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Bbc - Detroit Goes Bust

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Michael Lewis in his entertaining book: 'Boomerang: Travels in the New Third World' in the final chapter writes about the bankruptsy of a smallish city across the bay from San Francisco - the name escapes me.

One of the interesting things was (if I remember correctly) the inability of the city to pay the pensions of former public sector workers. And there was nobody to recue them.

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Michael Lewis in his entertaining book: 'Boomerang: Travels in the New Third World' in the final chapter writes about the bankruptsy of a smallish city across the bay from San Francisco - the name escapes me.

One of the interesting things was (if I remember correctly) the inability of the city to pay the pensions of former public sector workers. And there was nobody to recue them.

Vallejo.

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I take it no chance of London ever going bust? :unsure:

Didn't New York once have difficulties?

The UK is going bust trying to pay London's debts.

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It was that vastly expensive Robocop project that sent them over the edge.

I was just going to post that may be they should be investing in robot police officers, at least they don't need pensions.

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I wonder why the Fed doesn't just step in and offer to buy up all the bonds from cities and states as they get into trouble (or even before).

This would allow these floundering governments (which can't print their own money) to issue all the bonds they want, without having to worry about their debt rating or having to find buyers for their bonds. They could appease the unions by spending as much as they want on salaries, pensions, benefits, etc. They could issue all the debt they want to cover these costs, with no adverse effects. These governments would just roll their debt over indefinitely, and never worry about repaying it. Sounds like a foolproof plan to me.

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It was that vastly expensive Robocop project that sent them over the edge.

"we're taking detroit private' said the old man.

to be fair, private ownership cant do a much worse job than the elected officials...imagine a few dozen Diane Abbotts and you have the Detroit municipal govt.

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Holy Cow indeed.

How long has that evening train been gone?

America's greatest industrial city of the twentieth century now bankrupt. You better hope that your children don't want to work with their hands. (And moving on to other matters, for those of you with an interest in the Jamerson bass part on this track,

, and if you don't know who Anthony Jackson is
- a rewarding click for anyone who likes a flanger.)

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Attorneys for the city’s pension fund say they would have won a restraining order blocking the bankruptcy filing temporarily – and preserving pensioner rights – but Gov. Snyder’s legal team tricked them. The Detroit Free Press reports pension fund lawyers agreed to the government’s request for a 5-minute delay to a hearing for the order, and that in that five minutes Snyder’s attorneys filed the bankruptcy papers in another court. “It was my intention to grant your request,” the judge told the pension lawyers.

http://www.freep.com/article/20130718/NEWS06/307180130/

Once again the little people get screwed.

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http://www.theonion.com/articles/detroit-sold-for-scrap,1931/

Prescient article from the Onion in 2006...

Snip

DETROIT—Detroit, a former industrial metropolis in southeastern Michigan with a population of just under 1 million, was sold at auction Tuesday to bulk scrap dealers and smelting foundries across the United States.

"This is what's best for Detroit," Mayor Kwame M. Kilpatrick said. "We must act now, while we can still get a little something for it."

/Snip

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Michael Lewis in his entertaining book: 'Boomerang: Travels in the New Third World' in the final chapter writes about the bankruptsy of a smallish city across the bay from San Francisco - the name escapes me.

One of the interesting things was (if I remember correctly) the inability of the city to pay the pensions of former public sector workers. And there was nobody to recue them.

Oakland? Seems likely...

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I read it as a combination of bad management of the city by a succession of mayors, too many promises to public sector workers, greedy unionistas and bad management in the car companies.

Of course, the root cause is the american political system where bent pollies are supported because they are pro-black or pro-business....

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I read it as a combination of bad management of the city by a succession of mayors, too many promises to public sector workers, greedy unionistas and bad management in the car companies.

Of course, the root cause is the american political system where bent pollies are supported because they are pro-black or pro-business....

Yep, the racial and commercial tensions were an enabler to the political, legal and business corruption which killed the place.

Detroit was like a mini-USSR within the borders of the US. Unfortunately for the commissars, they weren't allowed to build a wall to keep people in, so their tax base just gave up and walked away.

The only answer the managers of Detroit ever had to a problem was 'more taxes, more spending'. The results are self-evident and it should provoke some thought about that kind of approach, but it won't, it'll be rationalised away.

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Vallejo.

On May 6, 2008, the City Council voted 7-0 to file for Chapter 9 bankruptcy, at the time becoming the largest California city to do so.[17] Stephanie Gomes, Vallejo City Councilwoman, largely blames exorbitant salaries and benefits for Vallejo firefighters and police officers. Reportedly, salaries and benefits for public safety workers account for at least 80 percent of Vallejo's general fund budget. (Stockton filed for bankruptcy in June 2012.)

On November 1, 2011, a federal judge released Vallejo from bankruptcy after nearly three years.[18] The city is now taking measures to find more revenue, and has already gotten new employee contracts, lowered pension plans for firefighters, increased the amount city staffers add to their health insurance and eliminated minimum staffing requirements for the fire department. The legal fees included in bankruptcy cost the city $8 million.

A brief analysis of Vallejo's financial downfall is featured in Michael Lewis' book Boomerang: Travels in the New Third World.[19]

http://en.wikipedia.org/wiki/Vallejo,_California#Bankruptcy

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Yep, the racial and commercial tensions were an enabler to the political, legal and business corruption which killed the place.

Detroit was like a mini-USSR within the borders of the US. Unfortunately for the commissars, they weren't allowed to build a wall to keep people in, so their tax base just gave up and walked away.

The only answer the managers of Detroit ever had to a problem was 'more taxes, more spending'. The results are self-evident and it should provoke some thought about that kind of approach, but it won't, it'll be rationalised away.

Detroit should be Ed Balls and the NUTs wet dream...7th highest education budget in the nation and not even a quarter of students graduate high school.

http://www.intellectualtakeout.org/library/chart-graph/low-graduation-rates-common-well-funded-city-school-districts

If you can dodge the bullets, teaching in Detroit sounds great. Fantastic salaries and dirt cheap housing!

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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