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A Modest Proposal (apologies to Swift)

Decades ago, John Maynard Keynes famously wrote in his book The General Theory:

"If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines. . . and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again. . . there need be no more unemployment."

To Keynes, all that mattered was that people were employed doing something, anything. The quality of employment didn’t matter.

Is it any wonder that Keynesian economics (the kind embraced by Bernanke, Greenspan, Krugman, et al) has destroyed the economy?

It worked for Detroit.

by Anonymousreply 4107/24/2013

no, it hasn't.

by Anonymousreply 107/19/2013


Non Sequitur, party of R1, calling Non Sequitur....

by Anonymousreply 207/19/2013

I accept your apology. Do you want to date me? You sound creepy enough and like you have something to hide.

by Anonymousreply 307/19/2013

OP is laughably ignorant. Greenspan embraced Keynesian economics? Try again.

by Anonymousreply 407/19/2013

Freep, little freepster, Freep!

by Anonymousreply 507/19/2013

Imma letcha finish R4, but Greenspan totally shoulda won this shit. His shit was 100% my man JMKEYNES and you need to 'spect that.

by Anonymousreply 607/19/2013


Please explain how this is freepsterish.


by Anonymousreply 707/19/2013

It's not, of course R7; it's just stupid. And, as usual, you got caught and got your ass handed to you by R4 for that really, really stupid assertion about Greenspan who was, of course, not even remotely a Keynesian.

by Anonymousreply 807/19/2013


Not everyone is a government stooge.

by Anonymousreply 907/22/2013

And I'm still waiting for any explanation.

by Anonymousreply 1007/22/2013

idiots abound

by Anonymousreply 1107/22/2013

OP is a fucking moron.

Keynes was brilliant, and his theories have proven right time and time again, not just in predictions, but in being beneficial results.

R2 is even more stupid... Detroit (and Michigan) has been under Republican/Conservative and Corporate control for quite a while now. Their goal is to rob the workers of their pensions and pocket all that cash for themselves. Declaring Detroit Bankrupt was their attempt to push this.

Keynes bashers never have any facts on their sides. They're always wrong, and they're always promoting economic systems that have utterly failed, time and time again (Trickle Down, Austerity, Austrian economics, etc).

by Anonymousreply 1207/22/2013


Please elaborate on the assertion that Detorit has been under conservative control. Ever.

Keynes was a retarded cocksucking moron.

by Anonymousreply 1307/22/2013

Current mayor: Republican

Current governor: Republican


Are you really that stupid?

You know nothing about Detroit or its history, do you? Come on, be honest. You just want to blame everything bad on Democrats, liberals, and unions... regardless of the fact. You choose your conclusion, and then cherry pick facts (and make up some as well) to reinforce it.

by Anonymousreply 1407/22/2013


Yes, blaming the current mayor and governor for 60 years of fiscal mismanagement makes it okay.


by Anonymousreply 1507/22/2013

[quote]And I'm still waiting for any explanation.

An explanation for what? That Greenspan isn't a Keynesian? You made the assertion, moron; support it. You can't, of course, because he isn't, as his writings, speeches, and actions clearly demonstrate.

by Anonymousreply 1607/22/2013

Hi there, Libertarian Idiot Troll(TM)!

Well, you're back. After having your ass handed to you repeatedly by many different over several Libertarian Spam threads, you've jumped back into the pool, pretending like nothing happened.

Well, damn Keynes, Krugman and Greenspan! Those lousy Keynesians! Oh, wait, Greenspan was a disciple of Ayn Rand. His belief in unregulated markets led directly to the economic crisis in 2008.

Well, damn those Keynsians for falsely predicting massive hyperinflation! Oh wait, that was the Libertarians. Inflation's currently at 1.3%.

Well damn the Keynsians for destroying Detroit! Well, no, Detroit was destroyed by many different factors, none of which have anything to do with Keynes. Currently the state is being destroyed by Republicans who would make Dickens blush in their shamelessness.

Well, I'm sure the Keynsians were responsible for destroying the economy! Oh wait, the Dow and S&P just hit record highs. And unemployment is starting to gradually decline.

Well I'm sure the Libertarians will get something right. Someday. In the imaginary planet they inhabit they're infallible. Here on planet Earth, they're batting about 1 for 10.

And, as always, Libertarians are dumber than a box of hammers.

by Anonymousreply 1707/22/2013

Freeper trolls, freep and FREEP!

by Anonymousreply 1807/22/2013

[quote]Well, I'm sure the Keynsians were responsible for destroying the economy! Oh wait, the Dow and S&P just hit record highs. And unemployment is starting to gradually decline.

What's hilarious is that our resident moron has actually stated, and appears to believe, that the economy is *worse* now than it was in 2008!

Oh, and don't forget that it was the *unregulated* financial instruments that turned a financial problem into a near economic meltdown.

by Anonymousreply 1907/22/2013

Freeper freeps will freep

by Anonymousreply 2007/22/2013

[quote]Is it any wonder that Keynesian economics (the kind embraced by Bernanke, Greenspan, Krugman, et al) has destroyed the economy?

You people have been predicting the collapse of the economy for years because of Keynesian policies. The dollar was supposed to collapse. Inflation was going to ruin us. Time has proven you are completely wrong. So now you're going to declare victory and say the reason the economy didn't collapse in the past few years is that it was destroyed all along. Mission Accomplished!!

by Anonymousreply 2107/22/2013

[bold]Banking On Bankruptcy: Emails Suggest Negotiations With Detroit Retirees Were Designed To Fail[/bold]

Even before one of their own was appointed emergency manager of the city, lawyers who were consulting with Michigan officials over the winter believed Detroit should move into bankruptcy proceedings that would free the city to walk away from its commitments to retirees. Emails between Kevyn Orr — now Detroit’s emergency manager but at the time an attorney for the law firm Jones Day — and his colleagues show the lawyers believed moving directly to bankruptcy would be better for the city than going through a serious negotiating process.

In one email, an assistant to Gov. Rick Snyder (R) promises to set a meeting between Orr and someone “who is not FOIAble,” suggesting an intent to evade transparency laws. In another, Jones Day lawyers suggest to Orr that elevating Detroit’s bankruptcy in national media coverage would “give you cover and options on the back end to make up for lost time there.” Orr rejected that suggestion as unhelpful. Jones Day continues to represent Detroit in the proceedings, which could take a year or longer.

The messages made public thusfar show Jones Day attorneys defining bankruptcy as inevitable in their own words.

“It seems that the ideal scenario would be that Snyder and Bing both agree that the best option is simply to go through an orderly Chapter 9 [bankruptcy],” one Jones Day attorney writes to Orr in the emails. “Appointing an Emergency Manager, whose ability to actually do anything is questionable given the looming political and legal fights, would only serve to kick the can down the wrong path and unreasonably delay any meaningful resolution of Detroit’s problems.” Defining bankruptcy as the only route to a “meaningful resolution of Detroit’s problems” casts further doubt on the intent of the negotiations that followed Orr’s appointment in March, but a spokesman for Orr called those doubts “absurd.”

The emails were released in response to a Freedom of Information Act request by Robert Davis, a local labor activist with a troubled history. Davis faces federal corruption charges over school board funds that were spent on an advertising campaign. When the charges were filed in 2012, Davis called them politically motivated and said he is innocent.

One January exchange shows Orr reluctant to take on the emergency manager job, and concerned that the law empowering Gov. Rick Snyder (R) to appoint such officials “is a clear end-around the prior initiative that was rejected by the voters in November.” One January 31, Orr wrote that the entire emergency manager system “appears to merely adopts [sic] the conditions necessary for a chapter 9 filing.”

[italic](lots more at the link):[/italic]

by Anonymousreply 2207/23/2013

[bold]Governor Snyder Steals Pensions Out from Under Pensioners[/bold]

High drama played out in Detroit-area courtrooms today -- drama which culminated in attorney;s for Governor Rick Snyder stealing the pensions right out from under current and former city workers for Detroit.

The drama played out as an attorney for the city's pensioners prepared to file a temporary injunction to prevent the city from filing for Chapter 9 bankruptcy, a move which would have preserved pension benefits for city workers. But, as the Detroit Free Press reports, attorneys for the city requested a five minute delay. Ronald King, attorney for the retirement system, agreed to the delay, and during the five minute respite, city attorneys filed for bankruptcy protection in another court, thereby thwarting the attempt to preserve pension benefits.

Ingham County Judge Rosemarie Aquilina later told King "It was my intention to grant your request," referring to the injunction which would have stopped the bankruptcy filing.

by Anonymousreply 2307/23/2013

Detroit is The GOP dream!!

No $ for education

No $ for healthcare

No $ for infrastructure


by Anonymousreply 2407/23/2013

Remember, Detroit was under Republican City Manager appointed by Republican Governor. By GOP logic, Republicans responsible for bankruptcy. After all, they blame Obama for all the stuff that happened under Bush...

by Anonymousreply 2507/23/2013

[bold]Detroit Is the Beta-Test of the GOP Plan To Sell The Federal Government to Corporations[/bold]

In the software world, the concept behind beta-testing is an external pilot-test of a product before commercial quantity production for public consumption. During the beta test stage, a product has already passed an internal pilot-test where glaring defects have been removed, but since the product may still have some minor problems that require user participation, it is released to selected customers to test under normal, everyday conditions to spot and correct remaining flaws. Republicans have long sought to privatize government, and they have given indications that their penchant for restricting revenue sources and creating phony debt crises is part of their anti-government agenda to manufacture a scenario where the government is bankrupt to give corporations the opportunity to buy-out government assets and programs for a profit. On Thursday, the first beta-test of selling off a city to corporations began in earnest when an emergency manager in Detroit filed for bankruptcy, and it is a harbinger of the Republicans’ plan for the federal government.

Republicans have long sought to sell off government assets they claim are prohibitively expensive to private, for-profit enterprises they claim are better equipped to administer them because they will base operations on sound corporate business models. What Detroit is experiencing is the Bain Capital vulture capitalist tactic of taking over a company, leveraging it with debt, declaring bankruptcy, and selling off assets and firing union employees all while turning a profit. Michigan governor Rick Snyder followed Bain’s tactics in appointing his cohort to lead the city, disband the government, and create conditions allowing the emergency manager to declare the city bankrupt to sell off assets allegedly to satisfy creditors.

It is not common for a municipality to declare Chapter 9 bankruptcy according to U.S. Courts, and the purpose is to “provide a financially distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, or refinancing the debt by obtaining a new loan.” It may not be typical for municipalities, but it follows the Bain model right down to “refinancing the debt to obtain a new loan” that is part and parcel of leveraging a company, or in Detroit’s case, a city, with more debt it will never be able to repay without selling off all its assets.

In Detroit’s case, the city was leveraged to the hilt with state-backed bond money to allow it to meet payroll for its employees, and by feigning resistance by creditors, unions, and pension boards to take pennies on the dollar for their assets to assist in restructuring the city’s finances, the bankruptcy gives the emergency manager power to liquidate city assets, including public employee pensions, to satisfy demands for payment. Willard Romney would be proud of emergency city manager Kevyn Orr’s adherence to the Bain tactics; especially because as city employees and residents suffer like hundreds-of-thousands of employees Bain companies ruined, corporations will buy government assets for a pittance.

[italic](lots more at the link)[/italic]:

by Anonymousreply 2607/23/2013

[bold]The Bankruptcy of Detroit is the Future of America under the GOP[/bold]

Today it was announced that Detroit was filing for bankruptcy, making it the largest US city to go belly-up in our history. While it was no surprise that this was something that would eventually happen, the scary thing is that many other cities and even our own country are headed in this same direction. This is not an isolated incident, this is the shape of things to come if we don’t adjust our course very rapidly.

All around the United States, we’re seeing crumbling bridges and other infrastructure. Our education system is on the decline, much like the rest of the country, and through all of this the constant answer from the GOP and corporate America has been “outsource, privatize and cut taxes.” Over and over again, we see politicians promise that only by shrinking the size of government, stripping regulations and handing out more corporate subsidies will we be able to get back on the path to the “good old days” — which ironically happened to be when we had a large tax base, high taxes on the wealthiest earners and thriving unions.

Detroit didn’t crumble on her own, and it wasn’t as if this happened overnight. Detroit is very likely the dreary vision of the United States of America within my lifetime (I’m in my 30′s, by the way) if we continue to allow corporate America to kill unions, ship well-paying jobs overseas and replace them with part-time positions at Wal-Mart. Detroit is where we will end up sooner than later if we continue to buy the BS assurances that “the wealth will trickle down eventually” and keep on giving tax cuts to the top earners of the ever-shrinking tax base.

A city, or a country, cannot survive with a workforce comprised of mostly low-wage earners and only a few wealthy people paying little to no taxes. You cannot slash your way to prosperity, just as you cannot cut education funding and expect kids to suddenly become smarter, or teachers more motivated. You cannot continue to ask employees to work for less and slash their benefits, then complain that 47% of Americans are “takers” who are jealous of those with wealth and just want a handout.

Outsourcing and the race to the bottom for cheaper goods and labor is what bankrupted Detroit, and if we don’t do something very quickly, it’ll be what takes the rest of the country down as well. Detroit should be a stark reminder of what we have to look forward to in a future with a government run by the 1%, for the 1%.

by Anonymousreply 2707/23/2013

[bold]Detroit, and the Bankruptcy of America’s Social Contract[/bold]

One way to view Detroit’s bankruptcy — the largest bankruptcy of any American city — is as a failure of political negotiations over how financial sacrifices should be divided among the city’s creditors, city workers, and municipal retirees — requiring a court to decide instead. It could also be seen as the inevitable culmination of decades of union agreements offering unaffordable pension and health benefits to city workers.

But there’s a more basic story here, and it’s being replicated across America: Americans are segregating by income more than ever before. Forty years ago, most cities (including Detroit) had a mixture of wealthy, middle-class, and poor residents. Now, each income group tends to lives separately, in its own city — with its own tax bases and philanthropies that support, at one extreme, excellent schools, resplendent parks, rapid-response security, efficient transportation, and other first-rate services; or, at the opposite extreme, terrible schools, dilapidated parks, high crime, and third-rate services.

The geo-political divide has become so palpable that being wealthy in America today means not having to come across anyone who isn’t.

Detroit is a devastatingly poor, mostly black, increasingly abandoned island in the midst of a sea of comparative affluence that’s mostly white. Its suburbs are among the richest in the nation. Oakland County, for example, is the fourth wealthiest county in the United States, of counties with a million or more residents. Greater Detroit — which includes the suburbs — is among the nation’s top five financial centers, the top four centers of high-technology employment, and the second-biggest source of engineering and architectural talent. Not everyone is wealthy, to be sure, but the median household in the region earns close to $50,000 a year, and unemployment is no higher than the nation’s average. The median household in Birmingham, Michigan, just across the border that delineates the city of Detroit, earned more than $94,000 last year; in nearby Bloomfield Hills — still within the Detroit metropolitan area — the median was more than $150,000.

The median household income within the city of Detroit is around $26,000, and unemployment is staggeringly high. One out of 3 residents is in poverty; more than half of all children in the city are impoverished. Between 2000 and 2010, Detroit lost a quarter of its population as the middle-class and whites fled to the suburbs. That left it with depressed property values, abandoned neighborhoods, empty buildings, lousy schools, high crime, and a dramatically-shrinking tax base. More than half of its parks have closed in the last five years. Forty percent of its streetlights don’t work.

In other words, much in modern America depends on where you draw boundaries, and who’s inside and who’s outside. Who is included in the social contract? If “Detroit" is defined as the larger metropolitan area that includes its suburbs, “Detroit" has enough money to provide all its residents with adequate if not good public services, without falling into bankruptcy. Politically, it would come down to a question of whether the more affluent areas of this “Detroit" were willing to subsidize the poor inner-city through their tax dollars, and help it rebound. That’s an awkward question that the more affluent areas would probably rather not have to face.

[italic](lots more at the link)[/italic]:

by Anonymousreply 2807/23/2013

Detroit's pensions account for less than 20% of its debt ($3.5B of $18B). But unions getting way more than 20% of blame. Of course.

[bold]Cries of Betrayal as Detroit Plans to Cut Pensions[/bold]

DETROIT — Gloria Killebrew, 73, worked for the City of Detroit for 22 years and now spends her days caring for her husband, J. D., who has had three heart attacks and multiple kidney operations, the last of which left him needing dialysis three times a week at the Henry Ford Medical Center in Dearborn, Mich.

Now there is a new worry: Detroit wants to cut the pensions it pays retirees like Ms. Killebrew, who now receives about $1,900 a month.

“It’s been life on a roller coaster,” Ms. Killebrew said, explaining that even if she could find a new job at her age, there would be no one to take care of her husband. “You don’t sleep well. You think about whether you’re going to be able to make it. Right now, you don’t really know.”

Detroit’s pension shortfall accounts for about $3.5 billion of the $18 billion in debts that led the city to file for bankruptcy last week. How it handles this problem — of not enough money set aside to pay the pensions it has promised its workers — is being closely watched by other cities with fiscal troubles.

[italic](lots more at the link)[/italic]:

by Anonymousreply 2907/23/2013

[bold]Bankrupt Detroit 2013: A TEApublican Wet Dream[/bold]

Detroit in 2013 is an Ayn Randian utopia–a conservative wet dream. The free-market has spoken and the free-market is always right, according to the GOP.

In Detroit, worker-protecting unions have been busted up. Good manufacturing jobs that used to feed hard-working American families have been outsourced–their absence making the once bustling, thriving city nothing more than a defunct wasteland. And for what? The Republican God: the Almighty Dollar. The free-market doesn’t care how much human suffering it leaves in its wake though–as long as the bottom line is fat and healthy, it’s happy.

But the bottom line still wants more–it always wants more. Now that Detroit has been destroyed by Republican policies, it’s time for those .01 Percenters to start really raking in the dough by eagerly privatizing everything. This is the TEApublicans’ vision for every city in the United States of America, and if you disagree with their sociopathic laissez-faire extremism, you’re a socialist.

[italic](lots more at the link)[/italic]:

by Anonymousreply 3007/23/2013

[bold]Don’t buy the right-wing myth about Detroit: [/bold]

[italic]Conservatives want you to think high taxes drove people away. The real truth is much worse for their radical agenda [/italic]

In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium?

These are fair questions — and the answers to them can be found in the political mythology that distorts America’s economic policymaking.

As mythology goes, the specific story being crafted about Detroit’s bankruptcy is truly biblical — more specifically, just like the fact-free mythology around the Greek financial collapse, it is copied right from the chapter in the conservative movement’s bible about how to distort crises for maximum political effect.

In the conservative telling of this particular parable, Detroit faces a fiscal emergency because high taxes supposedly drove a mass exodus from the city, and the supposedly unbridled greed of unions forced city leaders to make fiscally irresponsible pension promises to municipal employees. Written out of the tale is any serious analysis of macroeconomic shifts, international economic policy failures, the geography of recent recessions and unsustainable corporate welfare spending.

This is classic right-wing dogma — the kind that employs selective storytelling to use a tragic event as a means to radical ends. In this case, the ends are — big shocker! — three of the conservative movement’s larger long-term economic priorities: 1) preservation of job-killing trade policies 2) immunity for corporations and 3) justification for budget policies that continue to profligately subsidize the rich.

[italic](lots more at the link)[/italic]:

by Anonymousreply 3107/23/2013

Basically, what r2 said.

Quite the leaps of logic. It seems you've been found out.

by Anonymousreply 3207/23/2013

How Right-wingers are using Detroit's fiscal crisis to undermine the social safety net...

[bold]Rand Paul's Detroit Shock Doctrine[/bold]

Detroit has now declared bankruptcy. A judge has ruled the act illegal—a decision that may or may not stand. Naturally, New York’s fiscal crisis thirty-eight years ago comes to mind, though in many respects the differences are more important than the similarities: New York was one of the world’s financial and cultural capitals, its private economy largely thriving; as such, the news of government’s bare coffers was shocking, a revelation, something the world at first had a very hard time getting their mind around. While what’s happening to Detroit, no one’s idea of an economic capital, isn’t surprising at all.

But note a striking similarity: reaction of those on the right.

To wit: here comes Senator Rand Paul, saying nothing would be more splendid than to let a major city go bankrupt—because with bankruptcy, you get “new management, better management, and by getting rid of contracts, contracts that give you where [sic] public employees are getting paid twice what private employees are and things come back more to normal.” No matter that so far the White House says only that it’s “monitoring” the situation, though former Obama auto czar Steve Ratner says he hopes Obama will pump federal money into the city. That is what Paul distorted into his claim that “apparently” the president is “making indications that Detroit can be expected to be bailed out.” And that, he says, will happen only “over his dead body.” Because municipal bankruptcy would give Paul the chance to do what right-wingers like him always do, starting with New York in 1975: make excuses for slashing the public sector.

Shock doctrine stuff, in other words. The unwinding of what’s left of the welfare state, by whatever means at your disposal. Same story, then and now. In 1975, its most prominent voice was William Simon, President Ford’s Treasury secretary, who leveraged his work as the butcher of New York to become a major conservative movement leader.

The roots of the Great New York City Fiscal Crisis lay in the recession of 1974–75, which hit the Northeast with a speed and force all out of proportion to the rest of the country. New York had always supported a program of middle-class entitlement unlike anywhere else, a sort of socialism in one city: subsidized housing and daycare centers; free college at the world-class City University of New York; free museum admission; nineteen municipal hospital, many of them world-class; free directory assistance—amenities that seemed only natural for a metropolis transforming itself, in the boom years after World War II, into the greatest city in the world.

It worked, until it didn’t. The city’s manufacturing base declined, and the unemployment rate, under 5 percent in 1970, hovered above 12 percent—shades, but only shades, of Detroit. White middle-class New Yorkers, fearing crime, fled to the suburbs—definite shades of Detroit there. Federal and state aid leveled off; expectations that Richard Nixon’s national health insurance bill would relieve the city of its massive outlays for Medicaid came a cropper when Congress voted it down (conservatives because it was too generous, liberals because it was not generous enough). Bills came due that this newly atrophied level of revenue simply could not cover: by the the end of 1974, the city’s debt was $11 billion, a third of that in short-term notes soon to come due, and over 11 percent of the city’s spending went to interest payments on that debt—to banks, suddenly reconsidering their lending practices in a recession. Other tax shelters started looking more attractive, So did other customers—for instance, some resource-rich Third World nations. So it was that banks started to asking for some of that money back, and started charging more interest to let them rent more.

[italic](lots more at the link)[/italic]:

by Anonymousreply 3307/23/2013

R2 is a moron.

And R13 (same moron as R2 and half a dozen other utterly stupid posts) wouldn't know his ass from a hole in the ground...

What is with the profound pride some people have in their own ignorance, that they feel the need to bray their ignorant stupidity at the top of their lungs, letting everyone know how utterly full of shit they are?

by Anonymousreply 3407/23/2013

Michigan Republican Governor Snyder's policies force Detroit into bankruptcy, so naturally, Conservatives try to blame President Obama (and unions of course, their constant go-to)...

Michigan --


Senate: REPUBLICAN Extreme Majority

House: REPUBLICAN Majority

Polices: TeaBag



by Anonymousreply 3507/23/2013

[quote]Not everyone is a government stooge.

No, R9... some, like you, are corrupt corporate stooges.

by Anonymousreply 3607/23/2013

[bold]Detroit, the New Greece[/bold]

When Detroit declared bankruptcy, or at least tried to — the legal situation has gotten complicated — I know that I wasn’t the only economist to have a sinking feeling about the likely impact on our policy discourse. Was it going to be Greece all over again?

Clearly, some people would like to see that happen. So let’s get this conversation headed in the right direction, before it’s too late.

O.K., what am I talking about? As you may recall, a few years ago Greece plunged into fiscal crisis. This was a bad thing but should have had limited effects on the rest of the world; the Greek economy is, after all, quite small (actually, about one and a half times as big as the economy of metropolitan Detroit). Unfortunately, many politicians and policy makers used the Greek crisis to hijack the debate, changing the subject from job creation to fiscal rectitude.

Now, the truth was that Greece was a very special case, holding few if any lessons for wider economic policy — and even in Greece, budget deficits were only one piece of the problem. Nonetheless, for a while policy discourse across the Western world was completely “Hellenized” — everyone was Greece, or was about to turn into Greece. And this intellectual wrong turn did huge damage to prospects for economic recovery.

So now the deficit scolds have a new case to misinterpret. Never mind the repeated failure of the predicted U.S. fiscal crisis to materialize, the sharp fall in predicted U.S. debt levels and the way much of the research the scolds used to justify their scolding has been discredited; let’s obsess about municipal budgets and public pension obligations!

Or, actually, let’s not.


by Anonymousreply 3707/23/2013


Are Detroit’s woes the leading edge of a national public pensions crisis? No. State and local pensions are indeed underfunded, with experts at Boston College putting the total shortfall at $1 trillion. But many governments are taking steps to address the shortfall. These steps aren’t yet sufficient; the Boston College estimates suggest that overall pension contributions this year will be about $25 billion less than they should be. But in a $16 trillion economy, that’s just not a big deal — and even if you make more pessimistic assumptions, as some but not all accountants say you should, it still isn’t a big deal.

So was Detroit just uniquely irresponsible? Again, no. Detroit does seem to have had especially bad governance, but for the most part the city was just an innocent victim of market forces.

What? Market forces have victims? Of course they do. After all, free-market enthusiasts love to quote Joseph Schumpeter about the inevitability of “creative destruction” — but they and their audiences invariably picture themselves as being the creative destroyers, not the creatively destroyed. Well, guess what: Someone always ends up being the modern equivalent of a buggy-whip producer, and it might be you.

Sometimes the losers from economic change are individuals whose skills have become redundant; sometimes they’re companies, serving a market niche that no longer exists; and sometimes they’re whole cities that lose their place in the economic ecosystem. Decline happens.

True, in Detroit’s case matters seem to have been made worse by political and social dysfunction. One consequence of this dysfunction has been a severe case of “job sprawl” within the metropolitan area, with jobs fleeing the urban core even when employment in greater Detroit was still rising, and even as other cities were seeing something of a city-center revival. Fewer than a quarter of the jobs on offer in the Detroit metropolitan area lie within 10 miles of the traditional central business district; in greater Pittsburgh, another former industrial giant whose glory days have passed, the corresponding figure is more than 50 percent. And the relative vitality of Pittsburgh’s core may explain why the former steel capital is showing signs of a renaissance, while Detroit just keeps sinking.

So by all means let’s have a serious discussion about how cities can best manage the transition when their traditional sources of competitive advantage go away. And let’s also have a serious discussion about our obligations, as a nation, to those of our fellow citizens who have the bad luck of finding themselves living and working in the wrong place at the wrong time — because, as I said, decline happens, and some regional economies will end up shrinking, perhaps drastically, no matter what we do.

The important thing is not to let the discussion get hijacked, Greek-style. There are influential people out there who would like you to believe that Detroit’s demise is fundamentally a tale of fiscal irresponsibility and/or greedy public employees. It isn’t. For the most part, it’s just one of those things that happens now and then in an ever-changing economy.


by Anonymousreply 3807/23/2013

Closing the [/italic] tag that got messed up. Ugh. Sorry about that.

by Anonymousreply 3907/23/2013

Good lord-

What do any of these posts have to do with the government counterfeiting money?

by Anonymousreply 4007/23/2013

R40, perhaps you missed reading the last line of the OP?

All these posts simply point out the utter lie that Democrats, Liberals, or Unions are the "cause" of Detroit's bankruptcy, which is the talking-point the right-wingers are going with.

by Anonymousreply 4107/24/2013
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