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Can Motown be mended?
Economist ^ | July 27, 2013 | unattributed

Posted on 07/28/2013 3:27:58 PM PDT by 1rudeboy

America’s biggest-ever city bankruptcy starts to roll

LARRY EDWARDS sits patiently in his wheelchair outside City Hall, waiting for a lift home. He worked as a gardener at Detroit’s Belle Isle Park between 1988 and 2011. That was before a knee injury, and then a stroke, forced him to retire. He remembers how beautiful the island was before people started to move out of town and the crooked politicians arrived. Mr Edwards will be 50 in December. The city already pays one-third of his full pension. He says that, since his pension is protected by a contract, he isn’t worried about the city’s bankruptcy. But he should be.

By filing for Chapter 9 on July 18th, Detroit sought protection from all its creditors, including pensioners like Mr Edwards. Nothing will change for the next six months. But Kevyn Orr, the emergency manager appointed by the governor of Michigan, says future and present retirees will see cuts to the unfunded portions of their pensions. Health-care benefits are also likely to be squeezed.

Detroit is the largest American city ever to file for bankruptcy. Its long-term debts are estimated at $18.2 billion, or $27,000 for each resident. Of this, about $9.2 billion is in unfunded retirement benefits. Since 2008 the city has spent around $100m more each year than it has brought in. Recent attempts to fix its finances have been thwarted by a feeble economy, a shrinking population and rapidly increasing legacy costs. Property-tax revenues have declined by 20% since 2008, and income tax by 30% since 2002.

The crisis has been brewing for decades. Fifty years ago the city was rich. GM, Ford and Chrysler cranked out nearly all the cars sold in America. Detroit was home to 1.8m people. Today only 700,000 remain. Many are poor and poorly educated—82% have no more than a high-school diploma. The city sprawls over an unmanageable 140 square miles (enough to swallow Boston, San Francisco and Manhattan). Delivering services to barely-populated neighbourhoods would be hard even if the city government were well-run, which it is not.

snip


TOPICS: Business/Economy; Culture/Society; Editorial; US: Michigan
KEYWORDS:
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1 posted on 07/28/2013 3:27:58 PM PDT by 1rudeboy
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To: cripplecreek

ping


2 posted on 07/28/2013 3:28:11 PM PDT by 1rudeboy
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To: 1rudeboy

No


3 posted on 07/28/2013 3:29:32 PM PDT by saganite (What happens to taglines? Is there a termination date?)
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To: saganite

yes


4 posted on 07/28/2013 3:30:33 PM PDT by 1rudeboy
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To: 1rudeboy

I don’t reckon something that is dead can be mended... it should be dissolved.


5 posted on 07/28/2013 3:30:37 PM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: 1rudeboy

Not under current management.


6 posted on 07/28/2013 3:31:54 PM PDT by Jim Robinson (Resistance to tyrants is obedience to God!!)
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To: 1rudeboy

Did I read that they building a new hockey stadium?

Funded how?


7 posted on 07/28/2013 3:32:45 PM PDT by berdie
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To: 1rudeboy

Economically Detroit is easy to fix. Slash taxes and regulation.

Politically its going to take a wide ranging round of indictments.

Socially it will take solid conservatives (Mostly black to begin with) promoting freedom in Detroit.

Basically its a matter of conservatives fixing the place through free market means or democrats will “fix” it with more of our money.

Faith, Family, and Free markets.


8 posted on 07/28/2013 3:33:30 PM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: 1rudeboy

Can liberals admit their governing philosophy inevitably leads to bankruptcy?


9 posted on 07/28/2013 3:33:59 PM PDT by vbmoneyspender
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To: 1rudeboy

I must know what time period we talking about before I can answer. (In the near term, No. In the very long term, probably not, but maybe.)


10 posted on 07/28/2013 3:34:43 PM PDT by gorush (History repeats itself because human nature is static)
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To: 1rudeboy

It certainly can, but accomplishing such a task will require some changes.

Foremost, Michigan must become a Right to Work state and end closed union shops for industry and government.

Second, local business regulation and taxes must be drastically reduced.

Third, the government, insurance industry and safety advocates need to get out of designing cars.

Fourth, the EPA must streamline its Superfund projects and ramp up development of Brownfields.

Not a comprehensive list, but a good start.


11 posted on 07/28/2013 3:35:21 PM PDT by noprogs (Borders, Language, Culture)
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To: cripplecreek
Buy to the sound of gunfire

FOR visitors expecting broken windows and muggers, downtown Detroit is a pleasant surprise. Busy food stands serve diners on lime and orange picnic benches, with live music provided by a classical guitarist. After lunch you can play a free game of outdoor table tennis, borrow a bicycle or take a stroll on the lovely riverfront.

The city may be broke, but some parts are reviving. Property is so cheap that Detroit still attracts dreamers. Perhaps the most prominent is Dan Gilbert, the chairman of Quicken Loans, a mortgage provider. In 2010 Mr Gilbert moved Quicken’s headquarters from the suburbs to the centre of town. Another of his companies, Rock Ventures, owns or controls over 30 buildings in the area, which locals light-heartedly call “Gilbertville”. Mr Gilbert’s firms have invested around $1 billion in downtown Detroit and employ some 10,000 people there.

snip


12 posted on 07/28/2013 3:35:56 PM PDT by 1rudeboy
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To: 1rudeboy

OK here’s a thought experiment: Split the city in two chunks, just like Berlin...maybe run a wall right up Woodward Avenue.

Put a Conservative governor in charge of one half, and a Liberal in charge of the other. Each would have complete authority to do as he sees fit with 50% of the tax revenue. No city council, no state intervention, he’d have similar powers to the Special Masters who have been put in charge of schools by the federal gov’t.

Come back in 5 years and compare the two sides. Then tear down the wall and the winning side takes over the other. Or wait 10 years and the correct outcome will have occurred all by itself.


13 posted on 07/28/2013 3:37:00 PM PDT by bigbob
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To: berdie
Did I read that they building a new hockey stadium? Funded how?

Bankruptcy: what bankruptcy? $444 million for the Detroit Redwings. Obama-cash no doubt.

14 posted on 07/28/2013 3:37:01 PM PDT by MamaDearest
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To: 1rudeboy

I don’t care, I was always more of a Stax/Volt guy, myself.


15 posted on 07/28/2013 3:37:06 PM PDT by dfwgator
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To: 1rudeboy

Could Nagasaki or Hiroshima be mended on the first of September, 1945?

Somebody would WANT to mend Detroit. Nobody is stepping up.

At least nobody with a viable plan.

Raze the entire region to the ground and plant it to buckwheat. Then let the natural rules of economics determine if there should even BE a city there, and allow it to develop according to that economic model.


16 posted on 07/28/2013 3:38:07 PM PDT by alloysteel (Unattended children will be given a Red Bull and a free Kazoo. Reminds me of Congress...)
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To: 1rudeboy
The first thing you need to do is replace most of the residents of the city. Since that is not going to happen anytime soon, I don't see a promising future for Detroit.

Resurrecting Detroit is akin to going into a Third World country and trying to bring it up to developed world standards. The city needs far more than investment to bring it back.

17 posted on 07/28/2013 3:38:21 PM PDT by kabar
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To: berdie
Detroit Red Wings Get New $400 Million Taxpayer-Financed Stadium While the City Goes Bankrupt

When the band plays "Hail to the Chief", they're pointing the cannon at you.


18 posted on 07/28/2013 3:38:41 PM PDT by ex91B10 (We've tried the Soap Box,the Ballot Box and the Jury Box; ONE BOX LEFT!)
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To: cripplecreek
Basically its a matter of conservatives fixing the place through free market means or democrats will “fix” it with more of our money.

And where will those conservatives come from? The vast majority of the residents don't believe in free market principles and conservative values. They believe in a culture of dependency and big government. They accept widespread corruption.

If it weren't for the federal government, Washington DC would be another Detroit.

19 posted on 07/28/2013 3:43:47 PM PDT by kabar
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To: 1rudeboy
Easy, make it into a tax-free zone.
A free haven where people can come work and trade without any tax burden.
Those who are already there will be offered a broom, a shovel or a one way Greyhound ticket out of town.
The city will boom again within two years if they do that.
20 posted on 07/28/2013 3:44:06 PM PDT by BitWielder1 (Corporate Profits are better than Government Waste)
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To: Jim Robinson
Not under current management.

You are correct sir, not under the rats, and even if Detroit can recover, it might take a generation or more, unless Odumbo bails them out, then they will continue to kick the can down the road, hence, back to square one.

21 posted on 07/28/2013 3:45:16 PM PDT by Mark17
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To: 1rudeboy

Detroit has far too few taxpayers and there is no motivation for new taxpayers to move in, so, no.... I don’t think Detroit can be saved.


22 posted on 07/28/2013 3:45:41 PM PDT by umgud (2A can't survive dem majorities)
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To: ex91B10

Thanks.

Still sounds a little coo-coo to me...but what do I know?


23 posted on 07/28/2013 3:45:41 PM PDT by berdie
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To: 1rudeboy

Does anyone care?


24 posted on 07/28/2013 3:46:59 PM PDT by doorgunner69
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To: 1rudeboy

Detriot, Michigan city-data

Looking at the above linked city data gives a good perspective of Detroit's problems. The city has been in a downfall for a number of years.

25 posted on 07/28/2013 3:48:11 PM PDT by deport
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To: 1rudeboy

They need RoboCop.

Of course the only thing that can work is a forcible military takeover.


26 posted on 07/28/2013 3:49:02 PM PDT by ImJustAnotherOkie (zerogottago)
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To: 1rudeboy

Detroit can be mended if Detroiters choose to mend it. That means quit voting 97% Democrat, quit voting for progressives, get the schools back, and stop allowing major crimes against citizens and property.


27 posted on 07/28/2013 3:49:41 PM PDT by Darren McCarty (Abortion - legalized murder for convenience)
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To: 1rudeboy

It would require shrinking the bureaucracy to the absolute core, so probably not.


28 posted on 07/28/2013 3:49:45 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)
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To: bigbob
OK here’s a thought experiment: Split the city in two chunks, just like Berlin...maybe run a wall right up Woodward Avenue.

That was pretty much done. Oakland County was Republican (until Detroiters moved there and brought Detroit with them). Detroit was and is democrat.

29 posted on 07/28/2013 3:52:01 PM PDT by Darren McCarty (Abortion - legalized murder for convenience)
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To: 1rudeboy

Wha’ happened to all them rich ,rich black folk, blowin’ the ‘Wall of Sound?’ Oh, da’s right. They wised up.


30 posted on 07/28/2013 3:53:09 PM PDT by Safetgiver ( Islam makes barbarism look genteel.)
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To: Jonty30

They could swear off chocolate?


31 posted on 07/28/2013 3:55:41 PM PDT by Misterioso (The hardest thing to explain is the glaringly evident which everybody has decided not to see.)
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To: 1rudeboy
Well, I hope that works out for all concerned.

My company had a similar experience, albeit on a much smaller scale.

We bought a couple of cheap apartment complexes in a high crime, dilapidated area, close to a hospital district. The premise being, people working at these hospitals would want to live close to work and be willing to live in the area if they could get to a “haven” apartment.

The cost was huge...renovation, security gates and personnel, tennis courts, work out rooms and biz centers. All I can say...it was a total failure. One I had tried to fight tooth and toenail.

32 posted on 07/28/2013 3:57:07 PM PDT by berdie
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To: 1rudeboy
Here are the current demographics of the city: Blacks: 83%; non-Hispanic whites: 8%; Asians: 1%; Hispanics: 7%.

For the 2010 American Community Survey, median household income in the city was $25,787, and the median income for a family was $31,011. The per capita income for the city was $14,118. 32.3% of families had income at or below the federally defined poverty level. Out of the total population, 53.6% of those under the age of 18 and 19.8% of those 65 and older had income at or below the federally defined poverty line.

33 posted on 07/28/2013 3:57:10 PM PDT by kabar
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To: vbmoneyspender

“Can liberals admit their governing philosophy inevitably leads to bankruptcy?”

No more than Stalin would admit that his collectivization plan starved millions of Ukrainians. He blamed everyone, up to and including his victims themselves. He was never wrong, which is symptomatic of a deeper psychological pathology.


34 posted on 07/28/2013 3:58:47 PM PDT by Spok
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To: 1rudeboy

The hard truth is that Detroit can’t be fixed until the citizens of Detroit are fixed. You can give them more money and they’ll just burn through it. You can jail the criminal politicians, and they’ll just elect different crooks. You can have portions of Detroit that are fine, but you’ll have to build elevated highways to get to them. The only true cure is to change the people. Without that, the best that can be done is to destroy the Democrat party so they don’t have the means to spread their bad habits.


35 posted on 07/28/2013 4:00:09 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: 1rudeboy
Motown is the direct result of liberal management and unrestricted unions. I have never seen greed in our country that even comes close to that of the auto unions. They have killed all the geese that layed all the golden eggs with nothing but pure greed.
You are seeing the future of out nation in three to four decades if we continue to elect the democrats/socialists in our federal government. The makers simply go someplace else and leave all the takers behind.
Yes, I and my family will be gone. I refuse to support those who will not go to school and gain the basic skills necessary for employment. I refuse to support a government who ignores our bill of rights and our constitution.
It is a well known fact that hunger is a prime motivator. Quit feeding the feral Americans for free and they will figure out how to make some money and feed themselves.
36 posted on 07/28/2013 4:01:19 PM PDT by oldenuff2no
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To: kabar

Not all conservatives are a bunch of do nothing whiners and will actually try to prevent the democrats from “fixing” Detroit with your money.

Not all conservatives are pathetic wimps.


37 posted on 07/28/2013 4:02:05 PM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: 1rudeboy
It could be mended if those in charge clearly identified what caused the problems and set out and implemented a program to correct them.

The problem from what I read is socialism/liberalism and an overabundance of entitlement citizenry (and no I don't mean anything racial...entitlement folks come in all colors and many are unionized).

The turnaround team should try to get Detroit classified as a "free trade zone" and exempt from the minimum wage laws and unions.

What Detroit has going for it is desperation and name recognition. Otherwise it is no more important than pastureland in Iowa or desert in Arizona (that said, its ports--water, rail, and air--don't hurt).

As a final note, Detroit doesn't need a bankruptcy lawyer to handle its turnaround.

It needs a turnaround guy who is a visionary at clearly selecting a course of action and who is also a mean as a snake manager capable of making and implementing tough decisions (actually, the toughest decisions).

38 posted on 07/28/2013 4:02:28 PM PDT by RoosterRedux (Liberals' first line of defense is emotion...the fall back position is specious reasoning.)
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To: cripplecreek
You failed to answer my question: Where will these conservatives come from and who are they? Take a look at the demographics of the city, the condition of the schools, public services, the quality of city government and its historical corruption, etc. Who in their right mind is going to invest money in a cesspool?

This isn't a matter of being a wimp or not. It is a matter of common sense. Detroit is no better than a third world country. And it is just a harbinger of things to come with many of our urban areas being in the same condition. St. Louis and Cleveland are headed in the same direction. We don't have the money to bail these places out.

39 posted on 07/28/2013 4:10:15 PM PDT by kabar
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To: 1rudeboy

Yes ... with bulldozers to scrape it flat.


40 posted on 07/28/2013 4:13:13 PM PDT by Ancient Man
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To: kabar

“The city needs far more than investment to bring it back.”

Very true! The other reality is that there are literally dozens of “Detroits” within the confines of the United States. I find it interesting (but not surprising) that FUBO wants people to “move to the cities.”
The only rationale is that control is easier. The truth is that our major cities are home to a host of conditions that doom them to becoming “Detroits” sooner or later. We have allowed “ the world’s huddled masses” to “huddle” in our cities sucking the financial guts out of them. There are just too few truly educated minorities as a percentage of their entire groups to effectuate the changes that need to happen in the cities. Sad for them, but sadder for those of us who have created the wealth that they are consuming. Unless there are draconian changes they will “win.” White America birth rate 1.6 per couple, but when you “add in” Blacks and Hispanics it rises to 2.11, So you know who’d doing the breeding don’t you! We are headed toward a minority majority with poverty for all! I am glad I lived in this generation, but I am so sad for my children and now their children.


41 posted on 07/28/2013 4:14:03 PM PDT by vette6387
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To: RoosterRedux
(and no I don't mean anything racial...entitlement folks come in all colors and many are unionized).

You don't think being 83% black has anything to do with the decline of the city? Or that reviving it will have to address that demographic? Take a look at the demographic history of the city. You can trace the decline of the city with the change in demographics. Politically correct or not, you can't discuss the collapse of Detroit without explaining why there has been such a radical change in the racial makeup of the city.

42 posted on 07/28/2013 4:22:59 PM PDT by kabar
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To: 1rudeboy
Detroit's long-term debts are estimated at $18.2 billion, or $27,000 for each resident.

$27,000 and add that to the $52,000 they owe Obama.

Boy, are they screwed.

43 posted on 07/28/2013 4:24:47 PM PDT by Slyfox (Without the Right to Life, all other rights are meaningless.)
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To: 1rudeboy
Rising transportation costs will help return manufacturing to Detroit. It sits astride the second busiest freight crossing on the continent and nothing will change that short of Canada choosing to spend trillions relocating their manufacturing region. The second bridge will ease the trade bottleneck and create jobs when its built.

Image Hosted by ImageShack.us

The Grandson of a neighbor was transferred to Detroit from NY a while back and he loves it. He gets far more bang for his buck than he got in NY. He's in a nice quiet neighborhood in the city with private security to back up police. Nobody tells him he can't have a powdered doughnut and a big gulp with his cigarette and he can openly carry a gun in Detroit. Within some 4 miles of his house he can see major league baseball, the NFL, Powerboat racing, The Detroit Grand Prix, air racing and sailboat racing. (As far as the Pistons and Red Wings are concerned, both should be downtown but no taxpayer funding)

The Chinese are buying up a lot of land in Detroit and I suspect they're just paying taxes on it till they either sell it or decide to build factories on their very cheap land. (transportation costs again) So far the William Hults is still looking to buy the Packard plant and has even hired the architects. A new Meijer (box store) just opened at the corner of Woodward and 8 Mile last week.

There is big money in Detroit and it will be unleashed once the bankruptcy is settled. The naysayers can say NO all they want, big money is saying something else.

Image Hosted by ImageShack.us


44 posted on 07/28/2013 4:26:46 PM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: vette6387
We are compounding the problem with our immigration policies. We bring in 1.2 million legal immigrants a year, 87% of whom are minorities as classified by the USG. Immigration drives 75% of our population growth.

Bureau of the Census: International Migration is Projected to Become Primary Driver of U.S. Population Growth for First Time in Nearly Two Centuries

"International migration is projected to surpass natural increase (births minus deaths) as the principal driver of U.S. population growth by the middle of this century, according to three new series of population projections released today by the U.S. Census Bureau. This scenario would mark the first time that natural increase was not the leading cause of population increase since at least 1850, when the census began collecting information about residents' country of birth. The shift in what drives U.S. population growth is projected to occur between 2027 and 2038, depending on the future level of international migration."

45 posted on 07/28/2013 4:30:46 PM PDT by kabar
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46 posted on 07/28/2013 4:33:36 PM PDT by RedMDer (When immigrants cannot or will not assimilate, its really just an invasion. Throw them out!)
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To: cripplecreek

“Socially it will take solid conservatives (Mostly black to begin with) promoting freedom in Detroit.”

cripplecreek, do you really think (enough of) such people can be found?


47 posted on 07/28/2013 4:52:47 PM PDT by jocon307
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To: cripplecreek

Sounds good, but the demographics will kill it. Until the demographics change radically, so that it is not run by corrupt dems, it is hopeless. And such a huge change in demography is highly unlikely.


48 posted on 07/28/2013 5:15:11 PM PDT by expat2
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To: jocon307

Yes. They only need to know there will be conservative support.

For instance in June, the Americans for Prosperity hosted the Frederick Douglass Junteenth celebration in Detroit in cooperation with the Union Conservatives. Reverend CL Bryant was a keynote speaker and has made at least two more trips to Detroit since. For those who are unaware Rev. Bryant was the primary driving force behind the Runaway slave movie. Tea Party types and conservative republicans are actively working on free market ideas to help solve the health care crisis of city retirees.

Personally I would inundate the city with every black conservative across the spectrum. I don’t like it being race based but I do think its the only way to break through. I would bury the city under conservatives like Mia Love, Allen West, Herman Cain, Ben Carson, Alfonzo Rachael etc. There are also local conservatives in Detroit like Rick Ector.

You’ve got to go at it like a war and unlike the mideast folly, this is a war worth fighting. You go at it with everything you’ve got. You break the tax and regulatory dam and you will soften up the ideological defenses. The indictments of city officials will likely continue.

The simple fact is that the whole country is going the way of Detroit so what better place to develop our strategy going forward. Detroit was once a republican city and its high time we took one back.


49 posted on 07/28/2013 5:19:46 PM PDT by cripplecreek (REMEMBER THE RIVER RAISIN!)
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To: jocon307

Even if they could be found, they are never going to be elected in Detroit.


50 posted on 07/28/2013 5:20:13 PM PDT by expat2
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