Can Motown be mended?

Economist ^ | July 27, 2013 | unattributed

[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

[vette6387]

“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.

[kabar]

(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.

[Slyfox]

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.

[cripplecreek]

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.



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.

[kabar]

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."

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[jocon307]

“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?

[expat2]

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.

[cripplecreek]

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.

[expat2]

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

[kabar]

You live in a fantasy world. What’s next? Take back California? LOL.

[cripplecreek]

And you will live in the word the democrats tell you to live in because doing otherwise is just too hard.

[kabar]

No, I am actually working in the trenches doing something. I have learned not to waste resources and time trying to change things that can’t be changed. You live in a fantasy world.

[SueRae]

Well said.

Did you see the piece on CNBC on Shinola, a company that manufactures watches and bicycles in Detroit? The CEO gave a great interview. I think his name is Heath Carr. The items are not inexpensive..but I would be willing to buy from them...just because. And if this was a publicly traded company, I’d have their stock. But they are smart in keeping it private. Bottom line, it will be people like this company’s CEO, with vision and resources, that will pave the way.

[jocon307]

“Detroit was once a republican city and its high time we took one back.”

I agree with you on that.

[Revolting cat!]

Easy, Motown (and Tamla) just needs some...

[1rudeboy]

There are plenty of areas in the U.S. that once were slums that are now fine, upstanding areas. It happens, as long as you don’t have a loser mentality about it.

[cripplecreek]

Shinola is a small company but its something and they make what looks like some real quality stuff. Bicycles, Watches, leather goods, Printing.

http://www.shinola.com/

There’s a Minnesota company now assembling wide screen TVs in Detroit. They use primarily Chinese made parts but hope to start making more of their own and are hoping Chinese manufacturers will eventually open factories here. A new Meijer store just opened on the corner of Woodward and 8 Mile. (first box store in the city I believe) Meijer is union but they’re competitive with Walmart and I actually prefer them due to their dedication to selling locally made or grown goods whenever possible.

Conservatives have got to get over being comfortable with losing and learn to step out of the bunker every once in a while. Nobody believed that the GOP could take both houses of the state legislature and the governors mansion let alone the SOS and attorney general. We even managed to elect a tea party republican to the RNC. A year ago people literally laughed in our faces when we said we would pass a right to work law but we created a coalition of tea partiers, republicans, AFP and Union conservatives and got it done. We did all of this stuff working with a very liberal Governor and against him when we had to.

[RoosterRedux]

Some Blacks are conservative...it is not a racial or genetic thing. The problem with Detroit was not a matter of color but of political proclivity.

Don't fall into that trap. It is not racial, it is cultural.