Detroit Files for Bankruptcy

[Irish Houstonian]

Detroit files for Chapter 9 bankruptcy | The Detroit News

UPDATE: the Bankruptcy filing has now been ruled by a Michigan district court to violate the Michigan Constitution.

 

[ChiRish]

Going to be a huge case. I deal with some reorganization stuff in my practice at times and it's time consuming and expensive. Chapter 9 isn't utilized very often but with the recent Stockton filing and now the enormous Detroit filing, I wonder what kind of precedent it will set.

Certainly should help the city out.

 

[IrishSteelhead]

 

[condoms SUCk]

This is going to get very very messy. Pension groups are going to sue and I'm sure the Obama administration will get involved somehow.
I'm actually surprised it get this far, I figured Obama would have pressured the Mich Gov to thrown Detroit a lifeline to help them out for a few more years.

 

[Irish Houstonian]

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[kmoose]

Detroit files for Chapter 9 bankruptcy | The Detroit News

Cleveland says, "Yawwnnnn! Big deal. Been there, done that!"

 

[notredomer23]

What percentage of the city actually pays taxes? I would be surprised if it was over 50%.

 

[BobD]

Just the companies in Detroit are too big to fail?

 

[NDPhilly]

TIL Detroit's mayor has been a Democrat every year since 1962. Just a interesting statistic.

 

[phork]

TIL Detroit's mayor has been a Democrat every year since 1962. Just a interesting statistic.

Just an FYI, every Detroit mayor since then has been a crook. Except for Archer. I would almost guarantee that if Kwame Kilpatrick was on the ballot, he would win again.

 

[irishff1014]

TIL Detroit's mayor has been a Democrat every year since 1962. Just a interesting statistic.

So i am not the only one that looked that up.

 

[NDinMich]

Just an FYI, every Detroit mayor since then has been a crook. Except for Archer. I would almost guarantee that if Kwame Kilpatrick was on the ballot, he would win again.

It would definitely be WAY closer than it should be (for those that don't know, former mayor, Kwame Kilpatrick is currently serving 20 plus years in the Federal penitentiary for his crimes committed during his time in office).

The corruption in Detroit runs far deeper than anyone realizes. The Public School system makes SEC Coaches look like altar boys. The water department, library, dept of transportation and on and on are all stealing money or wasting resources far beyond anyone's wildest dreams. The water department is overstaffed at a rate of 3 to 1...for every one job that is needed there, there are 3 people in it and they refuse to right-size.

The city needs a fresh start with no absurd union contracts, pensions, etc. Hopefully this bankruptcy is the beginning of that.

 

[NDdomer2]

first step in recover is admitting.

we all knew they were broke

 

[tadman95]

Heard today that Detroit lost 250,000 in population in the last decade, not to mention the lost business revenue. Tough to overcome that.

 

[nd1989]

....60 years in the making....

 

[Buster Bluth]

TIL Detroit's mayor has been a Democrat every year since 1962. Just a interesting statistic.

This is an unneeded, perhaps pathetic, jab.

There are three reasons Detroit is in the situation that it is in: sprawl, economic vulnerability, and racism.

Economic Vulnerability: The actual term escapes me right now (fellow amateur economics help me out! haha), but Detroit's economy is dependent on the automobile industry, with not nearly enough diversification. Cars are expensive, and new cars are a luxury, which means that car sales are likely to have high highs in booms, and low looooows in busts. When there is a recession, Mom and Pop hold off on buying a new car and opt to tough it out with the rust-gathered POS they've had for a while. This creates a scenario in Detroit where droves of people are laid off or hired at once as demand spikes and plummets. That's very unhealthy in terms of being an economically sustainable place.

Racism: Detroit has massive race problems. It's as bad as anywhere in the south. For example, when Ford let just a few blacks work in the white factories (Ford employed minorities, but not together. They had black assembly plants and white assembly plants), 25,000 whites walked off in strike. Now, Ford did this intentionally as a ploy in some negotiations with the union but that's irrelevant. The point is "white flight" happened worse in Detroit than in 99% of northern cities.

Sprawl: It's the biggest issue by far. Detroit may be bankrupt, but "Detroit" is still absolutely loaded. So when people say:

Heard today that Detroit lost 250,000 in population in the last decade, not to mention the lost business revenue. Tough to overcome that.

and assume that Detroit is shrinking, they're actually wrong. Detroit is sprawling, that is all. The two counties to the north of Detroit are two of the richest in the world.

It's much more accurate to say that Detroit is what happens when unsustainable development and economic practices remain in place. Are (Democrat) mayors and unions to blame? Yes, undoubtedly so. But they actually make up such a small fraction of the real problem. And just to note, I am no Democrat apologist (I've only voted for President twice, but it was for McCain and Romney haha) so don't disregard this as being so.

 

[L-cart ND-ana]

Trade Detroit to Canada

 

[BobD]

I was surprised to learn Detroit's population peaked way back in the fifties and has declined ever since. If I would have guessed, I would have said in the 70s or 80s.

 

[DSully1995]

Trade Detroit to Canada

Theyll barely let us build a bridge, were gonna need alaska and your first war draft pic for that to go through

 

[WakeUpEchoes]

This is an unneeded, perhaps pathetic, jab.

There are three reasons Detroit is in the situation that it is in: sprawl, economic vulnerability, and racism.

Economic Vulnerability: The actual term escapes me right now (fellow amateur economics help me out! haha), but Detroit's economy is dependent on the automobile industry, with not nearly enough diversification. Cars are expensive, and new cars are a luxury, which means that car sales are likely to have high highs in booms, and low looooows in busts. When there is a recession, Mom and Pop hold off on buying a new car and opt to tough it out with the rust-gathered POS they've had for a while. This creates a scenario in Detroit where droves of people are laid off or hired at once as demand spikes and plummets. That's very unhealthy in terms of being an economically sustainable place.

Racism: Detroit has massive race problems. It's as bad as anywhere in the south. For example, when Ford let just a few blacks work in the white factories (Ford employed minorities, but not together. They had black assembly plants and white assembly plants), 25,000 whites walked off in strike. Now, Ford did this intentionally as a ploy in some negotiations with the union but that's irrelevant. The point is "white flight" happened worse in Detroit than in 99% of northern cities.

I think maybe the term you are looking for is "elasticity" but I could be way wrong. Employment is highly elastic in Detroit, along the lines of what you said above.

I agree with most of what you said, save for the racism argument. White Flight happened years ago, and no doubt it has had lasting effects to this day. But City Council in the D is inoperable and insanely broken. Just look at when Governor Schneider tried to lease Belle Isle to a billionaire in order to bring in income to Detroit. Actually listening to the comments and discussion at that City Council meeting is mind blowing.

I agree with you that the city is broken. I just don't think racism is one of the top three factors. Who has been in charge of the city for the last 30 years? Can you honestly say that "white people" have utilized racism to bring the city to where it is today?

The video below is a local radio station playing and discussing audio from a City Council meeting - some of those quotes are actual City Council members. Mind-boggling. Talking about getting Coleman Young back. What a joke.

<iframe width="640" height="390" src="http://www.youtube.com/embed/XI_6Ia0kDrg" frameborder="0" allowfullscreen></iframe>

Detroit City Council has more hurdles for Belle Isle lease deal | Detroit Free Press | freep.com

 

[irishog77]

Trade Detroit to Canada

Hell, go all Michael Finley and Metta World Peace on them and amnesty their @***. Just dump it.

 

[Buster Bluth]

I agree with most of what you said, save for the racism argument. White Flight happened years ago, and no doubt it has had lasting effects to this day. But City Council in the D is inoperable and insanely broken. Just look at when Governor Schneider tried to lease Belle Isle to a billionaire in order to bring in income to Detroit. Actually listening to the comments and discussion at that City Council meeting is mind blowing.

I agree with you that the city is broken. I just don't think racism is one of the top three factors. Who has been in charge of the city for the last 30 years? Can you honestly say that "white people" have utilized racism to bring the city to where it is today?

The video below is a local radio station playing and discussing audio from a City Council meeting - some of those quotes are actual City Council members. Mind-boggling. Talking about getting Coleman Young back. What a joke.

Racism is a two-way street. It's still huge in Detroit though. Whites dislike the blacks who "let their old neighborhood fall into disrepair," and blacks dislike the whites who took their investment into the suburbs. I suppose a better way to phrase it would be "race relations." The area is almost completely segregated; it's bewildering.

Here is a racial map of Detroit area:

Blue = Blacks
Red = Whites
Orange = Hispanic

Here is where Detroit is:

I think a really good example of just how ****ed up racial tension is there is when a guy ran for mayor years ago and was doing well in the polls and was the leading candidate, until the opponent revealed that he had a white parent and was thus only half-black. His numbers bombed and he lost the race. It's unbelievable how racist the whole place is.

If I insinuated that "whites were racist and ****ed Detroit over when they left," that isn't what I meant.

 

[Buster Bluth]

I think maybe the term you are looking for is "elasticity" but I could be way wrong. Employment is highly elastic in Detroit, along the lines of what you said above.

Nah it's a "_____ good" term I'm looking for. An expensive luxury that is prone to highs and lows.

 

[NDPhilly]

Damn Eminem wasn't lying about how 8 mile rd totally segregates the city.

 

[anarin]

The hispanics OWN the east of this map!!

 

[Buster Bluth]

I was surprised to learn Detroit's population peaked way back in the fifties and has declined ever since. If I would have guessed, I would have said in the 70s or 80s.

The 50s are when the interstates were installed. From there the white flight happened everywhere.

The only difference is what cities were able to annex surrounding land. That's the difference. People definitely moved out of neighborhoods and further away from the cities, but some cities were able to annex these new places too.

 

[Cackalacky]

Flickr: Eric Fischer's Photostream

Buster, that ethicity map came from the above link. Look at the other cities. Most of the major cities are segregated. Inner city black, suburb white. Crazy.

 

[NDinMich]

Race relations is a way better way to put it. The white people that left the city over the years, did so because they could afford to. The same applies to the Black people (for the most part). The black people didn't leave the city, are the ones that either can't afford to move out to the suburbs. Smart people (both black, white and hispanic) don't live in the city because there are virtually no services and other things people need to live (grocery stores, power is spotty, garbage pickup is iffy and good schools are non-existent).

Like I said, race relations is a better way to put it than racism but the problem is goes much deeper.

 

[phork]

Trade Detroit to Canada

I would trade Detroit for Quebec, straight up.

I was surprised to learn Detroit's population peaked way back in the fifties and has declined ever since. If I would have guessed, I would have said in the 70s or 80s.

The riots were a big part of this. Ever since, including today, the black population feels the need to elect a black representative to council/mayor and doesn't trust anyone white. When an emergency manager was originally brought up one religious leader was quoted as saying

"We understand we have financial difficulties," Shabazz said. "Give us the help we want, need and deserve, not the help you want to impose on us. We don't want an emergency manager or a consent decree. This is white supremacy and we will fight you.

"Before we let you take over our city we will burn it down first," Shabazz said.

Incredible.

Detroit needs to shrink its borders, break union contracts and redo them (while maintaining a fair living wage) and get rid of the absolute atrocity of nepotism that exists at all levels in the city. And like someone mentioned above, get streamlined and right size the employment levels.

My Dad tells me stories all the time when he used to walk over the Ambassador bridge (bridge from Windsor, Ont to Detroit.) Go shopping in beautiful downtown. Of course that was 60 years ago.

 

[Buster Bluth]

UK

Flickr: Eric Fischer's Photostream

Buster, that ethicity map came from the above link. Look at the other cities. Most of the major cities are segregated. Inner city black, suburb white. Crazy.

Read further. Most inner cities are indeed black, that's not the issue per se. It's an issue when the wealth moves out of the city, which is why most of our biggest cities struggle financially.

Detroit is worse in terms of it's geographical and political segregation. Cleveland is 53% black, Chicago is 32% black, Columbus is 28% black, Toledo is 27% black. Detroit is 83% black. That's more than unusual.

Again, Detroit is what happens when you do nothing to mitigate the effects of sprawl. ALL of the wealth moved out of the city and it crumbled underneath its own weight. Race relations and the lack of cooperation and trust only exacerbate their problems, which is why it's a tertiary issue.