Pontiac city as stalled as car it no longer makes


With its emergency services disbanded, the urban zone is a living metaphor of penury, writes CARL O'BRIENin Pontiac Michigan

IT’S A flat, four-mile drive from the affluent tree-lined streets of Bloomfield Hills to the empty lots and abandoned homes of Pontiac. But it’s a journey that crosses some of deepest ravines of America’s social divide.

Pontiac, a city of about 60,000 people, is in crisis. The police and fire services have been disbanded to save money (neighbouring areas have taken over their duties). The last Pontiac car – named, proudly, after the city – rolled off the local assembly lines in 2010. In its wake, the only remaining auto-assembly plant in the city finally closed.

The rapid depopulation of the area has resulted in eight public schools closing, while layoffs are rampant and small businesses are shutting down. The median family income is now $30,000, just above the poverty line.

Pontiac was a place built for the age of the motor car. It helped create a sprawling city of detached, family homes with white picket fences. Today, swathes of the city resemble a post-apocalyptic wasteland: there are overgrown lots, boarded-up windows and handwritten signs on some street corners advertising bed-bug exterminators.

“Pontiac is a bankrupt city,” says Kent Clark, a pastor and chief executive of the Grace Centres of Hope, an organisation that works with the city’s homeless. “Yet, we’re surrounded by wealthy areas. Many are shocked at the short distance it takes to go from the richer areas into the ghetto.”

Down the road in the pristine neighbourhood of Bloomfield Hills, Mercedes dealerships and dog-grooming parlours thrive in a community where the median family income is more than $200,000. Half of the properties there are valued at over $1 million.

The US is no stranger to these contrasts. Luxury and penury have always co-existed in uneasy tension. But, in this election year, the widening gap between rich and poor – combined with a shrinking middle class – means it has become a political issue like never before.

Over the past 30 years, incomes have soared among the wealthy and super-wealthy. The higher up the income ladder, the bigger the rise has been.

In 1973, the top 1 per cent of earners took home 8 per cent of the national income. By 2007 that figure had risen to 18 per cent. Those at the top in America haven’t enjoyed such a concentration of wealth since 1929.

For a long time, the US was in denial about this growing income gulf. The middle class clung to the promise of affluence for all and, as in Ireland, used mortgages and credit-card debt to make that dream a reality.

No more.

The 2008 financial crisis and the economic downturn burst the credit bubble that had allowed the middle class feel much richer than it really was.

“I believe the increase in income inequality is the most important and under-reported economic story of my lifetime in the US economy,” says Michigan State University’s economics professor, Charles Ballard.

“Those who have benefited most from the increase in income inequality often don’t want it to be discussed publicly . . . But if people start to think about it, and if they are troubled by it and want to take action, that might be a problem for those at the top.”

Now, the chasm between the rich and ordinary workers has become a crucial talking point for Barack Obama. He has spoken of restoring the values that built the largest middle class and strongest economy the world has ever known.

The president has acknowledged that the basic social contract – that hard work will be rewarded – has been slipping away. But apart from not hiking taxes for the middle class and letting George Bush-era tax cuts that benefited the wealthy expire, he has provided little in the way of convincing policies that would reverse this trend.

“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” he said in the state of the union address this year. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Mitt Romney has shied away from criticising inequality. But he has channelled middle-class frustration over stagnant middle-class incomes by laying the blame squarely at the door of the president, (though experts agree the reversal of fortunes has been gathering pace for decades).

He, however, wishes to maintain George Bush-era tax cuts. In addition, he claims he will cut tax for the middle classes by up to 20 per cent.

“Every family in America wanted this to be a time when they could get ahead a little more, put aside a little more for college, do more for their elderly mom who’s living alone now . . .” he told the Republican convention earlier this year. “This was the hope and change America voted for. It’s not just what we wanted. It’s not just what we expected. It’s what Americans deserved.”

Americans’ new-found concern about their lack of opportunity probably has little to do with inequality. Instead, it is most likely a reaction to personal experience of stagnant incomes and stubbornly high (at least by US standards) unemployment.

But you don’t need to believe in equality to be concerned about these trends.

As the gaps keep widening, the experience of other countries has been that it breeds social unrest, political instability and can erode the legitimacy of democratic institutions.

The memories of the race riots in Detroit and other belt cities in Michigan in the late 1960s are still raw here.

The city continues to bear the scars of the “white flight” that led to many heading for the outer suburbs, leaving abandoned homes and empty lots downtown. No one – Democrat or Republican – will want to turn the clock bad to those polarising days.

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