Posted on 07/19/2013 7:44:27 AM PDT by SeekAndFind
The City of Detroit filed for bankruptcy yesterday afternoon. It owes as much as $20 billion, and there is no conceivable way that debt will ever be paid. The city offered its debtors 10 cents on the dollar, but the debtors refused.
A good deal of the blame -- rightly or wrongly -- will be placed at the feet of municipal workers -- sanitation, water, sewer, cops, firefighters and so on.
The pressure of ever-rising wages for no additional work, leading to ever-rising pension costs, plus ever-increasing benefits and ever more closely defined work rules will likely be found at the bottom of all this.
But it's not the unions' fault. It is the fault of the elected officials -- Democrats in Detroit -- who didn't have the guts to say "No" to their largest voting bloc.
It has been said that the difference between public and private unions is this: Private union leaders know that if their demands become too high, the company will go out of business and everyone will lose their job.
Public unions, until recently, just kept demanding, and getting, more and more while producing nothing new in terms of services they render. Union pensions tend to be so generous that taxpayers end up paying almost full wages to three or four workers, only one of whom is still actually working, to do exactly the same job that one person had been paid to do in an earlier age. According to some estimates, retirees outnumber active workers 2-1.
No amount of technology can move a public union to reduce its workforce.
Example: I stay in a small hotel in Dallas that used to have three people behind the registration desk. Some time ago the hotel installed kiosks into which you put your credit card and, voila, out came your room key card with a printed folder telling you the room number.
There remained only one person behind the registration desk to handle people who hadn't made a reservation in advance. Assuming there were two fully-staffed shifts a day, that means four people per day were no longer needed.
Those jobs are never coming back. The hotel is more profitable because, through technology, it has reduced its workforce by four people every day.
Public unions would never let that happen. If the hotel were a city like Detroit, the American Federation of Municipal Kiosk Workers would have demanded that every kiosk have an attendant. And the National Association of County Hotel Bill Sliders (AFL-CIO) would have demanded that at least two people remain on the payroll to change the paper in the room bill printer, even if no room bills are being printed any more.
The United Auto Workers based in Detroit has, for decades, had basically the same outlook as public unions. But auto manufacturers discovered it's a big country out there and they found that they could build factories in border and southern right-to-work states and produce cars for far less than the United Auto Workers were forcing them to pay in Detroit.
In a Forbes.com article from this past April, reporters Matt Patterson & Julia Tavlas wrote:
"As Reuters reports, in the past three decades nearly every job lost at U.S. car factories have vanished from unionized companies; meanwhile, job gains have come almost exclusively from non-union companies."
Car companies can move jobs to Tennessee or Mississippi, but Detroit can't move its sewer department to Arkansas or its cops to South Carolina. A broken water line in Detroit can't be repaired by a non-union employee working in San Antonio.
Again, I don't blame the union bosses. They did what their members paid them to do.
I blame the elected officials who never put the long-term financial health of their community ahead of their burning desire to be re-elected by pandering to the lowest common denominator.
There's more. Very often, when a municipal worker retires in a place like Detroit, he revs up the RV and heads to warmer climes. So the taxpayers of Detroit have to pay for 20 or 30 years of retirement for someone living (and spending that retirement money) in Florida or Arizona.
The city's population has dropped from almost two million in the 1950s to just under 700,000 who are paying 40 percent less in taxes just since 2000.
Fewer people paying less taxes to support more people doing less work.
Hey. Wait a minute. That sounds very familiar.
Here’s a very interesting thread at FR that was posted 4 years ago with pictures of Detroit....
http://www.freerepublic.com/focus/chat/2349112/posts
The people of Detroit will just have to eat their peas. lol
Any guesses on which Democrat-run cities will be next to declare bankruptcy? Has to be a long list....
Somebody should write the history of the glory that was Detroit.
During her heyday, Detroit was the grand American city and rivaled New York as the power center of the country.
The Detroit symphony orchestra pre-dated the 20th century.
At one time, Detroit was a tremendous incubator for art & music as well as home to some of America’s strongest and most diverse companies (GM, Ford, Chrysler, Motown ).
The 1960s were the beginning of the end after LBJ started his “War on Poverty”.
Having had some business dealings with the unified school district in our area recently, I can say for certainty - the city officials do not consider their budget to be ‘their’ money. It is just money they are given. If they need more, they ask for more. They don’t have to be careful with it, they don’t have to account for where it goes - really, they don’t particularly care.
Detroit is the same. I think the plan all along was to go bankrupt and let the feds pay for it. That’s us, folks. It’s not the feds’ money either - they can just get more.
I think they should bulldoze Detroit and put the city officials and union officials in jail for life.
The problem is that the unions have been buying off the Rats for decades to give them more money for less work. At the bargaining table you have the unions and the Rats and no one represented the people paying the taxes. Let Detroit crumble into ruin and be a monument to corruption.
“Perhaps one of the most predictable events of all time. lol”
The open question is: “Who’s next?”
Answer: The next large, Black RAT-run city!
My father retired from the Detroit Police Force in 1974 as a Detective Sergeant. He is now 87 and has been collecting 1/2 sergeants pay for 40 years after 25 years on the force.
Just sayin’
Detroit has a 3rd World population that can only create 3rd World conditions. Imagine a city populated exclusively by the likes of Rachel Jeantel and Trayvon Martin. Do you think that city would resemble Vienna or Kyoto or even Pittsburg?
Detroit = Zimbabwe North
“Do you think that city would resemble Vienna or Kyoto or even Pittsburg?”
Only after a zombie apocalypse.
“The 1960s were the beginning of the end after LBJ started his “War on Poverty”
Precisely!!! Kudos galore to you!!!
This simply cannot be said too much or overemphasized.
BINGO!!!
It’s a Ponzi scheme. The first generation of government workers got the big payoff. The second generation got somewhat less. The third generation will get nothing.
RE: The open question is: “Who’s next?”
Here’s one city to worry about (Article dated April 2013)
http://globaleconomicanalysis.blogspot.com/2013/04/philadelphia-5th-largest-city-in-us-is.html
Philadelphia, 5th Largest City in US is Effectively Bankrupt; Mayor Holds Closed Meeting With Wall Street to Discuss Asset Sales
I say it's time to surrender....poverty won.
The First 10 City Pensions That Will Run Out Of Money http://www.businessinsider.com/first-city-pensions-insolvent-2010-12?slop=1#slideshow-start
#10 Fort Worth...Unfunded liability: $2 billion Unfunded liability per household: $7,212 Solvency horizon: 2023
#9 Detroit...(already Obamasized)
#8 Baltimore...Unfunded liability: $3.7 billion Unfunded liability per household: $15,420 Solvency horizon: 2022
#7 New York City...Unfunded liability: $122.2 billion Unfunded liability per household: $38,886 Solvency horizon: 2021
#6 Jacksonville...Unfunded liability: $4 billion Unfunded liability per household: $12,994 Solvency horizon: 2020
#5 St. Paul...Unfunded liability: $1.4 billion Unfunded liability per household: $13,686 Solvency horizon: 2020
#4 Cincinnati...Unfunded liability: $2 billion Unfunded liability per household: $15,681 Solvency horizon: 2020
#3 Boston...Unfunded liability: $7.5 billion Unfunded liability per household: $30,901 Solvency horizon: 2019
#2 Chicago...Unfunded liability: $44.8 billion Unfunded liability per household: $41,966 Solvency horizon: 2019
#1 Philadelphia..Unfunded liability: $9 billion Unfunded liability per household: $16,690 Solvency horizon: 2015
gotta wonder how many of these are “sanctuary cities” in addition to their other moronic choices. I know St.Paul is.
With the lack of market forces, taxpayers must rely exclusively upon management to say no to costly demands. Management in this case of the current issue in Wisconsin is the Governor, but the scenario is no different throughout other levels of government. County Executives, Mayors, & Town Councils all act as management in the government "corporation". The government official must work even harder to represent the taxpayer in negotiations with public employee unions under these circumstances. There is a political party, however, that is beholden to the very government unions they are supposed to be negotiating with.
The Democratic Party receives an overwhelming amount of money in political donations from public sector unions, in fact their top 4 donors are various government unions (http://www.opensecrets.org/overview/topcontribs.php).
Many candidates go to union sponsored events, and pledge their support. This would not be a problem if not for the fact that the elected official in question will be sitting across the negotiating table from the very union that supported them in their campaign. If a candidate for office received a donation from a corporation, then after elected gave a no bid contract to that corporation it would be called corruption. How is this situation any different?
Considering most government entities (other than federal) must balance their budgets every year, you would think that politicians would be restricted from offering paybacks to the unions. They can’t give what they don’t have. Right? The problem with this argument is that the official has the ability to promise, and get passed into law, retirement and health benefits that will be paid for in the future. This takes away any current budgetary restraint that may exist, and puts us in the situation we find ourselves today all across the nation.
Gov. Walker’s proposal specifically eliminated collective bargaining for pension and healthcare benefits. This addresses the problem of politicians overpromising future benefits for unions that helped elect them. Any progress made in Wisconsin or other states, however, may be short lived if the screamers get to rule the debate. It would not be surprising if unions spend even more than the current record amounts in the next election in order to drown out rational discussion.
http://freemarketsfreepeople.net/?s=government+unions
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