"Five reasons Chicago is in worse shape than Detroit" via Bloomberg

[313WX]

But Detroit is also similar to Wayne Country, Chicago, and State of Illinois, and a few thousand other public entities in that public pensions have turned into financial burdens of epic proportions. That's what's fascinating. Not the shared misery.

But unlike Detroit, Chicago, and even Wayne County and Illinois has ways to avoid the same fate. Now if they make the right decisions to deal with the pension obligations remains to be seen. But it must be kept in mind that those entities have far more sound leaders and they're more relevant to folks [[socio-economically speaking) than Detroit.

Balance Sheet Insolvency does not automatically equate [[nor does it automatically lead) to Cash Flow Insolvency.

[Bham1982]

No other city was once the wealthiest in the nation per-capita [[besides New York) nor has any other city lost 1.2 million people that accounted for 2/3rds of its peak population. Also, no other city has been completely gutted of its major employers and its middle class tax base like Detroit has [[including the cities you references). Detroit is in a league of its own. Every individual that's not a Detroiter realizes this.

Not true. Detroit is fairly similar to its Rust Belt peers. Regarding city proper, St. Louis actually has greater population loss. Regarding metro areas [[which is really the more relevant comparative apples-to-apples metric) Detroit actually fares better than all the cities in the Eastern Great Lakes. Cleveland, Pittsburgh, Buffalo all have worse long-term population numbers.

This whole convoluted conversation [[not directly related to Detroit) about Chicago simply reeks of "misery loves company." I guess by trying to bring down other places, it's supposed to make folks here feel better instead of actually coming up with viable solutions to make our city a decent place to live/work and compete with attractive places like Chicago.

This is a nonsense point. You're conflating the relative desirability of a city and its relative financial health. I am Mr. Negativity when it comes to Detroit, and can hardly be called a mindless booster.

NYC was easily the richest and most powerful city on earth in the 1970's yet essentially went bankrupt. Orange County, CA was one of the richest and most booming counties in the U.S. in the 1990's, and home of the SoCal dream, and went bankrupt. Chicago is actually a pretty serious economic underperformer, but it's irrelevant to the funding of its long-term pension liabilites.

[Bham1982]

But unlike Detroit, Chicago, and even Wayne County and Illinois has ways to avoid the same fate. Now if they make the right decisions to deal with the pension obligations remains to be seen. But it must be kept in mind that those entities have far more sound leaders and they're more relevant to folks [[socio-economically speaking) than Detroit.

On what basis would you conclude that Illinois has "far more sound leaders" and "has ways to avoid the same fate"?

Illinois is an economic basket case, much worse than even Chicago. Illinois has the worst population loss in the U.S. Can't do worse than that.

Most of its governors go to prison. The Nerd maybe a cynical lapdog to corporate interests but he doesn't strike me as corrupt or bound for Jackson Penitentiary. And Michigan is actually growing. You're doing pretty bad as a state if Michigan is beating you in terms of population and economic growth.

[313WX]

Not true. Detroit is fairly similar to its Rust Belt peers. Regarding city proper, St. Louis actually has greater population loss. Regarding metro areas [[which is really the more relevant comparative apples-to-apples metric) Detroit actually fares better than all the cities in the Eastern Great Lakes. Cleveland, Pittsburgh, Buffalo all have worse long-term population numbers.

As a percentage, the population loss in St. Louis vs. Detroit is dead even. That said, Detroit was much larger and wealthier than St. Louis in its prime. The extent of the declines are not similar.

As far as the health of the metro areas, that's not really relevant for this discussion. We're discussing the health of these cities as municipal entities. Detroit, as a municipal entity, is completely independent of Oakland/Macomb Counties and their cities.

NYC was easily the richest and most powerful city on earth in the 1970's yet essentially went bankrupt. Orange County, CA was one of the richest and most booming counties in the U.S. in the 1990's, and home of the SoCal dream, and went bankrupt. Chicago is actually a pretty serious economic underperformer, but it's irrelevant to the funding of its long-term pension liabilites.

The Orange County bankruptcy was not due to government mismanagement [[meaning service delivery was NOT an issue) or pension obligations, but due to an unforeseen cash crunch when the bond market crashed in 1994.

As for New York, even when it had its financial issues, it was still the country's wealthiest major city and had the largest economy, not to vital infrastructure for commerce most places in the US [[with maybe a few exceptions) seriously lack, especially places like Wisconsin and Indiana. Also, let's not forget it received a federal bailout.

[313WX]

llinois has the worst population loss in the U.S. Can't do worse than that.

As of the last official Census count, Illinois grew by 3.3% while Michigan was the only state in the union to report a population loss.

As far as any estimates since the last official Census count, just to give an example of how reliable they are, there were estimates in 2009 that Detroit still had nearly 1 million people...

[Wesley Mouch]

So 313, what's your point? Yes, Detroit is different. We're not exactly like any place else.

And every other city is different. Size, economy, history, etc. So what?

Are you suggesting that we're special? That we are somehow unique? I see the differences, but think the similarities are more illuminating.

You're fighting here. What fight you for?

[emu steve]

As of the last official Census count, Illinois grew by 3.3% while Michigan was the only state in the union to report a population loss.

As far as any estimates since the last official Census count, just to give an example of how reliable they are, there were estimates in 2009 that Detroit still had nearly 1 million people...

I have a question about the 2009 estimates.

Were these est. Census done for say July 1, 2009 or were they released in 2009 for 2008?

I wasn't on this forum back then and don't really know the local [[Detroit) details of the 2008 financial crash and the depopulation of Detroit.

Measuring something like this which is literally changing significantly day by day [[like job losses back then) is difficult.

July 1, 2007, July 1, 2008, July 1, 2009 and April 1, 2010 population estimates and counts [[4/1/2010) are all likely to be very, very different.

EDIT: For July 1, 2009 Census est. 910K for Detroit. They completely missed the foreclosure crisis and depopulation taking place.

http://www.census.gov/popest/data/hi...2009/city.html

[Bham1982]

As of the last official Census count, Illinois grew by 3.3% while Michigan was the only state in the union to report a population loss.

As far as any estimates since the last official Census count, just to give an example of how reliable they are, there were estimates in 2009 that Detroit still had nearly 1 million people...

The last state Census count was last month, and show that Illinois has the worst population loss in the nation, and that Michigan is growing.

The last city Census count was just released this morning, and shows that Chicago has the worst population numbers among the largest U.S. cities. So you have a last-place city in a last-place state.

The decade of the 2000's was very different. Michigan was an economic disaster and Illinois was doing reasonably well. Times have changed.

[Bham1982]

As for New York, even when it had its financial issues, it was still the country's wealthiest major city and had the largest economy, not to vital infrastructure for commerce most places in the US [[with maybe a few exceptions) seriously lack, especially places like Wisconsin and Indiana. Also, let's not forget it received a federal bailout.

Yet it still went broke. If NYC can go bankrupt and essentially collapse, then it can happen to any city. NYC has been the richest and most powerful city on earth since probably the 1920's or so, yet could not avoid collapse.

NYC never received a federal bailout, BTW. It took 20-25 years for the city to fully recover. It wasn't really back on its "A" game until maybe 2000 or so.

[313WX]

I have a question about the 2009 estimates.

Were these est. Census done for say July 1, 2009 or were they released in 2009 for 2008?

I wasn't on this forum back then and don't really know the local [[Detroit) details of the 2008 financial crash and the depopulation of Detroit.

Measuring something like this which is literally changing significantly day by day [[like job losses back then) is difficult.

July 1, 2007, July 1, 2008, July 1, 2009 and April 1, 2010 population estimates and counts [[4/1/2010) are all likely to be very, very different.

EDIT: For July 1, 2009 Census est. 910K for Detroit. They completely missed the foreclosure crisis and depopulation taking place.

http://www.census.gov/popest/data/hi...2009/city.html

If you're trying to suggest that 200,000 up and left between the 2009 and 2010, I highly doubt that. Tons of people had already left when Engler lifted the residency requirements and the real estate bubble made it easier for middle class families to buy homes in places like Southfield, Eastpointe, etc.

[313WX]

Yet it still went broke. If NYC can go bankrupt and essentially collapse, then it can happen to any city. NYC has been the richest and most powerful city on earth since probably the 1920's or so, yet could not avoid collapse.

NYC never received a federal bailout, BTW. It took 20-25 years for the city to fully recover. It wasn't really back on its "A" game until maybe 2000 or so.

President Ford signed a law that gave NYC $2.3 Billion dollars of taxpayer's money.

[corktownyuppie]

President Ford signed a law that gave NYC $2.3 Billion dollars of taxpayer's money.

- I agree with you that balance sheet insolvency doesn't necessarily equate [[*yet) to cashflow insolvency

- I also agree that it comparing Detroit and Chicago is kind of an irrelevant and fruitless exercise. The problems of both [[and the resources of both) are not comparable in any meaningful way.

- When President Ford signed the $2.3 Billion law to help NYC, that was a loan, not a gift...though I recognize that when you're desperate and on the precipice of catastrophe, sometimes it *is* a gift just to be able to have a loan approved.

- While I don't think that the city of Chicago is anywhere near the verge of collapse, capital flight, population loss, etc. that Detroit went through, it is -- in my opinion -- foolish to assume that they will address the problem in the necessary ways to prevent the balance sheet problem from ballooning into the cashflow problem.

It's a small nuance of a difference, but it's one that should create concern for anyone who relies on the financial health of the city [[and the state). Balance sheet insolvency doesn't turn into cashflow insolvency overnight...but with each passing month, the snowball gets more and more difficult to overturn. And because the solutions are so politically toxic, leaders/politicians have no motivation or political will to put them into place until the problems are readily visible to the "man on the street".

Unfortunately, by the time it gets to that point, the cure for the illness is orders of magnitude more unpleasant than they needed to be.

[Bham1982]

President Ford signed a law that gave NYC $2.3 Billion dollars of taxpayer's money.

He did no such thing. You are conflating "giving" and "borrowing".

[Wesley Mouch]

- I agree with you that balance sheet insolvency doesn't necessarily equate [[*yet) to cashflow insolvency
...snip...because the solutions are so politically toxic, leaders/politicians have no motivation or political will to put them into place until the problems are readily visible to the "man on the street".

Unfortunately, by the time it gets to that point, the cure for the illness is orders of magnitude more unpleasant than they needed to be.

You hit it on the head there.

I'm hoping for insolvency without bankruptcy for Chicago. Here, we were fortunate to experience bankruptcy. Debts were erased or deferred. Contracts adjusted. A true train wreck in Chicago just might get real reforms made. Here, the first minute its legal to start selling city assets to allow pay increases, you can bet that it'll happen. Belle Isle sold to Kock Brothers for a coal dock? Sure, we need the cash to give city council a 2% raise.