Detroit Has Declared Bankruptcy

#Money

Tue, Jul 23rd, 2013 22:30 by capnasty NEWS

Detroit, considered "one of the most important cities in the 20th century," has given up trying to address "the misdeeds" that brought it to its knees and has, instead, declared bankrupcy.

Those misdeeds indisputably include a history of abandonment, neglect, isolation and outright hostility born directly of the racial tensions that have historically divided Detroit from its predominantly white suburbs, and from the rest of the state of Michigan. Add to the list a failure of leadership on every level — from myopic, at times corrupt local politicians who punted on Detroit's long-term debt issues, to a bipartisan Washington policy establishment that has blundered along for years without anything resembling a cohesive urban policy or a strategy for shoring up US manufacturing.

And, of course, let's not forget the economic misdeeds of Detroit's Big Three car manufacturers (those pioneers of job outsourcing) and Wall Street (whose predatory lending and casino mentality resulted in the foreclosure epidemic that would devastate the tax base of cities across the US).The year after Chrysler and General Motors entered managed bankruptcies, Michigan elected a Republican governor, a helmet-haired certified public accountant (and venture capitalist), Rick Snyder, who bankrolled his own campaign to the tune of $6m, proudly billing himself as a technocrat capable of reviving the state's foundering economy. Snyder, after promptly cutting corporate taxes, saw the writing on the wall in Detroit. Nervous about the possibility of an unmanaged bankruptcy — which could have tanked the bond rating and borrowing ability of the entire state — Snyder appointed bankruptcy lawyer Kevyn Orr as Detroit's "emergency manager" in March. Democratically elected officials (the mayor, the city council) retained their job titles but no real power; Orr, meanwhile, would control the city's finances and negotiate with creditors. He was granted near dictatorial powers, including the ability to break union contracts with city workers and sell off municipal assets.

The above image is from the Wikipedia entry on Detroit.

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