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Detroit declared bankruptcy a few days ago. I've written, for years, about how Detroit should serve as a stark warning to Americans who believe in liberal social policies, like highly progressive taxes and expensive social safety nets. These socialist programs don't cure income inequality. They merely destroy wealth by reducing incentives for building businesses and encouraging dependency. That's why societies with lots of government spending typically have few civil institutions and a small middle class. Here's the message our politicians on both sides of the aisle seem to miss: 50 years ago, Detroit was one of the largest and wealthiest...

For the open-borders crowd, immigration is a patent medicine, able to cure whatever ails you. The latest pitch is that requiring immigrants to live in Detroit is the solution to that city's many ills -- see here and here, for instance. The second link, from National Journal, is aptly titled "A Modest Proposal", because it's no more real than Jonathan Swift's 18th century essay by the same name calling for the Irish to escape poverty by selling their children as food to the rich. The problem is that the Detroit suggestions do not seem to be intended as satire. And...

Downtown Detroit’s housing market was hit hard by the recession, as well the collapse of manufacturing and the long-term exodus of people. Currently one of the nation’s worst housing markets, the prices of homes have plummeted, while foreclosures continue to skyrocket. While the city is struggling to recover, China’s real estate-hungry buyers see an investment opportunity. While many people in the United States aren’t looking to purchase homes, a new craze has hit Chinese investors hoping to cash in on Detroit’s woeful housing economy. After announcing that the city filed for bankruptcy on July 18, Detroit property has been a...

Chicago — Having just been downgraded three notches by Moody’s, Chicago is suddenly hearing the uncomfortable shifting of deck chairs, as people wonder if the nation’s third-largest city is about to slam into the same debt-and-pensions iceberg that sank the SS Detroit last month. It was once inconceivable that the Motor City would become the setting for post-apocalyptic visions of burned out, abandoned neighborhoods, a corrupt and incarcerated city government, and all-but-nonexistent public services. Yet Detroit’s collapse took but a few decades. Now, the same disbelief and denial about Chicago is being heard, yet the evidence for the inescapable bill...

Detroit, you're not alone. Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole. A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement. Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have...

Detroit’s bankruptcy and the problems facing its pension funds offer two important lessons to other communities. One is that state and local governments need to do a much better job managing retirement funds. The other is that they should not pre-emptively reduce hard-earned benefits at the first sign of trouble. Several state and local pension systems around the country are under serious stress. Not surprisingly the hardest hit retirement funds are in places devastated by global economic forces like Detroit, as well as inland cities in California like Stockton, which was battered by the real estate collapse and has also...

What do northwest Washington, D.C., South Beach Miami and upper Manhattan have in common? Less than 50 years ago, the now vibrant communities didn't look much different from most of Detroit, says emergency manager Kevyn Orr—whom Gov. Rick Snyder tapped in March to revive the broken Motor City. This is what gives him hope that Detroit can stage a comeback. "D.C. in '91 was still burned out from the 1968 riots," recalls the youthful 55-year-old attorney who worked for 22 years in D.C., at the Federal Deposit Insurance Corporation, Resolution Trust Corporation, Justice Department and Jones Day law firm. "You...

Salon’s Andrew O’Hehir has fingered the main culprits behind Detroit’s bankruptcy. According to him, it’s none other than Fox News host Sean Hannity and all his fellow racist conservatives who were threatened by Smokey Robinson. In his July 27 screed for Salon headlined “Why the Right Hates Detroit” O’Hehir claimed the fall of big cities like Detroit and New Orleans had less to do with longtime Democratic rule and more to do with the right’s desire, as seen in the “coded racism of Sean Hannity” to punish the cities that spawned “the worldwide revolution symbolized by hot jazz, Smokey Robinson...

Liberals incessantly claim fealty to “science,” while falsely caricaturing libertarians and conservatives as the ones stubbornly ideological and averse to real-world facts. Scientific method, however, involves objective observation and testing beliefs against results. In that vein, it is liberals who prove habitually impervious to facts and the disastrous real-world results of their philosophies. Take gun control as one recurring example. Liberals persist in their anti-Second Amendment crusade despite irrefutable data that America’s murder rate has been cut in half over the past three decades even while gun possession has reached record highs and firearms restrictions have drastically receded across America....

**SNIP** Usually, they vote with their feet and leave. But in extreme cases like Detroit, they simply fail to pay them: Nearly half of the owners of Detroit's 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records. ... "Why pay taxes?" asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. "Why should I send them taxes when they aren't supplying services?...

Detroit could be looking to ObamaCare for a bailout as city leaders try to cut back on retiree health costs as they enter bankruptcy proceedings. The New York Times reported Monday that the city is proposing a plan aimed at reducing its $5.7 billion in outstanding retiree health costs. In short, they want to take those retirees too young to qualify for Medicare and send them into the ObamaCare insurance markets -- which are scheduled to launch next year. Doing so would ease the burden on the Detroit coffers by taking them off city coverage. But it would inevitably increase...

Growing up in Roseville in the 1970s, by the time I reached junior high school the majority of my neighborhood friends were refugees from Detroit, those who fled at a time when the inner city was showing the earliest signs of degenerating into an urban wasteland. These suburban families represented the beginning of white flight, a massive population shift that would prove to be Detroit’s undoing over the next four decades. Once safely settled in suburbia, these whites would eventually lead the charge against cross-district busing and would congregate as an anti-Detroit voting bloc. That led to Macomb County political...

On Sunday’s “This Week with George Stephanopoulos” on ABC, Washington Post columnist George Will took on proponents of federal assistance for Detroit, which declared bankruptcy earlier this month. According to Will, the city isn’t undergoing a fiscal crisis, but is facing a much more serious cultural one, which is the source of its woes. “Can’t solve the problems because the problems are cultural,” Will said. “You have a city, 139 square miles. You can graze cattle in vast portions of it. Dangerous herds of feral dogs roam in there. You have 3 percent of fourth graders reading at the national...

Sina Finance reports that since the bankruptcy on July 18 was announced, the Chinese website Sina Weibo has been all abuzz about how properties can be picked up for a pittance. Caroline Chen, a real estate broker in Troy, Michigan, claims to have received numerous calls from people in China. Chen says that some people have called and said they want to buy 100 to 200 properties. She said that a colleague recently sold 30 properties to a Chinese buyer. The buyer said we don't need to see the properties just pick the good ones.

Michigan's Attorney General Bill Schuette, a Republican, said on Saturday he would defend retirees who risk losing public pensions because of Detroit's bankruptcy, putting him at odds with the city's emergency manager appointed by fellow Republican Governor Rick Snyder. Schuette, an elected official, said the Michigan state constitution is "crystal clear" in stating that pension plans are a contractual obligation that may not be diminished or impaired. "Retirees may face a potential financial crisis not of their own making, possibly a result of pension fund mismanagement," Schuette said in a statement. The attorney general said he would file in federal...

A lot of people have been writing about Detroit lately and why the one-time economic powerhouse is now a bankrupt echo of wasted opportunity. Most of it, coming from the usual suspects at MSNBC, is a lie designed to direct the public’s attention away from the oil – the lifeblood of the Motor City – on their ideological hands. The problems of Detroit are not so much economic one; they were caused, for the most part, by political corruption. Unlike most of those opining on television and in print, I was born in Detroit, in (the now gone) Mt. Carmel...

Selling only 38 pieces from the Detroit Institute of Art could raise $2.5 billion. By John Fund Everyone has an idea about how to handle bankrupt Detroit. Public-employee unions want a state or federal bailout. A liberal state-court judge in Lansing wants to block the bankruptcy because it might reduce government pensions — with no thought as to where the money to pay for them will come from. Supply-siders want to create “innovation zones” that would spur growth by reducing taxes and regulations in the inner city, but it would be years before that measure would have an effect.

Failure sometimes has an inertia that is difficult to stop. Detroit’s reality is anything but pretty: Detroit city services are already stretched extremely thin. On average, police take about an hour to respond to calls for help, and 40% of street lights are shut off to save money. Because of a lack of funds, the police force has shrunk in size to the point that it simply can’t respond in any meaningful way to help citizens who are victims of crime. As you might imagine then, crime is horrific. City services are so minimal as to almost be non-existent. Yet...

Symbolizing the dramatic decline of Motor City, many buildings and structures in the former manufacturing mecca of Detroit, Mich. lay in crumbling and weather-beaten ruins. In his bestselling book, "The World Without Us," Alan Weisman (who has reported from abandoned cities such as Chernobyl, Ukraine and Varosha, Cyprus) wrote that structures crumble as weather does unrepaired damage and other life forms create new habitats. A common structure would begin to fall apart as water eventually leaks into the roof, erodes the wood and rusts the nail, he wrote. Without intervention, many of Detroit's abandoned structures would eventually succumb to nature's...

The City of Detroit tried to file for bankruptcy last week. A state judge initially blocked the filing, but a federal judge ruled Wednesday this week that the bankruptcy case can move forward. More legal maneuvering is ahead and Detroit may well succeed in the end. After all, Detroit owes somewhere in the neighborhood of $18 to $20 billion to over 100,000 creditors. One group of creditors particularly wary of a municipal bankruptcy is Detroit’s public sector labor unions. They fear a bankruptcy judge might allow the city to cancel or reduce their pension or retiree health benefits. The unions...