The fate of Detroit

Updated: Saturday, August 3, 2013
The fate of Detroit story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - On Wednesday, one week after it declared itself bankruptcy, the City of Detroit celebrated its 312th birthday.

Tonight, in Tom's Corner, Tom Van Howe says Detroit's troubles, decades in the making, are only just beginning.

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I'd like to be a rah-rah guy for our state's largest city. But the truth is, no matter how I twist it and turn it and shape it...I Just can't.

The City of Detroit is the result of a train-wreck 50 years in the making. We all watched it happen, one slow-motion, hair-raising leg at a time.

How many times have you seen someone shake his head and say, helplessly, "well...that's Detroit."

And there are so many things to blame it on. Blame it on incompetent or corrupt leadership. Blame it on an auto industry that seemed unable to compete with the rest of the world. Blame it on unfunded pensions.

Blame it on NAFTA that did take hundreds of thousands of jobs south. Blame it on OSHA, which required companies to spend millions to make workplaces safer. Blame it on the cost of oil from the Persian Gulf. Blame it on white flight.

Blame it on loss of tax revenue.

Blame it on what or whomever you please.

The fact is, Detroit is a gigantic mess. It is a failed city.

In 1960 it was the fifth largest, and richest, per capita, city in the country with a population of nearly two million.

Now, with a population of just 700-thousand, 60 percent of its children live in poverty. Unemployment plods along at nearly 20 percent.

Some 30-thousand current and retired city workers are wondering if they'll have any of the pension they helped pay for.

A full third of Detroit's 140-square miles—an area the size of Grand Rapids—is now vacant or desolate.

It's a city that finds it difficult to even maintain street lights.

In the city itself, there is anger and outrage at the predicament people are finding themselves in...as if they believed the city could go on borrowing and running up bills that it never intended to pay. That day is now over.

I thought the defiant column by Mitch Albom, the celebrated Free Press writer, was terrific.

"Yeah, we're broke," he wrote, "But we got up this morning and had breakfast. Yeah we're broke. But we'll carry on...We'll still be here. We're not going anywhere."

It's nice and its easy to be defiant. But its not going to pay any bills. Its not going to bring back people who've already left. It's not going to raise tax revenues. Its not going to make leaders anymore honest.

For the record...Stockton, California, declared bankruptcy 13 months ago. And its parks are reportedly populated with drug dealers, its courts with lawsuits, its business districts with boarded up windows—with little relief in sight.

Are there positive signs in Detroit? Yes.

The Tigers are in first place. Consumer Reports says the new Chevy Malibu is hands down the best car on the road in just about any price range. Private developers want to build a new soccer stadium downtown. The state has agreed to issue $450 million in bonds to help develop a new Red Wings hockey stadium—and $200 million more to help develop 45 blocks near downtown.

So yeah...some things have the patina of progress.

But bright spots aren't enough.  Detroit is in for a long painful recovery. If, in fact, its up for it. There will be no bailouts.

We know that now.

So, in a very real way, Detroit is a new frontier—an urban frontier—waiting for courageous and creative private investment to mold something new from the rubble.

We have our fingers crossed. In the meantime...Happy birthday.

In this corner...I'm Tom Van Howe.

Business News

Last Update on July 06, 2015 17:13 GMT

GREECE-BAILOUT

ATHENS, Greece (AP) -- A top Greek official says the government is "moving immediately"" to reach a deal with its creditors "as soon as possible" in order to stave off economic collapse.

Government spokesman Gabriel Sakellaridis said Greek Prime Minister Alexis Tsipras has sought support from all political party leaders and that the government is "fully aware of how crucial the situation is."

Tsipras met with rival party leaders a day after Greeks soundly rejected a proposal by creditors for more austerity measures in exchange for rescue money.

Sakellaridis said the leaders couldn't ignore the people's message for a viable deal that would be fair to the poor, deal with Greece's massive debt and restore liquidity to the hobbled banking system.

GREECE-BAILOUT: IMF

ATHENS-Greece (AP) -- International Monetary Fund head Christine Lagarde says the fund stands "ready to assist Greece if requested to do so."

Her statement is the IMF's first reaction to Sunday's decision by Greek voters to reject further austerity measures in return for bailout loans.

Greece is in arrears to the IMF, having failed to pay a 1.5 billion-euro ($1.7 billion) loan due last Tuesday. The IMF said it couldn't get involved in a further bailout of Greece if the country remained in arrears.

The IMF last week also said that Greece would need debt relief as well as new financing worth more than 60 billion euros through 2018 to avoid financial collapse.

Greece is expected to meet with its creditors tomorrow.

GREECE-BAILOUT-REACTION

ATHENS, Greece (AP) -- On the streets of Athens, Greeks are proud of their toughness and defiance after Sunday's landslide "no" vote against creditors' demands -- but they acknowledge there's still plenty to worry about.

George Papadokostakis, a 34-year-old coffee shop owner, says he's very happy with the referendum result. He says "something happened last night with the Greek people. ... we were in a dead-end situation (but) with the `no' vote we believe there may be something better."

Shoe store worker Nicky Zachary thinks Greeks are tough and united in rejecting austerity. She says "we can live with very little and we can live through difficult situations. And I think after the referendum, the Greek people are united."

GREECE-BAILOUT-TSIPRAS

ATHENS, Greece (AP) -- Greece's defense minister says three opposition parties have signed a declaration backing Prime Minister Alexis Tsipras (TSEE'-prahs) in bailout negotiations with creditors.

That makes a total of five parties behind the prime minister, who already had the support of his own Syriza (SEER'-ih-zah) party and the junior party in the governing coalition, the Independent Greeks.

Defense Minister Panos Kammenos says the support heralds a "new era" in Greek politics and would boost Athens' chances of reaching a deal with European and international creditors.

Tsipras convened a meeting of party leaders today, a day after winning a bailout referendum that rejected creditors' previous demands. Following the vote, Greece's finance minister resigned, and he's already been replaced.

GREECE-BAILOUT: FINANCE MINISTER

ATHENS, Greece (AP) -- The Greek government has named Euclid Tsakalotos as the country's new finance minister, a day ahead of an emergency meeting with creditors in Brussels.

The 55-year-old economist was Prime Minister Alexis Tsipras' lead bailout negotiator in talks that halted last month before Tsipras called a bailout referendum. In that referendum, Greeks overwhelmingly voted against recent creditor proposals required for bailout cash.

Tsakalotos replaces fellow-economist Yanis Varoufakis who quit earlier Monday, saying his departure would help bailout negotiations reach an agreement.

GREECE-BAILOUT: FITCH

UNDATED (AP) -- Credit ratings agency Fitch says Greece's `no' vote in Sunday's austerity referendum "dramatically increases" the risk of the country leaving the eurozone.

Fitch said a deal between Greece and its creditors remains possible but that there's little time. The agency said the resignation of Finance Minister Yanis Varoufakis signals the Greek government's desire to again start talking with its creditors.

It said creditors could make stronger commitments on easing Greece's huge debt but were unlikely to make big concessions on austerity measures. In addition, Fitch said the European Central Bank may find a way to provide hobbled Greek banks with additional liquidity while negotiations continued.

Markets steadied on the news of Varoufakis' resignation to not register further falls. Germany's DAX ended 1.5 percent lower, while the euro was up 0.8 percent on the day just below $1.11.

ECONOMY-SERVICES

WASHINGTON (AP) -- U.S. service firms grew at a slightly faster pace in June, as business activity and new orders increased.

The Institute for Supply Management says its services index edged up to 56 in June from 55.7 in May. Any reading over 50 indicates that services firms are expanding.

Steady hiring over the past year has fueled a consumer spending rebound from a winter slump. Many economists say the economy will expand at an annual rate of 2.5 per cent in the second quarter, after shrinking during the first three months of 2015.

Still, the index's hiring component slipped in June to 52.7 from 55.3 in May, which indicates that the rate of job growth might slow.

JAPAN-HONDA

TOKYO (AP) -- Honda's new CEO is promising to take more time in product development, and to bring his company together as a team to avoid the quality lapses that have led to shrinking profits at the Japanese automaker.

Takahiro Hachigo, an engineer who has worked in the U.S. as well as China, talked to reporters today after his appointment was approved by shareholders and the company board.

Honda's brand image has suffered after a series of massive recalls for popular vehicles in Japan, as well as for defective Takata air bags in global markets.

Hachigo's promise to turn the company around centers on raising the efficiency of global manufacturing and delivering on what he calls Honda-like products. But he's been a little short on specifics.

SKINNY OREOS

NEW YORK (AP) -- These Oreos are for adults. That's what the parent company of the Nabisco treat is saying about the new "Oreo Thins."

Mondelez International says Oreo Thins still have the same cookie to cream ratio, but they're thinner. And each cookie is 140 calories as opposed to the 160-calorie regular Oreo cookie.

Mondelez calls Oreo Thins a "sophisticated" snack for grown-ups that isn't meant to be twisted or dunked.

The thinner cookie joins the permanent lineup of Oreo cookies starting next week in the U.S.

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