The ongoing Motor City narrative
Detroit’s troubles have been a long time in the works, but no-one has any idea what comes next
It was inevitable, really. Detroit’s attempt to declare bankruptcy last week was a long time coming because the city, despite the best efforts and endeavours of its citizens, was stoney broke.
As the city fell asunder in the last few decades and the population declined, it remained way too big to be managed effectively by the city fathers with the money coming into the kitty. Less people living in the city (the current population of 700,000 is a long way off Detroit’s historical high of 1.85 million) meant a lower tax base and less money to pay the bills which had to be paid, from pensions and wages to maintaining the infrastructure of a modern American city. Detroit borrowed to the tune of some $18 billion and now the day of reckoning has arrived (though state judge Rosemarie Aquilina thinks otherwise).
None of this comes as a surprise to anyone who has watched the comings and goings from Michigan. I’ve written before about my impressions of Detroit after a visit to the city last year. Anyone seeking more analysis and reportage should check out Mark Binelli’s excellent Last Days Of Detroit, which was published earlier this year, or the highly recommended Detropia documentary.
Binelli has written a re-up on how the city got to this sorry pass and it makes for a bleak read. He points to political ineptitude, racial tension and general blunders at every level. There was also wholesale neglect and a strong willingness by many who could take action not to do so: “Obama extended $82bn in federal loans to Chrysler and General Motors. In the city of Detroit, federal loans were a pipe dream”.
He also asks – and answers – the question everyone else is asking. “What happens next? The truth is, no one knows. The US has never seen a municipal bankruptcy on this scale. It could take years to wend its way through the court system.”
Paul Krugman has also been musing about the Motor City. After parsing the various reasons already presented like a pensions crisis and irresponsibile institutional goverance, Kurgman concludes that market forces are largely to blame for the city’s woes. “Sometimes the losers from economic change are individuals whose skills have become redundant; sometimes they’re companies serving a market niche that no longer exists; and sometimes they’re whole cities that lose their place in the economic ecosystem. Decline happens.” And the markets keep on trucking in the midst of all this: the Dow Jones industrial average hit a record high the day after Detroit declared bankruptcy.
There’s little comfort for the good people of Detroit caught up in this nightmare in any of this analysis. They will fret about how an already wild city will be policed, worry about fire service in a city which definitely needs a functioning one and be concerned about all those other public utilities, from transport to health, which a city needs to function. Like every city, there are definite pockets of inequality in Detroit, but the bulk of the city is poor and relies on public services which will inevitably be attacked and downsized to pay the bills. And such austerity measures, as we’ve learned here, don’t always work.
For all those manic street preachers claiming that the end is nigh for the city which was once the fourth biggest in the United States, there are others which believe better days are ahead. The truth, as always, lies somewhere inbetween.
Detroit will survive, but it will always be a shadow of the city it believes itself to be. The good times when the Motor City was producing mighty cars and great music will never return. The music might, but the cars and that heavy-duty industry won’t be coming back. Detroit’s biggest challenge will be working out how to pay the bills accumulated during the good times with the money it has to spend now. That won’t be easy or pretty. Yet despite predictions of urban prairies and wastelands, Detroit will probably still stand, bloodied and bruised but unbowed and changed beyond all recognition from how it once was.