Detroit bankruptcy: American dream demise

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Detroit is a model of capitalism. A need for labor arose, people arrived, the jobs left, the labor left. What remains are broken factories which long vanished companies have no responsibility to clean up or demolish, and 100+ square miles of very old single family housing that the remaining poor people have trouble maintaining. That system was about as "engineered" as a platypus and it was as capitalistic as a gold rush boom town. Unions didnt drive people out of the city if that's what you imagine.

Detroit was a "company town". The Company went bust and so did the town.

Bring back the Homestead Act.It could be the new urban frontier.Raze the buildings that are to far gone and make community gardens.

I wonder if we could turn some of the old buildings into self-sufficient agorist fortresses, free from meddlesome government?

It was also a union town. The unions over-valued the worth of their members, and the companies sought cheaper labor elsewhere.

Barclays' Bank and Lloyd's Bank founders came from which religion, sect?

1 Judaism
2. None/Atheists/Humanists
3. Pentecostals
4. Quakers
5. Born Again Christians
6. Deists
7. Methodists
8. Baptists



Answers on a postcard....




Those evil Quakers trying to take over the world.



Anyone who buys into the crap that Jews run investment banking doesn't really know how investment banking works.

Even in the top 20 most of them do not have a Jewish Heritage, nor are the run by Jews. In fact big investment banks aren't generally privately owned.

The unions and the pension plan they forced on the auto makers was one of the reasons they went belly up.

Ahh, the old politician's punt of promising the public sector generous pensions (to be paid by their successors) rather than generous wages that would have to come out of their own budgets has come home to roost.

Operations were initially moved to the suburbs for decades, not Mexico. There was plenty of union activity in the suburbs of Detroit. People wanted to live in the suburbs and the companies followed and sometimes led the exodus. That was deeper and steeper in Detroit for many, many reasons. Detroit simply became an unattractive place to live and work. The flight of the regional manufacturing jobs happened later.

The current auto-capital of North America is north of the border. Ontario, Canada. They still have unions. They also have nationalized health care that gets it off the backs of the automakers. The Big 3 wrote a letter a few years back telling the Canadian government how helpful that was to their costs and urging the preservation of that system.



This is happening but I don't think the city profits from it. I believe the wrecking company folds that into their profits. Cities pay companies to demolish things and cart it out. There is a documentary called Detropia (on netflix) that shows young men scrapping a broken down building at night. One asks who is buying all of this scrap iron and the other guesses China. And of course it highlights that scrap metal and waste paper are our primary exports to China. The American industrial world of the 50s sold as scrap to China.

Another way they are going to look at settling with creditors is selling the art in their gallery. There will be a legal fight over that. Detroit has something like $18 billion in liabilities (which will go way down after bankruptcy), and the top 38 items in the museum are worth $3 billion or so. Basically the spoils of the industrial age.

Synthetic oil made american cars more reliable.

No, being forced to face the fact that Japanese cars are safer and more reliable - with or without synthetic oil - forced the American auto industry to raise the priority of reliability and safety.

Many problems converged, like people living longer, and pensions having cost of living increases.

All pensions are based on invested funds growing, and taking inflation into account, flat wages over the last forty years, and the population decline in all the old industrial cities, that did not work out.

Then there was the shortfall in funding at the old numbers, which were way low. The shortfall is over a Trillion, and that would not cover the long term liabilities.

Like our current Baby Bust generation, a much smaller generation to pay for the oversized War Baby generation.

No one ever used Al Gore's Locked Box for retirement money, they spent it, and left an IOU. Then they sold Bonds to cover the ongoing pension costs.

I think they should just fold. Otherwise they have to work to extract money from the dying remains, and if the Bond Holders and Pension Funds want it, they should extract it.

The City owns very little, I am sure if they could sell the art in the Museum it would be long gone, with no records.

The city would not spend the money to foreclose on abandoned houses, so the land is owned by who knows who, and it would take an army of lawyers decades to sort it out, and they are very willing to try, as long as the money holds out.

There are no recoverable assets. Sales Tax, Property Tax, are the only income. The cost of collecting, and maintaining Police Protection of Tax Collectors, uses up the money collected.

It took fifty years to dig this hole, now it is self digging.

The neighborhoods are strange and dangerious places, and downtown is like a Zombie Movie after dark, filled with abandoned large buildings, inhabited by Evil Spirits.

Unlike other cities that redeveloped the core areas, and let the edges decay, Detroit is even decay. Flint is about the same, as are many of the Great Lakes old industrial towns. Clevland is 20% abandoned houses.

Coal, Iron Ore, Steel Mills, and Barge Traffic are not what they used to be.

So even if the Pensions and Bonds get wiped out, Detroit will still be there, festering, in a downward spiral.

Already it has been compared to Grand Theft Auto, and Silent Hill.

They live in abandoned places and come out at night to feed.

You may remember New York City was in a similar crisis in the 1970s. They had many of the same issues as Detroit, and are now one of the world's most successful cities. Why? New York had a diversified economy, and is still working hard to attract new businesses. Detroit had one very dominant sector, and its fortunes rose and fell with it. So I have to disagree with the OP, and say that Detroit is more or less an isolated case. Flint, Akron, Gary and a few other Midwestern cities are in the same class, but not most cities.

Industry requires investment in order to survive, so if the banks and investors decide that they no longer want to invest money in it then it dies. Wall Street and the wealthy financial elite control Washington and are largely responsible for creating global free trade policies which has done much to destroy American industry. Therefore there is truth in the original article. I do not think that Detroit is an isolated case. Possibly just larger and deeper than elsewhere due to other factors including its climate and geography. Even cities in California with economies based around software development that expanded in the 1970s to 1990s are suffering in the same way from globalisation and outsourcing with rising unemployment and masses of disused buildings where programmers once coded. Are they next in line to be wrecked then shipped out to China? It's far from uncommon for investment bankers to demand that companies offshore production in return for investment money.

The bankers operate a scorched earth mentality where they build up cities and industries when there is money to be made from them, then abandon them when they are no longer as profitable or they lose interest. It could be argued that Detroit did not make cars - it made money back in the days when there was money to be made from the automotive industry in Michigan.

It was the Toyotas that suffered from engine oil sludging. So much for the myth of Japanese reliability.

Toyota has a disturbingly naughty habit of denying the existence of the problems found and reported with their vehicles.
That said, they are still generally rated higher in consumer reports than the big 3 so that's the brand I go with for now.