dagblog - Comments for "When Detroits Go Bankrupt"

Exactly! Storm the

MrSmith1 — Wed, 04 Dec 2013 19:40:48 +0000

Exactly! Storm the ramparts!!

As I see it, municipal

Michael Maiello — Wed, 04 Dec 2013 19:06:30 +0000

In reply to Nice piece, MM. I watched a

As I see it, municipal governments negotiated compensation packages for their workers, often with an eye towards defraying present day costs (wages) with future promises (pension and health benefits). It's worse than theft for the governments to renege now. It's a retroactively bad faith negotiation.

Nice piece, MM. I watched a

MrSmith1 — Wed, 04 Dec 2013 17:49:56 +0000

In reply to When Detroits Go Bankrupt

Nice piece, MM.

I watched a small part of Morning Joe this morning, and they kept yapping about the unreasonable, greedy unions and the overly-generous pensions, but no-one ever brought up a) what happened to cities and states honoring their committments and b) why aren't we holding the mayors and governors who have consistently raided state pension funds in order to balance their budgets, accountable for the shortfalls?

To the first point; The state or city made the pension agreement, whether it was unfair or stupid is moot; they made the deal and then chose not to raise the revenue necessary to fund their legal requirements. They used to call that gross dereliction of duty, now it's a brilliant political tactic. How in any way does this make the unions to blame? The politicians chose to not raise taxes rather than meet the needs of their budgets and now they are screaming about the nasty, greedy unions? Some please explain this to me as if I was a 4 year old child.

And...and...make much

Peter Schwartz — Wed, 04 Dec 2013 12:48:34 +0000

In reply to It's irrelevant at the moment

And...and...make much political hay on the "fact" that Democrats can't run a city responsibly...and let unions run rampant...until, well, the city becomes like Detroit.

Ramona, is there a good book on "what happened" with Detroit?

Edit to add: In fact, there was a short piece by a Republican consultant (name escapes) whom I think of as somewhat moderate saying, "This is the Republican's moment. America thinks the Democrats are bankrupt and incompetent. We need to seize it with new ideas!"

His two proof points are Obamacare and Detroit.

He suggests they hold their convention in Detroit and startle the nation with a plan for remaking Detroit into the city it once was. Of course, he doesn't hint at what that "plan" might be, but that's a detail that can be worked out (or not) once they regain the WH and people once again think of them as the "party of ideas."

Why not a big investigative

Peter Schwartz — Wed, 04 Dec 2013 12:44:39 +0000

In reply to When Detroits Go Bankrupt

Why not a big investigative piece on how Detroit arrived at this point?

Something sweeping like a Russian novel...

And where does all that money come from to pay the lawyers...up to $1 billion?

It's like Stone Soup. No one has any money, but they can always find some for the lawyers to sue. I guess they think of it as an "investment."

Just think how rich their

trkingmomoe — Wed, 04 Dec 2013 03:28:32 +0000

In reply to It's irrelevant at the moment

Just think how rich their friends will get on their purchases during the fire sale.

It's irrelevant at the moment

Ramona — Wed, 04 Dec 2013 02:02:26 +0000

In reply to Not sure. It's possible!

It's irrelevant at the moment in Detroit. They elected a new mayor in November, but the governor has installed an Emergency Manager with full dictatorial powers. The mayor will be able to sit in on meetings but won't have a vote. Neither will the City Council. Whatever happens will happen because Kevyn Orr wants it to happen.

Orr has intimate ties with the law firm organizing the bankruptcy but the judge apparently saw no conflict today. He did hint that something didn't smell right but that didn't stop him from giving bankruptcy the go-ahead.

Chris Hayes just interviewed a former Goldman Sachs guy who helped Detroit avoid bankruptcy during the last Great Recession. He told Chris Detroit could have avoided bankruptcy and the subsequent looting of pensions if the state paid the city the millions of dollars they reneged on two years ago. It caused the city to enter into a loan where, if their ratings went down by even one point they would have to pay the entire interest immediately.

They set the city up for failure and now they're on the fast track to make it happen.

Not sure. It's possible!

Michael Maiello — Wed, 04 Dec 2013 00:34:53 +0000

In reply to Creditors cannot force a city

Not sure. It's possible!

Creditors cannot force a city

Donal — Tue, 03 Dec 2013 23:58:14 +0000

In reply to When Detroits Go Bankrupt

Creditors cannot force a city or town to liquidate its assets, nor can they take over the government and run it for its own benefit.

Which is why the creditors in Harrisburg bought the election and installed their own mayor. Could that happen in Detroit?