Dave Bing: Today was a 'very, very difficult day'

[Orangeyes]

http://www.freep.com/article/201307...-manager-kevyn-orr-bankruptcy-news-conference

Video

 

[cuseattle]

Is this the worst jobs thread? You win Mayor Bing.

 

[cto]

Poor Dave. He looks and sounds so beaten-down and sad. When he took the job four years ago, many observers said it would be hopeless if Detroit could not get concessions from its creditors. Well, now it will get them.

 

[Eric15]

I read that the average response time for the Detroit Police Department to high-priority calls is 58 minutes. That's how chronically under-serviced the city is.

Detroit has one of the finest art collections in the country, and is considering selling off valuable pieces to fund their cash-starved pension system.

 

[Forza Azzurri]

Is this the worst jobs thread? You win Mayor Bing.

Not to turn this into an OT thread but you have no idea what you are talking about.

Detroit's current financial woes are decades in the making.

What bothers me about this whole process is that retirees may end up in line behind secured creditors for both their pension and their retiree health benefits.

Those are the people who should be paid first.

 

[cap2nine]

Not to turn this into an OT thread but you have no idea what you are talking about.

Not trying to put words in cuseattle's mouth but I believe the intent was to recognize that Bing inherited a horribly difficult situation, not that Mayor Bing personally has done a poor job.

 

[Forza Azzurri]

Not trying to put words in cuseattle's mouth but I believe the intent was to recognize that Bing inherited a horribly difficult situation, not that he personally has done a poor job.

If that is the case, then I would agree. Detroit was brain dead and on life support when Bing was elected.

That is clearly not how I interpreted it.

There needs to be a mechanism whereby creditors who are creditors through no fault-of-their-own (ie retired city workers) are made whole while creditors who choose to put themselves at risk (ie. by lending money, whether on a secured or unsecured basis) bear the bulk of the cost of bankruptcies.

The argument that municipal borrowing rates will rise and and municipalities will have more difficulty borrowing is portrayed as a bad outcome but is really a great outcome.

From the Federal government to States to Cities to individuals, this country has proven over and over again that it will gorge itself on debt if given the opportunity.

If rates are higher and it is harder to borrow, perhaps there will be more incentive to set budgets and negotiate contracts that allow entities to live within their means.

 

[SWC75]

Dave is like the football defensive back who is the first defender to come into the picture when the wide-open receiver catches the pass and waltzes into the end zone. The first guy you see is almost always not the guy who blew the coverage. He's just the guy hustling to make up for it.

 

[ebucklewis]

There needs to be a mechanism whereby creditors who are creditors through no fault-of-their-own (ie retired city workers) are made whole while creditors who choose to put themselves at risk (ie. by lending money, whether on a secured or unsecured basis) bear the bulk of the cost of bankruptcies.

but that is not how it works and it is entirely within reason to say that is not how it should work. retired city workers put themselves at risk when they accepted the job and joined the union and voted for the criminals that negotiated those contracts (both union officials and elected officials).

 

[SWC75]

but that is not how it works and it is entirely within reason to say that is not how it should work. retired city workers put themselves at risk when they accepted the job and joined the union and voted for the criminals that negotiated those contracts (both union officials and elected officials).

Taking a job puts you at risk?

 

[ebucklewis]

Taking a job puts you at risk?

SWC - I know you worked for the government so you may not understand this - but yes, there is a risk that you will lose your job, your pension, etc..

 

[SWC75]

SWC - I know you worked for the government so you may not understand this - but yes, there is a risk that you will lose your job, your pension, etc..

Lose your job, yes. There shouldn't be a risk at losing your pension or health insurance, especially after you've retired. And you can hardly compare getting a job so that you can have money to live on to making a business deal so you can make a profit.

 

[Forza Azzurri]

but that is not how it works and it is entirely within reason to say that is not how it should work. retired city workers put themselves at risk when they accepted the job and joined the union and voted for the criminals that negotiated those contracts (both union officials and elected officials).

Seriously?

A guy who takes a job in the 1950s as a municipal worker when he graduates high school should have been forced to worry abut the fact that the city he works for may go bankrupt 60 years in the future and, as a result, he may lose some or all of his retirement income and health benefits?

Whereas the sophisticated secured creditors who willingly made loans to an ailing city should be made whole - at the potential expense of the above retired municipal worker?

 

[ebucklewis]

Lose your job, yes. There shouldn't be a risk at losing your pension or health insurance, especially after you've retired. And you can hardly compare getting a job so that you can have money to live on to making a business deal so you can make a profit.

believe it or not - many retirees invest in funds that carry municipal bonds so they can have money to live on when they retire.
listen I don't want to get in an argument about this on this board - Dave Bing is an extremely admirable man - but Dave Bing knew what he was getting into when he took the job, this has been decades in the making because of poor decisions made by elected officials, union officials and just about everyone in the city of Detroit that haven't left. there are not going to be any winners here - but the people that secure the debt are first in line - that's the way it works (or used to until the GM bailout)

 

[oldpinepoint]

This will be very interesting to watch and see how this plays out. Lots at stake, on a positive note about Detroit. I like the airport, eminem and kid rock.

 

[oldpinepoint]

believe it or not - many retirees invest in funds that carry municipal bonds so they can have money to live on when they retire.
listen I don't want to get in an argument about this on this board - Dave Bing is an extremely admirable man - but Dave Bing knew what he was getting into when he took the job, this has been decades in the making because of poor decisions made by elected officials, union officials and just about everyone in the city of Detroit that haven't left. there are not going to be any winners here - but the people that secure the debt are first in line - that's the way it works (or used to until the GM bailout)

I think the pensions would get rolled into the federal system. Can't remember what's its called

 

[ebucklewis]

Seriously?

A guy who takes a job in the 1950s as a municipal worker when he graduates high school should have been forced to worry abut the fact that the city he works for may go bankrupt 60 years in the future and, as a result, he may lose some or all of his retirement income and health benefits?

Whereas the sophisticated secured creditors who willingly made loans to an ailing city should be made whole - at the potential expense of the above retired municipal worker?

the guy that took the job in the 50's - most likely retired in the 80's at the age of 52 - and is most likely living off of an unsustainable pension negotiated by people he helped elect.

the secured creditors you describe are most likely fund managers that are trying to manage retirement funds for thousands of people.

like I said - there are no winners here - except maybe the people that have already lived off of their bloated pensions for the last 40 years

 

[OttoMets]

but that is not how it works and it is entirely within reason to say that is not how it should work. retired city workers put themselves at risk when they accepted the job and joined the union and voted for the criminals that negotiated those contracts (both union officials and elected officials).

And they put their pensions at risk when they and hundreds of thousands of their peers moved out of the city and stopped contributing.

Everyone in that region (especially the pensioners) benefits from the city of Detroit. Their moving out of the jurisdiction has contributed to the problem as much as any other factor.

 

[SWC75]

And they put their pensions at risk when they and hundreds of thousands of their peers moved out of the city and stopped contributing.

Everyone in that region (especially the pensioners) benefits from the city of Detroit. Their moving out of the jurisdiction has contributed to the problem as much as any other factor.

That point is valid. Detroit had a population of 2 million in the 50's and it's down to 700,000. That's why the taxing has to be done from a higher level and the money then sent to where it's most needed.

 

[CaliCuse]

http://www.freep.com/article/201307...-manager-kevyn-orr-bankruptcy-news-conference

Video

Through no fault of his own Bing's political career took a big hit yesterday. Unless he is instrumental in leading Detroit out of this mess. I think a meeting with all the big companies in Detroit is where he should start. Bringing in new industry could be a first step. Jobs and taxes are required to bring in the necessary funds to come out of this. If Dave can accomplish this there is no limit to how far he can go up the political ladder.Ee all know that Bing is no dummy having started and run a successful steel company. He can do this. Its should be interesting to watch his progress.

 

[OttoMets]

That point is valid. Detroit had a population of 2 million in the 50's and it's down to 700,000. That's why the taxing has to be done from a higher level and the money then sent to where it's most needed.

Would be a good idea. There was also a Salon piece advocating for consolidation earlier this week.

Everyone has contributed to the problem (though Dave Bing has done an admirable job in trying to get the city on a sound footing), but I have no small degree of contempt for the millions of suburban Detroiters who work in the city, enjoy its cultural attractions, and don't contribute a thing to its well-being (and have resisted attempts to consolidate).

For all its problems, Detroit would be in fine shape if a couple hundred thousand middle-class people lived within its boundaries rather than in some other jurisdiction within the metro area. They should consider this their problem, but they've washed their hands of the city that's given them a great deal. Very sad.

 

[OttoMets]

Through no fault of his own Bing's political career took a big hit yesterday. Unless he is instrumental in leading Detroit out of this mess. I think a meeting with all the big companies in Detroit is where he should start. Bringing in new industry could be a first step. Jobs and taxes are required to bring in the necessary funds to come out of this. If Dave can accomplish this there is no limit to how far he can go up the political ladder.Ee all know that Bing is no dummy having started and run a successful steel company. He can do this. Its should be interesting to watch his progress.

He's not running for reelection. I had high hopes, but this was a problem that no mayor could solve.

 

[texascpa]

I think the pensions would get rolled into the federal system. Can't remember what's its called

PBGC - Pension Benefit Guarantee Corporation

 

[Guy Fawkes]

PBGC - Pension Benefit Guarantee Corporation

Correct. They'll take this over and the current retirees will be fine once the PBGC is responsible. The problem is during bankruptcy the retiree payments and benefits are usually frozen until a judge has made a ruling to continue paying them. Depending on how long that takes most retirees will be in some serious short term financial trouble.

Also the current union employees of Detroit will be screwed. They will probably get penny's on the dollar for what their potential pension would have been once its settled.

 

[Forza Azzurri]

the guy that took the job in the 50's - most likely retired in the 80's at the age of 52 - and is most likely living off of an unsustainable pension negotiated by people he helped elect.

the secured creditors you describe are most likely fund managers that are trying to manage retirement funds for thousands of people.

The fact that the pension liability is unsustainable is not his fault. And there is a high probability that his pension and retiree health benefits represent the vast majority of his retirement income. Losing some or all of that would be catastrophic to the financial well-being of that retired individual.



If a bond that a fund manager owns get marked down to pennies on the dollar, the losses are spread over, as you point out, thousands of ultimate investors so each investor gets a small ding - hardly catastrophic.

It is one thing to punish the intrasigence of active employees, whether it be municipal employees like the Chicago teachers union or corporate ones like the Hostess employees , who simply refuse to acknowledge economic reality and continue to make financial demands that are impossible to satisfy.

They should take the same hit that the creditors should, and perhaps an even harder hit, but to punish an individual whose working life is effectively over and has little to no opportunity to replace that lost income, is simply not fair.