Author: Andrew Sullivan

Detroit Goes Bankrupt: Reax

Population Decline

Yglesias provides an overview:

This is the largest city to ever file for bankruptcy, and obviously no large city goes bankrupt without a complicated array of problems. But the basic reason Detroit needs to do this is pretty simple. In 1950 there were 1.85 million people in Detroit. In 1970, it was 1.5 million. In 1990, it was a million flat. By 2010, it was down to 710,000. When your city is shrinking like that, you end up with a tax base that’s inadequate to maintain the fixed infrastructure or to pay off pension costs that were incurred in more prosperous times. Shedding legacy obligations is a necessary part of the fix. You can shed legacy obligations without filing for bankruptcy by just stiffing pensioners. But the scale of Detroit’s fiscal problems are so enormous that doing it entirely that way would be cruel and pointless—bondholders need to take a hit and this is the way to do it.

Plumer notes some of the city’s other problems:

— The official unemployment is now 18.6 percent, and fewer than half of the city’s residents over the age of 16 are working. Per capita income is an extremely low $15,261 a year, which means there’s not all that much tax revenue pouring in.

— Low tax revenue, in turn, means that city services are suffering. Detroit has the highest crime rate of any major city, and fewer than 10 percent of crimes get solved. The average response time for an emergency call is 58 minutes. Some 78,000 buildings are abandoned or blighted and there are an estimated 12,000 fires every year. About 40 percent of the city’s streetlights don’t work.

— High crime and blight are driving even more residents out of the city. It’s also driving down property values, which means many residents have stopped paying property taxes. The city collected about 68 percent of the property taxes owed in 2011. Both of those things put a further strain on Detroit’s finances.

Soltas zooms out:

Detroit’s dependence on cars … wasn’t exactly the problem. It was dependence itself. Cities should never go all in on any industry, cars or otherwise. It didn’t realize that until it was too late.

Rob Wile explains what happens next:

Assuming the case goes forward — some creditors may try to object to the filing — the court will now determine which entities — corporations, pension funds, employees and anyone else Detroit owes money to —  will actually see the money they were promised by the city.

According to the American Bankruptcy Institute Journal, Detroit technically gets to do all of the proposing for how that works out. It will submit a restructuring plan to the court, and if the plan doesn’t violate any sections of the federal bankruptcy code, it will be voted on by the creditors.

The creditors don’t get to propose their own plan, and the court can issue a “cram down” order to force objecting creditors to accept parts of the plan. But there will be negotiations going along the whole way where creditors will have their say.

John Cassidy expects this process to take time:

Having seen General Motors and Chrysler both emerge from bankruptcy leaner and with much less debt,  [Detroit’s mayor, Dave Bing,] and other officials are evidently hoping for a similar outcome for the city. But even assuming that the bankruptcy filing does survive a legal challenge, it’s far from clear how a case of this size, complexity, and political toxicity will work its way through the courts; the process could take years. Municipal bankruptcy cases are invariably complex. With Detroit’s debts standing at an estimated twenty billion dollars, this is by far the largest such case in U.S. history. And Detroit is still a city of more than seven hundred thousand people. Can an unelected official like [Kevyn Orr, Detroit’s emergency manager,] govern such a city for years on end with no democratic mandate? A mayoral election is due to take place later this year. So long as Orr is effectively running the show, its result won’t mean much.

Tim Fernholz offers three reasons why Detroit filed yesterday instead of in September or October as expected. One theory:

[Orr] feared lawsuits from pension funds seeking to stop the bankruptcy. In Chapter 9, the city’s promise to spend billions paying for retiree health care is likely to be shifted to the federal government, and the pension funds themselves are likely to take significant cuts. Their managers have been filing lawsuits seeking to prevent the city from entering bankruptcy, but the filing stays them all.

Lydia DePillis looks at who Detroit owes money:

Detroit is about $18 billion in debt, and will only be able to pay out a fraction of that in the short term. The two main groups of creditors arguing they’re entitled to that money are public employees and retirees, and bond holders. The investors are likely to make out better, since more of that debt is secured; the city will continue to pay water and sewer bondholders. Most of the pension debt has no similar backstop.

City residents will likely suffer a lack of anything other than the most rudimentary public services for a long time, but the impact is likely to be felt most keenly by those who lost a large chunk of the retirement they were counting on.

Barro wishes the public sector pension system was designed differently:

If a federal court approves Detroit’s bankruptcy plan, its retired workers will see their pension benefits cut drastically.

It shouldn’t be this way.

When a company goes bankrupt, most of its workers’ pension benefits are insured through the Pension Benefit Guaranty Corporation, a federal government entity established under the Employee Retirement Income Security Act of 1974.

Congress should extend ERISA or a similar set of rules to municipal and state governments. This would force governments to manage their pension systems in a safe way, and would protect workers from destitution in the event of a state or municipal insolvency like Detroit’s.

Sommer Matthews also considers the pensions:

Michigan’s constitution technically prohibits the accrued pension benefits of public employees from being reduced retroactively. But Detroit Emergency Manager Kevyn Orr has previously indicated that bankruptcy would mean pension cuts for both current and former city workers would be on the table. The city’s pension funds currently face an estimated shortfall of about $3.5 billion. For (hopefully obvious) political reasons, it’s unlikely that current retirees would see their checks disappear entirely, but smaller checks are a (frightening) possibility. Future retiree benefits would be the big area for cuts, though. Plenty of states and local governments have already slashed pensions even without going bankrupt.

The above map, on Detroit’s population loss, is from Nate Cohn, who rounded up various maps on Detroit’s decline.

The Egalitarianism Of Getting Laid

A reader writes:

This is kind of a tangent of the Richard Cohen and racial fear thread, but I had another thought about your ease with African-Americans back when your neighborhood in DC was still dangerous.  Do you think going to gay bars had anything to do with your comfort level?

I am not gay, but have been in a few gay bars with friends here in NYC.  One think that really struck me was how it was one of the only places where different classes mix – meaning upper-middle class/wealthy whites with poor blacks (and all of the other various combos).  I live in Washington Heights, and about the only bar where you see blacks, Latins, and newly-arrived whites mingle is at No Parking, the gay bar across the street.

Not being from here, I’ve been a bit surprised how much straight New Yorkers divide up by class and, de facto, race. I could see why there might be less understanding in our views of poor blacks and Latinos.

I’m sure being gay has a lot to do with it. There’s nothing like dating or fucking a person of another background, race or class to help you see the humanity in everyone. Alas, the gay bars in DC, while much less segregated than in other places, are still sadly divided. DC’s Pride is even divided into regular Pride and African-American Pride. But the gay commonality can dissolve many barriers if you’re open to it.

One of my most vivid early memories of nightlife in DC was a trip to the Clubhouse – now defunct – in a neighborhood that was deemed a little risky even for 1988. I went with a white club-kid friend of mine who kept raving about the music, which was similar to that played in The Warehouse in Chicago. It was one of the sources for early House music, and as we went in – around 2 am or so – it was packed with men of color, helium balloons and a big punch bowl. It was an informal event – in a warehouse space – but the music was so over-powering and amazing and unlike anything I had ever heard, I was captivated. I’d guess my friend and I were the only white dudes in the room (maybe we missed a couple in the mosh-pit of rhythm, and I was then a slip of a thing, a cute twinky English schoolboy. But within minutes I was part of the crowd, ignored by most, smiled at by a few, and completely immersed in that House sound that became the background to my coming out.

How do you get scared of generic young black men when you’ve danced with them all night long, or had so many fuckbuddies who needed a washcloth in the shower? In that sense, I’ve always felt that being gay was a real moral blessing. I could have been so much worse a human being if I’d been straight.

The Best Defense Is A Good Economy

Drezner has a long article (pdf) on the diminishing returns from defense spending. It concludes:

The lesson from this analysis for U.S. grand strategy is that an overreliance on military preponderance is badly misguided. Again, it is not that military power is useless; it is that the law of diminishing marginal returns has kicked in. The United States would profit more from investing in nonmilitary power resources than in military assets. An excessive reliance on military might, to the exclusion of other dimensions of power, will yield negative returns. Without a revived economy and the associated global recognition of a renaissance in American economic power, the United States runs the risk of strategic insolvency. The United States needs to focus primarily on policies that will rejuvenate economic growth, accelerate job creation, and promote greater innovation and productivity. If the U.S. economy is perceived to be rebounding, then the biggest economic beneªts that have been hypothesized to flow from military predominance will be preserved. Furthermore, over the long run, economic growth is the strongest driver for growth in defense spending. Short-term cuts can lead to long-term growth in defense spending. As policymakers weigh the choice between maintaining a large military and taking steps toward economic revival, the results in this article point strongly toward deeper cuts in defense expenditures.

Steinglass adds:

[T]here was a time when states needed huge armies because they were interested in conquering each other to get bigger, suck in more tax revenue, and justify their rulers’ thirst for glory. Then after that there was a time when states represented rival ideologies that fought each other to justify the belief systems that held them in power with their own populations. Then the Berlin Wall fell, and now that’s over too. I just don’t see the rationale for preserving a military that can defeat any other militaries anywhere in the world twice at the same time in an age when states are no longer seeking to conquer other states for fun and profit, as they were during the struggle of liberal democracies against totalitarianism. The vague strategic rationales that float underneath our defence budgets don’t describe a vision of the world that makes any sense to me.

Me neither, which finally dawned on me after the debacles of Iraq and Afghanistan. This issue is generational as well. Those born after the Cold War ended cannot understand why this vast continent, defended by two vast oceans, with woeful infrastructure and massive debt, should still be playing the global hegemon game. The Founders would be appalled. But the logic of this is so powerful that even 9/11 cannot refute it. In retrospect, au contraire. Our reaction proved its expiration date had long passed.

That’s why I can live with the sequester. It may be the only way to bypass the McCainiacs and military-industrial-complex and actually slash defense.

Where Music Isn’t Free

Chris Kjorness argues that reggae outlasted mambo for the same reason the United States outlasted the Soviet Union:

At the height of  ’50s mambo fever, you would have been laughed out of the room had you predicted that comparatively tiny and impoverished Jamaica would soon become a dominant force in global music, while the Caribbean’s longstanding cultural capital of Havana fell into irrelevance and decay. But the rise of communism and its attendant cultural protectionism soon choked off mambo and Cuban creativity at the source, while Jamaica’s economic boom and unfettered recording industry uncorked a revolutionary new music called reggae.

Many Cuban musicians welcomed the revolution, and quite a few benefited at first, but that soon changed:

By 1961, all production facilities had been nationalized. State approval was required for any new recording. Censorship and bureaucratic red tape frustrated artists. Reduced tourism and trade cut Cuba off from its most lucrative markets, and the lack of profit motive meant that no one stood to make money by pushing new music or reissuing perennially popular recordings. Meanwhile, the deteriorating economy (exacerbated by the U.S. embargo) made money still more scarce. By 1966, Cuba, which used to press millions of records a year, only managed to eke out 184,000.

Meanwhile, in free-market Jamaica:

[T]he sound-system dance was the place most Jamaicans went to show off their wares and hear new tunes. An underground economy grew around the dances: Organizers charged admission, DJs received a fee, and food and alcohol vendors lined the streets around the venue. Competition between DJs was intense, and customer feedback immediate. The hottest music in 1950s Kingston was American jazz and rhythm and blues. DJs paid a premium for records by artists such as Rosco Gordon and Fats Domino. Records were imported or bought off boat workers coming from the United States. Many DJs actually got their start working as migrant laborers in the United States, using the money they earned to collect equipment and records. A new breed of music entrepreneurs was just beginning to build the infrastructure needed for Jamaican music to flourish.

The Cuban government continued its censorship as recently as December:

A crackdown on reggaeton and other unnamed musical styles that are threatening the revolutionary country’s traditional musical culture will punish artists and fine those who programme it, according to Cuban Music Institute boss Orlando Vistel Columbié. “We are not just talking about reggaeton. There is vulgarity, banality and mediocrity in other forms of music too,” Vistel told the official Granma newspaper. “But it is also true that reggaeton is the most notorious.  On the one hand there are aggressive, sexually obscene lyrics that deform the innate sensuality of the Cuban woman, projecting them as grotesque sexual objects. And all that is backed by the poorest quality music.” …

Musicians who play reggaeton are threatened with being struck off official lists, making it harder for them to work, and recordings are already being purged from official catalogues. Radio and television stations are also under pressure to drop reggaeton – though Cubans can still turn their dials to radio stations in nearby Miami or elsewhere.

On The Front Lines, On The Job

Chris Chafin considers how war correspondents rationalize risk:

Holding seemingly contradictory ideas in close proximity seems to be important for combat reporters. You acknowledge that you put yourself in dangerous situations, but believe you have the ability to figure out which are dangerous in a general sense and which are dangerous in a more immediate sense. You recognize that things are out of your control, that conflicts shift in ways that are unpredictable for reasons that are opaque to you, and yet trust yourself to stay safe. These are close cousins to the decisions we make every day, to smoke, to drink too much, to bring drugs on an airplane. “I know this could go badly,” we think, “but I know what I’m doing.” In combat situations, consequences can be more immediate.

Francesca Borri, a combat reporter in Syria, says that living with fear is part of the job :

One recent evening there was shelling everywhere, and I was sitting in a corner, wearing the only expression you could have when death might come at any second, and another reporter comes over, looks me up and down, and says: “This isn’t a place for women.” What can you say to such a guy? Idiot, this isn’t a place for anyone. If I’m scared, it’s because I’m sane.

Armed With Ingenuity

SYRIA-CONFLICT

Matthieu Aikins profiles the Syrian rebels’ arms makers:

More than in any of the other Arab nations riven by war in recent years—more than in Egypt, Libya, or Iraq—the rebels here have taken a DIY approach to arming themselves. This has been born out of a combination of necessity (other rebellions have been better supplied) and uncommon opportunity, as rebels have been able to hold significant territory where workshops can be set up and kept safe from regime attacks. Though regional countries like Saudi Arabia and Qatar have supplied arms to the rebels—and the US decided in June to begin its own limited program—weapons have been scarce enough that the rebels continue to manufacture their own. The whole region around Aleppo, which had been the center of Syria’s heavy industry, quickly became particularly fertile ground; as the rebels captured machine shops, steel mills, and power plants, they began adapting them to the task of war.

Some of the rebels’ creations verge on the outlandish. When I ask about one odd-looking, 15-foot-long wooden trebuchet, which its proud creator is using to hurl 4-pound fragmentation bombs, he tells me he got the idea from the videogame Age of Empires. Another Aleppo inventor gained fame with an armored car called Sham II (an improvement on an earlier Sham). Two crew members sit inside the car, an old diesel chassis with steel panels welded around the outside, and look at TV screens. While one drives, the other uses a PlayStation controller to aim and fire a machine gun mounted on the roof.

Hannah Lucinda Smith also toured the rebel workshops:

By taking apart weapons they’ve captured from the regime’s checkpoints, the rebels’ manufacturing team has worked out how to reverse-engineer them, meaning Assad’s troops are getting carbon copies of their weapons fired back at them.

(Photo: A rebel fighter holds an improvised mortar shell, one of many stacked at a factory in the city of Aleppo, Syria’s commercial capital, on July 7, 2013. Syria’s 27-month war between rebel forces and pro-government troops has killed more than 100,000 people, a monitoring group group estimates. By JM Lopez/AFP/Getty Images)

Suicide Leaves Behind Nothing, Ctd

A reader responds to this post:

I can go through periods when I think that life isn’t worth living. But I don’t have the will to enact a suicide. For when I think of those in my life who would be affected, it makes those thoughts moot. Life is sometimes not worth living for myself, but it is always worth living for others. I have a cat who depends on me; I have family and friends who love me; colleagues and clients with whom I am trustworthy and dependable; how could I break that love and defile that trust? I can handle my own black thoughts, but I couldn’t handle imposing them on others in such a way. My connections tether me to this world. I stay for them, when I can’t for myself. Suicide isn’t painless.

Another:

My wife tried to commit suicide once, by injecting herself with her diabetic husband’s insulin (that was her second husband, I was her third).  She had three children very young (her first was born when she was 19, the third four years later), which ruined her life financially, and she felt she was an unfit mother.  The incident happened long before we got together and when she told me about it all I could do was hold her. I too have suffered from depression and the occasional suicidal thoughts, so even though I’ve never actually attempted suicide, I understood what she was going through enough so that I could sympathize with her.

To feel like you’re inadequate, that you’re incapable of handling all the things life throws at you, unable to cope with the inevitable sadness that comes to any of us, is a common thought among suicidal people.

It doesn’t matter how much money you have, the rich and poor alike feel the same thing. Some of us, myself included, feel like we’re nothing more than a burden to the people who love us, whether that means emotionally or financially, and don’t want others to have to exert any more energy on our behalf.

I can speak for myself, and I can speak for my late wife (who died several years ago, not from suicide), that what we want mostly is to feel wanted: we don’t always want to be cheered up, we would like people to tell us from time to time that they like us, to recognize that we are just sad sometimes and we’d like them to respect the fact that we have the right to feel sad.  My wife and I were very happy for the five years we were together in great part because we shared that feeling of inadequacy and clung to it as a means of mutual support.  In losing her, I still have the memory of that, and that keeps me going despite the many difficulties I’ve had since she left us.

She would be angry with me if I were to take my own life, and some days that’s all I need.

Update from a reader:

By chance I’ve been to three funerals in the last month: the first a relative, the second an acquaintance, and the last a coworker who committed suicide. There were many bittersweet moments at the the first two – smiles, stories, even a few laughs and you got the impression everyone left feeling better than they did going in.

The last funeral was shocking in comparison. Despite a wonderful service and communion, it was the grimmest affair imaginable. No smiles, no stories – just crying relatives and friends staring at their shoes. Shame, guilt and misery everywhere. You could see it suffocating all the decent, hurting people left cleaning up the mess.

Suicide definitely leaves something behind.

Legalize Single-Sized Living

It could be a boon for New York and San Francisco, according to Emily Badger:

Around the turn of the last century, American cities were full of housing options that are largely nonexistent today: tenements, boarding houses, rooming houses, flop houses, single-room occupancy buildings or SROs–all variations on the idea of small living spaces at low cost. Some were rentable by the night. Some were built around shared amenities like showers and kitchens … All of them contribute to our grainy picture of early urban America as overcrowded, flammable, and full of unscrupulous landlords.

By contrast, most American cities today regulate the low end of the studio market, setting it somewhere around a minimum of 400 square feet in size. Likewise, building codes set a ceiling on occupancy, capping the number of unrelated people who can room together under the same roof. The effect, argues the Sightline Institute’s Alan Durning, is that we’ve outlawed the bottom end of the private housing market, driving up rents on everything above it. If we want to make cities more affordable, he proposes in a new ebook, Unlocking Home, we should look again at housing solutions that went out with the last century.

More Dish on urban housing here, here, and here.