Time Magazine Cover Story—Detroit: The Death — and Possible Life — of a Great City

Posted by Kendall Harmon

If Detroit had been savaged by a hurricane and submerged by a ravenous flood, we'd know a lot more about it. If drought and carelessness had spread brush fires across the city, we'd see it on the evening news every night. Earthquake, tornadoes, you name it — if natural disaster had devastated the city that was once the living proof of American prosperity, the rest of the country might take notice. (See pictures of the remains of Detroit.)

But Detroit, once our fourth largest city, now 11th and slipping rapidly, has had no such luck. Its disaster has long been a slow unwinding that seemed to remove it from the rest of the country. Even the death rattle that in the past year emanated from its signature industry brought more attention to the auto executives than to the people of the city, who had for so long been victimized by their dreadful decision-making.

By any quantifiable standard, the city is on life support. Detroit's treasury is $300 million short of the funds needed to provide the barest municipal services. The school system, which six years ago was compelled by the teachers' union to reject a philanthropist's offer of $200 million to build 15 small, independent charter high schools, is in receivership. The murder rate is soaring, and 7 out of 10 remain unsolved. Three years after Katrina devastated New Orleans, unemployment in that city hit a peak of 11%. In Detroit, the unemployment rate is 28.9%. That's worth spelling out: twenty-eight point nine percent.

If, like me, you're a Detroit native who recently went home to find out what went wrong, your first instinct is to weep. If you live there still, that's not the response you're looking for. Old friends and new acquaintances, people who confront the city's agony every day, told me, "I hope this isn't going to be another article about how terrible things are in Detroit."

It is — and it isn't.

Read it all.

Filed under: * Economics, PoliticsEconomyCorporations/Corporate LifeThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--Politics in GeneralCity Government* International News & CommentaryAmerica/U.S.A.

33 Comments
Posted September 26, 2009 at 5:52 pm [Printer Friendly] [Print w/ comments]



1. Sarah1 wrote:

What a striking striking line: “The school system, which six years ago was compelled by the teachers’ union to reject a philanthropist’s offer of $200 million to build 15 small, independent charter high schools, is in receivership.”

Yes—better that children not be educated at all, than the unions surrender their death grip on a failed system.

Because it is the *unions* that are the most important.

September 27, 9:22 am | [comment link]
2. Sarah1 wrote:

Unfortunately the author’s solution to the Detroit problem—much of which he blamed on “white racism” for the rich having the gall to move out of a crime-laden city—is for the Federal Government to create Another Detroit by giving vast sums of tax-largessed to prop up the city with a “Renewable Energy” industry.

The article reminds me of so many postmodern movies like American Beauty and Pulp Fiction—great with pointing out the *problems*—not so good with pointing out the solutions.

September 27, 9:36 am | [comment link]
3. Words Matter wrote:

How is one a “victim” of his own choices?  Making choices is a fundamental human activity and might make one a victimizer. But the use of “victim” seems inappropriate and dehumanizing. This seems another instance of victim-stancing, a classic criminal thinking disorder.

September 27, 9:37 am | [comment link]
4. Jeffersonian wrote:

The ugly truth is that Detroit’s demise was a suicide, not a murder.  Between the corrupt city government of Coleman Young and the unions that drained the life blood from the automobile industry, anything decent and vital was sucked from Detroit by parasites.  I spent several months in Detroit a little more than a decade ago recommissioning the Chrysler Jefferson North plant, and was horrified to find the city - outside of Greektown - indistinguishable from any of scores of fly-blown third world cities I’ve been in.  It can only have gotten more squalid since.

September 27, 3:42 pm | [comment link]
5. mari wrote:

The old “renewable energy” line is a scam. Whether it’s in the Pacific Northwest, Michigan or any other state, the money funnelled into the scam means one thing, it will be spent in Spain or some other foreign country, paying a foreign company to manufacture and install with their own foreign workers and own foreign materials a wind farm, or to make a pretense of a startup in one of those states, again, with foreign workers, not American citizen workers. It’s a load of garbage. A windfarm in upstate NY built by one of those Spanish companies fell down three months ago, and the city is stuck with a pile of junk.

Just as Obama won’t allow drilling off our coasts, he will give billions to Brazil to drill for oil off their own coasts. He’s giving billions to a car company to build a factory in eastern Europe. He is only interested in draining our country dry and leaving us broke and in debt to China.

The teachers unions are a criminal enterprise that need to be dismantled. Our children have been sacrificed to their greed and corruption.

September 27, 5:24 pm | [comment link]
6. Ken Peck wrote:

5. mari wrote:

The old “renewable energy” line is a scam. Whether it’s in the Pacific Northwest, Michigan or any other state, the money funnelled into the scam means one thing, it will be spent in Spain or some other foreign country, paying a foreign company to manufacture and install with their own foreign workers and own foreign materials a wind farm, or to make a pretense of a startup in one of those states, again, with foreign workers, not American citizen workers. It’s a load of garbage.

It isn’t entirely clear to me why American Capitalism cannot build wind and solar generators or “farms”. There is a large wind farm near where I grew up in Texas. It could be that those giant windmills are European or Japanese, but surely we should be able to build them. My electrical company uses something like 10% wind generated electricity. It is possible.

I’ve been told that high speed rail isn’t possible in the U.S. Guess what, SNCF (the French national rail system ) has filed a proposal to build a high speed rail system between Dallas, Austin and San Antonio (which would be in competition with Amtrak’s Texas Eagle that takes over 10 hours to travel that 275 miles), putting up something in excess of $13 billion to build and and expecting 175% return in 15 years—and without federal stimulus money.

There is something seriously wrong with American capitalism—and it isn’t labor unions (which Europe has) or government regulations (which Europe has).

September 27, 9:35 pm | [comment link]
7. Jeffersonian wrote:

Ken, we can build all of that stuff, we just can’t make it pay.  It’s all just a big hole we throw money into.

September 27, 10:14 pm | [comment link]
8. stjohnsrector wrote:

Jeffersonian - much for the better in pockets has happened in Detroit in 10 years.  Our parish is in downtown Detroit and I live five blocks from the eastern border of Detroit (I drive by Jefferson Nirth Assembly almost every day).  The recession has put much to a halt but my first 5 years back here showed great improvements in pockets in the city.

September 27, 10:38 pm | [comment link]
9. Words Matter wrote:

T. Boone Pickins was promoting wind energy last year but gave up on it because he couldn’t get the electricity from west Texas to the cities where it is needed. The infra-structure just isn’t there.

Is that high-speed train another run at it?  It’s been proposed twice now and fallen through. Theoretically, it would beat airline travel in time and comfort, when you factor in travel time between downtown/business areas and airports.

September 27, 10:46 pm | [comment link]
10. Jeffersonian wrote:

I believe it, #8, as I could see small pockets of rejuvenation when I was there.  The mayor then seemed to be a good guy, a contrast from the years of Young and Co.  There was a super deli just across the street from the plant that made the best pastrami I’ve ever had. It’s just that the squalor just seemed to be growing exponentially while the good plodded along.

September 27, 11:25 pm | [comment link]
11. Ken Peck wrote:

7. Jeffersonian wrote:

Ken, we can build all of that stuff, we just can’t make it pay.

And my question is, why not? Why is it that the French think they can build high speed rail in Texas and make it pay, while Americans can’t. It doesn’t compute.

9. Words Matter wrote:

T. Boone Pickins was promoting wind energy last year but gave up on it because he couldn’t get the electricity from west Texas to the cities where it is needed. The infra-structure just isn’t there.

And yet somehow TXU gets 10% of its electricity from renewable sources—some 2,150 MW from wind in 1995 and more coming on line. Of course, we do need to improve the electrical grid here in Texas and in the U.S. to meet the needs of the 21st century.

I think there was a good deal of politics (or specifically political support that he was seeking for infrastructure improvements) that caused him to slow the pace for the idea for the time being. Also the credit crunch affected his ability to finance the plan. I don’t think it’s entirely dead.

Is that high-speed train another run at it?  It’s been proposed twice now and fallen through. Theoretically, it would beat airline travel in time and comfort, when you factor in travel time between downtown/business areas and airports.

SNCF has filled the proposal in response to requests. We’ll have to see if American Airlines and/or Southwest Airlines tries to kill it.

It would be faster than AA, which flies from Dallas to San Antonio via Houston, so a direct shot from Dallas to San Antonio by rail would be significantly faster and cheaper. (And if my experience riding SNCF in France is any indication, a whole lot more comfortable and pleasant; and the food would be a major improvement.) For a variety of reasons, AA might actually support the plan.

Southwest flies direct non-stop in about an hour, so that HSR with a stop in Austin, Southwest could be faster, albeit more expensive but less comfortable and pleasant. My guess is it would be more expensive than Amtrak Texas Eagle (which takes over 10 hours to do the 275 miles and has odd arrive/departure times, which is why no one uses it) but cheaper than Southwest.

My understanding is that the Dallas/Fort Worth station would be in the vicinity of DFW airport, with easy connection to down town via DART light rail. Probably something similar would be the case with San Antonio. SA has a good bus transit authority that would get one down town pretty quickly. Again, if my experience with SNCF in France is any indication, there is less hassle at the train stations than at the airport (my only experience with that being Charles DeGaulle).

September 28, 12:13 am | [comment link]
12. Bill Matz wrote:

The rail comparison should be even better than Ken suggested because you realy need to compare point to point. Given that the airports want you there two hours prior to flight and that rail stations are usually closer, total trip time may actually be shorter by rail.

September 28, 12:32 am | [comment link]
13. Jeffersonian wrote:

Ken, I couldn’t find anything about a French proposal or its expected rate of return.  All I could find about high speed rail in Texas was these guys, and they’re just bursting with excitement over all the federal money that is going to get showered upon them.

You’re right about one thing, Ken:  There’s something rotten with American capitalism these days.  When everyone is sending Gucci-loafered lobbyists to DC for their rent-seeking cash instead of fighting it out in the market for profit, there’s an enormous problem brewing.

September 28, 9:52 am | [comment link]
14. Ken Peck wrote:

13. Jeffersonian wrote:

Ken, I couldn’t find anything about a French proposal or its expected rate of return.  All I could find about high speed rail in Texas was these guys, and they’re just bursting with excitement over all the federal money that is going to get showered upon them.

From the Dallas Morning News website: French interested in Texas high-speed rail

Notice this paragraph:

The filing isn’t related to applications for stimulus money, but in response to Congressman John Mica’s interest in finding out what private companies think they can make money in the U.S. That provision was inserted in legislation last year, and the French filing was in response, said FRA spokesman Warren Flatau.

September 28, 10:35 am | [comment link]
15. Phil wrote:

I don’t buy it, Ken.  The implication that federal money will be involved is all over that blog post, even if SNCF piously says they never thought of it.  Why, never!  Not for one minute!

I’ll be happy to be wrong, though.  If they can do it, I’m all for it.  Over certain distances, I think rail travel beats air by far.

September 28, 11:17 am | [comment link]
16. Jeffersonian wrote:

I agree with you, Phil.  That article does not say what Ken thinks it says.  Especially cryptic is this citation:

At $13.8 billion in construction costs, SNCF expects benefits to outweigh public infrastructure costs by 170% over a period of 15 years. This project would have the highest rate of return of any of the corridors profiled in the studies presented here.

In no way does this describe anything resembling a rate of return to the French outfit.  It seems to be an overall cost/benefit analysis.  My bet is the French company would get a contract to build this, get paid for it, and then perhaps be contracted to operate the system.  Naturally, they’re going to make money doing it.  The question is, is anyone besides the taxpayer going to pay for silly thing?

September 28, 11:49 am | [comment link]
17. Ken Peck wrote:

15. Phil wrote:

I don’t buy it, Ken.  The implication that federal money will be involved is all over that blog post, even if SNCF piously says they never thought of it.  Why, never!  Not for one minute!

I’ll be happy to be wrong, though.  If they can do it, I’m all for it.  Over certain distances, I think rail travel beats air by far.

 
Are you suggesting that SNCF is mendacious like American corporations? The proposal was in response to a Congressional inquiry as to what rail services might be profitable. It doesn’t propose a federal subsidy. Do you suppose that if Congress were to ask for recommendations as to what oil drilling might be profitable that a response from Exxon-Mobil “implies” federal money or that they would be “pious” in not seeking federal money?

On the other hand, the federal government has long subsidized all manner of transportation projects for well over a century. It is important for commerce. So I would rather see my tax dollars go to decent HSR than to military adventures in Iraq. We could have paid for most of the HSR being proposed with the roughly trillion dollars we’ve wasted there the past 8 years.

So if SNCF does it with their money (and pockets the profits) I’m fine with that. If they get my tax dollars for it, I’m fine with that too. The only real question is why American capitalists can’t do what Europe and Japan seem quite capable of doing. Maybe (gasp) “socialism” does work better for the people than “capitalism” as practiced in the U.S. Europe does seem to be able to provide its people with a single payer health system that is cheaper and by many measures better than that of the U.S. Europe does seem to be able to provide its people with HSR that is superior to anything in the U.S. We seem to do a better job of rat holes like AIG, Bank of America, Citibank, Enron, WorldCom and military adventures.

September 28, 12:01 pm | [comment link]
18. Phil wrote:

Ken, I wasn’t suggesting anything about mendacity, though, if you want to know the truth of it, yes, I think SNCF is just as mendacious, or not, as American corporations.  Near as I can tell, the Bible doesn’t say Americans are sinners and French aren’t.

In any case, give me a break.  Jeffersonian, above, gave you the money sentence: “...SNCF expects benefits to outweigh public infrastructure costs by 170% over a period of 15 years.”  Got that?  SNCF’s benefits will outweigh the rights-of-way condemned and given to it, the track built for it and the utilities provided for it.  No kidding?  A business major dropout could have run that business case after a full night of drinks.

And, we’ve been through the health care stuff before.  Surveys show 85% of the people here are satisfied with their health care, so, to the contrary, it seems American capitalists are doing pretty well, especially considering the government and third-party payers have rigged the whole system against the capitalists’ customers.

[Edited by Elf]

September 28, 12:12 pm | [comment link]
19. Ken Peck wrote:

16. Jeffersonian wrote:

The question is, is anyone besides the taxpayer going to pay for silly thing?

Well, since everyone is a taxpayer, taxpayers will pay for it either through taxes, through the fares they pay or perhaps by investments in stocks and bonds.

If this thing is started in my lifetime, this taxpayer will probably be an investor through some of my mutual funds. And yes, if there are federal and state subsidies, I will be paying for it through my federal and Texas taxes. And if it should be completed in my lifetime, I most likely will pay for it through fares for trips to Austin and San Antonio.

The federal government has been subsidizing transportation in the U.S. for at least a century and a half—e.g., the First Transcontinental Railroad. I probably could dig up some earlier examples of federal subsidies for roads, canals and railways. It continues today with subsidies for air, water and land transportation all paid for by taxes.

If taxpayers don’t pay for this project, then we will pay for not having it through tax subsidized air and land travel, more expensive energy costs and more pollution. There’s always what economists call the “cost of lost opportunity”.

September 28, 12:16 pm | [comment link]
20. Ken Peck wrote:

18. Phil wrote:

“...SNCF expects benefits to outweigh public infrastructure costs by 170% over a period of 15 years.”  Got that?  SNCF’s benefits will outweigh the rights-of-way condemned and given to it, the track built for it and the utilities provided for it.  No kidding?  A business major dropout could have run that business case after a full night of drinks.

If I were Bill Gates and decided to invest billions in HSR between Dallas, Austin and San Antonio, I would first form a stock company and put a few billion in it. I’d try to sell stock to other billionaires. What I didn’t raise through stocks I would raise through bonds.

The corporation would go to the Texas legislature to get the right of way through eminent domain. That process involves paying for the land at a fair market value. (Jerry Jones recently did something similar to build the new Cowboys stadium, although he also got cash from the City of Irving.) This does not necessarily need a government subsidy. But it is necessary to convince the legislature that the project is deserving of the government’s exercise of eminent domain.

Once the corporation owns the right of way, construction can start. And what SNCF says, is that it will be profitable in the long run. The problem is that American corporations do not think long term. If the “investment” doesn’t pay off in less that five years, they won’t buy in.

And, we’ve been through the health care stuff before.  Surveys show 85% of the people here are satisfied with their health care, so, to the contrary, it seems American capitalists are doing pretty well, especially considering the government and third-party payers have rigged the whole system against the capitalists’ customers.

85% may be satisfied with their health care; I’m satisfied with my health care. But obviously 15% aren’t. I’m also interested in whether that 85% satisfied includes the 25% that have no health care coverage in Texas. I doubt that those who have lost their insurance along with their jobs or because of a catastrophic illness or can’t get it because of a pre-existing condition are “satisfied”. It seems that in spite of what some polls say, there are significant concerns about the system, including its rapidly escalating costs rendering it unaffordable to businesses and individuals—so much so that “health care reform” was a major topic for both parties in the elections last year.

No doubt the American capitalists are doing pretty well—they’re laughing all the way to the bank; they have it rigged the way they want it and are spending millions a day to keep it rigged.

[Edited by Elf]

That seems to be what the far right wing wanted. They were (and still are) the ones who said let them fail. They were the ones saying “[Edited by Elf]

I think the problem should have been addressed before 2008—that deregulation, lax regulation and no regulation—bought and paid for by those “conservative capitalists” to allow their greed to reign supreme—should have been addressed by the federal government.

I also think we really do need to look at this “too big to fail” business, which is just another form of the monopolies and trusts that stifled competition in the 19th and earliest 20th century and led to laws against them which have been greatly weakened in the fervor to “deregulate” in the last quarter of century or so.

All the nice theorizing about “free enterprise capitalism” does not, in fact, work according to theory. Instead economic and political power is increasingly concentrated in the hands of a few, unelected individuals who are responsible to no one and the very antithesis of a democracy. “To big to fail” is legalized extortion.

September 28, 1:21 pm | [comment link]
21. Sarah1 wrote:

RE: “Well, since everyone is a taxpayer . . . “

Not true, of course.

September 28, 1:26 pm | [comment link]
22. Ken Peck wrote:

[Comment deleted by Elf - ad hominem]

September 28, 1:31 pm | [comment link]
23. Jeffersonian wrote:

Well, since everyone is a taxpayer, taxpayers will pay for it either through taxes, through the fares they pay or perhaps by investments in stocks and bonds.

To add to Sarah’s undeniable truth in #21, I’ll say that the three populations you mention are not the same people.  Those who seek to profit from such a line should bear the risk of same.  As a taxpayer, I’m not interested in assuming that risk.

September 28, 1:38 pm | [comment link]
24. Phil wrote:

Ken, I don’t like bailouts, either - maybe for different reasons.  And I agree with you in having the perception that many American corporations privilege the short term over the long to an excessive degree.

September 28, 1:41 pm | [comment link]
25. Ken Peck wrote:

[Comment deleted by Elf - questioning decision of The Elves]

September 28, 2:44 pm | [comment link]
26. mari wrote:

High speed rail in Europe and Japan remains extremely expensive, and it will only raise the already expensive costs of rail travel if it’s implemented. At present, both the Bush and now the Obama admin have outsourced control and security of rail to Indian companies, in places like California, and DC, locations where there have been frequent disruptions and accidents.

Europe and Japan do not allow for the outsourcing of jobs, though they have heavily bought into the importation of cheaper foreign labor. They at least still have the tax base to help prop up their ridiculously high expenses.

September 28, 3:01 pm | [comment link]
27. Ken Peck wrote:

21. Sarah1 wrote:

RE: “Well, since everyone is a taxpayer . . . “

Not true, of course.

Give me an example of someone who is not a taxpayer.

23. Jeffersonian wrote:

To add to Sarah’s undeniable truth in #21

I am quite prepared deny the so-called “undeniable truth”.

Everyone is a taxpayer. Statement of fact.

Give me an example of someone who is not a taxpayer.

September 28, 5:07 pm | [comment link]
28. Jeffersonian wrote:

Ken, roughly half of all working Americans pay no income tax, and a large portion of them get the EITC to refund their FICA.  Since the funds to subsidize this particular boondoggle would surely come from general revenue (read: income taxes), it’s safe to say the large majority of Americans would pay little or nothing toward it.

And anyway, you completely mischaracterized that blog post.  Nowhere in it did it even begin to state that these rail lines would be built solely with private money.  If you’re of a mind to sink your money into it, have at it, amigo.  But leave me out…I’ve seen too much of government-run transportation white elephants to take seriously that they are anything but a drain on the public purse.

September 28, 6:41 pm | [comment link]
29. Jeffersonian wrote:

To reinforce my point, I cite the Business Wire piece linked in the blog post:

Each of the highly detailed proposals filed on September 14, 2009 outlines SNCF’s project rationale in the respective regions, including an evaluation of the benefits of high-speed rail networks to the targeted communities and environment; detailed technical descriptions of the project, including proposed route, estimated operations costs, services, and schedules; the project’s business model, including simulated revenues, financial statements, and possible financing opportunities with both the public and private sectors; and the plan’s compliance with existing legislation and the possibilities for federal, state, and local government partnerships.

When I read about “public/private partnerships,” I reach for my wallet.

...in these corridors will produce significant public benefits – benefits that will offset by almost twice the public investment in the design and construction of the systems.

So why drag the State into the mix to finance the project?  Why not do it yourself and laugh all the way to the bank?  Perhaps all those bennies accrue to someone else, or aren’t going to accrue at all and these guys are just attempting to socialize their losses while they privatize their gains.  Either way, no sale.

September 28, 8:06 pm | [comment link]
30. Ken Peck wrote:

28. Jeffersonian wrote:

Ken, roughly half of all working Americans pay no income tax, and a large portion of them get the EITC to refund their FICA.

Federal income tax and FICA are not the only taxes.

Everyone pays taxes; not every tax is paid by everyone.

Maybe infants don’t pay taxes, but their parents surely do.

September 28, 8:18 pm | [comment link]
31. Ken Peck wrote:

29. Jeffersonian wrote:

So why drag the State into the mix to finance the project?


The government gets involved because individuals and corporations don’t have the power to buy land by eminent domain. It isn’t necessary to get the state to finance the project. Even AT&T has to get government entities to acquire right of ways.

September 28, 8:24 pm | [comment link]
32. Jeffersonian wrote:

Yet the article you linked specifically says there will be government financing of this project.

And why should the government be using eminent domain for private projects?  Let the developers buy out people in the path of their train.

September 29, 12:23 am | [comment link]
33. Ken Peck wrote:

Regarding the use of wind to generate electricity, this just showed up in the Dallas Morning News:

German power giant E.On is expected to announce on Thursday that the world’s largest wind farm, close to Sweetwater, Texas, is open for business and generating juice.

The wind farm in Roscoe, just west of Sweetwater, boasts 627 wind turbines, with a total capacity of 781.5 megawatts.

That’s huge – about as much capacity as a coal-fired power plant, and enough juice to power 265,000 homes. The farm covers nearly 100,000 acres – an area several times the size of Manhattan.

World’s largest wind farm opens in West Texas

Note that it is German company that is doing this; raising again the question of where are American companies?

As for Pickens plan, it has not been abandoned only delayed.

On July 8, 2009, The Wall Street Journal reported that T. Boone Pickens has postponed plans to build his Texas wind farm. He said the project was stopped partly because existing transmission line capacity wasn’t available. His company had planned to build new lines, but couldn’t get financing. On the same date, The New York Times, reported that Pickens is committed to purchasing 667 wind turbines and will develop wind projects for them. On his Mesa Power Group website, Pickens said he expected to continue development of the Pampa project, but not at the pace originally expected.

wikipedia: T._Boone_Pickens

or modified. The DMN article above states

As some wind farm developers slow down in Texas, E.On keeps building. T. Boone Pickens had planned to build an even larger wind farm in the Panhandle but decided instead to disperse the turbines around the country.

October 1, 10:27 am | [comment link]
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