Category: Uncategorized

Behind the scenes

Unusual changes in the Corps:

The commander of the 22nd Marine Expeditionary Unit was removed from
his position on Wednesday, less than a week after the force’s
subordinate units were first brought together to deploy in 2014, Marine
officials said. Col. James Christmas was relieved of command by
Maj. Gen. Raymond Fox, the commander of II Marine Expeditionary Force,
out of Camp Lejeune, N.C., after the general lost confidence in
Christmas’ ability to continue commanding the Marines and sailors of the
22nd MEU,” said Capt. Binford Strickland, a Marine spokesman. No
additional explanation was given for the decision….

At least six other Marine officers have been
removed from command since mid-March. In each case, Marine officials
have provided little explanation for why the decisions were made, saying
a general officer had lost confidence in that commander’s ability to
lead his personnel.

I don’t even have a crazy conspiracy theory here, I just know that seven reliefs of command in four months appears to be out of the ordinary.

UPDATE: Talk of “purges” is considerably overblown, in my opinion.  Now, this is a purge: “Of 90 generals arrested, only six survived the purges, as did only 36 of
180 divisional commanders, and just seven out of 57 army corps
commanders. In total, some 30,000 Red Army personnel were executed.”

It occurs to me, however, that there is one time when it would make very good sense to replace MEU commanders, and that is when new military action is at hand.  When one considers how the Syrian rebels appear to have failed in their bid to overthrow Assad and the recent army coup in Egypt, I find myself wondering if this might be an early sign of expanded American military intervention in the Middle East.

Mailvox: on moderation

Halojones-Fan erroneously believes moderation equates to copyright and responsibility:

Someone as smart as you figure yourself to be should understand that, if
you’re talking in a legal-proceedings sense, there is no such thing as
“light” moderation. It’s like saying you’re “a little bit” pregnant.
If you delete comments for content, beyond simple “this is spam”, then
you’re implying that you review and approve of whatever stays on the
blog. You provide the discussion forum; you allow people to wander in
and use it; you are as responsible for the content as the editor of a
newspaper is responsible for what’s in his rag.

That moderating is hard is not an excuse to not moderate.

“But it’s other people saying these things, not me!” Then let them get their own blogs.

First, his argument is intrinsically self-contradictory.  How is spam excerpted from this magical review and approve process?  Furthermore, the fact that a comment is not deleted does not mean it has been reviewed and approved; it does not even mean that it has been read.

The newspaper comparison is a false equivalence. The very important difference between me and the editor of a newspaper is that the editor of the newspaper is soliciting and paying for the content he publishes.  The newspaper also often owns the copyright for the material he publishes, whereas I do not solicit comments, pay for them, or claim ownership of their copyright.

To say that I am responsible for the comments made by the commenters on this blog is more closely akin to claiming that the owner of a restaurant is responsible for the comments made by the people who come to eat there.  The fact that the comments are written here rather than spoken is irrelevant; it is totally absurd to attempt to hold any blogger responsible for the free speech of his commenters and I am unaware of any case in which a blogger has been legally held responsible for the comments of his commenters regardless of whether moderation is allowed or not.

Furthermore, even in the legal sense, there is a distinction between light moderation and heavy moderation, just as there is a definite legal difference between a woman who is pregnant for two weeks and one who is pregnant for eight months.  Halojones-fan point is observably absurd, as the law quite clearly distinguishes between a woman who is “lightly pregnant” and a woman who is “heavily pregnant” in numerous ways.

Change or face real change

Radley Balko has an excellent article in the Wall Street Journal on the need to demilitarize American police culture:

[I]t is crucial to change the culture of militarization in American law enforcement. Consider today’s police recruitment
videos (widely available on YouTube), which often feature cops
rappelling from helicopters, shooting big guns, kicking down doors and
tackling suspects. Such campaigns embody an American policing culture
that has become too isolated, confrontational and militaristic, and they
tend to attract recruits for the wrong reasons.

If you browse online police discussion
boards, or chat with younger cops today, you will often encounter some
version of the phrase, “Whatever I need to do to get home safe.” It is a
sentiment that suggests that every interaction with a citizen may be
the officer’s last.

Now, we know that the police actively discriminate against the intelligent in building their department rosters, so perhaps we shouldn’t be too hard on those who have the inability to think through the logical consequences of their militaristic, short-sighted attitudes.

And demilitarization is without question in the material interests of the police as well.  They have started a war of escalation and attrition that they cannot possibly win.  Perhaps you recall how completely freaked out the LAPD was when the ex-cop went rogue and started targeting police families?  And maybe you remember how much fear was expressed throughout law enforcement communities when it appeared prosecutors were being targeted at home?

It does not take a master logician to observe that all the “whatever I need to do to get home safe” mentality guarantees is that abusive police homes will soon be unsafe.  And the growing Hispanic population means that there will likely be more Latin American-style infiltration, assassination, and terror directed at the lower levels of law enforcement.  Indeed, there are some analysts who believe this is already taking place in parts of the American Southwest.

Offended by reality

It took more than eight years for Gavin McInnes to shake off the diversity with which he was infected at university:

I first noticed I was brainwashed while on vacation in Jamaica. We went into a souvenir shop and I caught myself being offended by fridge magnets portraying black soccer players with huge grins. They had bugged-out eyes and exaggerated lips and it reminded me of the Golliwogs I had been taught are evil. Who was allowing this magnetic minstrel show of a soccer game to appear before my eyes? Why, Jamaicans, of course. They are allowed to create cartoon sculptures of themselves. As this basic truth seeped into my cranium I could feel the liberal-arts professor in my head say blacks can make these magnets because they’re not coming from a place of privilege…or something…but that feels like a Band-Aid solution to a hemorrhaging gash in the logic. Now we have to research who created what image before we deem it unacceptable? Former University of Colorado professor Ward Churchill tells us the Cleveland Indians logo is offensive. Is that because a white guy drew it? What if they hired an Indian to draw it? Is that OK? I thought my diploma would provide tools for the real world, but it was nothing more than a Ph.D. in Shit for Brains.

Racism doesn’t pervade every part of modern life, but when you have a liberal-arts education, anti-racism sure does. The fridge-magnet incident was disturbing because I felt myself having an emotion that wasn’t mine.

The second time this happened I almost pulled my brain out and threw it in the garbage. We were watching a movie at an old-timey theater and I saw a black man who worked there taking out the garbage. He was black as coal and was wearing an attendant’s uniform that included white gloves. His lips were very red and enormous. He also had big eyes. I feel racist even describing this guy. When I caught this human being wearing the skin in which he was born, I was not amused. I had been so brainwashed into finding that kind of depiction of a black person offensive, I even got offended when it was the guy’s actual face! I felt like politely sauntering over to him and asking him if he would kindly take it down a notch. Thanks, college.

That’s the beauty of the modern collegiate brainwashing.  It leaves the victim in a state of permanent offense, because he – or as now much more often the case, she – is programmed to be offended by reality.  It is a literally delusional state which leads the brainwashed victim to lunacies such as declaring, with a straight face, that Margaret Thatcher is not a woman.

Keep this in mind when you are contemplating where to send your children to university.

Four economic axioms

Karl Denninger spells them out:

  1. Economic progress only comes through capital formation.
  2. Capital formation only comes from economic surplus.
  3. Economic surplus is earnings less expenses including taxes. 
  4. All other forms of “development” are nothing more than leverage-driven bubbles.

The reason most people can’t distinguish between leverage-driven bubbles and real economic growth is that most people don’t read history and don’t know the first thing about economics.  They can’t distinguish between the products of government-driven malinvestment and market-driven investment, and so they confuse bank balances for wealth, statistics for substance, and digital abstractions for money.

But as Karl, Steve Keen, and myself have all demonstrated, using different methods, there has been no economic growth in the United States for nearly 30 years.  It is all an illusion of credit expansion, which is why the Federal Reserve has been so desperate to keep inflating the credit supply.  But the Fed could not maintain credit inflation, managing only disinflation, and it is only a matter of rapidly decreasing time before the credit contraction begins.

And that, my friends, is when things start to get interesting, in the sense of the apocryphal old Chinese curse.  To paraphrase Margaret Thatcher, the problem with credit inflation is that, sooner or later, you run out of borrowers capable of paying installments.

Response Part XIII

At long last, we reach the effective end of Matthew Johnson’s epic saga of exaggerations, false interpretations, inept logic, and outright lies, with an appendix in which he attempts to justify using the comments on this blog as evidence of my horrific thoughtcrimes:

Appendix I. Inclusion of blog comments

This Appendix examines the question of whether to give weight to comments made on Beale’s blog by people other than himself. A key question is whether or not Beale actively manages the content of the comment threads on his blog by removing comments: if he does so, it follows that he has permitted all other comments to remain.

In considering the question, it’s worth looking at the precise meaning of the term “moderate” in the context of Blogger, the blogging platform used by Beale. As this article by Blogger explains (https://support.google.com/blogger/answer/42537?hl=en), turning on Comment Moderation in that platform means that all comments have to be actively approved by the operator of the blog before they are published. Beale’s blog is not moderated in this sense, possibly because the large volume of comments on his posts would make it impractical.

However, there is evidence to suggest that Beale actively manages the comments on his blog. To begin with, his post “Rules of the blog” lays out conditions under which he will delete comments: If you refuse to either answer a question or admit that you cannot answer it, then you will not be permitted to comment here and all of your subsequent comments will be deleted. (See Fig X.1)

Cross-comments and off-topic comments will usually be deleted. If your comment gets deleted, deal with it. (Ibid.)

There are at least five people who have been banned that insist on trying to comment here from time to time under different names; just ignore them as someone will get around to deleting their comments as well as the comments of those who respond to them soon enough. (See Fig X.2)

You will not call me a liar without providing any evidence of my lying, nor will you attempt to attribute to me words I have not written or actions I have not performed. If you do, your comments will be deleted and you will probably be banned. (Ibid.)

Any insertion of evolution or Creationism into a post that is not directly and specifically related to either subject will be deleted. (See Fig X.3)

If you are one of the small group of persistent anklebiters who insist on making the same tedious and incompetent attacks over and over again, I will simply delete your comments. This group includes, but is not necessarily limited to Beezle, Cabal, Cisbio, Dan Picaro, and the weirdo who keeps posting about his ancestors being fish. (See Fig X.4)

Attempts to claim that my refusal to further engage with a commenter whose arguments have repeatedly been demonstrated to be flawed are the result of cowardice or an inability to respond are false and will be deleted. (Ibid.)

There are, therefore, clearly stated rules on what is not permissible content on Beale’s blog. Since Beale does not forbid threats or defamatory comments, it would seem that they are allowed under his rules. He restates his willingness to delete comments in a later blog, “In which we are amused,” in which he explains how comments work on the site: It’s even easier to Remove Content using Blogger’s comment template than it was with CoComment… so don’t operate under the mistaken impression that it’s going to be any harder for me to keep the usual suspects from getting out of hand than it was before. (See Fig X.5)

Along with his stated intention to manage comment content on his blog, there is evidence that Beale actively does so. He threatens commenters with deletion:

Obvious, you will address me here as Vox if you wish your comments to remain. (See Fig X.6)

and blocks commenters when he disapproves of their content:

Beale: You can start commenting again as soon as you demonstrate that you can produce something besides ignorant and reflexive anklebiting, Obvious. It didn’t escape anyone’s attention how you fell silent and didn’t admit that you were wrong when I referenced the information about the introduction of 16-bit color and dynamic lighting models. If you can’t bring anything original to the table, no one is interested in what you have to say.

Commenter: Really? (See Fig X.7)

Beale: Yes, really. If you’re just going to ignorantly snap at ankles, you’re not going to be allowed to participate. Take a position, for crying out loud. Stand up for what you believe, don’t just yap in reflexive response to things about which you know nothing. Look at DH. He probably agrees with me about as much as you do. But he has a lot more to say than simply offering snarky negativity. There is nothing wrong with disagreeing. Or being wrong. But for the love of all that is left and right, don’t be so bloody tedious. And it wouldn’t hurt if you’d drop the passive-aggressiveness either. It doesn’t make your arguments convincing, it makes them sound like they’re coming from a petulant teenage girl. (See Fig X.8)

Deletion due to content seems to be common enough on the blog that commenters expect it: Vox is certainly ging [sic] to delete this but your comment is too amusing… (See Fig X.9)

The above comment was, in fact, deleted: it survives in the comment thread because another commenter quoted it. (We can be certain that it was deleted by Beale and not the commenter because when a commenter deletes his or her own comment it looks like Fig X.10. The commenter whose comment was deleted participates further in the thread and does not dispute the attribution of the quote, so we can assume that it is genuine.)

Therefore it would seem that Beale actively manages the content in the comment threads on his blogs, meaning that while he may not necessarily agree with the content of those comments that are not deleted, he does consider them to be appropriate for publication. In addition to the above, there are two comments that should be given particular weight: the rape threat against NK Jemisin (which was published through the SFWAAuthors feed; see Section A.3.3, Rape threat against SFWA member by blog commenter) and the allegation that Teresa Nielsen Hayden has herpes (which he reproduced in one of his own posts; see Section B.1.1, Personal attacks).

Here Matthew Johnson is clearly attempting to use my very light comment moderation, (which is entirely focused on allowing for a very broad range of discourse), and portray it as my only allowing content of which I approve.  He is doing so because he is attempting to manufacture a way to make me responsible for the two comments by blog commenters that he claims “should be given particular weight”.

Never mind that the one comment is not, as he falsely asserts it to be, a rape threat at all, while the second comment is clearly satirical given that it purports to be written by a Sonoran Desert Toad.  Given Mr. Johnson’s evident inability to detect satire, one can only wonder why he has not yet published a lengthy investigative report concerning former SFWA president John Scalzi’s self-described predilection “to force myself on women
without their consent or desire and then batter them sexually.”

In any event, I am simply not responsible for any comments made here or anywhere else by anyone besides myself.  I don’t block even one in one hundred commenters, whether I agree with them or not, not even when they are directly attacking me.  By way of example, here is one of 65 comments made in the last year alone by a single commenter, most of which were made in this vein and were not deleted.
Phoenician February 04, 2013 6:54 PM 
“Odd, isn’t it? Scalzi
would tuck his little manhood away and put on some fishnets for a
little publicity yet he most likely won’t take on Vox for what
would amount to a lot more publicity if crushes his biggest foe.” 
“Biggest foe”?  Bwahahahahahahahahhahhah!! Do you
people have no sense of your own *ridiculousness*?
“Some sad wanker who has achieved
fuck all in life except helping his father evade taxes starts
preening about “Alphas” and “rabbits”, a bunch of
sycophantic losers slime up to him because his posturing feeds their
neuroses and insecurities, and now you’re claiming that he’s the
“biggest foe” of someone who actually has a life?
“Dude, VP isn’t the “biggest
foe” of anyone or anything except his own grasp on reality. He’s
a sad loser, fawned on by other sad losers.”

As it happens, I neither agree with that comment nor consider it to be appropriate for publication. It is vulgar, factually incorrect, and illogical, but as it was on topic and clearly expresses Phoenician’s genuine opinion, I saw no justification for eliminating it.  The same is true of the two comments about which Matthew Johnson is complaining, although the one written by the Toad also happened to be more than a little funny as well.

My primary concern in moderating the discussions here is to foster genuine intellectual discourse.  That means ensuring that the commenters keep their attacks on each other within reasonable bounds, answer questions that are addressed to them, not repeat the same statements over and over again, and refrain from going too far off-topic.  While I feel an amount of responsibility for defending those who come and participate in the discussion here, I have no concern at all for those who are not participating in the discourse.  I feel no more responsibility to intervene when one commenter expresses a negative opinion about an SFWA member than when another commenter expresses one about a German politician or a Japanese game developer.

According to this report, the SFWA Board is not only asserting the right to supervise my speech, they are asserting the right to supervise the speech of every single individual who comments on my site or the site of any other SFWA member.

In light of how nearly every other SFWA member with a site moderates much more heavily than I do, and how many attacks on SFWA members can be found on those sites, I think the Canadian Regional Director is opening a particularly pernicious Pandora’s Box here in attempting to hold me responsible for the statements of my commenters.  And he may even be putting SFWA itself in jeopardy, considering the hundreds of personal attacks that can be found in the SFWA’s own forums, both at sfwa.org and sff.private.sfwa.lounge.
This finally brings to a close my posting of the SFWA Board report, as I already made the most pertinent bits of Appendix II public in my first post.  However, in the interest of responding to the anonymous comments by SFWA members and non-members in included in that Appendix, I would like to request that any SFWA member or ex-SFWA member who would like his anonymous opinion to be included in my response to the Board report, or any non-member who is potentially eligible for SFWA membership and would like the same, email me or leave a comment here.

Response Part XII 

§ 107 . Limitations on exclusive rights: Fair use

Notwithstanding
the provisions of sections 106 and 106A, the fair use of a copyrighted
work, including such use by reproduction in copies or phonorecords or by
any other means specified by that section, for purposes such as
criticism, comment, news reporting, teaching (including multiple copies
for classroom use), scholarship, or research, is not an infringement of
copyright. 

CS award finalists

Speculative Faith announces the finalists for the 2013 Clive Staples Award:

We have finalists. In a tight race, with only percentage points separating first through ninth place (yes, we did need to revert to the tie-breaker second- and third-place choices), the top five books are moving on to the finals….

And now, your finalists, in alphabetical order according to the author’s last name:

Liberator by Bryan Davis
A Throne of Bones by Vox Day
Mortal by Ted Dekker and Tosca Lee
Prophet by R. J. Larson
Starflower by Anne Elisabeth Stengl

But now, on to the important business at hand. It is time to vote for a winner. Please follow these rules.

* You MUST have read at least two of the nominations.
* You may vote ONLY ONCE for a first, a second, and a third choice.
* Your second choice and your third choice may not be the same as your first choice.
* Your vote for your second choice and your third choice may not be for the same book.
* You may mark the “none of these” option if you do not have a second or a third choice.
* Second and third choice options will only be considered in the case of a tie.

* Voting ends midnight Pacific time, July 28, 2013.

CLICK HERE TO VOTE

CLICK HERE TO VOTEIt is, of course, an honor to be nominated.  Frankly, considering the brouhaha that surrounded the establishment of Hinterlands, I’m astonished that the book is even eligible.

Hiding from the light

MIT is trying to conceal its involvement in the Aaron Swartz affair:

Lawyers representing MIT are filing a motion to intervene in my FOIA
lawsuit over thousands of pages of Secret Service documents about the
late activist and coder Aaron Swartz…. MIT claims it’s afraid the release of Swartz’s file will identify the
names of MIT people who helped the Secret Service and federal
prosecutors pursue felony charges against Swartz for his bulk
downloading of academic articles from MIT’s network in 2011.

MIT argues that those people might face threats and harassment if
their names become public. But it’s worth noting that names of third
parties are already redacted from documents produced under FOIA.

I’ll post MIT’s motion here once it’s filed.

I have never, in fifteen years of reporting, seen a non-governmental
party argue for the right to interfere in a Freedom of Information Act
release of government documents. My lawyer has been litigating FOIA for
decades, and he’s never encountered it either. It’s saddening to see an
academic institution set this precedent.

I find it
fascinating to observe how organizations appear to be increasingly disposed to try keeping their
actions against individuals hidden from the public view.  I recently
received an email from the Canadian Regional Director complaining about
how I’d characterized his previous communications with me:

“The membership numbers in the online directory represent our best data. We do not track membership numbers by specific dates.

“I
note that you have misrepresented my answer to your last request on
your blog. Failure to correct this will be considered in reviewing your
response.

“As previously instructed, all further correspondence in this matter should be directed to me.”

As
requested, I replaced what I’d previously written with a direct quote
to avoid any possibility of misrepresentation. However, note that this is what he
claimed to be a misrepresentation of his answer:


“Mr. Johnson informed me that the membership numbers in the online
directory represent the organization’s best data and that SFWA does not
track membership numbers.”

Of course, if that is
misrepresentation, what is one to make of the numerous, shall we say,
less than entirely accurate representations contained in Mr. Johnson’s report to
the SFWA Board?  Will his failure to correct them also be considered by the Board?  Based on his last sentence, I fear I will
likely not be hearing back from the Secretary concerning the number of
members in the organization on the three dates requested, Article V,
Section 5 (c) of the SFWA bylaws notwithstanding.

Response Part XII

Section C.2 is the last part of the report proper, although there is interesting material in the first Appendix that is well worth reading.  It’s mostly a rehash of previous statements, although the bit on “attitudes” is moderately entertaining.

2. Threats of nuisance litigation

Mr. Beale has repeatedly threatened to harass SFWA through nuisance litigation. Mr. Beale has made explicit his intention to sue both in the SFWA online forums (in a post later removed by moderators): “A lifetime membership in SFWA is presently valued at $5,000.00. Although the bylaws presently contain a formula that is intended to deprive a lifetime member of the greater part of that officially established value, that particular section is highly unlikely to hold up if challenged in any court of law. I’m sure you will understand that the SFWA cannot simply steal property worth $5,000.00 from its members regardless of what the bylaws state or how unanimous the opinion of its board members may be.” (Ibid.)

and also on his own blog: “The board can make that determination [whetheror not to expel him] and hope that it will stand up in court.” (See Fig C.7)

He has also suggested that his intent is to harass SFWA through nuisance litigation:

“Once the lawyers get their hooks in, they’re very, very good at keeping the billable hours going.” (See Fig C.8)

“My lawyer broke his leg a few weeks ago. He’s bored.” (See Fig C.9)

Intentions and attitudes towards SFWA

Mr. Beale has made his attitude towards the organization clear through his blog posts. On the most obvious level, he frequently refers to SFWA through derogatory plays on the meaning of the acronym, such as “Seriously Fascist Women’s Association” (see Fig C.10), “Spitefully Fascist Writers of America (Fig C.11) and “Seriously Fat Women Authors” (see Fig C.12).

More significantly, he has made clear that he sees little value in SFWA or membership in the organization: “SFWA is already sunk so far deep into the mire that it’s hardly possible to bring it further into disrepute.” (See Fig C.13)

Commenter: VD, any value with the SFWA?
Beale: “Considerable entertainment value, but other than that, not so much.” (See Fig C.14) “The appeal [of membership] is the mere fact of my membership infuriates all the right people.” (See Fig C.15)

He has also stated openly that he not willing to compromise, avoid conflict with the organization of other members, or accept sanctions if they are imposed:

“In rejecting NK Jemisin’s call for reconciliation within the SFWA, I declared that there can be no reconciliation between the observant and the delusional.” (See Fig C.16)

“I’ll never back down to them.” (See Fig C.17)

Finally, Beale’s attitude may be summed up in this exchange where he explains his motivations for seeking conflict with SFWA:

Commenter A: The point isn’t to win, the point is to carry out the threat, and to make the threat if it’s warranted. Even if it was to come to Vox’s expulsion from SWFA, then a lawsuit, Vox wins as long as he doesn’t back down. (See Fig C.18)

Commenter B: How is that a win? (See Fig C.19)

Beale: It all depends upon what the objective is. If, for example, I wished to set up a rival organization, it might be more effective to encourage the existing one to burn itself down first. Or perhaps I’m deeply wounded, emotionally, and I’m simply lashing out in the only way I know how. Or it could be the objective is to win three Nebula prizes running as part of a settlement. Or perhaps I think this is the way to become president of the organization since I couldn’t win in a free election. Or it could simply be an instinctive desire to sow chaos. (See Fig C.20)

Once more, Matthew Johnson freely admits that he violated discussion forum confidentiality, and again, I have no intention of nuisance litigation.  I merely intend to stand upon my legal rights according to state law and the organizational bylaws.

As for the idea that I have a bad attitude about the organization, well, I’ve spent the last eight years being publicly attacked by some of the most influential people in the organization as well as by two presidents of the organization, a vice-president, and various and sundry Board members.  Then I’ve had a witch hunt launched against me for something that literally hundreds of members have done and been repeatedly accused of doing things I simply haven’t done.  I’ve read the author of this report tell one lie after another, even as numerous members of the organization publicly claim I am things I simply am not.

To paraphrase Brad Torgenson, this is the organization that is supposedly helping my writing career?  That is supposedly defending my interests?

It is totally false to claim I will not accept sanctions if imposed.  I already have.  My blog was removed from the @sfwaauthors Twitter feed and I publicly acknowledged that was a correct and fitting sanction. However, I will admit that I do not have a particularly positive attitude about the
SFWA.  And I will also admit that I would be vastly amused to see the
Board expel a member for possessing a low opinion of SFWA.

Response Part XI 

§ 107 . Limitations on exclusive rights: Fair use

Notwithstanding
the provisions of sections 106 and 106A, the fair use of a copyrighted
work, including such use by reproduction in copies or phonorecords or by
any other means specified by that section, for purposes such as
criticism, comment, news reporting, teaching (including multiple copies
for classroom use), scholarship, or research, is not an infringement of
copyright. 

Detroit finally files

This bankruptcy filing isn’t exactly a surprise, but it does mark a potentially significant step in the deflationary process:

The city of Detroit filed the largest
municipal bankruptcy case in U.S. history Thursday afternoon,
culminating a decades-long slide that transformed the nation’s iconic
industrial town into a model of urban decline crippled by population
loss, a dwindling tax base and financial problems. The 16-page petition was filed in U.S. Bankruptcy Court in Detroit….
The Chapter 9 filing could take
years, experts say, despite hopes by the governor and Orr that the case
can be wrapped up in a year. A bankruptcy judge could trump the state
constitution by slashing retiree pensions, ripping up contracts and
paying creditors roughly a dime on the dollar for unsecured claims worth
$11.45 billion.
During a month of
negotiations, Orr has reached a settlement with only two creditors: Bank
of America Corp. and UBS AG. They have agreed to accept 75 cents on the
dollar for approximately $340 million in swaps liabilities, according
to a source familiar with the deal.

$18 billion may not sound like much, but the problem is that due to the way debt is stacked on top of debt, who knows how much more credit money will evaporate on the basis of its debt collateral having vanished.  And it’s not terribly surprising that the only creditors who are getting away without too much damage are the largest US bank and the largest Swiss bank.  They know the score, and 75 cents on the dollar is actually better than the average 60 cents on the dollar which their nominal assets are worth.

Where it’s going to get very interesting is when either Illinois or California attempts to declare bankruptcy, or, as a sovereign State, simply eliminate its debts by fiat.