in Ruins: Steven Crowder goes Ghetto-Detroit and the UAW

Now, I know Steven Crowder is a comedian, but this is the same video of I have seen uncut of other places throughout the city. I think it is indicative and an accurate portrayal of large parts of the city.

I think there are simply some areas that cannot and will not be rehabilitated. Democrats did this, but they will point their fingers at someone else.

43 posted on 05/18/2010 11:24:46 AM PDT by rlmorel (We are traveling "The Road to Serfdom".)
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To: Publius

I totally agree. Misfits? They should be so lucky, they left a long time ago. Now it is just moochers and malcontents.


44 posted on 05/18/2010 11:26:57 AM PDT by Frantzie (McCain=Obama's friend. McCain/Graham = La Raza's Senators)
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To: netmilsmom

You beat me to it. Sad video, but informative.


45 posted on 05/18/2010 11:27:03 AM PDT by rlmorel (We are traveling "The Road to Serfdom".)
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To: C19fan
"You can buy a house in Detroit for less than a car."
yeah, but the taxes on said home are outrageous.....property taxes are higher in detroit than anywhere except the most exclusive suburban neighborhoods.....afford the house, but not the taxes
46 posted on 05/18/2010 11:30:27 AM PDT by joe fonebone (They will get my Fishing Rod when they pry it from my cold dead fingers)
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To: rlmorel

This is a preview of what decision China will have in 30 years when they try to decide whether to bulldoze America or just nuke it and wait a thousand years before they move in.


47 posted on 05/18/2010 11:30:55 AM PDT by USS Alaska (Nuke the terrorist savages - In Honor of Standing Wolf)
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To: TChris

Hey! I do believe you were the one who recommended his book to me about two weeks ago...you were right, great book, and this link you provided was one of the best parts of it, I thought.

Thanks very much!


48 posted on 05/18/2010 11:32:26 AM PDT by rlmorel (We are traveling "The Road to Serfdom".)
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To: rlmorel
I do believe you were the one who recommended his book to me about two weeks ago...

I don't think so, because I just heard about it myself in the past day or two.

I'll join you in saying THANKS to whomever posted the link and info. :-)

49 posted on 05/18/2010 11:34:05 AM PDT by TChris ("Hello", the politician lied.)
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To: SamuraiScot
Or if for some reason the city holds title, auction them off to the highest bidder?

They just tried that this past year with horrible results.......Nobody was willing to buy.

50 posted on 05/18/2010 11:46:35 AM PDT by Hot Tabasco (Peanut butter was just peanut butter until I found Free Republic.........)
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