Does Bernie Sanders Actually Think NAFTA Is What Killed Detroit?

[Originally published by Forbes]


Listen to Bernie Sanders talk, and you grow convinced that he’s every bit as deluded now as when he was a young Communist sympathizer. He has spent his presidential campaign spouting ideas that sound wonderful, but have no basis in economic or socio-political reality–and that are inspired by a destructive, crash-and-burn style of radicalism. Rather than sensibly regulating the fossil fuel industry, for example, Bernie wants to end it, never mind that this would cause massive job loss, declining tax revenues, high energy prices, and would send the industry into even worse-polluting countries.… Read more

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Detroit…Greece…Puerto Rico…Does Anyone See A Pattern?

[Originally published by Forbes]


In July of 2013, Detroit became the largest U.S. municipality to go bankrupt. Like with other major news events, this bankruptcy forced us—the American public—to suffer a tidal wave of backwards analysis about the root causes. MSNBC analyst Melissa Harris-Perry explained that it was because Detroit’s government had become “small enough to drown in your bathtub.” A website called PolicyMic blamed NAFTA, never mind that much of Detroit’s industry merely went to more business-friendly neighboring suburbs. Paul Krugman called the city “an innocent victim of market forces.” But while researching the issue, I discovered a Thomas Sowell article from several years before that attributed the decline to the “Detroit Pattern.” This was a public administration model, he explained, that favored “increasing taxes, harassing businesses, and pandering to unions”–in other words, big government ideology.… Read more

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Will Detroit’s Dubious Bankruptcy Affect the Future of Municipal Finance?

[Originally published by the American Interest]


On December 10th, nearly 17 months after going bankrupt, and a year after entering trial, the city of Detroit finalized its bankruptcy proceedings. In many ways, the deal should be viewed as a bright spot. The city shed $7 billion in debt, dedicated another $1.4 billion toward service improvements, and reformed its pension system. But the deal did not go well for financial creditors. In what amounted to a dubious application of bankruptcy law, bondholders received fractional returns, while the city scrambled to preserve retirement benefits and even an art collection.… Read more

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The Motor City’s Regulators are Hitting the Brakes on Regrowth

[Originally printed in the Wall Street Journal]


David and Sky Brown do not seem like the type of people who would be targeted by Detroit’s law enforcement. This summer the couple moved into the Motor City’s dangerous northwest area to help with revival efforts. After fixing an abandoned home, they opened a backyard pen with goats and chickens and began hosting neighborhood dinners, using the animals’ eggs and milk. They hoped to transform their decrepit block into a community farm.

But the city squelched the Browns. Without warning, animal-control officials entered their home on the afternoon of Oct.… Read more

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How to Reform Detroit

Improving the Detroit charter is essential to the Motor City’s comeback. 

[Originally published by National Review]


Six months have passed since Detroit declared bankruptcy, and over this time numerous ideas have emerged about how the former industrial power can scrap its way back. The wiser of these have resisted suggesting federal aid — which came nonetheless via a $300 million package from President Obama — and instead proposed that the city work on its own to institute growth-friendly reforms. These have included making Detroit a “charter city” along the lines proposed by Paul Romer (he was thinking of the Third World, but Detroit’s need is as great) or one of Rand Paul’s “economic freedom zones”; others suggest just selling off the city’s assets.

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Motor City’s Next Moves

[Originally published by the American Magazine]


Detroit submitted its long-discussed financial restructuring plan to federal court last week, but conflicting laws — and the magnitude of Detroit’s bankruptcy — could bring the plan before the Supreme Court, according to University of Pennsylvania Law professor David Skeel, speaking recently at the American Enterprise Institute.

The restructuring plan determined that employees will receive only one-third of their original claims for pension and health benefits, while secured bondholders will be paid in full. The question of how to pay creditors is complicated by an apparent contradiction in Michigan state law, Skeel said at the AEI panel.… Read more

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Déjà Vu Detroit

[Originally published by City Journal]


To those who viewed Detroit’s decline as an inevitable result of longtime Democratic rule, the city’s bankruptcy filing last month came as welcome news. Finally, they figured, here was a chance to force prudent reforms on the terminally mismanaged Motor City. But at least one recent decision makes clear that Detroit won’t be rethinking its failed strategies for economic growth.

Just a week after the city declared bankruptcy, a state board approved a $450 million bond issue for a new Red Wings hockey arena near downtown.… Read more

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Root Causes of Detroit’s Decline Should not Go Ignored

[Originally published by the Urbanophile]

Recently Detroit, under orders from a state-appointed emergency manager, became the largest U.S. city to go bankrupt. This stirred predictable media speculation about why the city, which at 1.8 million was once America’s 5th-largest, declined in the first place. Much of the coverage simply listed Detroit’s longtime problems rather than explaining their causes. For example a Huffington Post article asserted that it was because of “racial strife,” the loss of “good-paying [sic] assembly line jobs,” and a population who fled “to pursue new dreams in the suburbs.” Paul Krugman, who has increasingly become America’s dean of misguided thinking, downplayed the city’s pension obligations, instead blaming “job sprawl” and “market forces.” The implication is that Detroit’s problems just arose organically from structural economic changes, and within decades somehow produced a city of abandoned homes and unlit streets.… Read more

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