"Michigan Governor: Detroit Bankruptcy Is A Good Thing For The City"
Detroit’s bankruptcy is a good thing for the city’s improvement, according to Michigan Gov. Rick Snyder (R). On a trade mission to China and Japan, the governor is looking to put a positive spin on the crisis that threatens to leave 30,000 current and former city workers without the retirement security their contract with the city is supposed to guarantee.
The trip is part of a campaign to attract tourism, real estate investment, and industrial activity to the state. Municipal bankruptcies like Detroit’s are not permissible in China. “You can tell there’s a real sense that they viewed it as a negative coming into the meeting,” Snyder told MLive.com after a weekend meeting with journalists in Shanghai. “The bankruptcy frequently comes up during Snyder’s meetings here, and each time he adds a positive spin,” the website noted.
Detroit’s financial restructuring is no guarantee that the city will adopt a development approach that can revitalize its economy in a sustainable way. Experts on the city and the region told ThinkProgress that tourism and cultural cache alone won’t bring Detroit back, and that the city needs to consolidate geographically and focus on retaining its local population with improved city services and career opportunities.
Depending on the choices Snyder and emergency manager Kevyn Orr make, bankruptcy could prove damaging to those development priorities. If approved at a hearing later this month, the bankruptcy filing will pit investors and bondholders against workers and retirees. Orr has pledged to cut the city’s pension payments, which are already modest by national standards, and wants a bankruptcy judge to let the city renege on retiree health insurance contracts. In the meantime, bankruptcy is already wreaking havoc on the city in various ways.
As part of this month’s hearing, Snyder will have to testify under oath about the process by which the city moved into bankruptcy. That news comes after his legal team dropped its objections to union efforts to force the governor to give a deposition relating to evidence that he and Orr failed to negotiate in good faith with workers and retirees prior to the filing.