Green Room

How did Detroit go broke?

posted at 11:23 am on September 17, 2013 by

A worthwhile and devastating report from the Detroit Free Press:

Detroit is broke, but it didn’t have to be. An in-depth Free Press analysis of the city’s financial history back to the 1950s shows that its elected officials and others charged with managing its finances repeatedly failed — or refused — to make the tough economic and political decisions that might have saved the city from financial ruin. Instead, amid a huge exodus of residents, plummeting tax revenues and skyrocketing home abandonment, Detroit’s leaders engaged in a billion-dollar borrowing binge, created new taxes and failed to cut expenses when they needed to. Simultaneously, they gifted workers and retirees with generous bonuses. And under pressure from unions and, sometimes, arbitrators, they failed to cut health care benefits — saddling the city with staggering costs that today threaten the safety and quality of life of people who live here…Decades of mismanagement [my addendum: and one-party rule] added to Detroit’s fiscal woes. The city notoriously bungled multiple federal aid programs and overpaid outrageously to incentivize projects such as the Chrysler Jefferson North plant. Bureaucracy bogged down even the simplest deals and contracts. In a city that needed urgency, major city functions often seemed rudderless.  When all the numbers are crunched, one fact is crystal clear: Yes, a disaster was looming for Detroit. But there were ample opportunities when decisive action by city leaders might have fended off bankruptcy.

Hardest hit by these stark conclusions?  Big Ed and Tampon Ears.  Meanwhile, the DFP editorial team might want to watch their backs; there’s a certain state judge on the bench who might feel a sudden urge to issue contempt citations over the publication of this piece.  Why?  Look no further than the oft-overlooked “honoring to Barack Obama” clause of the First Amendment.

 

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Add to this that Coleman Young drove out the population by decimating the police force and abandoning one of the core duties of government to protect the citizenry. People leave and take their tax dollars with them. You can’t cut spending fast enough to make up the kind of population loss that Detroit sustained during the Young years.

And he was a racist.

JAW on September 17, 2013 at 11:55 AM

Who knew that borrowing to fund general obligations would merely delay the day of reckoning?

Off-topic (perhaps), what are your thoughts on Bill Daley taking a pass on Illinois governor?

Steve Eggleston on September 17, 2013 at 12:11 PM

How did Detroit go bankrupt?

“Two ways,” Mike said. “Gradually and then suddenly.”

(Ah, the classics.)

No Truce With Kings on September 17, 2013 at 12:15 PM

No Truce With Kings on September 17, 2013 at 12:15 PM

a great line from a great book.

Steven McGregor on September 17, 2013 at 12:21 PM

LET IT BURN

burserker on September 17, 2013 at 1:34 PM

Well lets put Los Angeles under scrutiny and we can see a replay in real time of the implosion… Actually throw in the illegal alien welfare burden and we will see a case study of what will happen to the entire country if the Senate pushes thru their permanent amnesty plan.

Caseoftheblues on September 17, 2013 at 1:44 PM

How did Detroit go broke?

Democrats.

Next.

Gatsu on September 17, 2013 at 2:23 PM

My reading of this piece — yes, it placed blame on a lot of Democrats — was that it at least partly was an attempt to exonerate Coleman Young, or at least his ideology.

While there is no doubt that a lot was going wrong before the riots — and the Beacon piece is good for that — it seems from what I’ve read that Coleman Young decided to take Detroit in a direction that expedited its collapse, a direction that workers parties everywhere would admire.

CSPAN recently carried a “townhall” meeting, organized by Conyers, moderated by Dyson of Gerogetown (the one who called Holder the “Moses of our time.”), and various panelists including Coleman Young’s son. The comments by panelists and audience alike revealed an attitude toward Detroit as a laboratory for a “fundamental transformation” of American political, economic and cultural institutions.

The Free Beacon piece seemed to me to want to at least imply that this sort of ideology bore little responsibility for breakdown in Detroit. And that seems wrong to me.

EastofEden on September 17, 2013 at 2:39 PM

City leaders tried repeatedly to reverse sliding revenue through new taxes. Despite a new income tax in 1962, a new utility tax in 1971 and a new casino revenue tax in 1999 — not to mention several tax increases along the way — revenue in today’s dollars fell 40% from 1962 to 2012. Higher taxes helped drive residents to the suburbs and drove away business. Today, Detroit still doesn’t take in as much tax revenue as it did just from property taxes in 1963.

The Left’s answer for every problem… raise taxes.

mankai on September 17, 2013 at 3:51 PM

Yeah, RoboCop didn’t work out as planned.

Marcola on September 17, 2013 at 4:45 PM

Party like its 1999 except its 2013 and you are broke. I don’t think it took an in depth study to find the root cause of the city’s financial woes. They were there all along but the liberal democrat leaders ignored them for their own temporary fulfillment. I wish all of you left in Detroit good luck but I won’t be joining in the cleanup.

jaywemm on September 17, 2013 at 5:09 PM

Well lets put Los Angeles under scrutiny and we can see a replay in real time of the implosion… Actually throw in the illegal alien welfare burden and we will see a case study of what will happen to the entire country if the Senate pushes thru their permanent amnesty plan.

Caseoftheblues on September 17, 2013 at 1:44 PM

Actually, the Cal legislature has passed bills to:

1) Issue drivers licenses, and Cal Id cards, to illegal aliens.

2) Make it ILLEGAL for ANY local police to assist ICE in regards to ANY illegal alien.

In other words, they are making California an open borders sanctuary state.

I wonder how long after Gov Brown signs these laws that the first boats land with immigrants from around the world? There will be no one left to stop them from going strait to DMV and demanding legal identification, motor voter registration, and directions to the welfare offices to sign up!

Freddy on September 17, 2013 at 5:32 PM

And for the next in-depth report, the Detroit Free Press will analyze their coverage and editorials for all the truth and warnings they gave to citizens and voters in Detroit over the last 60 years that they see with such clarity now … oh, who am I kidding?

PolWatcher on September 17, 2013 at 6:36 PM

Well, it all started when some folks didn’t want to pick their own cotton…

JohnGalt23 on September 17, 2013 at 7:01 PM

How did it go broke?

Perhaps made promises it couldn’t keep?

Outgo > Revenue?

Taxes too high to cover a bloated government with promises it couldn’t keep?

Re-electing cronies, crooks, thieves, and people who promise what they know can’t be paid out?

Little things like being unable to balance a budget, perhaps?

ajacksonian on September 17, 2013 at 7:20 PM


How did Detroit go broke?

Democrats.

Next.

Gatsu on September 17, 2013 at 2:23 PM

…what he said!

KOOLAID2 on September 17, 2013 at 7:55 PM

They spent more than they took in.

Othniel on September 17, 2013 at 8:13 PM

The.DFP article never discusses white flight due to black (gang) crime. The first comment, by JAW, hits the nail pretty square. Real, consistent revenue fleeing can’t be offset forever by federal payoffs to special interests that are losing the long game.

M240H on September 17, 2013 at 8:26 PM

There’s a common denominator to all this waste and “mis-management”, isn’t there?

Twana on September 17, 2013 at 9:02 PM

Tampon Ears.

Mr. Benson, congrats. You made me click. These goofs are insane.

arnold ziffel on September 18, 2013 at 12:03 AM

Demographics

Thresher on September 18, 2013 at 12:52 AM

Yeah, RoboCop didn’t work out as planned.

Marcola on September 17, 2013 at 4:45 PM

Turns out, Robocop was an optimistic vision of Detroit’s future.

mankai on September 18, 2013 at 10:36 AM

The answer is simple:
They kept on electing leftwing idiot black democrats

TexasJew on September 18, 2013 at 11:47 AM

How did Detroit go broke?

They spent more that they collected in Taxes. Now, they need to live within their means.

Because, “What difference, at this point, does it make!”

I cannot remember who said that, but I think it is a ‘keeper’.

Freddy on September 18, 2013 at 4:27 PM