Wednesday, January 18, 2012

Fred Leeb: Detroit Must Take Advantage of Being the Nation's Poster Child

Fred Leeb: Detroit Must Take Advantage of Being the Nation's Poster Child

Fundamental Structural Changes Needed -- No More Band-Aids
Yes, Detroit must make huge reductions in expense, operate more efficiently, work cooperatively with its neighboring communities, sell off assets and borrow additional amounts wisely, but all of these actions are mainly for the short run and are likely to be inadequate. They will be necessary, however, to buy the additional time needed for new plans to be designed and implemented that will enable fundamental structural change. Detroit's problems are too deep to be resolved by using just the standard turnaround techniques. Detroit needs a huge amount of new investment and at least tens (more likely, hundreds) of thousands of new people and businesses who can pay taxes. They will not be attracted to the city by the wind down of services due to necessary cost cuts in public safety, roads, schools and other fundamental departmental areas. They must have something that is clear, tangible and positive to look forward to; they will be attracted by a long-term plan for success.

Detroit: In the Eye of the Storm
Detroit Must Take Advantage of Being the Poster Child and Utilize All of its Resources
In order to obtain the huge amount of resources necessary for a credible plan to implement fundamental structural changes, Detroit must take full advantage of being the national poster child for major cities that need revitalization and new jobs. National news organizations like the Washington Post, Bloomberg, the Wall Street Journal and the New York Times already are following Detroit's story very carefully. People in Illinois, California, New York and many other states have a spotlight on Detroit because Detroit was hit first and more severely. Leaders of many other big cities know that their problems are very similar to Detroit's and that they are not far behind in the need to fix their own problems. The rest of the U.S. is looking to Detroit for ideas and examples of how to overcome its tremendous financial problems because they know they will eventually need to do the same thing.

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Tuesday, January 10, 2012

Municipal bond crisis | LinkedIn

Municipal bond crisis | LinkedIn

 The municipal bond crisis hasn't gone away; it may just be developing slower than expected.

Please see the article in the Wall Street Journal by Kelly Nolan

Downgrades Threaten as Investors Reach for Yield

Sunday, January 1, 2012

Guest commentary: Detroit needs a long-term economic growth plan | Detroit Free Press |

Guest commentary: Detroit needs a long-term economic growth plan | Detroit Free Press |

This article by Professor John E. Mogk discusses the long-term vision that Detroit needs, not just a focus on short-term cost cutting that will only buy time, make city employees poorer and not stop the city's downward spiral.

An excerpt from the article:

"Only economic growth that provides jobs, lifts the median income of residents and expands private investment will reverse the city's fall. There is an urgent need for a long-term economic growth plan for Detroit to build on any short-term fix. Otherwise, budget cutting ultimately solves nothing; it simply seals the city's fate.

Balancing the budget will be painful, but it is the city's easiest challenge. Elected leaders, an emergency manager or a bankruptcy court will cut Detroit's workforce, reduce compensation, sell municipal assets, privatize services and raise fees or taxes. Residents will see services reduced and costs increased.

Then what? Then the real challenges begin."