If the residents of the city of Detroit want to blame any person or organization for its Chapter 9 filing, they only need to look as far as the unions that controlled labor there and the politicians who ran it over the past four decades. Detroit earned its bankruptcy the easy way — through greed, the desire for political power and poor planning.
Bond holders do not deserve the kind of responsibility that those who ran Detroit do. However, they, and their bankers, were willing to keep the city afloat by buying paper that was risky. They took the risk and fed Detroit with money. Now, they get to take the sort of damage that goes with risking to much, too often and for too long.
As the people of Detroit and experts tear apart the history of Detroit, some blame will be placed with the car companies. But they built Detroit — Detroit did not build them. It is not fair to say they destroyed her. As a matter of fact, these public corporations, with obligations to shareholders, may have been among the few wise parties. The Big Three automakers exited slowly, as city services dissolved and Detroit became a less desirable place to live and do business.
Detroit’s elected officials have lost all of their power. Orr has it, and soon a court will. Unions and their members can only wait to see how badly they will will be gored as part of the Chapter 9 process.
In sum, each side knew that the city began to flounder a long time ago, and each tried to hang on to as much money, and privilege, as possible. Now, each gets to suffer the consequences.
(Excerpt) Read more at 247wallst.com ...
