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Death Of A City - Detroit
The Painful Death Of A Once Proud City
The Warning Signs Were There and Ignored
Most people by now know, I would hope, that Detroit has had to file for bankruptcy. Many probably don't know that Kid Rock is from Detroit and an ardent fan of his home town. He isn't too fond I'm sure to see that the city he calls home has been laid to waste by corrupt Democratic administrations and labor unions who have made demands that city after city across this nation are finding out now that they can't afford.
So as we move forward with this article let me entertain you with a cut off the Kid's latest album about Detroit, Michigan. The whole album is worth a listen but we won't do it here now.
Kid's Tribute To His City Gone South
A couple of decades back the city of Detroit, which encompasses about 140 square miles, was thriving with a population of approximately 2 million people and times were good. After all the city as known as "The Motor City" where the UAW is strong and its demands are usually out of line with economic reality. As this unfolds we'll be able to see how vested the UAW was in the municipal financial instruments of the city itself, specifically as they pertain to retirement funds owed to those UAW workers who have soaked up the gravy for decades on end. Once upon a time the automobile was the king of Detroit and the rest is now known history with the auto company bailouts we, the tax payer, have had to suffer through.
The sad side of this remains that the population of this once thriving city has declined to 600,000 people. They can't pay the freight that is due and if you think they can please explain how.
We DO NOT need to start bailing out failed cities as their economic plight finally starts coming on. We don't need to start rewarding anybody who displays the gross financial management skills that caused this sort of disaster. To set such a precedent based upon political instincts will prove disastrous. Cities will get in line, followed by mismanaged states like California, New York and others, but people need to start paying attention. The facts are that the deficit in Detroit is 34% and this nation's federal deficit amounts to 40%. What should that tell you? Which line is the federal government supposed to get in when its recklessness in fiscal responsibility comes home to roost. If you think it can't happen then look at a small slice of the pie like Detroit and then start doing the math.
BACON? That's the solution?
Talk of quid pro quo, bringing home the bacon and being rewarded for reelecting Obama makes my stomach turn. Then she asks, "Why not?" I'll tell you why not Joann Watson, Because the tax payers of this nation did not create the mess we see in Detroit and have no obligation to pull your post toasties out of the fire. That was your job and you failed at it.
The city of Detroit is now out of gas and running on empty. So the average American who actually pays taxes is responsible for that? Because you were stupid enough to "bring home the bacon" and help insure the reelection of another inept politician by the name of Barack Hussein Obama the rest of us are supposed to compound that very suffering with your suggestion? Incompetence breeding incompetence? Is that it?
The facts are that union pension demands are the reason Detroit has met the fate it is facing. The city fathers over the decades are to blame for the plight it faces. The unions controlled labor in that city, as they do many others, and the administrations over time have capitulated and met those excessive union demands. For the past four decades the citizens of Detroit kept electing corrupt, union coddling politicians of the Democratic Party stripe. Now they have no one to blame but themselves.
They Still Want That Free Lunch
An emergency city manager, by the name of Kevyn Orr, was appointed to try to get a handle on the financial crisis but he ended up failing to get the parties to agree. He proposed that the city employees from the past and the present agree to spread the pain around with the municipal bond holders. Sounds reasonable doesn't it? Not when you're dealing with unreasonable unions it doesn't. There was the typical finger pointing with the unions blaming the bond holders and back at you.
The compromise effort failed and the unions filed in court in the effort to protect their bacon which really amounted to fat at that point. The meat was long gone. It appears to be a final grab fest for city money that just isn't there. Ironic that right now the two largest employers in the city are the school system and the pyramids of bureaucrats who run the city itself. Get a clearer picture now? City obligations are estimated at $19 billion dollars, most of that amount being pension obligations. So who is going to take the shot in the shorts?
The mayor and emergency city manager had to then go to the governor of Michigan and request that Chapter 9 be filed in federal bankruptcy court to fend off the union suits against the city.
I suggest that it not be the American tax payer. Some of the people running their gums are acting like any money obtained from the federal government is "government money." Therein lies an attitude problem because the federal government has done nothing lately but print money to put it plainly and simply.
Life is a risk and so is investing. The bond holders now, who took the risk along with the banks who doled out the money to try to float Detroit, will receive but pennies on the dollar as this fiasco is sorted out. Municipal employees will lose their jobs and the unions will suffer the result of having provisions in their bargaining agreements voided. That's the reality of the situation.
Some may say that the auto industry destroyed Detroit. I'm not certain that is the case. Yes, the industry built Detroit but decades of Democratic political corruption and union largesse are the leading contributors to this city's demise. The automakers saw the handwriting on the wall and began making an exit long ago as the city deteriorated, city services became more and more scarce and Detroit became an place of urban blight rather than a great place to live and work.
Detroit is a lesson in greed. Each of the parties involved had their hands in the till wanting to hang on to what they thought was theirs. The politicians were being the usual pick pockets I've come to expect to hold public office. They are in the game for the pursuit and maintenance of power. In the long run there are serious consequences to be paid in the pursuit of money, privilege and power. We're about to see a small portion of the consequences and then should start projecting it upward to those others we elect to be sound fiscal stewards of our money who aren't doing so.
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Have a nice weekend.
The Frog Prince