Well, it’s official, as Detroit cannot avoid bankruptcy any longer:
‘The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection and define how many claimants might compete for the limited settlement resources that Detroit has to offer. The bankruptcy petition would seek protection from creditors and unions who are renegotiating $18.5 billion in debt and other liabilities.’
As written before: The industry went away, but also, the Model Cities program as part of LBJ’s ‘Great Society‘ helped incentivize the city so that its politics became a system of patronage and its treasury like a cookie jar. It was a slow, increasingly corrupt decline, with many of the people who could leave having left (serious white-flight, some black-flight). The ones who did stay continued to argue over a shrinking pie as the tax revenue dwindled and the lights eventually shut off.
Detroit has been extrodinarily poorly managed…more to come, no doubt.
Addition: Over four years ago, when GM stock was selling at $2 a share and the debt-holders had been wiped out, this blog put up the video below. Here’s a brief 2:00 min explanation by Bill Ackman of Pershing Square on why the GM bailout was likely a bad idea:
Exactly the kind of civil service, bureaucracy, and vast redistributive apparatus that helped lead to Detroit’s decline is likely being implemented with Obamacare right now. Eventually you run out of other people’s money, and many of promises made to push the bill through hid costs.
Addition: Michael Barone reviews Charlie LeDuff’s book, and discusses how growing up in Detroit in the 60′s turned him into a conservative (Barone).
Some links on this site: Charlie LeDuff, Detroit’s populist, citizen journalist’s youtube channel here. At least he’s sticking around.
Hipster hope, artists, collectivists and small business types can’t save it either: A Short Culture Wars Essay-Two Links On Detroit & ‘Ruin Porn’
GM is not a municipality, but good money got put in, probably after bad and it reeks of politics: From The Detroit News: ‘How The Treasury, GM Stock Deal Got Done’
What about the popular arts and culture?:Update And Repost-From Grist.Org Via The New Republic Via The A & L Daily: ‘Getting Past “Ruin Porn” In Detroit’…A Few Thoughts And A Tuesday Poem By Philip Levine