Detroit files for bankruptcy

[MyLittlePony 340]

Maybe California is next.

[Karee 4,190]

Check my link.

Right. Were talking about the same thing. Bush had nothing to do with that.

[Bugs 455]

The Bush Tax cuts expired for the wealthy. It just so happened that the Obama stimulus expired at the same time and was not renewed. Only the Bush Tax cuts were extended for the non-wealthy. The 2% increase everyone got after both expired is due to the fact the Obama stimulus expired for everyone, not the expiration of the Bush Tax cuts for the wealthy.

Edited July 19, 2013 by Leon & Mylen

[Karee 4,190]

The Bush Tax cuts expired for the wealthy. It just so happened that the Obama stimulus expired at the same time and was not renewed. Only the Bush Tax cuts were extended for the non-wealthy. The 2% increase everyone got after both expired is due to the fact the Obama stimulus expired, not the expiration of the Bush Tax cuts.

Thanks. That's what I was trying to say.

[GandD 5,966]

Ah. My mistake. I remember the increase and I remembered the reason being more to FICA. I assumed it was part of the bush tax dealy.

[Bugs 455]

Ah. My mistake. I remember the increase and I remembered the reason being more to FICA. I assumed it was part of the bush tax dealy.

It was definitely timed together, in anticipation of a fight over the whole brouhaha at the end of 2012. The only time I have seen the entire Obama term where they actually got enough Republicans to vote yes on a major deal.

[GandD 5,966]

That's a whole nuther' can of worms

[Póg mo 1,749]

Unions are junk man. MAYBE a good idea in theory but in practice they are worthless. The Twinkies folks are back to work, at reduced pay. Good job unions, you showed management. Now pay your dues.

How is it that German auto companies have managed to survive? Maybe the decline of Detroit isn't as much the Unions fault as it was the refusal by the Auto Industry leaders to manufacture cars people actually want to buy? It is all to easy and woefully simplistic to simply say that the Unions destroyed the US Auto Industry and by extension Detroit itself. Fact is, even if Detroit based car manufactures where able to maintain their market share, most workers would still be replaced by robots, and seeing as a significant portion of Detroit's workforce was formally engaged in auto manufacturing, it's not too hard to imagine that Detroit would have problems.

P.S. Hostess did not simply go bankrupt just because those no good unions wouldn't play ball, in fact, if anything the management team at Hostess bare a significant share of the blame for the companies woes. Sorry to challanged your anti union narative, I do know you right-wing types always love to bash unions at every opportunity.

P.P.S. If we don't have unions, who is going to challenage the power of our corporate masters? The government?

The article's depiction of the company's fall omits crucial context and leaves readers with the impression that the act of discarding union workers is what allowed the "trimmed-down" company to re-emerge. The AP did not tell readers that, just three years prior to Mr. Rayburn's negotiations with labor, union workers made "substantial concessions" to aid the company's financial health, or that Hostess stopped contributing to workers' pensions and cut wages and benefits "by 27 to 32 percent."

Nor did the AP story mention the dramatic pay raises Hostess provided its executives during its financial struggles. For example, Brian Driscoll -- Hostess CEO in March 2011 -- received a salary increase from $750,000 to $2.25 million, according to The Wall Street Journal.

http://mediamatters.org/blog/2013/06/24/aps-hostess-comeback-story-ignores-context-abou/194570

[The Nature Boy 4,224]

Ahh another Liberal democratic corrupt model of socialist utopia bites the dust.

[Karee 4,190]

Ahh another Liberal democratic corrupt model of socialist utopia bites the dust.

This process began a long time ago. Coleman Young being elected mayor in 1974 was the beginning of the end.

[Karee 4,190]

Bankruptcy petition is move into the unknown

The bankruptcy of Detroit, confirmed in 16 pages filed at 4:06 p.m. Thursday, marks an epic fall for an iconic American city even as it opens a new chapter whose ending is decidedly uncertain.

No one really knows how the largest municipal bankruptcy in the nation’s history will end and when — not Emergency Manager Kevyn Orr, who recommended the step Tuesday, not his lawyers, and not Gov. Rick Snyder, who said he approved the filing “as a last resort to return this great city to financial and civic health for its residents and taxpayers.”

“This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored,” the governor wrote in his authorization. “Without this decision, the City’s condition would only worsen. With this decision, we begin to provide a foundation to rebuild and grow Detroit.”

The move carries enormous risks for the first-term governor, whose mantra of “relentless positive action” will be sorely tested by contentious court proceedings, public and political backlash, and the scrutiny of a national news media that poorly understands the depth of Detroit’s problems.

The reckoning was inevitable. The historic bankruptcy filing culminates decades of decline and drift, a toxic combination of chronic mismanagement, political dysfunction and corruption piled on top of decades of de-industrialization and population flight that have gutted the city’s tax base and its ability to provide services.

They can’t get much worse. Cops take an average of 58 minutes to respond to calls. Just 8.7 percent of violent crimes are solved, compared to 30.5 percent statewide. As many as 78,000 homes and commercial buildings are abandoned, and the city’s total long-term liabilities exceed $18 billion.

Detroit’s bankruptcy carries broad national implications for the nation’s $3.7 trillion municipal finance market, public-sector pension funds and promises of retiree health care for tens of thousands of public employees nationwide — all of whom could be impacted by prospective rulings in a Detroit bankruptcy case.

The filing also is a stunning rebuke of the city’s political class and 50 years of control by a co-dependent alliance of the Democratic Party and public-sector unions whose leaders fueled their campaigns and political needs with public dollars. In the end, their circular self-dealing and refusal to act to avert collapse exposed the people they claim to represent.

Likely losers in the case, filed just 17 minutes before unions persuaded an Ingham County judge to issue a temporary restraining order to block the governor, include some 20,000 city retirees. They stand to lose most of their health care coverage and a portion of their pensions as part of a difficult restructuring.

Public-sector unions could see a cornerstone of their reason for being — the defined-benefit pension — eroded by rulings that could pierce the constitutional protection of pensions as a contractual right. And general obligation bond holders could be treated as unsecured creditors, overturning the assumption that a cash-strapped city can meet its obligations simply by raising taxes.

The municipal bond market, accustomed to protection in the bankruptcy, won’t take it well if Orr persuades a bankruptcy judge to declare general obligation bondholders to be unsecured creditors. Matt Fabian, an analyst with Municipal Market Advisors, predicted Detroit’s bankruptcy “won’t act as a cleansing process.”

“They will likely pay punitive interest rates for the foreseeable future,” he told The Detroit News.

The arc of the bankruptcy is likely to reverberate nationwide, determining whether cities in financial distress could use Chapter 9 to jettison the legacy burden of pensions for public-sector employees, even those whose payouts appear to be protected by state constitutions.

In Michigan, Detroit’s collapse into bankruptcy raises fears that borrowing for municipalities and school districts will become more costly because the state is backing Orr’s contention that general obligation debt is not backed by taxing powers.

And the tortured legal process ahead is not likely to be reassuring for such city assets as the Detroit Institute of Arts, whose priceless city-owned collection already has captured the attention of creditors looking to wring liquid value from deadbeat Detroit. For the DIA, Thursday’s filing isn’t an end; it’s the beginning.

But of what? A municipal bankruptcy on the scale of Detroit has never been attempted before. Its petition estimates creditors in excess of 100,000; it has 48 unions, 10,000 employees and 20,000 retirees; its reviving downtown core is belied by thousands of blighted tracts, scores of abandoned buildings and abysmal delivery of basic city services.

Snyder’s bankruptcy aims to reverse that trend, however much his thinking seems more naivete than execution. The assumption is that Orr and his team of lawyers and turnaround firms can get the job done, but with whom, how and how quickly?

Absent real progress in service delivery and in bankruptcy court, Thursday’s filing most represents hope for a city badly in need of some. The hope is that the workout won’t devolve into a costly mess that enriches lawyers and impoverishes everyone else.

The hope is that Orr can deliver in a year, not drag it out for three or four; that the garbage will be picked up, the lights will go on, the cops will come; and that the city will be run for the needs of its residents, not its employees, their leaders and the political class.

That would be success when, and if, it comes.

From The Detroit News: http://www.detroitnews.com/article/20130719/BIZ/307190042#ixzz2ZVpC9sNF

[Karee 4,190]

“We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way.”

-- President Obama in his weekly address, Oct. 13, 2012.

[Darnell 8,478]

I heard a quickie blurb on the radio moments ago, the bankruptcy filing was deemed unconstitutional and is denied.

I'll find the source this weekend.

[Darnell 8,478]

here ya go.

http://www.usatoday.com/story/news/nation/2013/07/19/detroit-bankruptcy-unconstitutional/2569481/

http://www.usatoday.com/story/news/nation/2013/07/19/detroit-bankruptcy-unconstitutional/2569481/

http://www.usatoday.com/story/news/nation/2013/07/19/detroit-bankruptcy-unconstitutional/2569481/

Cool !