Detroit, decay and solidarity

July 31, 2013

The bankruptcy of the city of Detroit has many causes, including poor management, industrial history and dysfunctional American sociology. I think there is also an ethical problem: too little cross-border solidarity.

I don’t want to downplay the other failures. A more competent city government would have addressed, rather than added to, the problems. The U.S. car industry proved a disastrously weak economic anchor. And without widespread racism, there would have been fewer ghettoised African-Americans.

Still, the economic and sociological poison has not been spread equally. On the contrary, it is concentrated inside the legal borders of the city of Detroit. The Detroit of common speech and common sense – the big blob on a national map, the urban area served by a single international airport – has suffered much less.

In the United States, population change is a crude but accurate indicator of economic success. The city is failing; its population declined by almost 60 percent in the half-century from 1960 to 2010, to 714,000. The rest of metro Detroit, as defined by the U.S. government, is doing all right: the headcount increased by about 70 percent, to 3.6 million.

True, metro Detroit as a whole may not be thriving. The unemployment rate of 9 percent is well above the 7.6 percent national average. But the problems are concentrated in the city, which is in an apparently unstoppable economic and social decline. That descent has undoubtedly been accelerated by the legal and financial isolation of the city from suburbs.

Compare Detroit with European cities suffering from similar economic shifts. They have some terrible neighbourhoods, but nothing like Detroit’s urban wastelands. The main difference is that the European cities have a single regional government and budget.

In a European-style metro Detroit, unified regional planning would favour reconstruction of the old city centre over new buildings and new highways in ever more distant locations. Some of the tax revenue raised in what are today separate affluent suburban jurisdictions would be spent in the centre of the city. With better roads, schools, police and services, Detroit’s slums would be less slummy and the culture of crime and despair would probably be less entrenched.

There’s actually no need to go to Europe to find better ways to arrange urban jurisdictions. As David Rusk points out in his book “Cities without Suburbs”, the American cities that have expanded their city limits along with their populations generally have stronger economies, less racial segregation and more equal income distribution than the mostly older cities with rigid borders.

The ethical issue can be reduced to an old question: who is my neighbour? Everyone, even economists who believe people should be selfish, recognises that it is helpful to work together as a community. Almost everyone, perhaps excluding a few cold-hearted economists, would agree that the strong in a community have some obligation to help the weak. But how large is the relevant community?

Many residents of such affluent Detroit suburbs as Bloomfield Hills, where the median income is almost six times higher than in Detroit city, might say that legal boundaries provide good dividing lines. For them, justice might require the Bloomfield government to help the Bloomfield poor, but aid that crosses jurisdictions is charity, not duty.

Cross-border solidarity, they could say, is a fine principle but not a realistic practice. If political separations of rich and poor neighbours are always unjust, then everyone is guilty. For example, the United States is hardly about to unite with Mexico, even though the economies and histories of the two neighbouring nations are closely entwined, and Mexico could do with some help.

I wouldn’t dismiss the suburbanite case out of hand, but I believe that the typical municipal boundary lines of old American cities are unnecessarily numerous and unjustly arbitrary. The city of Detroit, despite its distinct legal and financial history, is not a self-sufficient community.

Rather, the city is a particularly troubled part of an urban area which has a single identity and economy. The car industry is tied to metro Detroit far more than to the city – Ford’s headquarters are in suburban Dearborn. And metro is unified by the history of racism. The city suffered and many suburbs gained from generations of forced segregation.

Metro Detroit should look after the distressed city, much as a parent should look after a wayward child. Indeed, Detroit city is a suffering part of a single country. The U.S. government should help out, just as it helped metro Detroit’s car companies, and just as any European national government helps its troubled cities.

Suburban resistance may preclude a single metro government for Detroit, but bankruptcy, with its helpful purge of debts and entrenched positions, could be followed by solidarity. I’m willing to make the case in Bloomfield Hills – although I might want a bodyguard.


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You are a good man sir! You don’t deserve some of the bashing that some commenters are sure to unleash.

Posted by tmc | Report as abusive

Mr Hadas,
you seemed to have left out some key facts. Perhaps the perspective of someone who actually lived in Detroit might help.
The main point you omitted is the beginning of the fall – the riots of the 60’s. That’s when the whites and business began to flee the city of Detroit for Bloomfield hills and beyond. Then the mayors, such as Coleman Young who’s philosophy for 20 years was &^%* you white people we don’t need you. In fact this attitude of corruption and Detroit solidarity spread like wildfire (isn’t Kwame Kilpatrick still in jail?). Case in point I once volunteered downtown at a shelter trying to get people jobs among other help. I was treated so poorly that after a few weeks i never went back (ok maybe i am unlikable) – Point is I guarantee you that anyone from Bloomfield Hills wishing to help will be treated equally poorly.

SO here is what I have to say to you Mr. Hadas – contrary to your implication that this is the white man’s fault. This problem can be squarely laid at the feet of the African American.

Posted by Xray | Report as abusive

The houses in Detroit, in which I lived, are all gone. They have either been razed or covered over by a highway.

Posted by hkrieger | Report as abusive

You may be correct @Xray, and I tend to agree with you, but simple blame does no good. Mr. Hadas very correctly stated “The bankruptcy of the city of Detroit has many causes” as the first sentence. He then points out several, and ways to improve things. Morally, the problems in Detroit are everyone’s problems, and all our faults.

Posted by tmc | Report as abusive

The super highways going thru Detroit weren’t build for the sake of the Detroiters, but they contributed to their cost.

Posted by hkrieger | Report as abusive

It is almost impossible for the suburbs of Detroit to help the City of Detroit proper. Since the ascension of Coleman Young as mayor in 1973, any Detroit politician who attempted to coordinate with the suburbs was reviled by other Detroit politicians and the vast majority of Detroit voters. Not just defeated at the polls, but publically humiliated and excoriated – then run out of town. Most political campaigns inside Detroit hung on just one question – who was most hostile to the suburbs and, thus, the most genuine Detroiter. This paranoia reflects the deep insecurity of most Detroit residents.

Hostility to the suburbs is how Detroit got so far out of syncronization with its suburbs. The suburbs responded by ignoring Detroit, except for entertaining items on the evening TV news. It is not likely that four decades of political separation can be repaired anytime soon. Perhaps it is better that Detroit solve its current problems without outside assistance. Eventually, the City would have the selfconfidence to deal with the suburbs on an equal footing.

Posted by 10x25mm | Report as abusive

There is no mention here of the role of America’s trade policy in the demise of Detroit. In 1960, domestic auto makers had virtually 100% of the U.S. market. Today, thanks to a free trade policy that provides free access to the U.S. market without getting access to equivalent markets, that share has fallen to about 50%.

Detroit isn’t unique; it’s merely the biggest example of what the blind application of flawed trade theory has done to the entire country.

Pete Murphy
Author, “Five Short Blasts”

Posted by Pete_Murphy | Report as abusive

Mr Hadas is advocating the sociological equivalent of sleeping with the front door open in a bad neighborhood. Good luck with that. Somehow I don’t think he has thought this through. State and federal funds that originate from private sector wallets outside of central Detroit have been and are being spent there. So what, exactly, does he think should be happening? I suspect he is slyly making another argument that simply reduces to, “Spend more of other, rich people’s money.” Do I detect a strong whiff of typical “caring liberal” behind the verbal facade?

Posted by Pat_Rich | Report as abusive

This is the same liberal nonsense that I should assume responsibility for the decisions my neighbor makes. So, if I approach my neighbor and tell him he needs to take care of his yard, or pay more attention to his children, or get a job–I’m told that I am impressing my “values” on him and I should mind my own business. The author lives in fantasy world.

If a citizen makes a decision that the agenda of the city council does not align with my personal philosophy, he can sell his property and move to a location more in agreement with his personal values. The idea that a city council makes a decision, I relocate to a suburb, and then I should be expected to bail out that same city council is nonsense. Why does the author believe that I should bankroll poor decisions at either the individual level or within a political entity which is totally the opposite of what I believe? You’re now asking me to fund your agenda.

Individually, I am already bankrolling 35% or more (of a total 70%) of the black children born out of wedlock via welfare. And, I bankroll their Medicaid, Head Start and school lunches. Now the author wants me to bankroll the pensions of city employees who have a better pension plan than I have because of some perceived civil duty?

I already pay state taxes to a government that I don’t always agree with, but to subsidize the corruption and political patronage of the Coleman Young’s of the world, while at the same time they demonize me because I question their agenda, is sheer stupidity. Your logic has no geographical limits–hit the suburbs, then when that source of funding is insufficient, hit the adjacent counties, then the entire state, and then the federal government. From the author’s perspective the sources of funding are virtually unlimited–same mentality is espoused within the Beltway.

This is Detroit’s problem. Allow them to go through bankruptcy and fix the problem. Without a doubt, every one will take the hit (with the exception of the politicians who never ran out of other people’s money). To expect any other community to subsidize the mismanagement of the past 50 years is absurd at best. As a taxpayer, it is unreasonable to continue to demand more while denying me input into how those dollars are spent. If I remember my civics lesson, that’s the foundation of a representative government.

Posted by COindependent | Report as abusive

EXCELLENT COindependewnt

Posted by zuiderzee | Report as abusive

@COIndependant, you are not religious in the least are you? Seem to be quite mean spirited in fact.

Posted by tmc | Report as abusive

@TMC Your confusing common sense with being charitable. Common sense demands that you do not throw capital/wealth at a hopeless cause. Detroit needs to resolve the problems they created and the bankruptcy process allows them to do that.

It has nothing to do with religion or being mean-spirited whatsoever–as each person, including yourself, has the option to choose where they direct their support. E.g. I do not contribute to any fund regarding the well-being of pets when there are children who would be better served. If that makes me mean-spirited, then I surely can live with that.

Insofar as Detroit is concerned, for 40+ years the politicians ignored the writing on the wall. If anything, the state of Michigan might consider suing the estates of each of those politicians and the municipal union leadership who personally benefited, and use those funds to offset the forecast losses to the pension system. But, you and I both know that will not happen–even when considering what they did was “criminal” in bankrupting the city, it was not illegal. So the politico’s and unions get a(nother) pass.

Posted by COindependent | Report as abusive

I do understand your point. I don’t like helping those that won’t help themselves either. The problem in Detroit though, is going to spread. Other cities will follow in it’s path. Maybe not as bad, but bad enough. We can’t afford to just walk away from them even though we feel we should. If we were to do that, the decay would continue to spread, animosities would grow exponentially, and the stability of our nation may even be threatened. Also I think Mr. Hadas is a very good person. Thanks for your opinions an I do look forward to reading them. Perhaps I should not have been so harsh myself.

Posted by tmc | Report as abusive

“Metro Detroit should look after the distressed city, much as a parent should look after a wayward child.”

This is code speak for white suburbanites should help out urban blacks like they are wayward children who can’t look after themselves. You’re not fooling anyone. We know what white flight is… a lot of us were there when it happened.

Posted by colsa2 | Report as abusive

I don’t know what “solidarity” is but it sounds Euro.

Posted by colsa2 | Report as abusive

Yes, we can leave them to their own issues–that is specifically what bankruptcy laws are designed to do. Bankruptcy allows them to restructure their debts and restructure their business practices to reflect their reality.

Granted, there are numerous cities and states that will have to endure the same process, notwithstanding the fact those same cities and states have literally ignored the problems for years.

Only by holding the states and cities accountable will the problem get fixed. If the feds (you and me) pick up the tab for one city they will have to do it for all–you’re talking trillions of dollars here, which we do not have.

The debt- and bondholders, who made the decision to invest and took the risks will be hit first. Granted, the pension beneficiaries may take a reduction, but that’s better than getting cut out completely. When you have 40%+ of your annual budget funding past workers, you have a problem that has to get fixed. It’s harsh, but they cannot avoid what has to be done. California, Illinois, Los Angeles and Chicago are next–they can no longer ignore the obvious.

Yes, it will result in a lot of angst among the cities, states and the unions. But they have, again, known for years that their obligations were underfunded and their pension plans were unsustainable. Logical place start is to have the pensioners pick up more of their health insurance costs and limit their COLA increases.

Posted by COindependent | Report as abusive

@COIndependent, again I agree with you. The bankruptcy should continue. The unions and pensioners should take their cuts. But I agree with Mr. Hadas that after those things occur, the people left in that city should be helped. We all should be part of doing that. So I would say that county, state, and federal assistance be brought to bear to get the city back into a safe, reasonable place to live that can support itself. Just punishing the investors isn’t enough. We should not punish the people. Yes, a few of them voted, but did it really matter?

Posted by tmc | Report as abusive

In reply to Peter Murphy.
The U.S. buyer abandoned the Detroit Auto makers because they were fed up buying poorly made product. Other than the light truck market, this problem still exists to this day.

Posted by dungeondevil | Report as abusive