How Cronyism And Corruption Brought Down Detroit

Tyler Durden's picture

Detroit U.S.A.: Once the most prosperous city in America. With a booming manufacturing sector and cultural magnetism, the city had bright horizons after World War II. But as the 1960?s rolled in, the marriage of Big Business and Big Government overtook Detroit. The central planners in government needed the powerful corporations, and the powerful corporations came to depend on the bureaucracy, too. The marriage worked well for the politicians and for their corporate cronies, but Detroit itself entered a decades-long decline. America watched as Detroit slowly bled people, jobs and revenue. Politicians tried spending money. They tried raising taxes. The more they taxed and spent, the faster the city declined.


Detroit still had its "Big Three" auto manufacturers, until two of its crown jewels, General Motors and Chrysler, imploded in 2008 under the weight of reckless and subsidized mismanagement.

Instead of allowing market forces to rebuild Detroit and the auto industry, the United States handed billions of dollars to General Motors and Chrysler.

Five years later, the city of Detroit is bankrupt and almost $20 billion dollars in debt. Meanwhile, General Motors has a cash balance of over $20 billion, still owes the taxpayers over $10 billion dollars that outgoing CEO Dan Akerson said will not be paid, and the company continues to benefit from an unprecedented $18 billion tax gift from the bankruptcy.

Why is General Motors walking away with billions while Detroit dies?

How did so much money change hands between the world's most powerful corporate leaders and government officials while delivering on so little of the promise sold to America by central planners? Bankrupt: How Cronyism & Corruption Took Down Detroit answers this question, and many others.

Complete with the candid analysis of pundits, journalists, analysts and government officials, sourcing of historical news and government archives, and on-scene interviews with everyday Detroiters, Bankrupt sheds light on what happened to Detroit, and who is to blame.


And most importantly, it asks "What is next for the Motor City?"

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Rakshas's picture

Apres moi, le deluge

wee-weed up's picture

Another city ruined by Lib Socialist Democrats.

N2OJoe's picture

Ha, you call that ruin? I see your Detroit and raise you Camden and Newark!

lotsoffun's picture

trenton and phillie are real gems also.


Rafferty's picture

How the hell did you get 7 downs?  Actually how the fuck did you get a single down?  Jesus, why is everyone, in the Land Of The Free, so afraid to state the blindingly obvious?  All the bankrupt turd world cities and neighborhoods in the US are black.  And yeah, it's someone else's fault. 



PT's picture

Did the black people close down all the factories and ship the jobs elsewhere?

Miles Ahead's picture

Actually yes.  Bill Clinton, the first Black President, shipped all those jobs south of the border by getting NAFTA through which our White President Ronald Raygun never could have pulled off. 

So yes.  The first Black Prez started it, then we've had some respite, and now the second (and hopefully last) Black Prez will finish things off with TPP or whateve that is.  Stop complaining and suck it up (as he said).

Loucleve's picture

It all really started downhill with the first black mayor. he was militant, anti-white, and succeeded in driving wihites out of detroit.   there is a lot of "history" here, and its mostly based on racial animus.

so maybe blackw didnt ship the jobs overseas, but they certainly had a lot to do with the destruction of the city.

PT's picture

Thanks for your reply.  Perhaps I have more to learn.

PT's picture

Oh, that's right.  If only the black people had been willing to work eighteen hours per day and live under a bridge, the jobs never would have left Detroit and they'd still be working today.  Gee, how could I forget?






What's that saying again?  A bad carpenter always blames his tools?

PowerPlayer's picture

PT, you obviously aren't from Michigan.  Go look up the Detroit race riots and you will see why all the white people fled the city.

PT's picture

Thanks for the input, PP.  You are correct.  In this case I don't know all the details.  The arguments others are putting out don't quite make sense to me so I call them out on it, but the truth is that I do not know so their must be finer details that I don't know about.  Thanks again for pointing me in the right direction.

Miles Ahead's picture

What, are they special?  If the Brown people south of the border (just barely south of) can do it (and btw, it's 19 hours) and live under the bridges, why can't Blacks?  Sure, it's warmer in Juarez and them other towns, but apparently warmth wasn't appreciated in the good ol' days of the South where ol' times there are not forgotten and all the work plentiful.  It's always something; freedom, jobs,... ain't no pleasin' some folks...

greatbeard's picture

>> ruined by Lib Socialist Democrats.

Detroit is simply the unfortunate victim of the natural progression of capitalism.  The jobs simply moved overseas.  Your tying it to the red/blue dichotomy is simply non-sense fed to the simple minded.  You were served a double helping.

augustusgloop's picture

Scratch oversees. Mexico is now the 2nd biggest importer of cars to US (after Canada). Nissan, Honda, GM, VW, Audi, and possibly soon BMW will have plants in the Bajio region (Guanajuato, SL Potosi, Aguascaliente, Queretaro)---wages are about $3 USD an hour. Engineers are in from Japan, Germany, US, ETC. This is the Supercluster of industry that the politicians were trying to save in the rust belt. All within a day's train freight from Laredo, TX.

Queretaro is the fastest growing large city in the Americas.

Panem et Circus's picture

Sorry bud, that's not capitalism. That's fascism.

MeBizarro's picture

Another ZH bout of idiocy.  Capitalism seeks the lowliest overall cost of production.  Period. 

nmewn's picture

And communism seeks complete control of any & all means of production.

So the winner is, the soft bigotry of the connected via lowered expectations of us crony socialism.


SDShack's picture

Technically, that is not accurate. Fascism is the complete control of all means of production by the state. In THEORY, Communism as outlined by Marx had the workers take over all means of production. But you are correct in REALITY. The reality that is Communisim is really Leninism, Stalinism, or Maoism and all are just another form of fascism. The Workers Party (Communists) took over all means of production, but since the govt was only composed of a single party...the Workers Party or Communists, it is just another Fascist state. Technically it is just splitting hairs, but being precise in language and history makes it easier to persuade the low information sheep when they are ready to listen. IMO Stalinism is a better term to use than Communism because it is more accurate concerning how communism was actually practised... essentially the same as Nazi Fascism. What we have now is a nexus of crony capitalism and socialism.

philipat's picture

Yes, Globalization has been great for the Corporatocracy and its political operatives in the NWO. So far. But the strategy of offshoring and record margins is now stalling because firstly, record margins are fine but there has to be a consumer with resources to buy (Especially in an economy which comprises 70% consumption) and secondly because, therefore record percentage margins mean nothing with no sales line. It is  also a natural consequence of Globalization that incomes in the developed world will decline and those in the emerging world will increase until a new poibt of equilibrium is reached somewhere in the middle. That process is now well underway.

I never thought I would hear myself saying this but the best interests of the average American would be served by a large dose of protectionism. Which is, of course, why it will not happen.

PT's picture

Welcome to the party, albeit a little late.  It's simple really.  If you helped build something then you really should have some kind of a share in the production.  When Chinamen or Mexicans build something but can't afford to buy it, they are being shafted.  It's not just the rich US consumer who loses his job.  We could have had Chinese factories building cars for the Chinese, US factories building cars for the US, Mexican factories building cars for Mexicans ... but it was more profitable to have the cheap workers in one country and hope that the rest of the world would supply rich customers in a different country.

Like I said before, the US worker in crushed between US real estate prices and foreign labour prices.  TPTB have alot of "wealth" simply "buried in the ground" and want to keep those real estate prices high.  But they don't want to supply the wealthy workers that keep those prices high ... 

surf0766's picture

It is not red/blue. It is progressive/communist /socialist against everyone who is left.


philipat's picture

"Progressive" is such an arrogant term in the political context. It derives from the word "Progress" and thus assumes that the term means "Progress" results from the policies of "The Progressives". As in the world of Tax policy, IMHO, "Regressive" is a better way of describing the policies implicit. Isn't 5 years of failure enough? Of course, it is in terms of the latest opinion polls.

Pickleton's picture

" Isn't 5 years of failure enough?"


Your window is juuust a touch shy.  This country has been infected since the Teddy and Woodrow days.

Pickleton's picture

No clue why that posted twice.

Singelguy's picture

Detroit is simply the victim of crony capitalism. Fixed it for you.

The.Harmless.Who's picture


"Another city ruined by Lib Socialist Democrats."


If only it was that simple... 


If you blame Lib Socialist Democrats for the ruins, then you're saying what? That the answer is:


"intolerant Anti-social authoritarian"


Help me out here?  


Oquities's picture

Ignorance votes for skin color, gender, false promises, good looks and height.  we elected a president mostly because he was black (tho he was truly mostly white.)  we will elect our next president because she is female (tho she is mostly male.)  detroit elected black leaders in opposition to white influence, and looked no deeper.  we need campaign reform to prevent this.  i propose a new reality show called "Soap Box," a competitive debate on a national stage so that we can find real thinkers/leaders.  in order to be president of the united states you should be natural born, over 35, and pass a psychological exam certifying you're not a sociopath.

The.Harmless.Who's picture





Fair enough, I see where you're going with this, but I'll raise your "skin color" and "sex", and tell you that AIPAC and the Banking and Energy Lobbies are more powerful.  


A campaign - ANY campaign  will be hijacked by the lobbyists and these types don't care about race or sex.  


And whilst I applaud your selection criteria, it doesn't go a long way as to who decides what is acceptable and what isn't?  For this generation is far detached from the Founding Fathers' (slavery aside) visions.



p.s. I agree with you about Obama - He's a douche.... That guy is responsible for the deaths of many people with darker skin than him (so he can't play the race card!), and is equally responsible for the inequality we find in people of all races! 


But its not like the American people were given a choice.... I mean it was a choice between Obama and McCain!!!  and then... Obama and that Mormon chap whose name escapes me .... Christ on a Bike - is this what is left in America?  



Oquities's picture

fair and true elections require ALL campaign money being provided by the government instead of by individuals, with networks and newspapers required to provide air time/column space on an equal basis.  this will eliminate PACs and lobbyists, which should all be illegal (yes, the SCOTUS is wrong about corps being people).

effendi's picture

Doesn't work.

If one good candidate puts his hand up the other side can then put 10 candidates in the running. So does each one get equal airtime and column space? What if they get 10,000 dummy candidates running?

Here in Australia we have had elections where the ballot paper is referred to as a table cloth by the election officials. 200+ candidates can be running, including candidates who run as a joke (In England they even had a political party called the Monster Raving Looony Party).

And the government doen't pay for squat. The taxpayer does.

Pickleton's picture

No.  not really.  It could all be easily solved by 1 easy law.

If you do not posess the right to vote for the candidate according to existing law, you may not contribute ANYTHING to the candidate.

I as a Texan should have NO SAY in california politics PERIOD.

Pickleton's picture

why are all my replies posting twice?

Andre's picture

Actually, race and sex matter a lot. It's social teflon - or kevlar, depending.

If Obumble does something and people object, "It's because he's black, and we know blacks are oppressed". If Hillary does something wrong, it's OK because "She's a woman, and we know women are oppressed." Face it, Biden could not get away with most of the stuff BHO has pulled because some very LOUD minorities would swear it was oppression.

I would however like it to be clear that while some people think Hillary is at least human, I think it's clear she's a reptile. Not a reptilian, just a reptile.

kchrisc's picture

Correction. Detroit is just society ruined by government.


"From history one learns that government, being a criminal syndicate, can only produce poverty, misery and death."

TimmyB's picture

If liberal socialism is the cause, then one would expect that Germany would be a cess pool. Could someone please explain why much more liberal and more socialist places on Earth than Detroit have done so much better than Detroit, if liberal socialism, instead of some other cause, is what brought Detroit down?

MisterMousePotato's picture

Give it time. I saw a cartoon yesterday with a guy with a noose around his neck tied to a sapling, which he was watering.

JLee2027's picture

Just as we now debate the reasons for the fall of the Roman Empire, I'm sure there will be endless theories and reasons as to why America is economically collapsing. We have to accept what's happening and to salvage the remainder, turn the people back to the nation we once were. Reestablishing our relationship with GOD leading to a fix of the moral foundation wouldn't hurt. 

cynicalskeptic's picture

German companies have labor representatives on their corporate boards.  Labor is viewed as integral to a company's success.  And even though a German company may move it's low cost/low profit production to cheaper labor locales German companies keep high end production IN GERMANY.  

In contrast the US has seen a mindless focus on the cheapest possible labor costs - ignoring all other factors.  The US has shipped much of its manufacturing overseas - and brought in cheap labor (legally via H1B or illegally) when it could not relocate jobs.  

BOTH political parties in the US have been complicit in 'free trade' agreeements - with TPP bring the latest and most egregious.  

Meanwhile the masses are kept distracted with the left/right BS believeing there's some difference between Democrats and Republicans.  The Tea Party and OWS BOTH started out in protest to the BANKING SYSTEM and Wall Street - and both have been co-opted and turned off course.  NO REAL CHOICE will be allowed in US politics.

GCT's picture

Agree Cynical.  Those labor reps do indeed know when their labor needs to take cut though along with no minimum wage in Germany.  Germany had pay caps for several years and only allowed raises in labor last year.  American labor unions prefer to bankrupt companies.  Having lived and worked Germany and my wife working for a German company they do alot of things differently then the USA.  You want a manufacturing job you become an apprentice first.  You work up the ladder to become a skill manufacturing labor.  Americans would not tolerate it.  Take a look at the trades in the USA. 

One commenter comparing socialism in Germany to that of the USA is quite frankly a joke.  The USA does not have a true socialist mdel we instead have private companies making a profit off us taxpayers.  They lobby and write the laws and then get taxpayer money unless you exceed the poverty level.  This is a huge difference in my mind.  Most Americans if they never lived or worked in Europe would never tolerate their systems as it requires responsibility on the parents and for choices you make.  Their education systems are tough and they hold students to standards and parents accountable.  When we returned to the USA my two sons skipped a grade in the USA.  There is no fluff to hire more teachers they teach the basics and your required to take two years of English.  They do not teach feel good everyone is a winner classes you must earn your grade.  OH MY GOODNESS YOU MUST SPEAK THEIR NATIVE LANGUAGE as they have a national language.  There is no german as a second language or french as a second language.  Basics are emphasized and homework is given out! 

You do not run to the emergency room because you do not want to schedule an appointment with your doctor!  You do not go where ever you like to see a specialist you must be referred to see them.  When comparing countries it helps to know what your talking about.  In America those that work help those that choose not to work dumping more money into a system to support private entitites or corporations.  While we chase the American Dream all but one of my German friends rented their place.  When renting you brought with you kitchen cabinets and appliances, Wardrobes as the place did not have closets.  Germany nurtured small business while we nurture large corporations eliminating jobs in the USA. 

What always boggles my mind is Americans think they have a real choice in who they vote for.  Candidate A or Candidate B is not a choice in Europe you have many choices.  Our two party system has eliminated choice.  I love the USA and I am not dissing home,  I just get tired of people trying to compare how well a European country using a socialist model is doing so well when the USA is using a fascist model.  Some need to know the difference.  I will not even begin to discuss what we as Americans take for granted would not happen at all in Europe.  I know most Americans would balk at just the thought of maybe owning one vehicle and it would be old and well maintained.  You see most of the vehicle on the road in the USA would never be allowed on the roads in Europe.  You must maintain them including the paint, no primer allowed to run on the roads. Vehicle inspection lasts a couple of hours.

Mudduckk's picture

Greece is to Germany as Detroit is to Bloomfield Hills. 

Promethus's picture

Timmy, see Ultimate Warrior and Rafferty posts above for answer.

Kirk2NCC1701's picture

@Rakshas: "Apres moi, le deluge"

"You're on your own." is what both built and ruined the country, when no other cohesive forces or values endure.

Ah, the weaknesses and foibles of human nature -- so easy to exploit by smart, organized predators.  And so easy to enhance with well-meaning, bureaucratic socialism.

A people with no Past, no Culture and no Vision or Organizational skills are doomed to slide down the food chain.  And those who have forgotten it are no better either.  Being declared "free" with legislation does not make it so, if the aforementioned attributes are lacking.

Future Jim's picture
     Should America Save Detroit?

A lifetime of education from America’s media elite, such as MSNBC, CNBC, NPR, PBS, the NYT, the Washington Post, CBS, NBC, ABC, and CNN, have given me the foundation and principles that empower me to think for myself and thereby figure out why we can’t let Detroit go bankrupt.

Detroit is too big to fail.

Republicans are turning Detroit into a plantation.

Don't blame the victims of greedy capitalists.

“To attack Detroit is to attack black.”

Only racists would oppose a bail out.

We are all in this together.

It takes a village (a government).

We have to move forward.

Somebody has to be in charge.

There is a Constitutional mandate to promote the general welfare.

Government rightly has the power to implement any good idea.

When we're all on the same page, everyone benefits.

Everyone has a right to good healthcare.

Everyone has a right to a living wage.

Everyone has a right to good nutrition.

Just think of it as reparations for slavery.

Do it for the children.

Do it for Trayvon.

What if it were Obama's kids?

What if it were your kids?

If it helps just one child, no cost is too great.

In a free-market, who would save a dying child?

It would be bad if George Bush did it, but we can trust Obama.

Obama is The One.

Obama! Give us our orders!

Only racists distrust Obama.

Don’t let Republicans make a liar out of Obama.

The alternative is chaos.

The alternative is anarchy.

What would Jesus do?

After all, Jesus would be a Democrat.

Detroit has done everything right. It has been ruled by Democrats and unions for 51 years, and ruled by black mayors for 49 years. It even has the 3rd highest income tax of any city in America. Therefore, the problems of Detroit must be part of a vast right wing conspiracy. As an example, consider how the internet has allowed the spread of right wing hate speech from people like this guy. He says stuff like:

No man has a right to the fruits of another mans labor.

Government dependency is the new plantation.

When we’re all free to pursue our own interests, everyone benefits.

In a free-market, children wouldn’t be dying.

It takes a village – but not a government.

Nobody has to be in charge.

The legitimate purpose of government, is to minimize government.

Sooner or later, socialists run out of other people’s money.

Individualism made America great.

The world is the result of our individual choices.

America is the least racist country in the world.

The myth of Obama is busted.

Progressivism = Liberalism + Fascism

Progressivism violates the Soul of Humanity.

You can instantly become the person you want to be.

Freedom is the Promise of Reality.

Now can you see the problem? These are the ideas on which America was founded, and we all know that America was founded on slavery. Such right wing hate speech is what scared all of the white people into leaving Detroit. It is like something out of Atlas Shrugged, in which the most productive people in America left the system and formed their own society. Therefore, the solution must come from the federal government because, while it is easy to leave a city, it would be much harder for people to leave the country, and Obama’s DHS would stop them if they tried – and rightly so.

What about when it is no longer Obama’s DHS? I know it is hard to imagine how America could elect anyone who is not a Democrat ever again – but that is why we need global governance, so that wealthy individuals cannot escape their debt to their country and to the world.

As you can see, a lifetime of education from America’s media elite have given me the foundation and principles that empower me to think for myself.

401K of Dooom's picture

You sound just like a resident of Ann Arbor, Michigan.  They have the same education and yet their city is better.  The secretis that they live in a physically separate locality than Detroit.  So they can mouth the same slogans and have a nice life. 

malek's picture

Just wait until the student debt bubble bursts...

mvsjcl's picture

Negative votes? Really? I thought it was funny, satirical and spot-on.

lotsoffun's picture

anybody ready to start (again) 'back to africa'?  i'd love to see most of the nfl and nba go back.  they need to - for their people.  and obama also.  even if he isn't born in kenya.  go back!  go east young man!  help the others.  be humanitarian!