I grew up in Detroit. I went to high school in what can be considered an 'inner ring' suburb, went to college at the University of Michigan nearby, and did my graduate work at Wayne State University downtown. After medical school, I came back and did residency outside of Detroit, and even finished my residency up in Flint, MI. My parents still live in the suburbs. And in many ways, I will always be a child of the Motor City.
It is rough, it is grimy, it is tough nosed. It is also the definition of blue collar, hard working Americana. All the greatness of America's past and all the ills that it now bears can be summed up by the city of Detroit.
And in that respect, the bankruptcy of Detroit, now the largest in the history of the United States of America, is an extremely sad event for me. But, it was an event whose time has long been expected.
I graduated high school in an inner suburb of Detroit in 1991. I remember discussing with my U.S. government teacher (who happened to be our local teacher union representative, and a proud liberal) about the long term expectations of Detroit economically. I remember his words to this day: "Son, Detroit is circling the drain; it is just a matter of time."
I guess by that, he meant 22 years.
Everyone in Detroit knew that without enormous, radical change, the city was dying. They have known this since at least the early 1980s. That radical change has never come. The city's population peaked at almost 2 million in 1950, during the boom times of the post-war era. It had the highest media income of any city in the U.S. at that time; it now ranks 66 of the largest 68th cities. Detroit, other than New York City, was considered the national center of culture, arts, and music.
That population now hovers at just over 700,000 people today.
The city in 2000 was acting like it still had 2 million people. Despite drastic cuts since 2000, Detroit is still one of the most overstaffed cities. As of 2011, one city employee for every 55 residents...by far the most in the United States. The public services were bloated, and bureaucracy clogged with numerous useless union workers who could neither be laid off or fired, and who would all achieve full pensions after 25 years of service. And once those people retired, the cycle continued, because someone would have to pay for those pensions.
Pension reform is a dirty word in Detroit, for a very simple reason: a large proportion of the population of Detroit lives on city pension money. Simply put, it is a hamster wheel; the city must run faster and faster to attempt to keep pace with itself.
How did Detroit become like this? Well, progressives made it that way. From 1961 on, Detroit more than any other city in America became the crucible in to which progressives poured every utopian idea imaginable.
Detroit spent more on education, welfare, and infrastructure than almost any other city in the U.S.A. during the sixties and seventies. The city passed tough regulations, allowing city leaders to manage which businesses could open in the city, and which could not, largely basing those decisions on political leanings. Money flowed into the education system, as some of the largest public schools in the country were built in Detroit.
The cycle was kept alive during this time because of the boom times of the auto industry. Of course, the gas crisis of the 1970s put an end to that, as General Motors, Ford, American Motors, and Chrysler all struggled through out the latter part of the century.
Furthermore, race issues became paramount. Mayor Coleman Young was considered a leading African American progressive when he became the leader of Detroit in 1974. But from the very start, Mayor Young was one of the leading race baiters of the Democrat Party, blaming many of the ills of the city on the rich white upper class. That white group was already fleeing the city after the riots of 1967...Mayor Young just helped speed up the process. In his inaugural address, he stated, “I issue this warning to all those pushers, to all rip-off artists, to all muggers: It's time to leave Detroit; hit Eight Mile Road!”. Many mark it as the moment at which whites were no longer welcome in the city of Detroit.
So white flight began in earnest. The Detroit suburbs, primarily along the north corridor adjacent to the now famous 8 Mile Road, grew at astonishing rates. Wealth fled the city of Detroit, leaving an underclass of both African Americans and Whites that remains to this day.
To this day, African American progressives still applaud Mayor Young...despite his complete and utter failure to improve the city he controlled. Crime, poverty, lack of education, and corruption all spiraled out of control under his tenure...and Democrats cheered.
As the city started hemorrhaging money, how did it react? First, it increased local taxes up to the constitutional limit within the state of Michigan. To this day, it has the highest tax rates in the state. It increased union protections to the maximum; almost nothing can be done in the city without union oversight. And it refuse to scale back city services, despite a bloated bureaucracy whose size could no longer match the small size of its populace.
There are numerous examples of this. For example, it costs Detroit $62 in administrative costs for every paycheck if cuts. That's 3.5x the average for municipal government, and 4x the average private employer. Why? Because instead of privatizing the business (which many do), it takes four times as many employees to do the payroll in the city...because of union demands. Out of the 149 people working in the payroll department today, 51 are uniformed officers of the police department...for some unknown reason.
Such excesses run rampant through the city services. Another example is the demolition of abandoned properties in the city. There are approximately 78,000 vacant structures in the City. Approximately 38,000 structures are considered dangerous. Should be an easy job to move forward on, with the mixture of state and Federal money to clean up the city, no? Of course not, not in Detroit. Because of barriers in the city administration, legal hurdles, etc., it costs $8,500 on average to demolish the average city home. These homes, on average, only cost about $5,000 on the open market. If you tore down only the 38,000 structures in Detroit considered "dangerous," it would cost about $350 million, mainly because of the bloated bureaucracy remaining in the dysfunctional city.
Detroit is now a largely abandoned city. The population is only 700,000, and will likely drop below that mark in the next census. Far more people reside in the suburbs today than within the city itself. Large swaths of the city are completely empty. This has become so much of a problem, the city recently tried to relocate individuals in sparse areas in order to restructure city services in a way that made some fiscal sense. Many of the residents refused to move, even when given new homes to move to.
To be fair, it isn't like there haven't been rays of sunshine in the city. Dennis Archer became mayor in the 90s, and led a resurgence, cleaning up corruption and trying to streamline the city. But it became too much for him to fight the entrenched interests, and he left, leaving possibly the worst mayor in America, Kwame Kilpatrick (who is on probation after serving time in jail for corruption charges). Mayor Dave Bing, a former basketball star, has numerous bright ideas, but has to fight the City Council for every inch. No good man can fight the corrupt and the incompetent for very long without becoming burned out.
I am still an idealist though. I believe that Detroit can survive and even flourish, given the right leadership and focus. The auto companies are doing relatively well. Other companies are trying to move to the city to diversify its businesses, led by Dan Gilbert (owner of Quicken Loans, and the Cleveland Cavaliers). Wayne State University, the Detroit Medical Center and the Henry Ford Hospital system, among others, employ tens of thousands of dollars and bring billions in research dollars into the city. If planned correctly, the Detroit/Suburb/Ann Arbor corridor could become a center of medical and scientific research...only lack of imagination and will prevents it from becoming so.
But the entrenched progressive interests that have dominated Detroit for the past 70 years are a powerful force, that fight tooth and nail any reform that would make serious progress in the city. City employees must be drastically reduced, and city services diminished to fit a city of 600k people, instead of one of 2 million residents. Portions of the city need to be bulldozed, possibly created into potential green space or farming uses. Pension reform is a must, because the city cannot afford the bloated pension system it currently uses. And a tax system that promotes business and innovation is a must.
Bankruptcy, as painful and embarrassing as it is, could help bring about those reforms. But every one of these reforms are fought by the old time progressives, who still envision the city of the 1950s instead of the reality of the 21st century.
So despite all the hopes and dreams of a formerly great city, progressive lead the city forward into the future; as my former teacher once said, the city still appears to be circling the drain.
This was cross posted at Neoavatara.