Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts

Monday, May 20, 2013

"Detroit" by Charlie LeDuff (2013)


What killed Detroit? The saying used to be “As goes GM, so goes the nation.” If that expression is true, then we are all in trouble. Journalist Charlie LeDuff, formerly of the New York Times, returns home to the city where he grew up to work for the local newspaper, a far cry from the job he held in New York. He hopes to cover what may be the biggest story in America; the death a of a once great city; a place where Henry Ford began the $5 work day, and ended with the loss of the auto industry to the foreign market, before falling victim to the recession of 2008.

Looking back through some of Detroit’s history paints a picture of the city which became home to hundreds of thousands of workers during the great migration from the south. These people arrived seeking a better life, only to find themselves living in the worst end of town, while relegated to a life of factory work. For several generations that was the expected “norm”, but once the Unions got involved, with their demands for high pay and good benefits; even for the unskilled; the industry fell to the complacency which often accompanies the assumption that things will always remain the same.

Why go to college when you can sweep the factory floor for $18 an hour? Why prepare for any other work when you have a virtual guarantee of lifelong employment, and a retirement which meets all your needs? This is the thinking which allowed the people of Detroit to be taken down by crooked politicians, corrupt labor leaders, and the apathy of the people themselves as they watched their world literally crumble about them.

When the city went broke many of the municipal services we take for granted fell by the wayside. Garbage went uncollected, and fires raged out of control as people; unemployed and without hope; set fire to the vacant houses around them. The firefighters have no equipment which hasn't been damaged, or stolen to be sold as scrap, and even the federal bailout money which was supposed to help save the dying city, was pilfered by a cast of characters who rival those in Jimmy Breslin’s “The Gang Who Couldn't Shoot Straight.” The saying in Detroit is that sometimes when there is a crime, the people call the police. And as if to return the favor, sometimes the Police show up.

The authors brother Billie had a job as a writer of sub-prime mortgages, part of what brought the whole nation to its knees, just as the easy credit extended by GMAC in order to make cars affordable to all, did back in the 1920’s. The car was the precursor to the mindset that begat the housing bubble of the early 2000’s. Billie ends up working at a screw factory for $8 per hour, even as he loses the home he, himself, once wrote the sub-prime mortgage on.

Detroit itself, once home to an ambitious and upwardly mobile workforce has become the emblem of what went wrong with America in the heady years after World War Two had come to a close. Lacking any real competition from abroad, we became fat and lazy, allowing crooked politicians to lead us down the path to our own destruction.

With the bailout of Detroit’s “Big Three” comes a great lesson in greed and corruption. Arriving in Washington aboard their corporate jets to beg for a Federal bailout, they return home empty handed, seemingly at a loss as to what went wrong. They had arrived in style, but with no concrete plan to present to Congress. They were shocked when they were turned down for the bailout money, returning to Detroit to regroup. Only after returning to Washington; in hybrid automobiles; would they receive any attention at all.

Detroit’s “hip-hop” Mayor Kwame Kilpatrick, presided over much of the city’s decay. And when he was caught and sentenced to prison, he served 99 days and when released returned to live with his mother, Carolyn Cheeks Kilpatrick, a United States Congresswoman and a member of the Congressional Black Caucus.

As the factories and plants closed, the properties remained vacant, becoming a place for the homeless and drug addicted to seek shelter. The description of men playing ice hockey in the basement of one of these vacant buildings is incredulous, especially when they discover a body at the bottom of an elevator shaft frozen in ice. He was there for months before anyone reported him. His name was Johnnie Lewis Redding, second cousin to the great singer Otis.

And, as the city burns, there is no money left for schools, leaving the children to bring their own toilet paper to class. Books are a rarity, and the ones in use are hopelessly outdated. What kind of future awaits these children, who are daily accosted by drug dealers and cannot even play safely outdoors anymore?

Mr. LeDuff has done an extraordinary job at chronicling the demise of a once great metropolis. The scariest part of the book however, is that this is the blueprint of what is happening to America all over, as we watch our jobs; and futures; being shipped all over the world, leaving nothing behind for the average working class person.

When the authors brother Billie moves to a rented property, after losing his home, he packs his belongings in boxes stamped “Made in China” as he wonders aloud, “Don’t we make anything here anymore?” This is a book which will astonish you as it paints a picture of what our national future may look like under the leadership of the incompetent. The real pity is that we are the ones who choose them.

Not only has the author written a book about the fiscal failure of one of the nation's former leading cities, he has also given us a glimpse of what made Detroit the great metropolis she once was. And along the way, he makes some startling discoveries about his own family. Sometimes, while confronting the communal present, we find a mirror image of our individual pasts. A very revealing, and well written book.

Wednesday, March 13, 2013

Melvin the Moon Man, Monopoly and Money


I really don’t remember what made me think of this old board game from 1959, but I did, and it brought back some great memories. I was about 4 years old at the time, and apart from “Candyland”, this is the first board game which I remember playing. Monopoly and Scrabble were staples in my home, but I was way too young to understand those games. My parents, like so many in the 1950’s, had friends over on Saturday nights to play games like Parcheesi and Monopoly. It seems that no one does that anymore.

The point of the game was to traverse the board, which is a replica of the moon’s surface; complete with craters; accumulating “Moonbucks” as you went along. Movement around the board was controlled by a dice cage which tumbled two dice which determined how many spaces your “spaceman” could move. At the end of the game the astronaut with the most money was the winner. I actually learned to count on this game, which used denomination of ones and fives for currency. 

When I say that I learned to count, I don’t mean to imply that I was stacking up bills like the banker at a blackjack table, but I did learn to count the pieces of paper I accumulated in my rounds. I think my brother and I counted all the bills as ones to determine the winner. He may have been older than me, but at 5 and a half he couldn't count any better that I could at 4, so it all worked out.

Anyway, I was thinking about the Melvin the Moon Man and the Moonbucks used in the game; probably in a subconscious response to the news about the Federal Budget and deficits. I kind of believe that money is an abstract, with no intrinsic value of its own, after all there isn't enough money; or even precious metals; in the world to cover all of the expenditures we have made and now owe money for.

 Well, what is money? It’s merely a system by which we keep count of our transactions. When the Indians ruled the continent they used wampum, a certain pinkish part of shell which they all agreed was “special”, and therefore valuable. That’s what we need today; something which we can all agree upon to accept in exchange for the goods and services which we use. So, I advocate the “point system”.

Simply put, since there is not enough real money to go around, we need to create some without risking inflation, or loss of wealth to anyone who already has that attribute. It’s an admirable thing to create wealth; just as it is equally despicable to prevent those less fortunate from surviving in a decent manner.

Remember Monopoly? I always liked that game; you got $1,500 to start out with. It came from the “bank” which, presumably, just printed it. We did this aboard ship one time and actually had to “print” our own additional bills to cover the $1,500 for all of the players. Different caliber bullets were used in place of the different pieces which came with the game. If you had one of the real pieces, it meant you had been in from the start, or else purchased your place at the table from another player. That was usually a cigarette - left or right handed – both were accepted as currency.

Simply put, doing away with “real” money; which has no real value, being backed by nothing; and replacing it with Moonbucks or Monopoly money would be a viable answer to almost every problem imaginable.  That this can all be done without bankrupting anyone, or redistributing anyone’s private wealth makes it all the more attractive as a solution.

Under this plan, all debts would be reduced to zero. There would be no balances left on credit cards. This will put people at risk of bankruptcy on an even keel, and spark some buying amongst the people who have been waiting out the “recession” before buying that new car or truck. People who own their homes get to keep them, but must keep paying the mortgage. People with equity get to retain their equity. People who rent and are in debt would get debt forgiveness and a stipend of about $25,000 in Moonbucks, or Monopoly money to start them off.

Just think about it before you laugh. I am not advocating socialism, communism, or any other “ism” for that matter. I’m just trying to let everyone know that money is only valuable as long as we all agree to accept it as such. Meaning that money; when not backed by enough “precious” metals; is worthless, just as Moonbucks or Monopoloy money is. It only has purchasing power because you have it.

For those afraid that most people would choose not to work; be assured that their 25,000 “points” would cover the necessary expenses to keep those people out of poverty without costing you a cent. If they do decide to work, they get to add to that, increasing their purchasing power. Rich people remain rich without the necessity of having people living in the streets, or families without a roof over their heads.

Taxes would be a thing of the past as they are currently levied; you could go to a fee based economy instead; with those who work using their points towards roads and transportation to get them to work. The ones who choose to remain at home would still have access to light rail and buses which would be manned by the same people who man them now. So, if you have money, or a job, or both; you’re not threatened in anyway.

Well, it will probably never happen; although I do believe that it is the only alternative left. We have tried everything else to no avail, and the catchphrase “There has to be a certain amount of poor people for there to be rich people” is just not true. Imagine, under my plan, you could actually cut out the “money” printed here and spend it. Laugh if you will, but Melvin would understand.