Homeless in Arizona

Our royal rulers love to tell us that we are too stupid to run our own lives and that we need their leadership and advice to survive.

But sadly they always seem to run their ships like drunken sailors spending every last cent they have and maxing their credit limit again spending every cent of it too.

I would love to make fun of our royals rulers and call them stupid, but I suspect this is more of a criminal thing and when they spend our money like a drunken sailor it's not because they are stupid, but because they want to steal every last cent from us.

Source

Detroit goes bankrupt, largest municipal filing in U.S. history

By Michael A. Fletcher, Published: July 18 E-mail the writer

Detroit filed the largest municipal bankruptcy in the nation’s history Thursday, marking a new low in a long decline that has left the U.S. automaking capital bleeding residents and revenue while rendering city services a mess.

The city, which was the nation’s fourth-largest in the 1950s, with nearly 2 million inhabitants, has seen its population plummet to 700,000 as residents fled rising crime and deteriorating basic services, taking their tax dollars with them.

In March, as Detroit faced an estimated debt of $19 billion, Michigan appointed an emergency manager vested with extraordinary powers to rewrite contracts and liquidate some of the city’s most valuable assets. That led to once-unthinkable proposals such as forcing public employees to cut their retirement benefits or demanding that investors in municipal bonds — long considered among the safest investments — take pennies on the dollars they lent to Detroit. In recent days, both of those groups objected, propelling the city to file for bankruptcy.

In a sign of Detroit’s dire fiscal situation, few officials and lawmakers in Michigan or Washington vigorously protested the decision — a far cry from the 1970s, when President Gerald R. Ford intervened with federal loans to prevent New York City from falling into bankruptcy. That there is far less stigma now could encourage other distressed cities and towns to follow Detroit’s lead, some analysts worry.

Detroit’s deterioration, which started in earnest after the 1967 race riots were among the most violent in the country’s history, has accelerated in recent years.

In the 1950s, Detroit, known worldwide as the Motor City, had one of the highest per capita incomes in the country when auto plants were hiring wholesale. Now it has the highest rate of violent crime among the nation’s big cities. Average police response time is almost an hour. Nearly 80,000 buildings are abandoned or seriously blighted, and 40 percent of the city’s streetlights do not work. The jobless rate is above 18 percent, more than twice the national rate.

The abysmal services encouraged more people to flee. The city lost more than a quarter-million residents from 2000 to 2012. Tax revenue and state aid have plummeted as the auto industry hit hard times, crimping Michigan’s finances. Its best-known cultural export, Motown Records, left long ago.

To plug its deficits, the city borrowed huge sums over the years. And the state-appointed emergency manager, Kevyn Orr, a former D.C. bankruptcy lawyer, was unable to forge a deal with creditors.

In a letter authorizing the bankruptcy filing, Gov. Rick Snyder (R) said the consequences of laboring under extreme debt would be even worse than bankruptcy.

“I know many will see this as a low point in the city’s history,” he wrote. “If so, I think it will also be the foundation of the city’s future — a statement I cannot make in confidence absent giving the city a chance for a fresh start, without burdens of debt it cannot hope to fully pay.”

That view is widely shared, as few political leaders pushed for a bailout of the city. After news of the bankruptcy filing, the White House issued a statement saying that President Obama is following the situation and that he remains “committed to continuing our strong partnership” with Detroit.

But others warned that bankruptcy would bring pain to the city’s 9,500 employees and nearly 20,000 retirees, while plunging its financial future into uncertainty.

“A bankruptcy might be good in terms of wiping out the debt,” said Coleman A. Young II, a state senator and son of a former mayor of Detroit who served for 19 years. “But in terms of the human impact, retirees who could have their pensions gutted, citizens who will lose services . . . it is going to be painful.”

The filing begins a one- to three-month process to determine whether the city is eligible for Chapter 9 protection and who may compete for the limited settlement money that Detroit has to offer. But it could be years before the city emerges from bankruptcy.

Orr has talked about spinning off city assets, including the Coleman A. Young International Airport and the beloved Belle Isle park, to raise money. Some have mentioned the city auctioning off some of the valuable works at the Detroit Institute of Arts. But Orr has reportedly said he will not sell the art, much of which is protected by private covenants, city agreements and state laws.

It is unclear whether those barriers will stand in a municipal bankruptcy, in which a federal judge has no power to force asset sales but can refuse to approve a debt-settlement plan.

This week, the city’s two pension funds filed suit seeking to block a bankruptcy, an action that Orr’s office said indicated that negotiations outside bankruptcy court were fruitless.

The city’s bankruptcy petition far surpasses the $4.2 billion filing by Jefferson County, Ala., in 2011, which previously was the largest in the nation. That county, which includes Birmingham, is on track to emerge from court protection by the end of the year, with many bondholders forgoing interest payments and others unable to recover even the amount of money they lent the county.

Jefferson County’s bankruptcy plan cut $1.2 billion in principal payments to investors who held bonds in a defaulted sewer project, according to Bloomberg News.

Many observers consider that outcome a hopeful sign for Detroit, which they say must shed its debt to have an opportunity to recapture any part of its past glory.

“If Detroit comes out of this a decent credit risk, other municipalities are going to absolutely want to follow their lead,” said Ken Noble, a New York bankruptcy lawyer. “This is absolutely a watershed event for municipal finance. And, really, it is the only shot that Detroit really has.”

Daniel C. Miller, the city controller in fiscally pressed Harrisburg, Pa., said Detroit’s move could be a model for other distressed cities.

“I like what is happening in Detroit very much,” he said, noting that Harrisburg is not in bankruptcy but is struggling in state receivership. “People say that if a city files for bankruptcy it cannot borrow again. That is all just ridiculous talk. Guess what: In Harrisburg, we can’t get access to capital markets right now.”

Orr has said he wants to use bankruptcy to erase many of Detroit’s debts and then invest $1.25 billion in upgrading city services and infrastructure in hopes of putting the city on a path to recovery.

A former mayor suggested that the city could take a cue from two of its automakers, which were bailed out by the Obama administration and brought through bankruptcy and are now thriving — a fact that Obama frequently boasted of during his reelection campaign.

This time, there are few signs of help from Washington. But former mayor Dennis W. Archer said Detroit could still see the same kind of recovery.

“Once the city gets through this, it will be well on its way to substantial revitalization,” he said. “The stigma of bankruptcy has not prevented corporations from going on to be successful. Witness Chrysler and General Motors. The same could be said of the city of Detroit. If this works, other distressed cities will be knocking on our door and asking, ‘How did you do that?’ ”

Detroit: The downshift

In a 2010 Washington Post-Kaiser Family Foundation-Harvard University Detroit poll, almost all residents of the main three-county metropolitan area of Detroit saw their economy as in ruins.

Detroit’s demise was decades in the making

Detroit’s demise was decades in the making

By Keith B. Richburg, Friday, July 19, 5:11 AM E-mail the writer

My heart aches today knowing that my beloved home town of Detroit now has the notoriety of being the largest American city to officially file for bankruptcy. But the filing was really just a formality. Detroit has really been broke, broken and in decay now for decades — a shell of a city, with a small downtown and some scattered neighborhoods dissected by miles of abandoned storefronts and vacant lots.

The Detroit I remember ceased to exist a long time ago. But it was kept alive by a pride, a nostalgia for its former glory, and an illusion that revival was just around the next corner. We who love Detroit — even people like me who abandoned it long ago — were all complicit. I could visit for a week or a weekend, set the rental car stereo to the Motown oldies or classic Detroit rock songs from a bygone era, take in a Tigers game, have a hot dog and a Vernor’s ginger ale at Lafayette Coney Island downtown, and comfort myself with the fiction that this was still the same city I knew growing up as a kid.

After years of financial struggle, Detroit filed for Chapter 9 Federal Bankruptcy Protection on Thursday, the largest U.S. city to do so.

Of course, the old neighborhoods are nothing like they were. My older cousins and aunties in their 70s, 80s and 90s are still in the same houses as before. But theirs are some of the few houses still standing on streets that are now mostly abandoned; they live behind metal burglar bars on their windows and the curtains and shades pulled tight. If I go in the winter, I know their streets will never be cleared of snow and ice, so the driving is treacherous. And I never go out at night. My old house on McGraw Street burned down and was reduced to rubble years ago.

Most of the old-time residents say they never plan to move, even though city services are virtually nonexistent in the old neighborhoods and most of the neighbors are gone. It’s a pride, a stubbornness and an attitude of “I bought this home 40 years ago, and no crack addicts or gangbangers are going to drive me out of it!”

It’s that attitude that led many Detroiters to instantly reject Mayor Dave Bing’s plan to shrink the size of the sprawling city to geographically consolidate the people, and the services. It’s an admirable obstinacy Detroiters have. It’s also why the city was destined to go bust.

Bing aside, much of the political class is also bankrupt. Detroit politics has been wracked by a series of corruption scandals, going back to the Coleman Young years. The last elected mayor before Bing, Kwame Kilpatrick — better known as the “Player Mayor” for his extravagant lifestyle of bling and parties — sits in prison for felony corruption. But Detroiters are prideful and protective of their own; even when Kilpatrick and his associates were shown to be corrupt, many Detroiters came out to support him, blaming the prosecutors for unfairly targeting a black elected official.

In fact, therein lies the real truth about Detroit, one that I’m loath to admit. For all my fond memories of Detroit from the 1960s and ’70s, it was always one of America’s most racially polarized cities. Older Detroiters are correct that the city was surrounded by a ring of often-hostile white suburbs, in a largely conservative state that had little time for a poor, destitute, Democratic and black city.

Peak period

Writers often speak of Detroit’s “glory days” as the 1940s and ’50s, when the city came to symbolize America’s manufacturing prowess and Detroit’s population peaked at nearly 2 million people, making it the fourth-largest city in the United States behind only New York, Chicago and Los Angeles. But it was also a deeply divided city, with Southern white and Southern black transplants in an uneasy, combustible mix.

After years of financial struggle, Detroit filed for Chapter 9 Federal Bankruptcy Protection on Thursday, the largest U.S. city to do so.

There were race riots in the ’40s, when whites didn’t want to work on assembly lines next to blacks. And new black residents were “redlined” into certain neighborhoods. The police force was all white and like an occupying army in black neighborhoods. My father would always point out to me the restaurants along Grand River Avenue or Woodward that would not serve blacks when he arrived in the city.

Of course the city did explode, in riots in 1967, and that was when Detroit’s downfall — its current path to insolvency — was set in agonizing slow motion. The white families in my neighborhood, my friends, all fled to the safety of the suburbs. My street, and my neighborhood, went from mixed to all black in an instant. Many of the black newcomers who came couldn’t get mortgages, so most ended up as renters, not homeowners.

Properties fell into disrepair. Drugs, prostitution and burglaries soared. My parents had burglar bars installed on all the downstairs windows; the thieves climbed a front-yard tree and came in the upstairs. They had upstairs bars installed. The burglars ripped those bars out and hit us again. And again. And again, until my parents finally moved far away, to the very edge of Detroit on the border of Dearborn.

I never wanted to say it aloud, but my old neighborhood had become the quintessential American ghetto. Like others, I wanted to cling to the illusion that this was just some passing phase, that my old neighborhood, the heart of the city, might someday be restored. Like everyone else, I whistled past the abandoned lots.

Racial politics

The white population’s abandonment of the city left Detroit with a shrinking tax base and deteriorating, segregated public schools — a system locked in place by a Supreme Court order that halted busing across school district lines. But blacks left behind in Detroit had one thing left — political power. And they would guard it jealously against any encroachment, real or imagined.

Thus, the city’s black political class sees conspiracy theories everywhere. The investigation of the last mayor by the Detroit Free Press, and his indictment by a prosecutor, are seen as a white conspiracy to undermine black “home rule” of Detroit. The governor’s appointment of an emergency financial manager, once it became clear that Detroit cannot manage its own fiscal affairs, is again seen as a hostile, racist takeover by the state over the city’s elected black leadership.

Racial politics, and that racial prism, long ago ruined Detroit, and now they hamper any chance the city has at a modest recovery. As a longtime friend, one who has stayed in Detroit and worked to help the city, once put it to me succinctly: “Some people would rather be the king of nothing than a part of something.”

So this bankruptcy is sad. But it was, in a sense, inevitable, the final chapter in Detroit’s long slide from glory. Maybe this will be the kind of shock therapy the city needs, the hammer blow that gets the remaining residents to stop living in the past, recognize that the old Detroit is never coming back, and start making the painful sacrifices necessary to build a new, smaller city with what’s left.

I hope so. But somehow I doubt it. If we Detroiters have one fault, it’s that we are addicted to nostalgia and living in our highly selective view of the past.