Detroit On Brink Of Bankruptcy . . . Sends Pension Fund Trustees To Hawaii For Conference

The City of Detroit has left whole areas without street lighting and even proposed allowing buildings to burn rather than spend the money on fire fighters. The mayor has called it quits and even an emergency manager appears close to throwing in the towel on the city. However, Detroit’s two public pension funds (long accused of gross mismanagement) are sending four trustees to Hawaii at the cost of $22,000 as an educational trip.

The funds are reportedly $600 million underfunded due to poor management. Yet, while Detroit literally burns and descends into darkness, four trustees will be drinking Mai Tais on the beach in Hawaii.

We have long discussed how incompetence and corruption has been the norm among Detroit’s politicians (here and here and here and here), judges, police, and prosecutors.

Trustees insist the conference provides the education needed to manage the public fund competently. Other major public pension systems, including the Los Angeles Fire and Police Pensions, have declined to send trustees to the conference.

The six-day National Conference on Public Employee Retirement Systems (NCPERS) conference starts this weekend on the 22-acre oceanfront resort at Waikiki.

Cynthia Thomas the executive director for both funds insists that the expenses fall within the systems’ travel and expense policies — and will offer important educational opportunities for the trustees. She further stressed “The way conferences are set up, there’s not too many of them happening in Indiana or Kansas.”

Well, it certainly is not going to be Detroit any time soon.

Source: FREEP

21 thoughts on “Detroit On Brink Of Bankruptcy . . . Sends Pension Fund Trustees To Hawaii For Conference”

  1. As I was born and raised in Detroit we had a line everybody knew….”Meet the new boss, same as the old boss”

  2. The real, deep, irony here is that, starting with the white flight enabled by the Interstate system, it is the automobile that destroyed Detroit.

  3. Lottakatz: “There is about 15% unemployment in Detroit. The DOL stats for St. Louis say that there is only a 7.something% for St. Louis but it’s ranked harder to get a job here that Detroit with 12-13 people chasing every not-quite 2 jobs, 1.8.”

    Never. Ever. Ever. Use the DOL for stats regarding unemployment. Their info is so off and unreliable. See follow article about this:

    The Ever-Unreliable Unemployment Rate

    January 13, 2009

    “It’s become a figure of terror; misunderstood and wrongly applied, it initiates panic in the populace. News commentators raise it on a pole and predict the economy is going down for the last time…

    “That’s a lot of power to give an undifferentiated Unemployment Rate. As of this writing, the UR is at 7.2% (please, no screaming allowed).”

    “Always concerned for the unemployed (at least those who want to be employed), a good understanding of the Unemployment Rate is necessary to retain hope and stave off discouragement.”

    “The US Department of Labor conducts a monthly survey of 60,000 homes, categorizes each person over 16 as part of the Labor Force or the unemployable. They do so by asking the unemployed if they are looking for work, and if they have, in fact, actively looked for work in the last four months. Then they add up those in the Labor Force and the portion unemployed and wizard up the UR.”

    “So, assuming .0015 of the population is a good sample (it isn’t) and assuming everyone tells the truth (they don’t), the UR is still a useless number, it doesn’t tell you who is unemployed. What percentage of your demographic is unemployed? Do executives make up that number or do minimum wage workers? What age? Even the Department’s breakdown is vague (two categories for age; 16 to 19 and 20 on up).”

    “The DoL claims to weed out the unemployable, composed of those physically and mentally unable to work. Unfortunately, the people interviewed in the poll may not classify themselves thus. Further, people on assistance programs who have no intention of working, claim they are looking for employment to retain eligibility of benefits (which is not to say all those on assistance fall into that camp). Thus the numbers are skewed by the mentally ill and infirm who simply don’t realize they are unemployable, and those protecting their aid eligibility.”

    “Further, unemployment is fluid, not static. People transition from job to job; are the 7.2% unemployed the same individuals unemployed during the same time last year?”

    “The simple truth is no statistically miniscule sample is going to be accurate, and even if it was, it is a number of averages, and you are far from average, right? Do not be discouraged by the UR. Jobs are out there. Companies may not be advertising them, but they still need quality people. Consider the early 80’s when the UR was at an all-time modern high of 10.5%; innovation reigned within the marketplace. The PC was invented and refined; consumer electronics shrank in size and grew in quality. CD’s were invented. Almost every sector innovated new products and channels leading to a giant drop in unemployment, because the market needed people to manage, expand, and improve business.”

    In others words, there are jobs in both the City of STL and Detroit, especially a need for city teachers, law enforcement, fire fighters, and the numerous job openings of the companies in the city of Detroit and STL. However, noone is lining up to live in or raise a family in the city of Detroit and STL for the reasons that I mentioned earlier: suburban flight (it use to be White Flight, but now middle class blacks, asians, hispanics are leaving the cities, as well).

    STL and Detroit are not alone. According to the 2011 US Census Data, most of the major and mid-major US cities, including Chicago, are losing residents to the suburbs.

  4. RWL, Thanks for the reply. I don’t see that Detroit and St. Louis, at least the city of SL and the city of Detroit are actually that different. There is about 15% unemployment in Detroit. The DOL stats for St. Louis say that there is only a 7.something% for St. Louis but it’s ranked harder to get a job here that Detroit with 12-13 people chasing every not-quite 2 jobs, 1.8 I believe. Both cities suffer from a lack of jobs AND/OR people qualified to chase the jobs that are available. While both cities have redeveloped and revitalized parts of the city the cities as a whole, are not healthy. They are though ringed by healthy suburbs. You are right about property taxes. St. Louis is possibly better off in that regard than Detroit.

    Jobs are still needed, perhaps even targeted jobs or industries. I may be hopelessly stuck in the past but at one time the US did manufacture its own cheap cr*p- now we import it. Only partially tongue in cheek here: we need to start manufacturing our own cheap or basically utilitarian cr*p. (why do I feel like Emily Litella now?) There are worse jobs than production line work and though it’s mind deadening it beats sitting on ones but with no prospects. (I have done that kind of work.) Our cheap cr*p might not be as cheap that way but it would extend the opportunity of work to people that don’t have it now.

  5. RWL: I hear about young people in far west Saint Louis County and points west moving back to the city. I hear that the retreat with your feet thing has reversed course there for young people who are bored with shopping mall by shopping mall by subdivision next to shopping mall and miles from nowhere. Anyhow, I also hear from BarkinDog that Cardinal Nation wants to set up a new nation state with membership in the UN and all that on the West Bank– the West Bank of the Mississippi. BarkinDog just came back from Brussels and Den Haag where this is being discussed in international circles.

    1. DogBisquitGuy,

      According to the 2012 census, the city of St. Louis has a population of about 318k (a couple of years ago, the population was 340k).

      The young people movement to downtown is temporary (I.e. they are renting, which were originally condos and lofts, but are now only apartments. After witnessing the crime, and how the retail stores close down by 11 pm-the nearest one is in midtown, these young people move into midtown, south county, or west/northwest county).

  6. Detroit needs what the rest of the country needs- jobs. It doesn’t matter what we have to do, repudiate treaties, impose back-breaking tariffs on our runaway corporations and out-sourcing companies, whatever; jobs are what are needed. Starve the military and feed the cities with job/stimulus.

    1. Lottakatz,

      The answer is not more jobs. Detroit, like most major cities, have jobs, but the workers are choosing not to live in the City of Detroit.

      Read this site, particularly the economy section(and you will be amazed at the findings of how the city of Detroit is a financial, medical, buisness & educational powerhouse):

      If I was a doctor, lawyer, nurse, teacher, etc, working in the City of Detroit, I will not choose to live in the city. Instead, I will join everyone else by living in Oakland County, MI (wealthy ‘suburb’ of Detroit).

      Did you know that there is almost more people living in the Detroit Metropolitan Region (5.2 million) than the number of people living in the state of Missouri (5.9 million), and Cook County (5.5 million-home to the City of Chicago), Illinois?

      We are experiencing a different problem in STL. However, it is not due to lack of job opportunities, but the availibilty of higher paying jobs elsewhere. One of my graduate professors told me an interesting phenonoma, transpiring with Washington University Graduates: As soon as they receive their diplomas, Wash U Graduates are heading to Lambert-International Airport in STL due to the low paying jobs here in STL, and the image of STL as a whole (One Wash U Graduate said in the STL Post-Dispatch: ‘Why would I want to stay here? There’s nothing here, except a couple of stadiums and the Arch. Although I wouldn’t mind retiring here, STL is the last place that I want to be to began my career!’).

  7. DogBiscuitGuy,

    Don’t worry! What is transpiring in Detroit maybe coming to Chicago and other major cities in the United States: It started out as White Flight in the late 1950s, but now its’ call suburban flight (since it is no longer only middle class whites leaving, middle class blacks, asians, hispanics have left, too) from the city into the far suburbs (in Detroit’s case, many are running to the wealthy suburb of Oakland County-one of wealthiest counties in the nation).

    Take a look at the latest census data: For the first time in decades, the city of Chicago is losing residents to the suburbs. Here in STL, we have been losing residents to St. Louis Counties (west & south county), St. Charles County, & Jefferson County, since the 1960s.

    Suburban Flight is coming to a theater near you, especially if you live in a major metropolitan region.

  8. You say that like its a problem….. Even Carl Levins not running…. Detriot has been targeted for years….look at the name Coleman A Young…. He’s the reason for why Detriot was and had been treated as a unwanted stepchild…. All while funneling funds to the west side of the state…. Set up to fail…

  9. If the pensions in Michigan are like the teacher pension system in Illinois, they are not underfunded due to mismanagement. The pension system in Illinois has been underfunded by the State for over 20 years and now the legislators are screaming that we have to reduce pensions and raise the retirement age. These are the very same legislators (in many cases) who have continually voted to underfund the state’s portion of the pensions.

  10. Ah…Nero, there you are!

    Sounds like something a company I used to work for did many years ago. They hired a “consultant” to help us “streamline” and become better “team players”. They sent us all to Miami for 4 days on a “retreat” so we could work together to make our company stronger. Then they turned around 2 months later and declared bankruptcy and we all lost our jobs.

  11. And the reason is……..
    The reason that places like Detroit go further downhill is the disparagement which is so rampant on this blog. Is someone from Chitown posting this topic?

Comments are closed.