Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts

Tuesday, July 23, 2013

Detroit: The Mirror Tells Its Tale

“If it weren't for the Chicagos and Detroits and Toledos, terrible things would spread out across the whole country and make trouble for everybody else. Such places are collectors of badness in the way hospitals are collectors of the sick and damaged.” ― Stephen Dobyns, Eating Naked: Stories
Consider this:  right now there are 78,000 abandoned homes in the city of Detroit, roughly 1/3 of its 140 square miles is derelict,  downtown is pocked with at least 60 abandoned buildings, some of which stand in the shadows of hotels and stadiums, nearly half of all Detroiters can’t read, much of the city’s population still consists of children living in poverty, the murder rate in Detroit is 11 times higher than that of New York City, police solve less than 10 percent of the crimes that are committed and crime has gotten so bad that even the police are telling people to "enter Detroit at your own risk".

Detroit is so mired in debt and beholden to the mistakes of the past that it amounts to little more than a “daisy chain” of disaster.  The city, or rather it leaders, had been spending $100 million more than it took in with each budget.

The city, for 51 years (1962 to present) had a one-party government (Democrat) that grew fat, corrupt and incompetent. But year after year, even decade after decade, the voters kept re-electing the same crooked politicians.  Not even crash test dummies are that stupid.

A long-time mayor went to jail after The Detroit Free Press spent years piecing together his trail of corruption.

Kwame Kilpatrick was convicted of 24 federal crimes including racketeering, extortion and bribery.  He used the mayor’s office to enrich himself for years through shakedowns, kickbacks and bid-rigging schemes.

Another newspaper, The Detroit News, revealed how officials robbed city departments of funds so thoroughly that inspected fire hydrants routinely failed to produce water and police couldn’t answer 911 calls. In one terrible example, firefighters responding to an apartment fire had to watch pleading residents die, because the ladders on their trucks didn’t work. Yet the officials were re-elected and federal money poured in, only to disappear.

Below, is the list of mayors who created and/or managed the decay of Detroit.

Roman Gribbs 1970-1974
Dennis Archer 1994-2001
Kwame Kilpatrick 2002-2008
Dave Bing 2009-present

Former NBA star turned mayor, Dave Bing seemed to be aboveboard when elected in 2009, however the blight and corruption that is Detroit overtook his office. 

When the city fell under state oversight following Governor Snyder’s appointment of bankruptcy attorney Kevyn Orr as its emergency manager, he became the final say on all city financial matters.  That action was clearly the impetus for Bing to announce in May of this year that he would not seek reelection. He was angered that his executive team would not remain intact to move his initiatives forward.

Detroit is only just the beginning.  When the next major financial crisis strikes, we are going to see a wave of municipal bankruptcies unlike anything we have ever seen before.


What’s past is prologue.  Was Ayn Rand prophetic?  Take a look at her fictional Starnesville from Atlas Shrugged.  It is Obamanomics taken to its fatal conclusion.  And as Daniel Hannan, Conservative MEP for South East England warns, we should tremble.

Monday, June 18, 2012

Grecian Formula

In its fifth year of recession and with an unemployment rate escalating above 22 percent, Greece’s election on Sunday, June 17, 2012 sought to avert an economic calamity in the debt-choked country.

The Grecian formula seems to be a proposal that would form a coalition government that is pro-Euro and continue austerity measures in return for bailout cash to save their bankrupt nation.

The new Prime Minister, Antonis Samaras said, “The Greek people voted today to stay on the European course and remain in the Eurozone…there will be no more adventures.”

“Today the Greek people speak. Tomorrow a new era for Greece begins,” Samaras said after voting in southern Greece.

The decision of nine million people will ripple far beyond the craggy tip of the Balkan Peninsula they inhabit.  An entire union of nations will be affected.

The Syriza Party, which had tapped into a vein of deep anger over the plunging living standards faced by many Greeks, had wanted to rip up Greece’s international bailout deals and roll back the new taxes, job cuts and pension cuts imposed in the last two years.

That plan will have to wait. The New Democracy Party has the first shot at forming a new majority in Greece’s Parliament.  If they don’t succeed, Syriza will doubtless go back to that poisoned well of rage.

The Greeks are under no illusion.  To keep bankruptcy at bay and have any chance of survival, the birthplace of democracy must accept the EU-IMF rescue loans and punishing austerity policies—it is little more than a choice between bad and worse.