Opinion: Detroit got what it deserved

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Opinion: Detroit got what it deserved

Postby TomKat » Sat Aug 03, 2013 6:16 am

Douglas A. McIntyre, 24/7 Wall St. 8:33 a.m. EDT July 19, 2013

There's plenty of blame to go around on who's responsible for Detroit's bankruptcy.

If the residents of Detroit want to blame any person or organization for its Chapter 9 filing, they only need to look as far as the unions that controlled labor there and the politicians who ran it the past four decades. Detroit earned its bankruptcy the easy way — through greed, the desire for political power and poor planning.

Kevyn D. Orr, the city's emergency manager, offered interested parties a likely way to avoid the bankruptcy filing just weeks ago. Employees of Detroit, past and present, could share the pain of the restructuring of financial obligations with bond holders. Each blamed the other for the city's problems. Each said the other should absorb the brunt of a restructuring. Neither budged. Orr ran out of options, as two city pension funds went to court to try to protect their assets, motivated by a final grab for Detroit's money.

The media's take on Detroit was to post pictures of rundown and vacant homes and to publish the estimates of Detroit's obligations — about $19 billion. The press also has pointed out the clear conclusion that bond owners will take cents on the dollar.

Unions will have parts of pension obligations voided. City workers will lose their jobs. The two largest employers in Detroit are the school system and the city itself.

These workers dwarf the number employed by General Motors and Chrysler. Ford barely has a presence in Detroit any more.

Detroit is a city where the employee base is tilted away from private enterprise — a rarity, if not a uniqueness.

Another fact the media mentions as it measures Detroit's fall from grace is the drop in its population from 1.8 million in 1950 to just above 700,000 in 2010. In fact, if only those two points in time are the basis of an analysis, it is misleading.

The city's population did not start to fall sharply until after 1970. The 1973 oil crisis that rocketed gas prices up and the deep recession of the early 1970s dealt Detroit's car industry a blow that made the size of the city's government unsustainable.

Detroit's tax base began to tumble. Anyone among union leaders and elected officials could look at the numbers. The costs to sustain Detroit as it had been for two decades were impossible to maintain.

But the city kept spending. Unions wanted to keep their power as well as preserve jobs. Politicians did not want to admit they were running a dying city, say as much to voters and begin a battle with unions to lower labor costs.

Both parties are to blame. Which should be blamed more cannot be measured exactly. Bond holders do not deserve the kind of responsibility that those who ran Detroit do. However, they, and their bankers, were willing to keep the city afloat by buying paper that was risky. They took the risk and fed Detroit with money. Now, they get to take the sort of damage that goes with risking to much, too often and for too long.

As the people of Detroit and experts tear apart the history of iconic American city, some blame will be placed with the car companies. But they built Detroit — Detroit did not build them. It is not fair to say they destroyed her.

These public corporations, with obligations to shareholders, may have been among the few wise parties. The Big Three automakers exited slowly, as city services dissolved and Detroit became a less desirable place to live and do business.

Detroit's elected officials have lost all of their power. Orr has it, and soon a court will. Unions and their members can only wait to see how badly they will will be gored as part of the Chapter 9 process.

All of them knew a long time ago that the city was beginning to founder and each party tried to hang on to as much money, and privilege, as possible. Now, each gets to suffer the consequences.
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Re: Opinion: Detroit got what it deserved

Postby swampbilly 1980 » Sat Aug 03, 2013 6:58 am

As much as I hate Unions, I'd submit that you CAN'T blame a Labor Union for the total demise of a city such as Detroit that hosted, (for decades), the 3 largest automobile manufacturers in the world. There's absolutely no way that every 4 years in the midst of labor contract negotiations that you DON'T see how many foreign made vehicles are on the road on your way to the bargaining table in the morning.

Unions can be dealt with. Stupidity can't be fixed.
If you're a major city and you see those "big 3 " borrowing money to stay afloat you should repeat to self-

Don't put all your eggs in one basket.
Swampbilly1980- I got a feeva',..and the only cure is more Mergansers and face paint.
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Re: Opinion: Detroit got what it deserved

Postby slowshooter » Sun Aug 11, 2013 2:29 am

swampbilly 1980 wrote:As much as I hate Unions, I'd submit that you CAN'T blame a Labor Union for the total demise of a city such as Detroit that hosted, (for decades), the 3 largest automobile manufacturers in the world. There's absolutely no way that every 4 years in the midst of labor contract negotiations that you DON'T see how many foreign made vehicles are on the road on your way to the bargaining table in the morning.

Unions can be dealt with. Stupidity can't be fixed.
If you're a major city and you see those "big 3 " borrowing money to stay afloat you should repeat to self-

Don't put all your eggs in one basket.



This.
All this for a bowl of borscht.
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Re: Opinion: Detroit got what it deserved

Postby Andy W » Sun Aug 11, 2013 4:56 am

garyt wrote:Enter Affirmative action, negroes had to be hired, by law.


The blacks were there long before affirmative action:

The thousands of African-Americans who flocked to Detroit were part of the "Great Migration" of the twentieth century. Between 1916 and 1930, an estimated one million Black Southerners migrated to northern cities.


Affirmative action in the United States began as a tool to address the persistent discrimination against African Americans in the 1960s. This specific term was first used to describe US government policy in 1961. Directed to all government contracting agencies, President John F. Kennedy's Executive Order 10925 mandated "affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin.


http://bentley.umich.edu/research/publications/migration/ch1.php

http://en.wikipedia.org/wiki/Affirmative_action_in_the_United_States
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Re: Opinion: Detroit got what it deserved

Postby TomKat » Sun Aug 11, 2013 7:04 am

garyt wrote:
You want to blame unions? Fine.
Your job will soon be outsources to China, Phillipines and India and theres no one representing you or your interests.
Union Mgt has its issues for sure, but they are not the problem.
BANKSTERS are the problem. As are the minorities.


I have been in the work force for 35 years. I have never paid a penny in union dues.

No one has represented my interests but ME in all those years.

I am not afraid to go it alone at work.
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Re: Opinion: Detroit got what it deserved

Postby slowshooter » Sun Aug 11, 2013 12:18 pm

When the Great Society came to pass the GOP created the War on Drug to fight back the blacks and keep them urban bound.

The numbers prove that blacks are basically being hunted by law enforcement. They use drugs at the same rate as whites yet are imprisoned at a greater rate.

Blacks are the new Native American.
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Re: Opinion: Detroit got what it deserved

Postby slowshooter » Sun Aug 11, 2013 2:34 pm

garyt wrote: In fact, whites sometimes receive longer sentences than blacks. Its proven in Florida for instance to be the case.



In Florida, Blacks are incarcerated 4.1 to 1 compared to whites.

Use your maths to figure that one out. They won't hurt you.
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