Detroit Bankruptcy - should the DIA (city museum) be forced to sell it's collection?

[davids]

I'd repsectfully disagree. Other parts of the country, which were heavily reliant on one industy, made it through the manufacturing exodus. Think steel / related manufacturing & Pittsburgh.

I stand with my opinion that Detroit's problem was it spent more than it took in.

Pittsburgh recovered from its manufacturing loss. But it was pretty terrible there for a long while. It was a very rough transition for many Midwestern cities, and I know that most have not returned to the size & strength of the past.

The US's economic transition from manufacturing has been massively disruptive. Government has a role to play in that transition, and principled decision makers may choose to go into debt in order to finance any number of initiatives to address the disruptions - re-training/education/business incentives/etc.

Note that I am not saying Detroit's government made principled decisions.

[Jonathan]

It's so American to not recognize that migrations, failures and successes can be tracked across countries and continents spanning centuries. It's the history of Globalization. We didnt invent this stuff. It's a political victory for one side in that many blame the whole fucking thing on some dude's union job.

[vertical_doug]

The beauty here is how the city of Harrisburg managed to buy an incinerator for 26.7mm in 1993 and morph it into 350mm elephant 15 years later through crappy deals, poor decisions and facilitating financial firms with various doses of fraud along the way.

https://self-evident.org/?p=952

Pittsburgh has been teetering on the edge of state receivership for years. Pension obligations.

Pittsburgh and Harrisburg: A tale of two deep-in-debt cities

Remove CMU, University of Pittsburgh, and the UPMC system from the equation, and Pittsburgh gets bleak fast.

[Saab2000]

One needs only to go to Pittsburgh's airport once to see that Pittsburgh is but a shadow of its former self. It's a beautiful airport. Used to, maybe, 25% of its capacity. It's a ghost town at PIT.

Detroit's airport is one of the bright spots of that city and that's mostly because Northwest Airlines, and now Delta Air Lines (which merged with NWA and kept the DTW hub), have chosen to make it a major hub. If they were do de-emphasize the importance of DTW in their route network it would be devastating to Detroit specifically and Michigan in general.

[j44ke]

It's so American to not recognize that migrations, failures and successes can be tracked across countries and continents spanning centuries. It's the history of Globalization. We didnt invent this stuff. It's a political victory for one side in that many blame the whole fucking thing on some dude's union job.

Yes, and that American business has never forgotten Theodore Roosevelt, even if most people have.

But back to the art - the concept that someone will buy the art and that it will remain in the country is flawed, because it ignores where the money is in the world now. That art if sold is much more likely to travel out of the country (Middle East, Asia) than it is to stay here. Ironic - after all, most of the great art collections present in this country originated from the money of the great robber barons at the turn of the (20th) century - the Mellons, the Carnegies, the Morgans, the Rockefellers, etc. - who bought it away from the debt-ridden European aristocracies.

[Dallas Tex]

With all these great minds in one room, let me ask: what's the best, quickest, most feasible scheme to bring Detroit out of the muck & on track to regain some of it's past glory as a powerhouse?

[Saab2000]

With all these great minds in one room, let me ask: what's the best, quickest, most feasible scheme to bring Detroit out of the muck & on track to regain some of it's past glory as a powerhouse?

It will never regain its past glory.

I've offered my suggestion of mass contraction of the city, something which might be possible in bankruptcy. This creates a path moving forward. How past sins are paid for is not for me to decide.

What realistic suggestion can you offer?

[Jonathan]

With all these great minds in one room, let me ask: what's the best, quickest, most feasible scheme to bring Detroit out of the muck & on track to regain some of it's past glory as a powerhouse?

Why assume there is a quick? To answer the question, freemarket forces are already at work. This is not a new story, its just the legal/financial part. Bankrupcy reorg is the legal mechanism. Detroit has been in the process of rationalization for a decade. Really, go look at the ford jobs site. Go look at real estate prices. Detroit has a better future, just maybe with a little less art from dead white guys.

[Jonathan]

It will never regain its past glory.

Jim, I think if you think about this you may nuance or change your opinion. NYC, Boston, London, and many other cities are proof that times move forward and new glories are found. It takes leadership courage and time but it happens.

[Dallas Tex]

It will never regain its past glory.

I've offered my suggestion of mass contraction of the city, something which might be possible in bankruptcy. This creates a path moving forward. How past sins are paid for is not for me to decide.

What realistic suggestion can you offer?

I don't think my ideas are completely realistic. But I'd go full speed. Give some of that land away to a business in an industry that requires tons of low skill labor: logistics, or light assembly manufacturing. Give takers a holiday from the more ridiculous permitting processes, property taxes, some OSHA regs, payroll taxes, and give the owners who invest a tax break on what they reap from investment. While I'm at it, strongarm a Wal-Mart to put a distribution center in Detroit. To pay for this, I'd cut some foreign aid to some country that hates us anyway. Oh yeah, have the army patrol the streets 24/7. If we can patrol the streets in some terrorist stronghold shithole, why can't they help in Detroit?

[davids]

I don't think my ideas are completely realistic. But I'd go full speed. Give some of that land away to a business in an industry that requires tons of low skill labor: logistics, or light assembly manufacturing. Give takers a holiday from the more ridiculous permitting processes, property taxes, some OSHA regs, payroll taxes, and give the owners who invest a tax break on what they reap from investment. While I'm at it, strongarm a Wal-Mart to put a distribution center in Detroit. To pay for this, I'd cut some foreign aid to some country that hates us anyway. Oh yeah, have the army patrol the streets 24/7. If we can patrol the streets in some terrorist stronghold shithole, why can't they help in Detroit?

You have some good ideas. But fucking WalMart? Quicken has already located thousands of employees into the downtown. A combination of large & small businesses would be great. And why pay for US soldiers when Detroit has a police force? Give them the money and the jobs. Last I heard the unemployment rate was near 20%.

Ultimately they're going to have to rebuild some infrastructure, too. Folks need to be able to get to and from those low-skill jobs you're proposing. That means maintaining roads, lights, utilities, and public transportation. (Maybe some bike lanes?)

How about doing something more to help out the people who live there? Low-skill jobs gets people into the McDonalds lifestyle. You may or may not care about their prospects, but there's no way to build a thriving city around families who are scrambling to put Spam and Wonderbread on their tables. Education - better schools, retraining for adults for starters - seems to me to be the next most important thing after public safety.

[Saab2000]

Interesting thoughts.

Jonathan, I agree that cities in decline in the past have made comebacks. New York is an example.

The difference with Detroit is that it's always been an industrial city (at least the Detroit we think of as the home of the United States auto industry) and that's not coming back. Some low skill manufacturing could take root and I basically agree with some of the givers/takers concepts. But asking Walmart? They're one of the biggest takers in the nation, setting up in places where they know people have no choices, paying them poverty wages to sell stuff that is not made in the US, and helping their employees with the paperwork to become takers on Medicaid and other assistance programs. Their wealth is predicated partly on public subsidies, just not direct subsidies.

The good jobs are gone. They could come back. Education is key. The idea the the auto companies are starved for talent is key.

The interesting thing is that Michigan is full of good schools and colleges.

I don't know what happened with Mayor Bing in Detroit but he is a native who, if I'm not mistaken, ran for mayor and certainly didn't do it because he needed the money. He tried to help.

I hope Detroit can make it. There are other cities that are in less bad shape but not far behind. And others which thrive. And the reasons for these failures are often more complex and nuanced than 'giver vs. taker'.

[RickM]

It's not coming back. Cities, like countries....die. Think of other cities that used to be somebody. Here's a quick list. More could easily be added.

America's 10 Dying Cities: From Detroit to New Orleans - Yahoo! Finance

[Dallas Tex]

Ok ok. Replace Wal-Mart with any big distribution operation. I hear ya. No one hates Wal-Mart more than me. One more point, invest heavily into vocational trade education. Not the way the US has traditionally treated this, as a red haired step-child to the education systems. Do it the way they do it in Europe. Europe is light years ahead of us in this area.

[Jonathan]

I reject the definition of coming back. Life and progress isn't static. It's was changing while it was good. It was never permanent to start. These are all romantic notions brought about because most of us were born in a 20 year period of time. If the art is sold, more will replace it. It gets made. This thread largely is about the past and how to hang on to it. Screw that.

[davids]

Ok ok. Replace Wal-Mart with any big distribution operation. I hear ya. No one hates Wal-Mart more than me. One more point, invest heavily into vocational trade education. Not the way the US has traditionally treated this, as a red haired step-child to the education systems. Do it the way they do it in Europe. Europe is light years ahead of us in this area.

That should be true nationwide. Every community should have robust educational options for a wide range of students.

p.s. Talking about jobs... Lots of people tend to forget one of Henry Ford's singular achievements - the creation of a well-paid working class, making enough money to afford a car. A lot of his contemporaries thought he was an idiot and taking money out of his pocket. It turns out that by putting more money in his workers' pockets he put more in his. That's a lesson worth remembering today.

[Saab2000]

Ok ok. Replace Wal-Mart with any big distribution operation. I hear ya. No one hates Wal-Mart more than me. One more point, invest heavily into vocational trade education. Not the way the US has traditionally treated this, as a red haired step-child to the education systems. Do it the way they do it in Europe. Europe is light years ahead of us in this area.

That should be true nationwide. Every community should have robust educational options for a wide range of students.

p.s. Talking about jobs... Lots of people tend to forget one of Henry Ford's singular achievements - the creation of a well-paid working class, making enough money to afford a car. A lot of his contemporaries thought he was an idiot and taking money out of his pocket. It turns out that by putting more money in his workers' pockets he put more in his. That's a lesson worth remembering today.

Yes. Yes. Yes.

I have a college degree. I'm glad I do. It taught me the importance of critical thought and exposed me to things I would not have otherwise experienced - my time with the international students was rich beyond description. It also would have left me massively in debt had I not been the recipient of the gifts of a generous aunt.

It also left me with no skills. I majored in humanities. Good stuff. And not useless or valueless but sort of worthless. My father believed that as long as you had a college degree you were employable. This was probably true when he entered the job market in the late 40s and early 50s. He also had a degree in engineering. It's no longer true. Young people need to bring skills to the table to be employable.

I didn't become employable until I learned a trade, in my case flying airplanes. Some folks do this through academic colleges and/or universities and others like myself do it through specific flight schools. The point is that it is a skill and too few people have skills matched to today's job market.

I am no expert here but it would be interesting to hear what the leaders of industry want in their young employees. There was recently an exposé on NPR about this, specifically with the shortage of engineers and the requirement to fill engineering positions in the United States Navy and the supporting industries. The jobs are there. They're not filled by people who drop out of high school or go to college to learn French and Theater.

Education, be it college educated engineers or trades with specific high level skills, is the key to this nation's future success. I firmly believe that. It is unfortunate that it is one of the first places budgets are cut when they need cutting.

[davids]

And then there's this: Canadian Man Sorry for Chugging Eight Beers and Swimming to Detroit.

[vertical_doug]

If you look at the New York City example, you probably have 10+ years of restructuring.

Prior- 1975 NYC still playing games
April 1975 NYC unable to access credit markets
July 1975 NY State forms Municipal Assistance Corp of New York City to oversea budget matters and guarantee new bonds issuance. Appointed by Governor Carey
MAC bonds still poorly received by financial markets
Nov 1975 after much begging, United States Congress passes a 2.1 billion Bond guarantee for New York City (this was Republican deal)
1976-1978 - lots of details details details, wage , union concessions, creditor concessions, extensions, lots of fighting and threats to leave etc.
1979 Budget balanced under MAC
1985 NYC able to access credit markets without guarantees

Key points are the formation of MAC to bring in fiscal discipline outside of the political sphere and federal government guarantee to buy time to restructure.
Of course, the devil is in the details and above my pay grade. But instead of Felix Rohatyn, Michigan can bring in Steve Rattner. He already has some credibility as the former car czar, should understand Michigan and Washington politics and is currently unemployed. Seems like a win win to me.

[zachateseverything]

I believe the real solution to Detroit's problems can be found in the movie Robocop 3.