Let The Bankruptcy Begin

The "Fist of A Champion" - a sculpture in downtown Detroit dedicated to legendary fighter Joe Louis - is a city icon. It was updated a few days ago to reflect the reality of the city as it prepares for bankruptcy. An artist added a massive replica of a can of Crisco. Heh. Bend over and brace yourself, Detroit.

Surprisingly enough, the city government does not see the humor.

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Hughey Newsome: The Race Card, Detroit & Zimmerman

Hughey Newsome, a black businessman who lived in Detroit for the past ten years, looks at how the race card is used by blacks in the grievance industry and in government, from our President to Detroit, and its impact. This from Mr. Newsomee in the Daily Caller:

Living in the Detroit metro area most of the last decade, I have experienced many of the events leading to its bankruptcy.

Take, for example, the 2008 State of the City address by then-mayor Kwame Kilpatrick. With Detroit facing a perilous fiscal future and him facing ethics complaints, Kirkpatrick highlighted race. He sparked controversy by using the “n-word” while referencing an insult he received from some random person.

Kirkpatrick vowed to stand strong against this attack, and asked citizens to stand by him against a “lynch mob mentality.” He essentially used that slur to leverage racial tension, inciting and dividing the mostly-black city against mostly-white suburbs. After all, it was the people in the suburbs — many who either worked in Detroit or had economic ties to the city — who were frustrated with mounting city corruption and mismanagement.

The citizens of Detroit rallied behind their mayor. It was racial politics — pure and simple.

Five years later, Detroit is in the midst of bankruptcy proceedings, and Kilpatrick – who resigned six months after his controversial address — was convicted of a series of felonies that may put him in prison for the rest of his life.

Kilpatrick is not the one bad apple who destroyed Detroit. Using race to cover for failure is commonplace. . . .

There are many similar examples of corruption and divisiveness involving city leadership where race is has often been used to rouse and incite but – most importantly – to distract from ineptness and unethical behavior.

Why is this dangerous?

Playing on peoples’ sensitivities and fears distracts attention from holding elected leaders accountable. Detroit’s political class understands this, and regularly delivers racial division rather than doing the hard work of attracting investment in the city. . . .

It’s not just Detroit where this game of racial division is played. This trick is played at the highest levels of government. . . .

George Zimmerman was found not guilty the same week Detroit declared bankruptcy. In the former case, too many — and too many who are too powerful — cast Zimmerman as a bigot despite no evidence validating this claim.

In his surprise address to the press about the Zimmerman verdict on July 19, President Obama mentioned the real bias that black men face on a regular basis. But rather than channel this concern into a productive conversation, he sought to leverage the racial tension he created to criticize “stand your ground” laws (which played no actual role in Zimmerman’s defense) and promote gun control. Obama’s question — “[I]f Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk?” — is particularly disheartening. On what evidence is this based? Does he not know that over 30 percent of Florida’s “stand your ground” claims are made by blacks and are 55 percent effective for blacks in court? Obama’s words of division and distrust – to advance a political agenda — diminish an opportunity to address real biases principally driven by media and entertainment. Too much time is spent complaining about and looking for the overt racism that has largely been banished from our society. Perversely, this effort to protect minorities from the bigot under the bed promotes the “soft bigotry of low expectations” that Obama’s predecessor sought to stamp out. . . .

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Krauthammer & McArdle Conduct Detroit Postmortems

From Dr. Krauthammer:

If there’s an iron rule in economics, it is Stein’s Law (named after Herb, former chairman of the Council of Economic Advisers): “If something cannot go on forever, it will stop.”

Detroit, for example, can no longer go on borrowing, spending, raising taxes, and dangerously cutting such essential services as street lighting and police protection. So it stops. It goes bust.

Cause of death? Corruption, both legal and illegal, plus a classic case of reactionary liberalism in which the governing Democrats — there’s been no Republican mayor in half a century — simply refused to adapt to the straitened economic circumstances that followed the post–World War II auto boom. . . .

. . . The legal corruption was the cozy symbiosis of Democratic politicians and powerful unions, especially the public-sector unions that gave money to elect the politicians who negotiated their contracts — with wildly unsustainable health and pension benefits. . . .

McArdle's post-mortem finds a tsunami of causes. She is certainly right about the number of contributing causes, though I think that, from the standpoint of simple math, Krauthammer has it right. That said, this from Ms. McArdle:

If you listen to the interwebs, the answer is “terrible, Democratic-run urban politics.” Or “union-busting anti-labor policies” in Southern states that transformed solid middle-class jobs in the Midwest into near-minimum-wage jobs in states such as Alabama and Tennessee. Or maybe “racism.” Or “the urban underclass.”

All of these answers are impossibly reductive. The city of Detroit has no one problem; it has a constellation of them. Here, in no particular order, are some of the most important factors. . . .

The factors she lists:

- The decline of shipping along the Detroit River.

- The claim that the South stole high paying union jobs by allowing for non-union near minimum wage pay is a falsehood. There is little wage disparity between Michigan UAW workers and non-union workers in Southern Right To Work states. The three killers have been expansive health and pension benefits for UAW retirees, deeply inefficient union work rules, and competition.

- Post-WWII UAW Pattern Bargaining tactics failed when competition came to the auto industry. This was at least as big a problem for the UAW and the auto industry as the availability of jobs in Southern right to work states.

- Middle Class flight: This was a real problem for Detroit caused by a huge increase in crime during the 50's and 60's. It picked up even more in the wake of the 1967 race riots - the most violent in the nation.

- White Flight and Reverse Racism: A large chunk of the white population fled after the race riots. Those that were left were subject to a series of deeply anti-white black dominated city governments.

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Detroit Heads To Bankruptcy

The problem with socialism is that eventually you run out of other people money. And as Instapundit is fond of pointing out, anything that can't go on forever won't. So today it is for Detroit.

Just as the Soviet Union was the poster child for failed communist economics, so is Detroit the poster child for failed left wing policies in America. Detroit, wholly under Democratic control since 1962, has gone from one of our nation's premier cities to failure and ruin. It faces unfunded pension liabilities of between $17 and $20 billion and has stopped paying money it owes to unsecured creditors just so it can keep city services running. The city has been spending $100 million in excess of revenues for at least the past five years.

So now this poster child for all that is wrong with Democrat misrule filed for bankruptcy today - with all that means for the all powerful unions and public pensions.

The state took over the management of Detroit's finances earlier this year, declaring it in a financial emergency. After studying the city's finances for several months, Kevyn Orr, the Governor's designee for restructuring Detroit, put together a deal that would have meant breaking union contracts and permanently reducing pensions. The unions and pensions are screaming bloody murder - not merely refusing the offer, but going to court, requesting that the state not be allowed to file for bankruptcy because the Michigan state constitution provides that public pensions cannot be touched. That is a pretty easy legal question. Art. I Sec. 8 gives Congress plenary power over bankruptcy law, and as such, it cannot be altered by any state law.

At least one Democrat city council woman has floated the request for Obama to give Detroit a federal bailout, arguing it was justified since Detroit's Democrats turned out strongly for him in the last election. Just send them some of those free Obamabucks.

That would be grounds for civil war. Update: Joshuapundit has up a much more detailed post on the bankruptcy that is well worth a read.

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Detroit's Public School System, Teacher's Union & School Board

A few days ago, I composed a post - Public Sector Unions: A Toxin, A Crisis & An Opportunity. Therein, I argued that public unions are a useless cancer on our economy and, in particular, that they are destroying our educational system. Comes today The Blogprof - a professor from Michigan commenting on the Detroit Public School System.

Some of the facts that he lays out in his post are stunning. Chief among them is that the Detroit Public School system (DPS) graduates only 25% of its students. And that figure is likely itself inflated as the DPS has, until recently, used "social promotion" to promote students to the next grade irrespective of their academic qualification. Moreover, of those who do come out of the DPS system, 33% of working-age adults, and 44% of all adults, read below the 6th grade level. The DPS school board and teacher's union are now in a fight with DPS emergency financial manager Robert Bobb over academic control of the city's schools.

The DPS School Board President is Otis Mathis, himself a graduate of the DPS system. Mr. Mathis composed the following e-mail for mass distribution last August:

Do DPS control the Foundation or outside group? If an outside group control the foundation, then what is DPS Board row with selection of is director? Our we mixing DPS and None DPS row's, and who is the watch dog?

Read the Blogprof's post for the rest of this horror story.

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The Politics Of Urban Poverty

Detroit, once a thriving metropolis, has now earned the dubious distinction of being the city in America with the highest poverty rate. The other nine cities that are vying for that distinction all have something in common with Detroit. They have all been run by Democratic Party politicians for at least the last the last 25 years. Doug Ross has the whole story. Does anyone detect a pattern here?

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