Detroit and others...

The financial crisis did not occur solely on
Kilpatrick's watch, Harris has said, but grew
slowly over time as residents and businesses left
the city. The looming deficit crisis has been
apparent for six years or longer, stretching into
the Archer administration, when Detroit enjoyed
surpluses mirroring national prosperity and saw
its work force bulge by 2,000 employees, while
continuing to lose its tax base.

Louis Schimmel, the municipal bond expert hired
by former Gov. John Engler to take over financial
management in Ecorse and Hamtramck, says
Detroit's financial situation mirrors that of
General Motors Corp. and Delphi Corp.

"In Detroit, the problem is that it's been so
horribly mismanaged," Schimmel said. "They always
think the answer is money. The answer is not
money. It's changing the structure. You can liken
it to what's happening in the corporate world. In
the '60s and '70s, companies were giving away
health care benefits they couldn't afford to pay
and all kinds of other things. The cost was made
up by the cost of the car. The employer said, 'We
are in our heyday; we can afford this stuff.' And
then China showed up, and India and everywhere
else. And Delphi said, 'The cost of labor is so
expensive we can't compete.' The same thing is
going to happen to cities. [My emphasis]

"I predict in the coming years there will be a
lot of Detroits. In Detroit, all the spending
caught up with them."

"Mismanaged", the man says.

The controlling concept here is that when they saw
a fine, easy ride, they jumped on. The results are
inevitable when there's a blank check at every
turn. Management is irrelevant as long as the money
holds out.

It never does in a blank check environment. In such
a situation demand eventually exceeds supply, no
matter the mewlings of all the titled folks, like
mayor, senator, Dr. This or Dr. That.

The article.