Detroit: Too Big To NOT Fail

Detroit: Skid Row

I doubt anyone is surprised to hear that Detroit is in deep shit right now.    That’s been common knowledge for quite some time now, despite the perennial “Detroit is experiencing a renaissance” articles in the media.   To be fair, occasionally I do hear about some good things happening in Detroit at the neighborhood level from time to time, especially in the way of urban farming and restoring abandoned buildings.

So basically what’s happening now is that they’re finally acknowledging that the situation in Detroit is out of hand.   The city has about $14 billion in unfunded liabilities (pensions, health care benefits, etc) and about $2.3 – $2.6 billion in annual revenues, which doesn’t cover their current expenses, let alone the debts and liabilities.    It looks like the state is going to step in and suspend the powers of the Detroit City Council and the Mayor in order to try to get things straightened out.    Detroit as we know it today is a failed city.   It’s a tough pill to swallow that these kinds of places exist in the omnipotent United States of America, but that’s reality.

State of Michigan Debt Clock

The rest of Michigan isn’t doing so hot, but I assume that a lot of the state is doing better than Detroit and Flint.   The state is about 125 million in debt, representing a little over $12,000 per resident.    This article from The Economist points out that this move is going to make a lot of people angry – there’s a big cultural and political divide between Detroit and the rest of Michigan and I’m sure the anger is going to go in all different directions over this.    People from Detroit (who tend to be black and democrat) aren’t going to like the state government (currently republican) calling the shots ethe rest of the state (which is mostly white and a little more conservative-leaning) isn’t going to be thrilled with bailing Detroit out while things are tight for them as well.

In The 2012 Election and the Elephant Outside The Room I mentioned that in a short period of time I think there will be some real talk of states wanting to split up one way or another.    Detroit and Michigan might be the most likely candidate at this point, although Northern California has been whispering about parting ways with Southern California for years.

It will be interesting to see what happens with Detroit in the next few years as there probably won’t be able to pull off any magic tricks and fix Detroit’s problems.   There are some different dynamics at play, but when the subject of municipal and state debts come up, it’s often pointed out that many of the states that are in trouble right now have economies the size of European countries.    Michigan’s economy is bigger than that of Greece.   If a major city goes down and brings the state down with them, what happens then?   We don’t know, but I’m sure we’ll see in the next few years.

I’ve never even been to Detroit, so I feel kind of silly saying what’s best for Detroit, but it really sounds like Detroit’s future isn’t in “Detroit”, but rather in a series of smaller communities.   By all reports a good portion of the city is already vacant.   If you go to yahoo or google maps and look at Detroit, there’s a lot of open spaces in the residential areas of Detroit’s inner city.       When/if the city government fails, it makes sense for communities within Detroit to pick up the pieces and go at it without them.   Honestly, it would be difficult to run a municipality any worse than Detroit’s leadership already has.   That’s probably the best way to get out from underneath the unsustainable debt of that city.

Whenever I come across articles about Detroit, I always read them.   It kind of fascinates me.   It sounds like everything is already in place to start devolving into a series of smaller communities already.   Occasionally you read about “urban pioneers” from the suburbs revitalizing one little pocket of the city, an ethnic group establishing a viable section of the city or a small inner-city area getting together and cleaning house.   Everyone might be better off starting from scratch instead of trying to keep the whole shit-show going.   Nothing lasts forever, especially municipalities.

It is cool to see examples of dilapidated buildings getting restored or communities within Detroit find some reason to wake up in the morning.   As I understand it, in the 50’s Detroit was basically America’s model city with a very prosperous middle class, a ton of cultural amenities, great architecture and so forth.   Returning to those days probably isn’t in the cards, but it is possible to create vibrant communities within that patch of land.

People that like history usually have a few events or periods that they’re really into.   One of mine is the fall of Constantinople.   Reading about Constantinople before the Turkish siege sounds a lot like Detroit – most of the prosperity was gone one way or another, they were deeply in debt, crime and depravity ran wild and large tracts of the once-great city reverted into farm plots, vineyards, orchards and open space.   The city had the feeling of a series of small villages instead of one grand city.   When the Ottoman Sultan Mehmet II finally made it past Constantinople’s gates he was a little let down with what he actually saw in the city as it was a far cry from it’s glorious legacy.

At any rate, I’ll continue to watch the news from Detroit.   The city’s plight is nothing new, but at some point they’re going to hit a breaking point (or magically solve their problems) and there could be greater implications for the rest of the country when/if that happens.

 

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