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Socialism wins again - Detroit goes Bankrupt!
After 50 years of socialist management, the golden goose has finally dropped dead, and Detroit - at one time our nations 4th largest city, has had to file for bankruptcy.
Hundreds of millions of dollars in debt to the unions, and with just a shell of the city left, Detroit has been judged by the states emergency manager (after they kicked out the Mayor and City Council for incompetence), to have no hope of paying off these debts. When you raise taxes on businesses - they eventually go elsewhere. When you raise taxes on individuals - they eventually go elsewhere. When you don't fight crime in your city - both business and individuals, eventually go elsewhere. When they leave, they don't come back. Your city's tax base will take a serious fall in income, and if you keep it up, long enough, your city will be broke. Next time, Detroit. Try a capitalist fiscal plan, not a socialist one. |
Adak, the decay of Detroit is classic advanced capitalism. A real socialist (by definitions you have previously argued for) would have seized control of the means of production, set artificial prices for the products (mostly cars) and kept people working, however inefficiently.
It's screwed, but it isn't socialism, and never was. |
Read any tw post about why Detroit failed. It's because American cars sucked for way too long compared to the Japanese. The jobs left, and so did many of the people. No people, no tax revenue.
But you want to blame it on the cops and firefighters because that fits your narrative. Too bad, because you were thinking very clearly in a lot of your recent posts on other topics. |
You don't know what the word "socialism" means, do you?
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As long as we're going line by line pointing out the sweeping inaccuracies:
- The mayor announced the bankruptcy. - The city council didn't get kicked out (but several of them have left, for convoluted reasons of deflated ego / sideline sex scandal / health problems -- and even then, they weren't kicked out, their pay was withheld for not showing up to work in 4 weeks.) There is a really serious issue re: the ratio of quality of life : taxes assessed. |
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Crippling strikes forced the companies to cave into their demands, and politicians were forced to cave into the demands of their own employees unions. That kept everyone working, but at a cost that neither the companies nor the city, could afford. |
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Later, it became apparent that quality control was the only way to go for the US car companies, but the unions resisted many of the changes needed. Also, through a series of crippling strikes, the unions removed a lot of value (money) from the car makers, making it impossible to fully implement the changes needed, to stop the slump the car makers were in. The big 3 car makers had a management problem, no doubt about that, but the unions were a very powerful force also, at that time. |
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The only person who had any power on this issue, was the emergency manager Kevyn Orr, who was put in place by the Governor. Orr was unable to get the unions to compromise on the debt they are owed by the city, although he did get compromises on debts owed from some major corporations (Bank of America, etc.). Before these compromises were made, the indebtedness of Detroit was estimated at roughly 20 Billion dollars! The majority of that debt is to the unions pensions - which are outrageous. :eek: |
Unions agitating for better pay or working conditions is not the same thing as 'socialism'.
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Unions frequently agitate for better pay or working conditions, but in the case of the Detroit auto companies, the unions were able to take control, by initiating crippling strikes, and ensuring their candidate won the election for the city, through large donations. After they won, of course, they "owed" the union and gave in very readily to demands for higher wages and benefits to city employees. We had the same problem in my city, which almost forced us into bankruptcy. Ten years later, we're still facing a huge debt, because of it. |
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Apparently, clubbing together resources and influence in order to take control of an entire industry is socialism if those doing it are also those who work in that industry, but free market capitalism if those doing it are the employers in that industry. Ok, I will go with that to a degree, since one of the key notions of socialist communism is that the workers should own the means of production (not that they do in this scenario, but they have been able to exert control over entry to that production). But why is it ok for the employer class to club together into ever larger and more powerful organisations that give them much greater levels of control over every aspect of their industry (and indeed the economic and political system in which it takes place), and dictate wage levels that cripple whole communities, states, countries in order to defend their own interests; but it is not ok that the workforce engage in combination to defend their interests? If workers enter into the market as 'free agents' with their labour and skills as their property to bargain with, why shouldn't they have the freedom to combine their strength in order to have a stronger property in the market? The corporation/business is owned by someone and they have a right to engage in combination with other corporations/businesses to strengthen their property and value in the market. Unions do not rob them of the value of their property, they defend the value of their own. |
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Detroit was heavily unionize in the 1950 and 1960s when Detroit was so innovative, became productive, and was profitable. What changed? By the 1970s, all top management was replaced with business school graduates. Top management in Detroit (ie Henry Ford) did not even have a driver's license. Top management was so ignorant that 2x4s were placed under the accelerator of the first Saturn. So that Roger Smith could not press that accelerator. Smith also did not know how to drive a car. So we should blame that on the unions? Top management technical ignorance in and after the 1970s was so widespread that, for example, no innovation exists in a GM in 30 years unless innovation was required by Federal regulation. GM even had three intermediate sized cars that did not share even one part. Unions did that? Unions stifled design innovation? Business school graduates did. And then blamed the unions, Japanese, unfair trade, taxes, education, environment laws, and virtually everyone else rather than admit who were so anti-American. Their rhetoric and lies are automatically believed by those most easily brainwashed. An engine that made Honda Accord and Civic the #1 an #2 selling car in America in 1980s (called CVCC) was developed in Ford in 1960 (called stratified charge). A bean counter and anti-American names Henry Ford stifled that innovation because it had three valves per cylinder - would increase costs. A 70 Hp per liter engine that was ready for production in GM in 1975 finally appeared in patriotic American products from Honda and Toyota in 1992. The new machine tools necessary to make superior innovation was too expensive according to Roger Smith and other bean counters. Many GM cars even today need anti-American V-8 engines. Hate, ignorance, and fear stifles innovation. The dumbest among us then blame others who have nothing to do with those designs - the unions. Even in the Indianapolis 500, V-8 (obsolete technology) engines are no longer raced. V-8 only exists where people who fear innovation and change (bean counters and wacko extremists) would rather blame others. V-8 is a trophy of those who are most anti-American. And others so brainwashed as to not even know that. The enemies of mankind stifle innovation to protect the status quo. Why would anyone make a hybrid whose gasoline engine cannot even recharge its battery? Makes no sense to engineers or layman. But makes sense to top management (bean counters) and to others brainwashed by rhetoric. Who do not even have driver's licenses. Unions clearly designed that car? Total nonsense. Only the most brainwashed would recite that stupidity. Corrupt people - bean counters - designed it. And so screwed up the design that it had to be redesigned. Volt took more than 10 years to design. But extremist rhetoric even somehow blames that on the unions. But then knowledge of reality is irrelevant to wacko extremist rhetoric. How long has this problem existed. We know that William Clay Ford started letting engineers design starting in 2000. Profits started to appear in 2008 and 2010. Ford did not need government loans to survive because, while still losing money massively, William Clay knew products designed by patriots (car guys) would appear some years later. In 2000, innovators replaced liars (bean counters). We are observe superior products designed by people who have driver's licenses. But that will not change 40 years of hate promoted by bean counters who blame everyone except themselves. How can Detroit survive when concepts taught in the business schools (communism) and rhetoric believed by the most easily brainwashed (wacko extremists) refuse to admit they are the problem? Why do so many GM products need 2 and 4 extra pistons to do what patriotic cars from Japan, Korea, and Europe do? Unions had nothing to due with people educated in concepts found in communism, mafia, and fear. Reality (and the reason for Detroit's crappy products) is directly traceable to stifled innovation and wacko extremist who would protect such evil. We are still many years away from patriotic American products (with Chrysler nameplates) designed by Italian engineers. We still have no GM products designed by American engineers. After decades of stifling innovation, Detroit is just another trophy of the business schools Wacko extremist rhetoric would blame everyone else. |
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Interesting dep't: Indy engines get 3 mpg, are rebuilt at 1200 miles, and cost about $1M a year per car to lease. |
I never paid close attention to the Indy rules. Are car makers allowed to try to improve the MPG of Indy engines? One extra gas stop can mean the difference between 1st place and not even being in the top 10.
An improvement to 5 MPG would mean you could win the race. Especially if you can make your tires last longer. |
They don't get to do anything to the engine. The sanctioning body selects what goes into the cars. Prior to 2011 they were all identical, now it seems there are two engines available, a H*nda and a Chevy.
http://en.wikipedia.org/wiki/IndyCar...012-present.29 |
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Those engines must have less displacement than any car in today's parking lots. Not because of race track rules. Because tinier engines are necessary for innovative racing machines. Why did Honda dominate in race circuits? Because Honda innovated. Why does Detroit suffer? Because Detroit industries were dominated by rich and dumb business school grads who thought the Renaissance Center (expensive offices for the rich) would magically revive Detroit. They spent big bucks on what they understood (ie corporate jets for all executives, crappy 1960 technology engines, cost controls, private elevators so that management need not see the riff-raff in the lobby, welfare for the rich). They were so mentally naive as to ignore what was important. Even Ross Perot who was paid $billions to leave because he was predicting destruction so long ago. The ignorant hate reality. Which even explains the Rennaissance Center. Michael Moore defined this problem decades earlier by documenting job destruction in Flint Michigan. Unions did not create that disaster. Bean counters playing money games (with pension funds and 0% financing) and stifling innovation created that disaster. Detriot is another example of how business school graduates enrich themselves by destroying jobs. |
2011 specs around 186 hp per liter, 2012 specs around 295 hp per liter.
Maximized for efficiency in a very specialized application. Comparisons should not be drawn between engines for practical applications. 295 hp per liter seems efficient. 3 mpg does not. 1200 mean miles between failure does not. |
OF COURSE, those engines are designed for a knife-edge-narrow purpose, to propel the vehicle containing it faster than the others just like it over the course of about five hundred miles, and other factors be damned, including fuel economy. 3 mpg is good/bad only in a given context. In the context of driving to work, that's berry, berry bad. In the context of a quarter-mile unlimited funny car, who gives a shit?
Even measuring hp/liter is a totally made up parameter. Let me ask you: which is "more efficient": a car with an engine that makes 186 hp/liter that wins the race or a car with an engine that makes 295 hp/liter that loses the same race? One puts all the resources into a winning effort, another puts all the resources into a losing effort. Which is more efficient? Context people, context. |
Meanwhile, back in the real world, specifically Lansing, Michigan:
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Why is Detroit bankrupt? Look at the region's major product. Its engines remained lowest performance. It stifled innovation throughout the product (not just the engine) in the name of cost controls. It feared fundamental product thinking advocated by innovators such as W. E. Deming. Its products would even rust out in two years. So they invented myths about 'more salt on today's roads' rather than paint those interior steel surfaces. To coverup their lies, they even underfunded the pension funds. And invented more lies to mask that fraud. So of course so many employees had to flee Detroit. Detroit's major industries were even blaming their employees rather than ignorant and corrupt management. Another example of 85% of all problems directly traceable to top management. Since that top management said there was plenty of blame to go around, then 99% of all problems were directly traceable to those people educated and acting to destroy American jobs. Bankruptcy is only reporting today on a problem that existed even 20 and 30 years ago. Same problems so accurately defined by Michael Moore's "Roger and Me". Problems continued because the problem makers - corporate leaders who stifled innovation - denied a problem even existed. They even said GM had no problems in 2007. That the only problem was the economy. These job destroyers blamed government, Japanese, the economy, education system, unions ... and even United and American Airlines for being too unsafe for corporate executives to fly on. Detroit is simply another victim of what is taught in the business schools. Those low performance V-8s still found in crappy products are but another reason for Detroit's bankruptcy. |
meanwhile, back in detroit engine land:
tw, calculate this one, if you will, please. maestro: |
You bring up two important points:
1) The unions role in the US car makers. 2) The role of the upper management and directors. I believe it's clear that upper management and directors were incredibly stupid and short sighted, on the whole. The Ford Mustang for example, was planned to be the Ford "Carnation", and built something along the lines of the old "Cosmopolitan". If memory serves, it was Lee Iacocca, when he was at Ford, who was able to kill the "Carnation", and bring in the support for the Mustang. Because he knew cars, and he knew drivers, and what they wanted. But I was focusing on the role of the unions in the destruction of the US car makers - and to the socialist policies of Detroit, that drove them to bankruptcy. Quote:
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Even Lee Iacocca, could BARELY keep Chrysler in the black - primarily helped in those years when he had concessions from the unions, AND had a good model car to sell. When the unions can dictate what their salaries and benefits will be, to management, the company is doomed. Perhaps their greed will be restrained for a little while, but before very long, it will rear up, and swallow the company. No doubt. When the unions can strike, and close a business that is vital to the industry or the country, it's time to change the laws regarding unions. I'm reminded of the FAA flight controllers strike in the 1970's. They were going to shut down every major airport in the country, if they didn't get their demands met. We had just had a disastrous 4 years under the Democrat Jimmy Carter, so our country was a complete mess - gas lines, our Embassy personnel held hostage for a year by Iran, etc. And now the flight controllers want a raise, or they'll completely cripple airline traffic. Airline mechanics, pilots, etc., wouldn't cross their picket lines, since they were unionized, as well. So Ronald Reagan fired every one of those flight controllers who wouldn't return to work. Support for them disappeared, almost overnight. Problem solved! :D With the city of Detroit, it was their giving into their workers unions, instead of the UAW, but they were all AFL-CIO. You simply can't give in, and you can't defer payments of the agreed upon pensions, etc. and hope to stay a viable city or company. We've seen that in city after city, and in company after company. |
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Marchionne did same in heavily unionized Italy. He fired all management in 60 days. And no employees. He quickly made Fiat so profitable that he could buy Chrysler and almost bought Opel. Extremist rhetoric wants to blame the victims - the employees. Exactly what happened in Hostess. Unions took wage cuts. Then scumbag management secretly gave themselves record bonuses on top of salaries that were increasing something like 10% every year. After all the purpose of a company is profits to top management. How did Fox New report those realities? The political agenda often blames the victim. Be it immigrants, gays, women rights, minorities, employees, Muslims ... Same exists with Martin. A victim is blamed by lies that say he was inside his girlfriend's house boosting he was going to 'get' that creepy ass guy. Another example of blaming the victim for a political agenda. We know where that myth came from because of what Fox News and other extremist propaganda machines (ie Limbaugh) are designed to do. Lie. |
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However sometime in that period, Corvette (for a short time) released a 70 Hp / liter engine. The famous expression was a 350-350. That's about the time that bean counters began replacing car guys. Stifled innovation began with a new top management tool - cost controls. We know why Honda engines more often win races. Higher performance across a wider range. In a short stint with Nascar, every Ford mechanic would brag about their higher performance engine. The number was routine with many Ford cars. Due to superior performance, Fords had 50 more horsepower. BTW, performance and efficiency are not same. And are not orthogonal. Why are Detroit designed products so unprofitable? They even still manufacturer V-8 engines. Detroit products are that technically obsolete. Due to cost controls, Detroit products are some of the most expensive to build. Why would anyone make a hybrid where its gas motor cannot even recharge its battery? A classic example of how widespread stupidity is in and around the Renaissance Center. |
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FYI, the Germans seem to be running V8s in Mercs and BMWs and even a few Audis.
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In many cases, V-8s only exist to market to fools who associate more noise or a bigger engine with personal superiority. An ego thing. What was a worst engine in Toyota's domestic history? That V-8 found in the Tundra. Companies that are profitable are not selling 1960 technology products. Detroit is a victim of four automakers who stopped innovating. Only Ford recently restarted innovation. Detroit has no choice but to downsize. What choices were left other than bankruptcy? Renaissance Towers were full of Detroit's rich who remained in denial. They destroyed American productivity while blaming the employees (using socialism myths). Those who destroyed Detroit were practicing classic communism. |
FYI the Tundra V8 is shared with Lexus LS and GS models, and the BMW that gets a V8 (and also a V12!) is the 7-series. These are quiet luxury vehicles, no?
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Many V-8 are noisy. Because noise and low performance successfully markets to those who are still attached to obsolete technologies and who fear of change. Obsolete technologies destroy jobs. Ignorant customers are why Detroit ignored reality - why GM even stifled a 70 Hp/liter engine technology. So what other alternative did Detroit (the city) have? Their major industries were promoting destruction of America while remaining in denial - ie still marketing obsolete technology. As Wagoner told Obama about 2008, GM's only problem is the economy. Nonsense. GM was even selling some cars for $200 less than it cost to build. Detroit's business leaders (GM and Chrysler - not Ford) even in 2008 were that much in denial. |
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Here's a fascinating slideshow of abandoned facilities in Detroit. The United Artists theater was the most powerful image to me--so ornate and so decrepit at the same time.
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My gosh what a waste!
The sheer scale of those photos is literally inconceivable in this country. |
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Here's another great pair: mixed in randomly are two shots of the same school, taken one year apart.
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This public library. They even left books on the shelves. Attachment 44968 |
I'm never sure. I see photos of "ghost towns" in America and it reminds me how much more space you have to live in, that places can just get "lost".
But this, this is staggering. I'm glad it's not common. We have our own problem at present in filling offices left over from various boom-times and unsuitable to convert to human habitation because they were built so cheaply. Old schools, churches, factories et al, can and have been converted. Especially in London, and it was happening in Leicester by the time I left. I will admit I underestimated the scale of things in Detroit. The apartments, the theatres, the churches, the schools. And they're not worth saving because it's not worth committing the money. I get it a little more now. |
I'm a little surprised there isn't more scavenging going on.
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Same with the office blocks here. We're only a little County Town, but there are wheels within wheels.
Less about residents and more about property companies owned by property companies, owned by conglomerates, backed by investment funds etc etc etc. So in the mean time the places slowly fall apart (on a tiny scale compared to Detroit) because the ultimate owners hope that Godzilla will turn up and stomp them flat and they can just throw their hands up and say, "Who'da thought?!" |
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Seriously the decay of Detroit is scary. This isn't a little mining town that faded when the silver ran out, this is a major bloody city. If it were a stand-alone entity, a Somalia-like collapse would be quite plausible. Being part of the US, it shouldn't go like that; the rest of the country can provide enough support to maintain a semblance of civil life ... but what happens if three, four, ten US cities go the same way? At what point can the US no longer hold it's act together as a socially and economically developed society? And then what? How many spare rooms are there in Grifftopia? |
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Or whatever commune 'Spode can get together. Not that you can rely on damned hippies to get organised. But you can bet that's where the sex will be at. Or of course my always go-to in times of trouble; Wolf. This pacifist will accept a gun might be needed at the end of all times. Edgar Wright thinks so, who am I to cavil. And if it's just gonna happen regardless, I want to be with my Christmasteers and Mr Limey makes four. Assuming my slower moving 'rents have karked it, I want to be with friends. Wait, how did I get onto this subject...? I am Cassandra! |
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- From one angle, drug users/dealers routinely squat houses, strip it out, then burn it down and move on. Non-owner neighbors are powerless to call the cops, since it isn't their building they're trying to evict someone from. - From another, brazen dudes will just roll into vacant commercial buildings and pull structural steel out by the truck load. I saw this just yesterday, a block away from Eastern Market. One dude, one bobcat, one trailer. Parked his truck around the corner, worked at it for a day, and then drove off. - From a third, building owners who want the land to be vacant but happen to own a historically significant building will leave it open to the elements (and scrappers) until they can get an emergency demo permit due to the building's now-imminent threat to public safety. - From a fourth, people buy buildings (that step is optional) and then pull architecturally significant stonework, woodwork, etc, out and sell it or move it to their out-of-state mansion. Detroit is a silly complicated mess. |
That last one sounds good, actually.
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The building in the linked article is in a Nationally Recognized Historic District. So in that case, it's plainly illegal.
In the not-so-illegal cases, it's another force of entropy dragging the city down for a quick buck. A beautiful old fixer-upper of a house built by some long-dead furniture baron is cool in its own right, but if all the mahogany wainscotting (and everything else of any value) is pulled out and sold across town or across the country, it's that much harder to sell the building; to fix it up; or even to argue against demolishing it. Detroit is full of structures that in most other places would be refurbished rather than demolishing them. But here, the momentum is solidly behind tearing shit down and building something new. Compounding the problem, rent even in the most in-demand neighborhoods is too low to support high quality renovations. It's a complicated issue. I'm generally in favor of preserving building stock -- modern buildings rarely are as beautiful, or as solidly built. Old ones have a lot of idiosyncrasies and outright problems, but they're often literally irreplaceable -- they were made by skills that we do not practice anymore. At the same time, there is a point where the number of vacant structures is overwhelming; they are often very dangerous, even just to passers by; and you can't compel other people to spend their money on projects they don't support. In fact, that's actually the underlying challenge with this town: it's so damn complicated and inter-dependent. It's impossible to find a single overarching solution, or even a clear solution to a discrete problem. A lot of horrible solutions -- short-sighted money grabs or just plain foolishness -- are proposed (and often attempted.) Which leads to a ton of inertia against doing anything unless it's known to succeed, since there's no need for more fuckedupedness. Which is basically just the road to stagnation, which at this point is really just active, accelerated decay. |
Thanks gv, that was especially helpful to a furriner.
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The picture of the library looks like a scene from the walking dead!
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I caught the end of a NPR story last week on abandoned buildings being scrapped out and the metal being shipped to China. From here that does not look like an efficient or sustainable model for development. |
Good idea, but Big V is going to have to clean a truckload of old bricks! ;)
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http://www.informationliberation.com/?id=44556 |
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