3 ms·

It's so weird that people find it hard to see a rotted mansion as a policy failure. That's straight up economic waste. It's like dumping milk to support the m

It's so weird that people find it hard to see a rotted mansion as a policy failure. That's straight up economic waste. It's like dumping milk to support the market price, even if people are hungry. Detroit isn't abandoned. It just doesn't have rich people, and banks were too aggressive in their pricing of foreclosed properties. Now those properties have all rotted. Economic waste should be severely penalized in the tax code.

lotsofpulp 6y ago
Detroit needed to shed its obligations before even a free house or land made sense for many people. The government’s obligations were made with the assumption that population (and economic) growth would continue. It did the opposite, and you simply can’t operate a business (or government) where more than half of your revenue is gone and your expenses keep rising. Just like you wouldn’t invest in a business laden with outsized debt obligations from projections that didn’t come true, you wouldn’t want to put your name on a title to take on the obligations of a city who had lost 50%+ of its people and revenue. Supposedly, this was attempted to be fixed in 2014’s bankruptcy rulings, so we’ll have to see if that brought the expenses in line to make it a worthwhile investment.
- im3w1l 6y ago
  The house is a real physical thing. Obligations, debt, bankruptcies, these are all abstractions. Ideally the abstractions should lead to the real physical things being taken care of. If they don't, something may be wrong with the abstractions. But we should be clear that there will always be some waste, so the question is if waste is higher than it needs to be.
  - lotsofpulp 6y ago
    Yes, but that didn’t happen until 2014, while the economic realities were clear to investors (including people deciding where to live and raise families) for decades already. Unfortunately, the political machine can move slower than society needs it to and in the meantime, the infrastructure and real physical things degrade.

lotsofpulp 6y ago

Detroit needed to shed its obligations before even a free house or land made sense for many people. The government’s obligations were made with the assumption that population (and economic) growth would continue. It did the opposite, and you simply can’t operate a business (or government) where more than half of your revenue is gone and your expenses keep rising. Just like you wouldn’t invest in a business laden with outsized debt obligations from projections that didn’t come true, you wouldn’t want to put your name on a title to take on the obligations of a city who had lost 50%+ of its people and revenue. Supposedly, this was attempted to be fixed in 2014’s bankruptcy rulings, so we’ll have to see if that brought the expenses in line to make it a worthwhile investment.

im3w1l 6y ago
The house is a real physical thing. Obligations, debt, bankruptcies, these are all abstractions. Ideally the abstractions should lead to the real physical things being taken care of. If they don't, something may be wrong with the abstractions. But we should be clear that there will always be some waste, so the question is if waste is higher than it needs to be.
- lotsofpulp 6y ago
  Yes, but that didn’t happen until 2014, while the economic realities were clear to investors (including people deciding where to live and raise families) for decades already. Unfortunately, the political machine can move slower than society needs it to and in the meantime, the infrastructure and real physical things degrade.