…to seek Chapter Nine Bankruptcy protection?
Will Chicago lead the way?
Credit: Skyscraper Page
Or will it be Trenton, NJ?
In time the answers will come out but Moody’s is analyzing which major cities are in danger of going bankrupt. The order and names on the list are less important than the underlying truth. That is major cities are either having serious financial problems now or will experience them in the near future. As I am fond of saying, plan accordingly.
Looks like LA may soon be following Detroit’s lead when it comes to Chapter Nine Bankruptcy protection.
Credit: News Genius
You can read about it here but the refrain is a familiar one, municipalities spend too much on generous pensions and get caught in a bind when the economy slows down. Couple that with high taxation, rising crime, crushing regulatory burdens, lousy schools, along with a poisonous political climate and you get…Los Angeles. Well, at least the weather is better in the City of Angels than in Detroit. As California Pension Reform President Dan Pellissier said last week:
I think your city of Los Angeles is probably two to three years away from being in the same position that Detroit is where there is not enough money to pay the bills…[L.A.] can’t project, going forward, a stable budget because they face the same pension problems that everyone else in the country does.
Given the current financial situation many cities find themselves in, individuals need to prepare to take care of themselves. The government won’t always be there to protect you or help you during your time of need. Independence and preparation are a better course of action than dependency on increasing stressed municipal departments. What are you going to do today in your life to become more independent?
The Detroit bankruptcy filing shows that if something cannot go on forever, it will stop. Some acted surprised but this has been years in the making given the toxic combination of corruption coupled with lavish spending the city has engaged in for over a half century. Decisions have consequences and math has finally trumped politics in Motown. Sure, some will fight it but the reality is, Detroit can’t meet its financial obligations and its debts will have to be reorganized in Bankruptcy Court. It won’t be the last city to enter Chapter 9 either, that much is a given.
Guess my predictions proved prescient.
City finances can impact crucial services like Fire and Police, which are being stretched to the breaking point by arson and crime. Old equipment and poor maintenance contribute to slow response times, which endanger both lives and property. As the Detroit Free Press reports:
The Fire Department’s average time is 7 minutes, and EMS’s response time is 15 minutes. That’s partly due to old trucks and ambulances that are poorly maintained combined with a never-ending string of incidents. Detroit has had between 11,000 to 12,000 fires every year for the past decade, and firefighters have been responding with “junk” equipment, according to an unnamed fire captain in Orr’s report.
If that wasn’t bad enough, 2/3rds(!) of the City’s ambulances are out of service.
Now Detroit may be an extreme example of municipal dysfunction but many of the same conditions exist in other communities. Falling tax revenues, higher fuel prices, increasing benefits costs, ballooning pension commitments, and economic stagnation are a fact of life for all cities, counties, and states. This results in fewer services, at a higher cost, with longer response times for citizens.
So don’t plan on government agencies quickly coming to your aid during an emergency. Having first aid kits, fire extinguishers, firearms, extra food and water, batteries, flashlights, and KNOWLEDGE will help you help yourself when things go wrong. Being prepared not only helps you, it also helps your neighbors and community become more resilient.
Take a look at this Steven Crowder video from 2009.
Big Government and Big Unions built that!
To think that once Detroit was the motor behind the Arsenal of Democracy, now its an example of what municipal bankruptcy looks like.
Credit: Alexander Synaptic
I’ve discussed this before but what is happening in Detroit is a symptom of what is happening in many American cities these days. It is probably the most extreme example but Motown points to a bleak future for cities that are loosing tax revenue, population, and business while increasing spending on government employees. The situation has become so bad that bankruptcy is being discussed openly. My guess is that this will happen, the only question is when. One thing I can safely predict though is many more cities will declare bankruptcy in the coming months.
Eventually this will mean that cities can get out from under the crushing union contracts, lavish employee benefits, and generous pensions that got them into their fiscal mess in the first place. However, in the interim city services will suffer and citizens will be left on their own to deal with emergency situations. In many respects, cities will become wild and dangerous places like some frontier towns were back in the 19th Century.
The solution is to plan on taking care of yourself in emergency situations. Individuals and communities will supplant municipalities as services decline in the face of continuing economic stagnation. This will produce greater self-reliance along with strengthening communities, but along the way it will be a rough ride.
Plan accordingly.
If you ever wonder why many cities and municipalities are broke, think about Los Angeles Mayor Antonio Villaraigosa.
Where did all the money go?
Credit: Pocho
If leaders can’t control their spending habits in their personal lives, how can anybody expect them to be good public servants? One prime example of this is the outgoing Mayor of Los Angeles. Apparently Antonio Villaraigosa spent money as fast as it came in and is now actively looking for a job once his term ends. He is well-connected and will land a good job somewhere, but the city and people he leaves behind won’t be so fortunate.
Earlier in his second term, Comptroller Wendy Gruel issued a report stating that the city faced an “urgent financial crisis” and would be unable to pay its bills in a matter of weeks. Even though the immediate crisis was averted, the underlying conditions remain. The combination of high debt, lavish benefits, comfortable retirements, and fiscal irresponsibility still exist in Los Angeles, a condition that is likely to continue until the city can’t borrow any more.
Think about this for a moment, do you trust governments that can’t control their own spending and are led by irresponsible people? As Tim Carney wrote the other day, the game is rigged against regular people. Mayor Villaraigosa and others can leave behind a wreck for others to clean up and face no adverse consequences for their actions. They don’t care if city services degrade and the livability of their cities suffers, its on to the next well-paying job and greater prestige.
So what does a regular person do?
Well, it start by realizing that government won’t always be there for you when things go wrong. You won’t be able to count on bankrupt cities to come to your aid, the alternative is to rely upon yourself, your neighborhood, and your communities to address urgent needs. Preparation is a process, and it starts with the realization that you have to take responsibility for yourself. This does not mean individuals become selfish or isolated, quite the contrary in fact. A prepared individual becomes an asset to the community he or she lives in. As more citizens become involved in becoming prepared, the communities they reside in become more resilient and connected.
This can start with minor steps like having a 3-day supply of food and water allocated for emergency use. It can also include wearing ID bands with important medical information etched on them. Another steps is having extra flashlights, radios, and batteries handy for when the power goes out. The key is to being taking small steps towards becoming better prepared. Realize that this is an ongoing journey that will yield rewards even if disaster never strikes. Governments won’t be there to save you, its time to take ownership of your safety and security.
I’m not just talking about urban blight like this:
Credit: Mojo Steve
I’ve written about how prevailing economic conditions affect government services in places like Detroit. I have also mentioned how some communities are turning to private and citizen policing to augment their sworn law enforcement members. One place this is taking place is…Detroit.
In one respect, this is a hopeful sign as citizens take (back) control of their neighborhoods when failed, corrupt governments fall short. However, it also shows the extent of the problem in many of America’s large cities face. Declining populations, ruinously lavish government pensions, corrupt political leaders, excessive regulation, and high taxation combine to form a perfect storm of fiscal destruction. The citizens are the ones left to largely fend for themselves as governments lack the resources to provide essential services.
With this in mind, what are you doing to prepare? As we see in places like Detroit, governments won’t always be there when you need them. Time to assert your own independence and take steps to prepare for when things go wrong.
Even in ostensibly peaceful and tolerant Sweden, civil unrest happens.
Credit: Scanpix Sweden/Reuters
Over the last few days, rioting has taken place around Stockholm. Many of the rioters are young and from immigrant communities suffering from high unemployment and lack of opportunity. Even in a country known for generous social welfare programs and a reputation for tolerance, anger and resentment can explode amongst certain subsets of the population.
Live in a nice neighborhood, on a peaceful street? Think you are immune to riots? What would you do if one broke out in your community?
Think about that for a moment.
Violence can happen anywhere and seemingly insignificant events can trigger rioting. When it happens, you will need to be ready. Having food, water, light, shelter, first aid items, and personal protection (firearms, clubs, knives, etc.) on-hand will be a necessity. When it comes to evacuating, you may be forced to flee your home with little notice if widespread rioting hits your community. We’ll go into more detail in future articles about how to prepare for civil unrest and similar events, just know that if it can happen in a cosmopolitan city like Stockholm, it can happen anywhere…
If anybody thinks Great Britain is peaceful and safe, think again.
Credit: ITV
The blood on that fella’s hands came from a British soldier that he beheaded moments before. It took twenty minutes(!) for police to arrive and eventually apprehend the two suspects. Before the police arrived, a lady confronted one of the alleged killers while he was roaming around the murder scene. She distracted him to prevent others in the area from getting attacked. All in all, a very violent and bloody scene of Islamic violence.
Great Britain has an undeserved reputation of being a non-violent country where crimes like this are rare. However, brutal assaults like this happen in the UK and everywhere else in the world on a regular basis. Some members of society are violent and full of anger, when they lash out it can be brutal.
The principle to keep in mind here is that you can be a veteran soldier and be attacked in your home country. Military training and combat experience can be trumped by surprise and violence as we have seen in this recent incident. Being alert, trained, and ready will give you the mindset necessary to survive during a violent incident even if you are a civilian. Remember too, that violent attacks can take place anywhere and you are never completely safe.
Bonus: If you have a moment, read this short article on the link between welfare and terrorism.
Two unrelated, related stories about emergency response times.
First, there was an attempted robbery at Pepe’s Grocery in Dallas, TX the other day. The store manager shot one of the robbers with his handgun and called 911. The police did not arrive until 75 minutes after the call was made.
Second, the Emergency Manager for Detroit delivered a report to the Michigan Treasurer that stated the City of Detroit was insolvent and unable to borrow money. Pension costs, debt service, and lower tax revenues combined with decades of fiscal mismanagement have brought the problem to a head. Police and fire response times in Motown are also comparatively long.
Credit: The Ruins of Detroit
These stories are related because they show that government services may not be there when you need them. In the case of Joe Cho, a pistol was all that kept him from being robbed since the police would not arrive for over an hour after he made his 911 call. For Detroit, residents can expect even fewer services (police, fire, public works) as the city deals with insolvency. As I have written about here and here, increasing municipal financial problems will have an impact on citizens lives.
Part of the solution to this is to become better prepared to handle emergencies yourself. Police, fire, and rescue personnel may not be as available or responsive as they have been in the past. Individuals will have to rely upon themselves and non-governmental entities to provide services previously performed by governments. Some example include:
Becoming better prepared means greater resiliency and independence in an increasingly unstable world where the government is not always there to protect you…
This is what we are approaching…and its great news.
The post-war model (or as Walter Russell Mead calls it the “blue social model“) is rapidly falling apart as its unsustainable fiscal policies and inflexible rule sets. The commitments and assumptions made before and after World War Two don’t match current reality. As Kevin Williamson writes:
The real debate for the next 30 years is not how we go about paying our bills, but how we go about not paying them. What is most likely is a much smaller and more modest government, something closer to what Robert Nozick called the “nightwatchman state.” The reason for that is the fact that we have good substitutes for Social Security and the Department of Education but not for the army or the courts.
The future is going to entail less government involvement and greater privatization of services. All of this will take place in an environment of austerity and slow growth, as we are currently experiencing.
What does this have to do with preparation?
The short-term could get rough, especially with declining government services (think roads, police, fire, and other services) and higher taxes. Less service for a higher price could lead to increased crime, longer response times, and worn-out infrastructure. This is already apparent in municipalities across the country that are either bankrupt (ex. Stockton, CA) or struggling to pay their bills (ex. Chicago, IL). As a citizen, you can expect less from your government, meaning you will have to be more independent and prepared.
The long-term will see a much more stable and resilient country (re)emerge though. Think back to life before the Progressive Era, the New Deal, World War Two, and the Great Society…there will be less government in people’s lives in the future. Instead of relying upon government institutions, citizens will have to become more involved in taking care of their needs as well as those of around them. That requires regular citizens stepping up though and assuming responsibilities that had been given to the state in years past.
My friend Kevin is fond of saying that firearms ownership is the gateway drug to freedom. I reckon preparation is a gateway drug to greater independence and responsibility, which will lead to a stronger nation.