Home » What to do about Detroit: illogical non-consequences

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What to do about Detroit: illogical non-consequences — 40 Comments

  1. “Rattner doesn’t even seem to factor in the possible (probable?) bad results to which that could easily lead.”

    Possible? Probable? Easily?

    Try provable. Demonstrated by Detroit. Working like the Law of Gravity!

  2. Neo-neocon,

    Although I’ve not yet read through the transcript or the post (I will later today), I can’t help but comment on the content of your own post.

    We see liberals invoke spirit of America” whenever it supports ulterior motives and abandon that call when it doesn’t. American hegemony is the direct result of the “spirit of America” but we see no Leftist support for that. Likewise, the Second Amendment is also in the spirit of America, but no flag-waving for gun ownership from the Left.

    One might easily counter Rattner with the argument that “it’s the American spirit climb out of the hole on one’s own. After all, until recently, immigrants came to this country to create their own opportunity, not to feed at a government trough because there wasn’t any rampant social welfare state.”

    IMO it goes to the comment I recently made in your post about Andrew Branca. It’s all about whaterver feeds the Left’s moral and cultural superiority at any given time.

  3. Neo – Giving Rattner the benefit of the doubt as well-meaning is a liberal sentiment he doesn’t deserve. As you know, the road to hell is paved with good intentions.
    Whether the remaining inhabitants of Detroit are solely responsible for the plight of the city or not doesn’t make it a moral obligation on everyone else to bail them out of the mess. If the Detroit and Michigan cannot be blamed or held responsible for their economic problems, what moral argument does Rattner fall on to claim the city is entitled to grab the property of fellow Americans who never lived there or had anything to do with theirunion commitments? It seems to me the height of moral hypocrisy to claim the rest of Americans should handle this because the people who actually live there are absolved of all responsibility, and utterly infuriating (to me at least) that I should made to feel compassion for Detroit public employees who didn’t, and don’t give a damn about their own neighbors or the taxes they had to pay. They cared for one thing, themselves and getting as much as they could. There’s a union for everything in Detroit. Rattner can argue all day about how the suffering is unfairly placed on the people who now have to support these pensions, but don’t try and argue they didn’t vote these governments in. They voted themselves the treasury, then voted to borrow billions they don’t have, now they want more. There will never be enough for the public unions – they will get it from whomever they can, and they couldn’t care less who has to pay for it. So I’m not buying the “it’s not American” BS. It’s not American to FORCE your neighbor to pay for your 90k pension when he’s got 2 minimum wage jobs, but Rattner and the unions don’t give a crap about that.
    “America” isn’t stepping up to contribute to 401-Ks and IRAs – most Americans have to save for their own retirement, and there was no moral outrage from Rattner or Obama about how to make the majority of us whole again after his boss was elected president and we lost half our life savings. “America” isn’t doing anything to ensure social security will be solvent, and if it goes belly up, I don’t expect to see this assclown on TV calling for compassion for those of us when the government can’t meet it’s obligations, and they call for “means testing” to weed out people who managed to save something.
    This is about buying votes. Rattner and his kind have no morals, and compassion for anybody paying the taxes. Rattner is as un-American as they come. Like Geitner, I would bet he paid less taxes than me while earning a lot more, but has no problem telling the rest of “America” what it takes to be a good American. Screw him.
    Sorry but I’ve had enough lectures about fairness from well-meaning liberals.

  4. Rattner had argued that “apart from voting in elections, the 700,000 remaining residents of the Motor City are no more responsible for Detroit’s problems than were the victims of Hurricane Sandy for theirs.

    What about all of the people who have benefited from the way Detroit has been managed for the past 50+ years? This wouldn’t have happened if someone – a lot of someones – hadn’t been making money off of it. If a person spends themselves into a hole is it our job to relieve them of their debt? Sure, you could blame it on the institutions that enabled it, such as a credit card co. or a bank that approved a risky loan, but in the end, it’s the debtor’s fault. And they likely had a grand time up to the point of bankruptcy. To compare all of the people who benefited from Detroit’s financial debacle for years to hurricane victims is nonsense.
    You don’t keep giving money to junkies, and you don’t keep funding financial mismanagement.

  5. From the transcript:
    WILL: “Can’t solve the problems, because their [Detroit’s] problems are cultural. You have a city, 139 square miles, you can graze cattle in vast portions of it, dangerous herds of feral dogs roam in there. 3 percent of fourth graders reading at the national math standards, 47 percent of Detroit residents are functionally illiterate, 79 percent of Detroit children are born to unmarried mothers. They don’t have a fiscal problem, Steve, they have a cultural collapse.”

    VANDEN HEUVEL: “I find that really insulting to the people of Detroit. I think there is a serious discussion about the future of cities in a time of deindustrialization. But in many ways, Detroit has been a victim of market forces, and I think that what Steve said is so critical, that retirees and workers should not bear this. And this story should not be hijacked as one of about greedy, fiscal, public unions.”

    Vanden Heuvel completely rejects culture, union pensions and corruption as factors in Detroit’s collapse and insists that Detroit’s ills are due to “deindustrialization and market forces”…

    Thus Seth Mandel hits the nail squarely upon its head when he states that, “Liberals will argue that it is imperative to promise unaffordable pension and health benefits to government workers, and once that predictably ends in financial ruin, that it isn’t in the “spirit of America” not to fork over billions more. At no point is a consideration for sustainable economic policy making introduced into the process.”

    Nor will liberals look at cultural factors because to do so would destroy their narrative. They’d rather destroy the country and their children’s future than look in the mirror. A better definition of moral cowardice, I cannot imagine.

  6. What to do about Detroit? Well the left and the media will ensure that liberals support a bailout. What should be done is to allow the citizens of Detroit to experience the full consequences of their behavior.

    Not just for their own growth but for the growth of the country. When there are no consequences, there is no learning from mistakes. Not that the left wants Americans to learn from their mistakes. Just the opposite in fact, their power rests upon ignorance.

  7. There are people who can delay gratification and those that can’t. Most of the saving, investing, and building is done by those who can delay gratification. Those who don’t have the longer vision and don’t understand a few basic economic facts usually end up leading lives of quiet, financial desperation. Those who can’t delay gratification seem to fall in that category.

    I’m sure many of us and our host have known people who succumbed to the siren call of borrowing to spend. It is painful to watch. It’s also painful to watch our elected representatives do the same thing because it’s really our future incomes that they are encumbering. Nonetheless, the progressives love to borrow for such things as “investing” in green energy, lengthening the term of unemployment, “investing” in worthless college degrees, building low-income housing, and shoveling money to cities for urban renewal (whatever that means).

    In my 30s I can well remember that the concept of one day not having to work for my living seemed very remote. On the other hand, the idea of one day having enough money to never have to worry about money seemed a good idea and I had been taught that the way to get there was by saving and investing. Thus, we always lived below our means and put money into mutual funds and our credit union.

    It has only been in the fullness of time that I have been able to appreciate the wisdom of that approach. I lost a part of my pension when my old employer went bankrupt. The things I did in the way back allowed us to survive quite nicely in spite of that set back. That said, I have to spend a good deal of time managing what I have left because the government has changed the game. Thank you Mr. Bernanke.

    Okay, what has all that got to do with bailing out Detroit? Well, the people of Detroit are the victims of government borrowing for uneconomic purposes, pension promises that can’t be kept, as well as outright theft. Most companies (my old employer is an example) have to shed all their pensions and bad debts in bankruptcy in order to get a fresh start. Then they (hopefully) will go forward in a much more fiscally sound manner. That is what Detroit needs to do. As for the pensioners – they won’t lose it all, but they are not going to get what they were promised. That’s a tragedy unless they saved and invested in addition to their pensions. Their biggest loss is going to be their medical benefits. (It was for me) Maybe the State of Michigan can work to help them with that. For the Federal government, which is technically broke itself, to pump money in there is the equivalent of throwing it in a black hole. It would only be putting a band aid on the wound and rewarding bad behavior. When you reward poor economic judgment, it usually leads to more of the same.

    Most people here may have at one time or another been faced with the issue of bailing out a family member or friend who has been a poor manager of their money. If you can help and it is temporary, it’s probably okay. Otherwise, one must be hard-headed – knowing that helping will almost always lead to more bad economic decisions. IMO, that is the way to proceed with Detroit.

  8. I don’t think I’d call Katrina vanden Heuvel a liberal; she is the editor of The Nation, after all. Here’s something Christopher Hitchens once said of her: “When there’s a democratic revolution in Ukraine, for example, Katrina vanden Heuvel will still say it’s an America-backed attempt to encircle Russia. There’s this instinct to support Moscow.”

    That’s from a piece on Victor Navasky, the fellow she succeeded at The Nation. Love this recollection of his from his school days:

    “We had one Marxist history teacher who taught a straight Marxist view of history,” Navasky recalls. “I remember he once asked where diamonds got their value. Someone said, ‘because they’re beautiful’. He said, ‘no, no’. Someone else said, ‘supply and demand’. He said, ‘no’. Someone else said, ‘from the sweat of the workers in the mines!’ And he said ‘right!'”

  9. If you mention moral hazard, you’ll be accused of talking about “welfare queens” “blaming the victim” “moochers”.
    You can tell from rhetoric, sometimes, when the speaker knows better.

  10. Just last month it was reported that, despite the city’s disastrous and desperate economic, financial, pension, tax, social and cultural, law enforcement, housing, population, and infrastructural situations, local government, business, and civic leaders are, nonetheless, proposing going ahead with plans to build a new, $650 million dollar hockey arena and surrounding 45 block “entertainment district”, touting it as an “investment,” sure to bring in new visitors, and to stimulate new investment and economic growth (see http://www.detroitnews.com/article/20130619/BIZ/306190075) –this, of course to follow other such misguided major “investment” expenditures in the past, like their virtually unused “People Mover”; major expenditures that have done their part to drive Detroit into the extreme state of poverty, violence, and decay it has fallen into.

    In my view, if you are going to pour billions of our taxpayer dollars into Detroit to “rebuild and revitalize it,” you might as well just charge up some debit cards and hand them out to all the crooked politicians, hustlers, and con men in Detroit, or perhaps just cut out the middle man and all that time and effort, and just flush the money down the toilet, because that is where it is all going to end up anyway.

    Prissy, bow-tied Will is, in this instance, right.

    Unless you can somehow get those citizens left in Detroit to come to have “civic virtue”–to work, to turn themselves into at least minimally educated, literate and numerate, honest, hardworking, independent, law-abiding citizens who value and practice virtues like–self-control, persistence, delayed gratification, honesty, thrift, and sobriety– good citizens who will go on to elect leaders having those same virtues, there is not a chance in Hell of such a major injection of money doing any lasting good.

    P.S.–To see just how far Detroit has fallen, you might want to check out the propaganda film, touting Detroit as a venue for the Olympics, titled “Detroit, City on the Move,” that the then Democratic Mayor Cavenaugh put out in 1965, just two years before the devastating riots that Detroit never recovered from http://www.youtube.com/watch?v=RNnh9ws8Apg ).

  11. I think the most sensible thing for Detroit (which ensures that it won’t ever be done) was something I saw at PJ Media (IIRC) – which was – to decertify it as a city, pull the plug on everything and make it a territory again … and let anyone who wanted to, sign up to homestead on a piece of property, repair the house or houses on it, plant gardens, live on their claim for six years and conduct any kind of legal business they liked, and organize defense and security for themselves. After six years, they’d own their claim, and maybe a reformed Detroit would be viable again.

    It would be epic. Can you just imagine the reality show it would make?

  12. I tend to take Rattner’s position, mostly because I remember the gloom that overtook me when I used to go through Newark on the train from D.C. to Boston. It looked like a city that had gone through a war and yet never rebuilt properly; simply dreadful, mean streets.

    Anyway, here’s an interesting piece by an urban planner on what he sees as the reasons for Detroit’s decline, with an emphasis on a lack of planning:

    Buffalo and Cleveland have suffered the same kind of economic loss, but have not (quite) fallen to the same depths as Detroit. In fact, Pittsburgh suffered as much economically as Detroit, and is now poised for an amazing Rust Belt comeback. Any number of cities has had as troubled a racial legacy as Detroit, without being as adversely impacted. And Detroit certainly hasn’t cornered the market on political corruption, as long as Chicago exists.

    So why has Detroit suffered unlike any other major city? Planning, or the lack thereof for more than a century, is why Detroit stands out. While cities like Chicago, Philadelphia and Los Angeles (don’t laugh — Detroit and LA essentially boomed at the same time) put a premium on creating pleasant built environments for their residents, Detroit was unique in putting all its eggs in the corporate caretaker basket. Once the auto industry became established in Detroit, political and business leaders abdicated their responsibility on sound urban planning and design, and elected to let the booming economy do the work for them.

    The author goes on to discuss nine specific areas:
    1. Poor neighborhood identification
    2. Poor housing stock
    3. A poor public realm
    4. A downtown that was allowed to become weak
    5. Freeway expansion
    6. Lack of/loss of a transit network
    7. Local government organization
    8. An industrial landscape that constrained the city’s core
    9. Ill-timed and unfulfilled annexation policy

    All basic stuff that begged for good leadership in all sectors.

  13. Detroit and its creditors deserve no assistance, but the left can not allow the city’s public unions take a few pennies on the dollar which would be the only possible outcome of a real bankruptcy proceeding. That would be a glaring example of the consequences of all their dearly held policies. Hence we will be told time and time again that its mean spirited to allow the city to go under. Soon it will also be framed in terms of racism. After all, the demise of Detroit is a vast right wing conspiracy.

  14. Wasn’t Steven Rattner a character in Atlas Shrugged?

    I could have sworn he was….

  15. “the people of Detroit are the victims of government borrowing for uneconomic purposes, pension promises that can’t be kept, as well as outright theft.” J.J.

    Anyone in Detroit who voted democrat since the 60’s is not a victim but a willing participant, who is now either panicking or looking around in bewilderment, ‘stunned’ that reality has finally arrived.

    It will be thus for many more cities, states and finally the nation as a whole. The dems premises, beliefs and resultant policies, along with a huge dose of willful denial, ensure that outcome.

    Nor is Detroit’s decline the result of a ‘lack of planning’, the cause of that decline is just as George Will states; a rejection of the cultural values that result in success, that has in turn resulted in cultural collapse.

    The majority of Detroit’s citizens consistently rejected “civic virtue”– “to work, to turn themselves into at least minimally educated, literate and numerate, honest, hardworking, independent, law-abiding citizens who value and practice virtues like—self-control, persistence, delayed gratification, honesty, thrift, and sobriety” and they elected those who told them what they wished to hear.

    That cultural rejection and consequent embrace of the liberal agenda is what has led to Detroit’s inability to respond to “deindustrialization and market forces”. While simultaneously capitulating to ever increasing union pensions, coupled with the majority of Detroit’s citizens tolerating the rampant, endemic corruption that has plagued Detroit since the 60’s.

    They’ve ‘made their bed’, as do we all and, to deny them the opportunity to learn from their mistakes is to perpetually treat them as children.

  16. I belive that this Robert Heinlein quote should fit in quite nicely here:

    “Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded – here and there, now and then – are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

    This is known as “bad luck.””

    I would suggest that this likely describes all those hard working creators and entrepreneurs who apparently “voted with their feet” and fled Detroit over the last several decades.

  17. The good burghers of the surrounding suburbs will pay the protection money to keep the 750,000 upstanding, sober & industrious citizens from killing them. Of course, the arrangement will be put in Rattner’s terminology.

  18. Detroit should just hire experts who specialize in fixing bankrupt companies…Bain Capital for instance.

  19. Those who rob peter to pay Paul can always rely on Paul to help them rob peter… and if that don’t work, there are a lot of other bandwagons a failed promoter arguing things can always hop on after a short break to clear the minds of the public.

  20. “I would suggest that this likely describes all those hard working creators and entrepreneurs who apparently “voted with their feet” and fled Detroit over the last several decades.” Wolla Delbo

    The left has an answer for people voting with their feet.

    “The Internal Revenue Service has launched a new global program to target what it calls “high wealth individuals” IRS Commissioner Douglas Shulman, 2010

    Is there really any doubt that the IRS will incrementally lower their definition of a “high wealth individual”?

    Nor has the IRS been letting ‘grass grow under their feet’; Swiss strike deal with US over tax evasion

    And just to make absolutely clear what’s going on; June 6, 2013 “Today the SEC announced that it is tightening the noose around investors. Currently on the table are two distinct proposals. The first is directed at institutional investors’ ability to withdraw money during a time of financial crisis. The second proposal would grant fund boards that oversee money funds to impose significant exit fees on investors during time of financial stress. The effect of either or both proposals would be to lock investor money in place.”

    Cyprus was the canary in the coal mine…

  21. Geoffrey Britain Says:
    July 31st, 2013 at 8:31 pm

    And just to make absolutely clear what’s going on; June 6, 2013 “Today the SEC announced that it is tightening the noose around investors. Currently on the table are two distinct proposals. The first is directed at institutional investors’ ability to withdraw money during a time of financial crisis. The second proposal would grant fund boards that oversee money funds to impose significant exit fees on investors during time of financial stress. The effect of either or both proposals would be to lock investor money in place.”

    Dammit, Atlas Shrugged was not intended to be an instruction manual.

  22. Allow me, gentle reader, to introduce you to FP. FP was a lady I dated briefly towards the end of 2007. She had many good qualities, but for an increasingly evident number of reasons, it wasn’t going to work out in the longer run. One of the lesser reasons, but nonetheless very telling, was the following.

    I suppose the subject was Hurricane Katrina or something like that. I suggested that I can see helping out the residents of a flooded-out town, located smack in a flood plain, and that possibly the U.S. Treasury via FEMA could finance a rebuilding of the town *somewhere* *else*, as it is perfectly plain that sooner or later, the town will get washed out again and we’ll have to bail them out again.

    (Gentle reader: *please* overlook the arguments against this, of which there are many. They are serious, substantive arguments. Please know that I was trying to reach across an invisible cultural aisle, so to speak, offering up an idea that might bridge a yawning gap between FP and me.)

    FP wouldn’t hear of it: she was in favor only of rebuilding the town right where it was. “But it’s plain you’re just gonna hafta rebuild it again at some point — it’s in a flood plain!” No sale. No acknowledgement of any problem with that. Rebuild it where it is.

    I mention it was 2007 because it was before the Meltdown of 2008. But why do I get the impression that FP, were she and I still in contact, would take exactly the same approach in 2013?

    (I know why. So do you-all.)

  23. MJR,

    Nothing new there, as you say we’re all familiar with the phenomena. So was Ben Franklin, “Reason cannot change the minds of people who have reached their positions through emotion.”

    Though that does beg the question, why talk to liberals at all? Might as well try to reason with a donkey…

  24. Neo, you are very logical. But logic is not wanted on the liberal asshat voyage, alas.

    Two thoughts: the pinkos regard these Detroiters and others of their kind and circumstance as babies: helpless and in need of succor by them, the kindly, all-loving, all-wise pinkos.

    These same parlor pinks will be utterly outraged if you bring up Kipling’s concept of ‘the white man’s burden’ (actually, Kipling’s idea was that it would be generous of the Anglosphere to share our knowledge with the more backward races to help them to get up to speed: teach them to fish, as it were. But he’s a racist imperialist for that. So terribly condescending, don’t you know.)

  25. Oh, and too bad there isn’t an Alanon for all the enabling-addicted liberal asshats. 😉

  26. The Leftists and their Democrat founding members are very logical. They come up with a problem, figure out how to make it grow, then they figure out the solution. Then they call for and demand power in order to implement the solution for the problem that they created. After all, nobody else knows how to fix the problems. Why? Because they didn’t create those problems and have no idea what the source of those problems are. Democrats, however, are different. They can Fix America. After all, they are the ones breaking power. If you submit to the Left, they will stop breaking America and suddenly… the problem will be fixed.

    Or will it.

  27. Have you read this article (from the Wall Street Journal) yet?

    http://online.wsj.com/article/SB10001424127887323829104578623422748612116.html#printMode

    It’s from 7/29, titled “Bill Nojay: Lessons From a Front-Row Seat for Detroit’s Dysfunction”

    “… I got a vivid sense of the city’s dysfunction. Almost every day, a problem would arise, a solution would be found–but implementing the fix would prove impossible.”

    He gives a sense of the futility of trying to make his department work, when every proposal was thwarted by the unions or micromanaged into impossibility by the City Council.

    Interesting (and frustrating)!

  28. Detroit’s problems are not the result of socialism. Portland and Pittsburg are largely socialist, and they are examples of successful cities.

    Detroit’s condition results from the ethnic cleansing conducted by Coleman Young. The white middle class (and very small black middle class) was driven out leaving behind a black population that was relatively stupid, indolent and violent. That population could and cannot sustain a modern economy, and Detroit collapsed.

    The same process occurred in Newark and is well-underway in Philadelphia, Atlanta and Chicago.

    Ron Unz has suggested that the universal support of mass Mexican immigration by the elites is due to their belief that the more important cities can be saved if Mexicans can ethnically cleanse blacks out of them. Los Angeles, New York and Washington are offered as examples of the successful application of that assumption.

  29. }}} If liberals reward bad decisions over and over, that’s a decision they make, but Rattner doesn’t even seem to factor in the possible (probable?) bad results to which that could easily lead.

    I will reiterate but not rejustify (except with a link) my thesis that the defining quality of PostModern Liberalism is a categorical incapacity to learn from experience.

    That is, they may have the highest IQ in any bunch (in some cases) but no matter their IQ they would rank in the bottom third or lower on any notional test for “Wisdom” — the ability to learn from experience.

    This is why they endlessly support government collectivism and socialism/communism. No matter how many times they fail, they “just weren’t done right”.

    See here and here. The latter also details one of the observable functional mechanisms that interfere with learning, the “Liberal Midnight Reset Button®”

  30. I highly doubt the masters of the Detroit fiefdom desired to “alleviate” suffering in any fashion or form.

  31. Liberals don’t believe in the power of moral hazards, because they believe that morality itself – the framework of objective values – is an illusion, and that no one is really a responsible moral agent accountable for the consequences of his acts and choices anyway; other than the odd “racist” here or there.

    It’s all through “no fault of their own” as I have been informed ad nauseam, by a number of leftist political activists.

    Urges, and flows, coalescence and dissipation, men just resources to be managed in the name of no name, ultimately.

    Liberals: engine drivers on a train to nowhere.

    (If I’ve unwittingly repeated what someone else said above, sorry. I find it difficult to read about a civilization collapsing from the inside. What as a student I found fascinating about human dysfunction as applied to post-Roman Britain, or the collapse of Gaul, I find nauseating applied to my own culture. We’ve become enervated hostages to our own hollowed out morality. )

  32. “If you believe Rattner to be well-intentioned–and from the sound of him I will give him the benefit of that doubt….”

    Neo, something to ask yourself: After how many generations of failure and disaster can one cease to attribute good intentions and deduce malice and utterly careless arrogance?

  33. bob sykes at 7:45 am:

    “The same process occurred in Newark and is well-underway in Philadelphia, Atlanta and Chicago.”

    I gotta disagree with you there about Atlanta. Mortgage fraud was certainly rampant in Atlanta during the “go-go” and builders/ developers grossly overbuilt way out in the exurbs (25-40+ miles from Downtown). As a result we got hammered by the crash but having taken our lumps we’re now coming back strong.

    While it’s true that there is plenty of poverty and some weak pockets in the “urban core”, Atlanta has long been blessed by a huge (and well educated and stable) black middle class (and upper middle class). Plus, in the past 20 years+/-, large (and ever-increasing) numbers numbers of yuppie-like urban pioneers have been moving in to the urban areas ( the “loft culture”).

    Actually ( IMHO) Atlanta’s weakest aspect economically — and the one that will take longest to overcome — is all that overbuilding in the exurbs. But close-in, things are looking much better. Cost of gas/transportation is really helping (fueling?) those closer-in real estate markets as well.

    I will concede that we’ve have a terribly corrupt (and incompetent) public school system, but it looks like folks have finally begun to work on that.

    Carl

  34. Atlanta is supported by Republicans and capitalists in the South, even though the core is still very Democrat light so to speak.

    The Left won’t allow it to recover, of course. They didn’t allow Detroit to recover. DC won’t regain patriotic feelings. Chicago won’t become uncorrupt. San Fran won’t become sane, normal, or anti-Hollywood.

    They’ll be working on it at the turn of the 22nd century, so long as the Left exists.

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