Comments on: When should we aid Detroit? http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: nixonfan http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47822 Fri, 16 Aug 2013 17:21:17 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47822 Washington cannot bail out Detroit. Discretionary spending is permanently sequestered, and bailing out Detroit is not high on John Boehner’s wish-list. Plus the Us has been “investing in our cities” for 50 years, and Detroit is the outcome. Paging Lyndon Johnson.

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By: two_opposite http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47783 Tue, 06 Aug 2013 17:21:32 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47783 The Obama administration will bail out Detroit at the last hour, for political gain, to the tune of $20 billion. This will occur close to Republican Governor Rick Snyder’s re-election campaign, who has orchestrated the Detroit bankruptcy. The bailout will make Snyder look like a mean-spirited moron.

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By: Dollared http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47779 Mon, 05 Aug 2013 19:13:34 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47779 It is not hard to aid Detroit, and it should happen. Detroit is the direct consequence of US policies to deindustrialize and financialize our economy, and the perverse incentives of our political system, that even on the state level allow rural areas to starve our far more productive urban areas of funds and other support. Michigan is the most egregious example, but these days the Republican governments in Wisconsin, Pennsylvania and Missouri are also trying as hard as they can to kill the goose that lays their golden eggs.

The Feds should step in and provide substantial funds in return for certain actions to shore up the community.

These could be 1) urban consolidation and renewal; 2) establishment of enterprise zones; 3) reform of service and business processes; 4) rehabilitation of the schools; 5) direct federal placement of facilities. The NSA thing is a good idea, for example, but there are many others.

Detroit does have the assets of 1)large areas of land well served by rail, land and water transport; 2)heavy local industrial concentration; 3) central location on the continent; 4) local, low wage, high industrial skill population. Fix these problems and the city could thrive.

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By: rikfre http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47760 Fri, 02 Aug 2013 16:58:48 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47760 Can we sell Detroit to the Chinese…or some other country that we give funds to but desire our destruction..?

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By: Kaleberg http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47754 Thu, 01 Aug 2013 03:26:42 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47754 The bond holders should take a 100% hit. They’ll just go whining and squealing to Uncle Sam and get reimbursed by the Fed. Sure, there’s moral hazard, but that’s the policy these days. If a retiree starves to death in the street, that’s his or her problem, but if a corporate investor has to endure single digit profits, that’s something the government needs to fix.

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By: Sechel http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47753 Thu, 01 Aug 2013 01:12:16 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47753 Too many politicians have traded votes for increased pension benefits and higher union wages. Politicians all too often think in the here and now and don’t concern themselves with the ramifications of poor planning as they are worried themselves about the next election. We also see that recipients of those benefits are naturally conflicted when it comes to weighing their own benefits vs the cost to the tax-payer.

We need to avoid moral hazzard here, and any bail-out if it comes should be more reorg than bail-out with pain felt equally amongst all. The 50 year old retiree collecting a pension while continuing to work a second job can’t walk away unscathed. This is what is ruining pensions across the country, this and not properly funding and accounting for those promises.

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By: realist50 http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47749 Wed, 31 Jul 2013 06:06:34 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47749 Adding to my prior post with a couple thoughts on what the federal government could or should do near-term for Detroit, what about directly addressing some of the discrete problems that we read about as examples of Detroit’s decline? Police response rates are an hour, so offer up a couple hundred federal law-enforcement officers to assist the local police. Too many of the street lights are out, so run a federal program to return them to working condition, whether that be via the use of local contractors or bringing in Army (or federalized National Guard) engineers to do it directly. (Not intending to militarize the project, but I can’t think of any other sizable group of federal employees who’d be available and qualified to do the work.)

The key would be that any such programs are limited in both scope and duration. Where possible, bypass the dysfunctional local government – based on a formal request from the state of Michigan and the emergency manager – and just get things done. Law enforcement should almost certainly operate under local or state control based on U.S. laws and traditions, but federally-paid officers could be deputized and directed by the city, county, or state. The message would be – “these problems need to be solved locally, but we understand that they can’t be solved overnight, so for a period of time (say 2 or 3 years at the outside) we will help on an emergency basis. After that, don’t screw it up again.”

I don’t know if I fully support my own proposal and the precedent it would set, but I find short-term aid to be preferable to throwing federal money at grandiose redevelopment ideas. As I said earlier, I dispute the notion that Detroit’s public services problems are wholly or even primarily due to lack of spending versus inefficient spending. I can also accept, however, that fixing those problems will take some period of time. This idea also strikes me as politically plausible, if the president emphasizes the public safety aspect of it.

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By: realist50 http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47748 Wed, 31 Jul 2013 05:28:12 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47748 I personally won’t go quite as far as y2kurtus’s plan, but he does highlight an interesting point. Let’s say that Detroit uses its bankruptcy both to lessen its legacy debt, pension, and healthcare obligations and to restructure how the city government is organized. (It arguably could and should have done the latter outside of bankruptcy, but Detroit now has an emergency manager with tremendous power and bankruptcy provides more scope to renegotiate public union contracts.) If Detroit does that, it at least has a chance to remake itself into a city with decent public services and a decent business environment. Having Dave Bing (or a like-minded successor) as mayor rather than Coleman Young or Kwame Kilpatrick should help dramatically with that process.

My point being, if Detroit can reach at least OK for public services, safety, and business environment, then having a lot of cheap, unoccupied land can be an advantage rather than just a negative. It would be wonderful if Detroit could be great in these areas, but just being OK should at least get some momentum in the right direction.

A rather surprising stat I’ve run across (Bruce Katz of the Brookings Institution, quoted by both the Economist and Matt Yglesias at Slate) is that 70% of the jobs in Detroit are held by people who live outside the city and also that 61% of Detroit residents who work do so outside the city. I would surmise that, on average, the former are higher paid than the latter – downtown office workers, Wayne State University employees, hospital employees, and the like in the former group while the latter tend to hold lower-paid jobs including a substantial portion employed in retail and restaurants. It does indicate, however, a level of regional economic integration. That suggests to me that there’s scope to convince some of the former group to move into Detroit if it’s even marginally more appealing. If that happens, some of the latter group at least benefit from more job opportunities close to home.

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47747 Wed, 31 Jul 2013 02:32:35 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47747 @Kaleberg the money we gave to the banks has already been paid back. That happened because banks make money. Cities always spend more than they take in because they are service centers to the poor who much prefer subsisting in cities than in the countryside where there are no social services to be had.

Detroit should be forced to offer their creditor group all city owned property, including all abandon property. This property should then be developed free of any zoning requirements with the proceeds flowing to detroits creditors. The world would be shocked at how much the urban property would be worth without government restrictions on it.

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By: Kaleberg http://blogs.reuters.com/felix-salmon/2013/07/29/when-should-we-aid-detroit/comment-page-1/#comment-47746 Wed, 31 Jul 2013 00:19:34 +0000 https://blogs.reuters.com/felix-salmon/?p=22299#comment-47746 rossryan has a point about bailouts and dependency, but we did bail out the banks and financial sector. I agree that this was a terrible idea, but why not bail out a city? We can probably offer the same terms, and offer the same money per capita.

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