Column, 656 words

Depending on the Kindness of Strangers

The only sure result of Detroit's bankruptcy is that armies of lawyers will make bales of money.

Donald Kaul

The other shoe finally dropped in Detroit.

The once-proud city — variously known as “Motown,” “the Arsenal of Democracy,” and “the City of Champions” — filed for bankruptcy. There’s a local effort to head off the filing, but most people don’t think it will get anywhere.

Detroit’s the largest American city ever to do this, and it’s been coming for a long time. Detroit’s been a mess for decades, but that shouldn’t blind us to how astonishing the event is.

Kaul-Detroit-Jonathan Dy

Jonathan Dy/Flickr

How does a city that was once the nation’s fourth-largest go bankrupt? How does a city that was the first to make “working class” a synonym for “middle class” become the equivalent of homeless?

In other words, how does a city go bankrupt? It’s a city, for crying out loud. It can’t go sleep under a bridge.

Yet that’s where it finds itself. Some of its wounds are self-inflicted, largely by the long string of incompetent and corrupt politicians its voters kept electing.

No one elected the man who filed for the bankruptcy, however. He is Kevyn Orr, the well-regarded bankruptcy attorney Governor Rick Snyder made emergency manager of the city. The state legislature bestowed czar-like powers on him, which he’s clearly using.

Detroit now owes nearly $20 billion to 100,000 creditors, mostly banks and pension funds, yet is unable to even keep up with current expenses.

It has long since cut services to the bone, with many city offices manned by a skeleton staff. It hasn’t been enough.

The average response time to a 911 call (in a city with one of the highest murder rates in the nation) is so long that many residents have given up using it altogether. Confronted with an emergency (like a heart attack for example), they simply deal with it on their own.

It’s what happens when virtually all of the people with any resources whatsoever decide to abandon a city en masse.

That’s what’s happened in Detroit. They used to call it “white flight,” but since black people with the option to leave bolted too, it’s more like “middle-class flight.”

Detroit had many problems, but the chief one was that it was a one-industry town. It made cars. When that industry, unable to keep up with foreign competition, began to leak jobs and the leaks eventually became a flood, Detroit’s vitality ebbed away.

Then there was the problem of race. The city was always a racial tinderbox (it’s been the scene of three major race riots in the past 150 years), but the riot of 1967 was particularly ill-timed and destructive. It turbo-charged the ongoing middle-class flight.

Before you knew it, a city built to accommodate nearly two million people had only 700,000 inhabitants rattling around, many of them destitute or close to it.

Moreover, as much as two-thirds of the tax revenue being brought in by its reasonably prosperous downtown area was being sucked up by pension payments to retired government workers.

That’s the way you get to be Detroit.

Czar Orr wants to solve the city’s problems by making its creditors take a haircut that amounts to a scalping, settling debts for as little as 10 cents on the dollar.

Some of the creditors want the city to first sell its assets, which include the multi-billion dollar contents of its world-class art museum and Belle Island, the crown jewel of the city’s once iconic park system.

Who knows where it will end? The only sure result is that armies of lawyers will make bales of money.

The federal government says it will not bail out the city. The state won’t either. Understandable, perhaps, but tragic.

A hundred billion dollars for Iraq, but not one red cent for Detroit. That’s our motto. The city, it seems, will be left dependent on the kindness of strangers.

That didn’t work out well for Blanche Dubois in A Streetcar Named Desire. I don’t expect it will help Detroit either.

OtherWords columnist Donald Kaul grew up in Detroit and now lives in Ann Arbor, Michigan. OtherWords.org

  • Johnny Dollar

    Here are some nice pictures of Detroit after the unions and government had their way with it:

    http://www.weather.com/travel/modern-ruins-abandoned-detroit-photos-20130715

    • John B.

      Sorry, the “unions” argument won’t wash. It explains nothing about the mess in Detroit.

      For many decades the auto workers’ union was not only one of the strongest and most progressive, but also one of the most honest and far-sighted. History has known few men as intelligent and public-spirited as Walter Reuther. He had an enormous influence — for the good — on the organization years before he was elected its president — and his memory, years after.

      Not long before his death in 1970 he went on a speaking tour. I heard him in Iowa City. He was warning that the economy was about to change in dramatic ways. Bargaining for shorter work weeks no longer was in the workers’ interests. Instead, they should bargain for longer blocks of ‘self-improvement’ leave to return to school and instead of higher and higher raises they should bargain for college scholarships/tuition support from the companies.

      He warned that without it the workers would not be prepared for a new economy where skilled technical jobs would be in high demand and hard labor jobs would diminish in number, compensation, and prestige. He also warned that we could not expect to remain aloof from the rest of the world; that our economy was increasingly affected by the economies of other nations — and the trend would only accelerate.

      If you want to know who in the auto industry really shares some of the blame for Detroit, look in the other direction at the auto industry CEOs, managers, and shareholders. These are the people who put short-term profits over long-term economic strength. Who time and time again missed engineering and consumer trends their opposites in Japan and Germany saw clearly. These are the ones who insisted on having special refrigerators hoisted by crane into their overnight hotel rooms so they could enjoy personal amenities not otherwise available. Who abandoned Detroit for the suburbs almost before the word ‘suburb’ made it into the dictionary.

      There are others to blame, of course. Among them are the voters, the criminals they put into office, and the banksters who kept shoveling money with no due diligence or oversight for how it would be spent — just higher and higher interest rates because they knew where things were headed.

      The absolute last people to blame for the mess are “the unions” as the not-so almighty “Johnny Dollar” claims.

      • JaylahP

        John, I believe you’re wasting your breath. If Rush didn’t say it, Johnny doesn’t believe it.

        • Johnny Dollar

          Thanks for the reminder. I haven’t heard Rush for a couple of weeks. I’ll make sure to tune in today.

      • Johnny Dollar

        Contrary to your interpretation of my comment, I have nothing against unions. I simply believe nobody should be forced to join one as a condition for employment. Nor do I believe unions should have superiority over secured creditors in a bankruptcy event such as that corrupted deal in the GM situation.

    • Hugo S LaVia

      A couple Catholic properties, a Unitarian church and a Protestant property kind of blow a hole in your blame game.

      • Johnny Dollar

        Sorry you weren’t capable of viewing the other 26 pictures for some reason.

    • Hugo S LaVia

      Also – “And while weather has ravaged the abandoned buildings … .”