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Author Topic: Down goes Detroit
G3
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quote:
Detroit's emergency manager says the city is defaulting on about $2.5 billion of debt.

Kevyn Orr said Friday that Detroit is asking creditors to take about 10 cents on the dollar of what they're owed. Underfunded pension claims will get less.

Orr spent about two hours Friday morning with dozens of people representing banks, insurers and companies holding Detroit debt. He told reporters earlier at an airport hotel in Romulus he wants to fix fiscal problems that have made the city insolvent.

He has instituted a moratorium on all of Detroit's payments on unsecured debt, seeking forgiveness of millions of dollars owed by the city.

He also said $1.25 billion will be set aside over 10 years for public safety, lighting and neighborhood blight elimination.

And before you get all excited, Romulus is actually a city in Michigan, not the home planet of the Romulan Empire...

Orr said, "We're tapped out" and put the odds at 50-50 that Detroit will file for bankruptcy. With a budget deficit that could hit $380 million by July 1 and estimates of the city’s long-term debt at $20 billion, I'm thinking the odds are not quite that good.

10 cents on the dollar and a moratorium on debt payments for all unsecured funded debt. I bet there's been a spike in Maalox sales.

Is it time for a new gooberment bailout? Is Detroit too liberal, uh, I mean, too "big" to fail?

[ June 14, 2013, 02:41 PM: Message edited by: G3 ]

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TomDavidson
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What I find especially interesting about this is that Orr, as the Snyder-appointed EM of Detroit, is essentially a mayor and a bankruptcy judge rolled into one -- and yet has opted to exercise his power in quite possibly the most drastic way. Was that what Snyder intended? I'd be very intrigued to hear whether that was the plan.
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DarkJello
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This could never happen to America. We are rich, and stuff. /sarcasm
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TomDavidson
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Technically, it could never happen to America.
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G3
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Yes, it can happen even here.
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TomDavidson
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No, it can't. Depending on what you mean by "it," I suppose.
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DarkJello
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America has failed. Detroit is one more example. But yeah, we can fail a LOT worse if we stick with the status quo. So-called progressives--Repubs and Dems alike--suffer from delusions of grandeur. One day humanity will evolve further, but it sure is looking bleak this century.

Do we all agree that Detroit is officially a money pit now?

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edgmatt
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I don't agree that "America has failed".
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TomDavidson
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Nor do I.
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AI Wessex
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"What I find especially interesting about this is that Orr, as the Snyder-appointed EM of Detroit, is essentially a mayor and a bankruptcy judge rolled into one -- and yet has opted to exercise his power in quite possibly the most drastic way. Was that what Snyder intended? I'd be very intrigued to hear whether that was the plan."

I have wondered how to "solve" the Detroit problem for many years. It has suffered through every possible calamity a city can impose on itself. It's main industry has practically abandoned it, taking with it most of the salaried middle- and upper-class tax paying people who lived there. Like some other major industrial cities that once flourished (e.g., Newark, St. Louis), the poor and lower-class masses who were brought in as cheap labor are now left with no jobs and no one to sell their 500sf look-alike houses to. The average sale price is slowly beginning to bounce back and many now be above $10,000.

According to the last census, the population has dropped so far that the city no longer qualifies for a host of federal benefits that offset some of the lost tax revenue, mayoral corruption and downright blind civic leaders the city has had to endure since the 70's.

Whole neighborhoods are abandoned or have literally disappeared; there are about 30,000 houses waiting to be demolished, many of which had their copper piping stripped out, making them unsellable. The city lights are turned off in broad swaths. In some areas whole blocks have been bought up, the houses razed and are now (once again) being farmed. Fun statistic: until a Whole Foods (?!) opened up in Detroit recently, there was not a single supermarket within the city limits. That can only mean that there is still a pocket of wealth that refuses to be dislodged.

DW can correct me if I'm wrong on any of that if he wants to, but that all comes from what has been written and said locally. There's nothing to bail out, G3, so keep wishing for something you can point your finger at and cackle about. Instead, you could rue the demise of yet another great city that struggles to vain to recover from its own wounds and those that the economy has given it.

"America has failed"

If you want to think of it that way.

[ June 15, 2013, 10:24 AM: Message edited by: AI Wessex ]

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Aris Katsaris
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DarkJello, last comment of yours (mainly considering Republicans to be 'progressives') made me wonder if you're familiar with the 'neo-reactionary' movement, sometimes also calling itself 'The Dark Enlightenment'. It's relatively new, and was practically unheard of until "Mencius Moldbug" became a prominent central point for it a few years back.

Neoreaction recently received a summarization of its belief system at "Slate Star Codex": http://slatestarcodex.com/2013/03/03/reactionary-philosophy-in-an-enormous-planet-sized-nutshell/
(Slate Star Codex is NOT a neo-reactionary blog, but has contained, among other things, some excellent articles alternately explaining or refuting various aspects of neo-reaction)

Occasionally I feel that some conservatives would feel better at home with neoreaction. G3, you may want to look into neoreaction too.

[ June 15, 2013, 02:55 PM: Message edited by: Aris Katsaris ]

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DarkJello
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Aris Katsaris:

Way too much info, even skimming it was tedious.

I consider "progressives" to be fanboys of big government. The more power it wields, the less is available for Joe and Sally. The letter found between the parentheses is superficial. My goal is to focus on identifying those that actually believe in the Constitution and BoRs, as evidenced by their actions. I prioritize work, family, and computer gaming above politics, but one day I would love to drill down on the matter with great determination. Someone will need to pay me a lot, thus it probs won't happen. Maybe in my next life?

On the other topic:

It sure seems like America has failed to me. Blind ruling the blind, all with great fanfare and pageantry. Hopefully I am wrong.

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Aris Katsaris
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quote:
It sure seems like America has failed to me.
Okay, when exactly was it ever successful then? Mention the 1950s and that would place it exactly after a very famous progressive reformation, FDR's.

Mention the 1800s and that's where your civil war took place, a quite obvious failure of America.

That's part of why I was wondering if you identified as a reactionary -- if you felt that the American Revolution was a failed idea from the very start, and that Americans should have never rebelled against the Crown.

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PSRT
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quote:
It sure seems like America has failed to me. Blind ruling the blind, all with great fanfare and pageantry. Hopefully I am wrong.
What exactly do you mean by "failed?"

If something has failed, you are measuring against something. What are the standards for success or failure?

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D.W.
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quote:
there are about 30,000 houses waiting to be demolished, many of which had their copper piping stripped out, making them unsellable. The city lights are turned off in broad swaths.
I’ve heard some horror stories say that the lights weren’t “turned off” but also the victim of salvage theft as well. But I have nothing to correct on that. The $10,000 house prices was a bit surprising but not shocking really.
quote:
In some areas whole blocks have been bought up, the houses razed and are now (once again) being farmed. Fun statistic: until a Whole Foods (?!) opened up in Detroit recently, there was not a single supermarket
The aspect of this I found more interesting were the areas that were not bought up and just have urban community farming going on in empty lots without any permitting or go ahead. But then again when the city is that stressed who is going to put up a fuss unless the land actually gets sold to someone who’s going to develop it?

I got to agree with Al that a bailout really isn’t the answer. It’s not like Detroit just recently hit a rough patch and needs a helping hand to get back on its feet. It needs to totally reinvent itself and come up with a means to support itself again. The question is do you do anything for the people there now in the hopes of giving revitalization a chance or do you cut your losses?

Is there any precedence for taking a large city and contracting its borders? Just draw a new line in the sand and say, “we aren’t funding anything beyond this line? I mean if you want to get really ambitious maybe even set up programs to relocate people beyond that line back into the empty homes on the inside? Then just let the periphery decay and or be demolished? I got to believe part of the problem is as AI pointed out the city is too big for its population anymore, making it too costly to support.

quote:
Do we all agree that Detroit is officially a money pit now?
Now? It has been for most of my adult life I believe. If this means it (or America) has “failed” what would success look like? Isolationist policies regarding automobile imports and the banning of offshore assembly plants for American companies?

Got a chuckle out of the Romulus joke G3.

[ June 16, 2013, 02:04 PM: Message edited by: D.W. ]

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WmLambert
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Perhaps better to understand what happened to Detroit, instead of acting like it fell to its fate accidentally.

Go back to LBJ and his Great Society program. He said at the time that he was doing it to secure the Black vote - and the primacy of the Democrat party. He named Detroit as one of his American Model Cities. The Nanny state pap got turned on, and the end of Detroit was begun.

Coleman Young was one of the Communista Union thugs before becoming mayor. Like LBJ, he admitted what he was doing: taking over the city for Blacks, Whites need not apply. Since Young, there's been a succession of Democrat bosses as mayors and power wielders - solely concerned with personal power. Coleman Young told Whites to cross Eight Mile and never come back. Eminem's movie reflected that.

The unintended consequence of forcing White Flight was in losing entrepreneurs and income generators. Blacks with businesses fled also.

Republicans ran the city from 1913 through 1962 with only five years of Democrat mayors sprinkled in. In '62 Democrat Cavanaugh walked down Woodward Avenue, arm-in-arm with Republican Martin Luther King, Jr, and a stunning upset based on African-American votes set the stage for all that came after. The 1967 racial riots caused him to step down, and Roman Gribbs replaced him for a short time as the last White Democrat. Young beat him easily and except for a few pale attempts at honor in the Mayor's office by Archer and Bing, the Manoogian Mansion has been home for Democrat machine politics.

[ June 16, 2013, 09:45 PM: Message edited by: WmLambert ]

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TomDavidson
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quote:
The Nanny state pap got turned on, and the end of Detroit was begun.
Well, I think the end of Detroit -- Detroit in particular -- was really caused by the removal of steel and auto tariffs.
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WmLambert
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No, Tom. The Greater Detroit area boasted Oakland County which was one of the wealthiest counties in the nation and still is today. The companies that used to thrive in Detroit moved out to the northern suburbs for self-preservation.

The increased bureaucracy that doomed the Steel industry in America didn't suddenly allow Japan to make better cars than we did. It took a full decade before the Shoddy Japanese egg-beaters became known for better quality control than our assembly lines could put out. Remember that Japan has no natural resources of their own - so everything must be imported to be used in manufacturing.

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TomDavidson
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quote:
The increased bureaucracy that doomed the Steel industry in America didn't suddenly allow Japan to make better cars than we did.
No. It allowed Mexico to make our cars.
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AI Wessex
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I think both of you are basically right. The white population in the city fell from 70% in 1960 to 55% in 1970, while the black population rose from 28% to over 40%. We can't credit LBJ for population migration. OTOH, I think the 1967 riots had a huge impact on white flight, though I can't find statistics on the population between the riots and the next census. The white population, by percentage, continued to fall steadily and in 2010 was only 10%. Fully 1/3 of the population lives below the poverty line now (60% of children). Unemployment is up to about 18%, principally because the city has lost almost half of the manufacturing jobs it had in 2000.

Reinvention via investment and drastic surgery to relinquish up to 30% of the geographic space are the only hopes for an economic revival, but that won't help the people who are trapped there now.

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G3
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quote:
Originally posted by edgmatt:
I don't agree that "America has failed".

I think it would be more accurate to say, "America is failing."

quote:
Originally posted by TomDavidson:
No, it can't. Depending on what you mean by "it," I suppose.

I love traditional America arrogance but every nation that's failed at one time thought it was impossible for it to happen. This idea of "it can't happen here" flies in the face of history and rational thought.
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G3
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quote:
Originally posted by TomDavidson:
quote:
The Nanny state pap got turned on, and the end of Detroit was begun.
Well, I think the end of Detroit -- Detroit in particular -- was really caused by the removal of steel and auto tariffs.
So you're convinced the inability to compete in a free market is what destroyed Detroit. What happened to cause it to be so non-competitive?
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TomDavidson
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The global definition of a "free market" is strained, of course. A "free" market is not necessarily the most beneficial, productive, or profitable market; efficiency is a virtue, but only insofar as it makes other things possible. In chasing efficiency in order to maximize profit growth (i.e. to appease short-term shareholders), auto companies failed to secure their base and ultimately destroyed themselves; it's taken them decades to recover, and they still haven't completely done so.

There's an old truism that a company should always make cars that the people manufacturing the cars should be able to afford. There are two ways to do this: pay your people a pittance and make crappy cars, or pay them enough to afford decent cars. This math is distorted by stock chasing, as more and more of the money you'd be giving back to your employees gets redirected towards professional leeches.

[ June 17, 2013, 10:34 AM: Message edited by: TomDavidson ]

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AI Wessex
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"I love traditional America arrogance but every nation that's failed at one time thought it was impossible for it to happen. This idea of "it can't happen here" flies in the face of history and rational thought."

It would be interesting if every once in a while you would put forward a constructive idea for how to solve a problem that you attack as being so transparently obvious.

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TomDavidson
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And just a quibble:
quote:
I love traditional America arrogance but every nation that's failed at one time thought it was impossible for it to happen.
I am not saying that it is impossible for America as a nation to fail. I am saying that it is impossible for the scenario as described above to happen to America.
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DarkJello
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WmLambert:

Your precision is much appreciated, and it essentially confirms my prior comment. We should always go with the best people and the best plan, and stop the suicidal path of "color first" that has gripped America for so long. The superficial wins politically, but then fails in the real world.

quote:
--------------------------------------------------------------------------------
Originally posted by edgmatt:
I don't agree that "America has failed".
--------------------------------------------------------------------------------
I think it would be more accurate to say, "America is failing."


This is more optimistic. Thanks G3.


quote:
Originally posted by Aris Katsaris:
Okay, when exactly was it ever successful then? Mention the 1950s and that would place it exactly after a very famous progressive reformation, FDR's.

Mention the 1800s and that's where your civil war took place, a quite obvious failure of America.

That's part of why I was wondering if you identified as a reactionary -- if you felt that the American Revolution was a failed idea from the very start, and that Americans should have never rebelled against the Crown.

#1) Yes, America was much more successful in the 1950s. But I don't credit "King" FDR. I give 99% of the credit to that generation. So-called progressive policies take time, but they always evince a design to push towards tyranny.

#2) The Civil War was a resounding success. Horrible for sure, but the alternative would have been devastatingly worse.

#3) Revolutionary war was a wild success. Improbable to the max, unless you believe the great sky wizard zapped our opponents with herpes, scurvy, and gastroenteritis. (Among other things).

What say you in reply?

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PSRT
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I say I still don't know what "Fail," and "Succeed" mean to you. Based on that lack of information, a cogent response is actually impossible.
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LetterRip
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The success of the 1950s was because the world infrastructure had been bombed to crap and all of our industrial base had been pumped up due to WW II. So we had enormous manufacturing and export demand and we had the factories to meet that demand. Also we had a larger percentage of the avialable workforce working and workforce available for certain types of labor due to women filling roles in factories during the war that men had traditionally taken, so incomes skyrocketed also.

We also had a massive influx of money from service pay that had been saved up, and from GI Bill spending. Then a post war 'baby boom' (parents spend ridiculous amounts in the first years).

We are talking a ridiculous perfect storm to light our economy on fire.

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DarkJello
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quote:
Originally posted by PSRT:
I say I still don't know what "Fail," and "Succeed" mean to you. Based on that lack of information, a cogent response is actually impossible.

Weaker families = fail
Increased selfishness (read immorality) = fail
Stunningly ignorant population = fail
(Thanks Dept of Uned)
Insane partisanship = fail
Welfare state (USSA) = fail
Skyrocketing debt = fail

Savvy?

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TomDavidson
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So you're arguing that families are weaker now than the '30s? That we're more selfish than the '20s? That we're more ignorant than any time in American history? That we're more partisan than we were during the Civil War?

Honestly, I think you just don't have a sense of perspective.

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AI Wessex
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"Stunningly ignorant population = fail
(Thanks Dept of Uned)"

Do you agree with people like CherryPoptart that the government should get out of the business of public education? Or do you think the government should have a greater hand in it to make sure the population is better educated?

"Insane partisanship = fail"

Are you one of the 99% who think that you're not one of the excessively partisan people, and it's the other 99% who are?

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AI Wessex
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"We are talking a ridiculous perfect storm to light our economy on fire."

Not just those things, but yes. Since there is virtually no likelihood of such a (good) perfect storm happening again, we're faced with two trains of political thought:

1. We starve the government by denying it of tax revenues, which leaves more in the hands of taxpayers.

2. We give the government the support it needs to sustain the things that we can no longer support without its help.

Both paths could lead to the destruction of the "Age of America", but no one has proposed a middle path that avoids the potential calamity either of those options portends.

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PSRT
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quote:
Weaker families = fail
Increased selfishness (read immorality) = fail
Stunningly ignorant population = fail
(Thanks Dept of Uned)
Insane partisanship = fail
Welfare state (USSA) = fail
Skyrocketing debt = fail

Weaker families than when, and by what measure? Certainly the divorce rate is high, but the reason for that is people have the freedom to make choices that they didn't have 50 years ago. If you value freedom, this is a straight up win.

I'm not sure what you mean by increased selfishness. How are you measuring this? Compared to when? Charitable giving happens at much higher rates than it used to, so that would contradict your point.

The population is more knowledgeable, on more topics, on a deeper level, every decade in this country. The statement that we are more ignorant is itself utterly ignorant. You are factually wrong on this point.

Insane partisanship has pretty much always been true. We might be slightly higher now than we were 20 years ago, 50 years ago, or 100 years ago... but if we are, its not by much, and these things have gone in cycles throughout our history. I do wish we were less partisan, but we are also not uniquely partisan. Most democracies are.

I don't know what exactly you mean by welfare state, but what I would mean by that is that there are incentives not to work. This turns out to be false... only a ridiculously tiny percentage of people game the system instead of working. Instead, most of our handouts that are to entities that actually need the handout help keep families intact (See your first point. You can't have strong families without an ability to keep them together through hard economic situations), keep people alive, and keep people with the resources necessary to try to find a job or improve their earning potential. (On the other hand, our corporate handouts, which absolutely DWARF direct welfare, are absurd, so on that point I'd agree with you).

Can you please explain why a public debt is a bad thing if it grows at 5-8% per year? Seems to me that this means that a government is providing services to the population the population doesn't need to pay back, thus the population has more money to spend on growing the economy and making itself comfortable.

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G3
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Well, there it goes. Detroit filed for Chapter 9. It's the largest municipal bankruptcy in US history.


quote:
“We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way.”

-- President Obama in his weekly address, Oct. 13, 2012.

Great job there Barry. Really a success story. Idiot.


quote:
Just before Detroit became the largest municipality to ever file bankruptcy, the failed city’s emergency manager, Kevin Orr, pleaded with top White House officials, including senior adviser Valerie Jarrett, for help.

And the answer was no. The people of Detroit, if they weren't aware of it they damn sure are now, are no longer useful since the election is over and are being left to rot. Who could have seen that coming?

[ July 19, 2013, 03:08 PM: Message edited by: G3 ]

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AI Wessex
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Like everything else, this is all Obama's fault.

Snyder said two years ago that he refused to let Detroit go bankrupt, but wasn't able to stop it. The Emergency Manager came in several months ago with an explicit objective of saving Detroit from bankruptcy, but he couldn't prevent it.

But like everything else, this is all Obama's fault. Be constructive here and tell us what should have been done?

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DarkJello
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This is foreshadowing all the way.

Why does it have to be "all Obama's fault" before he gets some blame?

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G3
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Uh oh, wait just a minute! County Circuit judge Rosemary Aquilina ordered that Detroit’s federal bankruptcy filing be withdrawn.

She says the governor and Detroit’s emergency manager violated the state constitution and has a real problem with prtoecting the city from lawsuits over union pension plans. And, oh yeah, because it makes Obama look like a dumbass:
quote:
“It’s cheating, sir, and it’s cheating good people who work,” the judge told assistant Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.”

Well, we can't have anything make Barry look bad can we? This is moronic legal reasoning.

quote:
Aquilina said she would make sure President Obama got a copy of her order.
I wonder if she's also gonna drop a hotel room key in with that ...
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G3
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quote:
Originally posted by DarkJello:
This is foreshadowing all the way.

Why does it have to be "all Obama's fault" before he gets some blame?

I'm not saying Detroit's failure is Barry's fault. The fault lies with 50+ years of liberal policies running the city to the ground.

Barry is a idiot for saying he saved Detroit from bankruptcy. He makes that claim and then, only a few months later the city falls apart and files bankruptcy. What that tells us is Barry has no idea what he's talking about, he just mouths words and platitudes and the media coos over his words without once thinking to question it.

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AI Wessex
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"Why does it have to be "all Obama's fault" before he gets some blame?"

Specifically, what should he get the blame for? What did he do that he shouldn't have; what didn't he do that he should have? G3 neglects to mention anything.

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AI Wessex
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quote:
I'm not saying Detroit's failure is Barry's fault. The fault lies with 50+ years of liberal policies running the city to the ground.

Barry is a idiot for saying he saved Detroit from bankruptcy. He makes that claim and then, only a few months later the city falls apart and files bankruptcy. What that tells us is Barry has no idea what he's talking about, he just mouths words and platitudes and the media coos over his words without once thinking to question it.

His funding the car companies was a *huge* win for Michigan, but that wasn't enough to save Detroit. Nothing could have. If it was 50 years in the making (it was), why is it his fault that it happened?

Was it wrong of him to try?

Were liberal policies the reason that the city population declined by 60% in those 50 years? Or was it perhaps that the automobile industry collapsed?

What specifically did "liberals" do that caused the collapse?

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