Why We Will All Bail Out Detroit

Yesterday, the city of Detroit filed the largest municipal bankruptcy in America.

Prediction

Everyone here, or, more properly, everyone at Ricochet’s children and grandchildren, will bail out Detroit for 100 cents on the dollar in one of the largest acts of crony capitalism ever recorded.

Background

Berkshire Hathaway has a municipal bond insurance company –

  1. Lord Humungus

    Great post. I might have known that the Oracle of Omaha would be involved. He’s gone from capitalist icon to fascist crony in just a few years. It’s horrible to watch.

  2. BrentB67
    Steve C.: This is going to be interesting. And no, there won’t be a bail out. Republicans control the House. · 6 hours ago

    I hope you are correct, but putting our hopes for fiscal responsibility on Boehner and Co. is a very thin reed to rely on.

  3. BrentB67
    EstoniaKat: Nice work, Dems.

    And the GOP should emphasize this at EVERY opportunity. But it’s not smart enough for that. · 3 hours ago

    Gov. Rick Snyder of Michigan is a republican. I don’t follow their politics that close, but when he is in the news he impresses me as being similar to Gov. Scott Walker standing up to traditional democrat interests.

    I agree with you that this is an opportunity to show a republican leader restoring a broken city to free market prosperity after it was destroyed by unions and democrats.

    I hope they take advantage of the opportunity you highlight.

  4. Misthiocracy

    screenshot_18-07-2013-18.23.16.pngLook what just popped up for me in the sidebar:

  5. BrentB67

    Yes, me too. My guess is Municipal Bond Rates are going higher.

    RicoAds.jpg

  6. BrentB67
    Scott Reusser: I’m not so sure, Brent. Unless Obama can do this by some sort of executive action (and you never know with that guy), a bailout won’t get by Congress, I don’t think. There isn’t across-the-spectrum, country-wide political pressure to bail out rustbelt dystopias. · 6 hours ago

    Scott, I think this is going to raise a deeper issue going back to Fannie and Freddie.

    When the GSE’s were incorporated there was never an express guarantee they had the backing of the full faith and credit of the United States. However, there always seemed to be an implied guarantee that allowed them to borrow at lower rates. When the housing market collapsed the implied guarantee became expressed in the form of a federal takeover.

    I contend that many states and municipalities have benefitted from lower rates than were justified by their financial condition because of a stealth implied guarantee. More so at the state rather than the municipal level.

    Detroit is big enough and enough people involved, sorry Stockton, that I will not be surprised to see Treasury pull some rabbit out of the hat without going through Congress.

  7. NonProfit

    Writing in from Stockton, CA, now merely the SECOND largest city in the US to seek bankruptcy protection.  Does this mean it’s too late for us to get our bailout??

  8. BrentB67

    NP – did Berkshire insure your debt?

  9. Jim  Ixtian

    My prediction for Warren Buffett’s comment on the up-coming Detroit bailout;

    “If I thought Detroit wasn’t going to be bailed out, I wouldn’t have invested in it…”

  10. NonProfit
    BrentB67: NP – did Berkshire I sure your debt? · 27 minutes ago

    Assured Guaranty and National Public Finance Guarantee

  11. raycon and lindacon

    Perhaps these comments should be held in German, and the Detroit response in Greek!

  12. BrentB67
    NonProfit

    BrentB67: NP – did Berkshire I sure your debt? · 27 minutes ago

    Assured Guaranty and National Public Finance Guarantee · 6 minutes ago

    If their CEO’s didn’t hold fundraisers for Obama then no bailout for you!

  13. Fred Cole

    They should call in OCP to fix all this.

  14. Misthiocracy
    Fred Cole: They should call in OCP to fix all this. · 24 minutes ago

    It’s called OmniCorp now.

    Or maybe you mean the real-world Omni Consumer Products?

  15. ctlaw
    Steve C.: This is going to be interesting. And no, there won’t be a bail out. Republicans control the House. · 9 hours ago

    Silly boy. When has that stopped Obama from doing anything?

    There’s nothing wrong with Detroit that a rogue ChiCom general can’t fix in 20 minutes. Other than that, there’s no hope.

  16. Ross C

    I see this as an opportunity.  Detroit is failing largely because half its revenue is consumed by pensioners in one way or another, the percentage is rising from there, and the demographic loss of population has sped up the problem. 

    The US has the same problem although slower because we are not shrinking in population. 

    Maybe…just maybe some conservative politician can connect the dots on this.

    NAH.

  17. BrentB67
    Ross C: I see this as an opportunity.  Detroit is failing largely because half its revenue is consumed by pensioners in one way or another, the percentage is rising from there, and the demographic loss of population has sped up the problem. 

    The US has the same problem although slower because we are not shrinking in population. 

    Maybe…just maybe some conservative politician can connect the dots on this.

    NAH. · 1 minute ago

    I think a conservative politician could connect the dots. Unfortunately outside of Sen’s Cruz/Lee/Paul we are left with republicans.

  18. Daniel Jeyn

    Fred made the joke already, but:

    Is it possible that future anthropolgists won’t be sure whether Robocop and Idiocracy were not documentaries?

  19. Daniel Jeyn
    Ross C: I see this as an opportunity.  Detroit is failing largely because half its revenue is consumed by pensioners in one way or another, the percentage is rising from there, and the demographic loss of population has sped up the problem.

    I think there is something to that.  Trends continue until they can no longer, and then: instant karma.

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