The Great Detroit Betrayal

AP Photo/Duane Burleson

Detroit has filed for bankruptcy. Most of the spot-news coverage has focused on the immediate fiscal crisis of the city, but the immediate fiscal crisis really isn’t what got the city into such deep trouble. Certainly, Detroit’s contracts with its employees and its debts to its retirees don’t explain anything about how and why this once-great city has come to such grief. Those contracts and retirement benefits are par for the course for major American cities—certainly, no more generous than those in cities of comparable size.

Any remotely accurate autopsy of the city will find the cancer that killed Detroit was the decline of the American auto industry. The failure of U.S. automakers in the '70s, '80s and '90s to make better cars at a time when foreign-made autos were beginning to enter the U.S. market was surely one factor. Another was the trade deals that made it easy for Detroit automakers to relocate to cheaper climes—most particularly, NAFTA, which boosted maquiladoras while shuttering auto plants in the United States, disproportionately, in Greater Detroit. Taken in aggregate, the U.S. trade deals of the past half-century have benefited finance while crippling manufacturing, and Detroit—along with swaths of Cleveland, Chicago, Pittsburgh, and other industrial cities—paid the price.

A second factor is the racial polarization that Detroit has never managed to overcome. As far back as the 1920s, the Detroit factories attracted workers who didn’t always get along. In particular, it drew hundreds of thousands of workers from the African American South and white Appalachia. Since its formation the 1930s, the United Auto Workers has spent much time and energy trying to combat white racism, and to keep tensions between these two groups from erupting in violence. The union didn’t always succeed. While it generally managed to get both its white and black members voting for liberal Democrats for state and national office, it seldom managed, even during the height of its strength in the '30s, '40s and '50s, to get its white members to vote for its endorsed candidates for Detroit city office. Why the difference? Because city officials, unlike state and national ones, set Detroit’s policing and housing policies, and many white Detroiters, including auto workers, wanted to preserve racially segregated housing and a brutal, racist police force.

As mass suburban development came to Detroit in the decades following World War II, the city became prey to epochal white flight. By the late '80s, when pollster Stan Greenberg conducted his now famous study of Macomb County—a white, working-class suburb adjoining Detroit, which had voted overwhelmingly for John Kennedy in 1960 and just as overwhelmingly for Ronald Reagan in 1984—he discovered a white electorate convinced that Democrats had created a government that benefited only blacks. Any notion of regional cooperation between increasingly black Detroit and its white suburbs was a non-starter.

As the auto plants closed and the whites fled, Detroit hollowed out. In time, as jobs and services vanished, blacks fled as well. In 1950, the city was home to 2 million people. Today, it is home to 700,000. Its unemployment rate, at 18.6 percent, is the highest of the 50 largest American cities. Its tax revenues, not surprisingly, can’t support adequate city services. And today’s bankruptcy filing is likely to reduce those services still further, while likely reducing the monthly pension checks of its retirees, though they and their unions have a strong moral claim to most favored creditor status. Moral claims often don’t amount to much, however, in bankruptcy proceedings.

Is it right to call what has happened to Detroit a tragedy? Not, surely, in a strictly Greek sense. There was hubris aplenty, but it was the hubris of auto executives who certainly don’t live within the city limits and won’t suffer the bankruptcy’s consequences. As for those who will suffer them—the residents, employees and retirees of Detroit—they’re not the tragic heroes who brought the city down. They’re the tragic victims.

Comments

Detroit, Milwaukee and the great central US was a lesson for the right ideology to grab what they could and get out of the way. Those at the top went overseas for cheap labor with the help of tax benefits they gave themselves after buying Congress. Those in the middle went to suburbs and pushed their GOP/NRA/ALEC agenda on their states as a form of self-protection. Their racism, sexism and exclusivity is clear. The slums where once working people could survive were stripped, controlled and deprived of tax support. In real estate it is called "bleeding". Take the rent money, never repair and let the rot happen.

The author really nailed this one. Detroit’s bankruptcy had nothing to do with decades of corrupt politicians pushing politically correct policies (indeed it goes without saying that political correctness trumps fiscal soundness every time). And, of course, he is spot-on when he espouses the notion that it is of no consequence to communities when they grossly overpay their municipal employees (as long as union fat cats are properly taken care of). Thanks for enlightening us.

Public sector unions used their political clout to corrupt Detroit's city government which in turn used control of the purse strings to feed the public unions obscene greed. I am from Mallorca and the situation is different.

When it comes to economics, you can't win. To paraphrase Harry Truman: Oh, for a one armed economist! I know that NAFTA caused grief to the U.S. auto industry but it has enabled Mexico to become a semblance of a middle class democracy. It also has reduced the burden of mass illegal immigration to the U.S. If you are truly concerned about poverty, then you must be more concerned about the genuine poverty of the third world rather than the relatively comfortable poverty of cities like Detroit. Furthermore, even if the American motor industry had remained prosperous, employment would have declined at about the same rate as it has since automation, not outsourcing, has been the major factor in manufacturing employment decline. It is ironic that now that workers are escaping the curse of having to work in "dark, Satanic mills," those whose intellectual forebears decried the curse of manufacturing now decry its decline. Perhaps it is a pity but this decline is not due to hubris or to racism; it is due to progress. We need to have pro-growth policies to generate new jobs for these displaced workers, not the dream of a return to the past.

Tommy, the politicians in Detroit were not particularly or uniquely more corrupt than mayors of other large Northern cities of day. I suggest Coleman Young was less corrupt than say mayor Daly in Chicago and no one suggests Dennis Archer was corrupt in anyway. Equally untrue is your claim the city workers were overpaid. There isn't any evidence to suggest their pay was out of line with that of other large city workers. If anything, it was less than Chicago or New York.

No city can function when it loses 2/3 of its population. Detroit died because people left. Much of that population flight was due to American racism and that hasn't changed all that much. It gained its population through accident of history, mainly due to shipping, and grew with automobile manufacturing. Once that began to slip and fracture, there really wasn't anything attractive left about Detroit. Its weather is harsh and miserable. It didn't have world-class art institutions or major universities. Its industry did not recover, nor was it replaced.

The city needs to be rebuilt to serve a very small population, but it should not be done by stealing from the people who served it honorably and well with their labor. Their pensions are part of their wages and they are owed that money.

If Obama had a city, it would look like Detrit.

Nonsense!

Pittsburgh's steel industry was hit even harder by foreign competition than Detroit's auto industry. The U.S. steel industry today is a pale shadow of its former self. But Pittsburgh today doesn't resemble the Detroit catastrophe.

New England was hit very hard by the loss of its textile and shoe industries to foreign competition. But today, Nashua NH is a thriving, bustling city.

These cities diversified. Pittsburgh leveraged Carnegie-Mellon University to attract biotech industry. Nashua NH also attracted high-tech knowledge workers, many of whom commute to work in neighboring MA.

Harold Meyerson's ideology is what is keeping Detroit down: Keep bitterly blaming the domestic auto companies and the foreign auto companies and keep hoping for a return of the good old days of American auto dominance, rather than looking toward the future.

These other cities worked hard to attract other types of businesses, and make their cities a good place to conduct business. But Mr. Meyerson would never recommend such a thing, oh no. Mr. Meyerson is NOT a liberal in the Hubert Humphrey mold. He is a self-described socialist, who regards private business as a necessary evil at best. He has no problem at all with the fact that in Detroit, the government is the biggest employer by far. The public school teachers and civil servants combined dwarf the combined employment of all the auto makers.

Another point. Mr. Meyerson wrote a whole article lamenting the loss of Detroit citizens to the suburbs, without ever having mentioned the 1967 Detroit race riots, which killed dozens of people. White flight became a rout after that. But white liberals will never criticize black violence. Oh, no, we can't do that! To insist that black citizens must be held to the same standards as white citizens? Oh, no, that would be racist.

Mr. Meyerson is right about just one thing though: Detroit's gigantic pension fund debts are not unique to Detroit. A recent study by Boston College has concluded that total pension fund obligations by America's cities may total as much as $4 trillion (that's TRILLION).

Stockton, Compton, San Bernadino, welcome to Meyerson's socialist club!

A rational examination of Detroit's fiscal demise reveals that the political power and greed of public sector unions destroyed the city's finances. Public sector unions used their political clout to corrupt Detroit's city government which in turn used control of the purse strings to feed the public unions obscene greed.

The early retirement, high pay, outrageous pensions, and grotesque lifetime benefits demolished the city's finances.

Pittsburgh withstood the demise of the steel industry without imploding. Pittsburgh didn't have the ridiculous obligations to public sector unions preventing its recovery.

Public sector unions killed Detroit, pure and simple.

At the time of starting the auto industry there are many type of problems created and they try to solve the problem. When a new thing lunch many things need to know by the makers and user also, how to make the product in a proper way and that can give the better performance , in the auto industry same thing happen. The US auto makers also try to do the better in 70s and they also success in their rally.
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At the time of starting the auto industry there are many type of problems created and they try to solve the problem. When a new thing lunch many things need to know by the makers and user also, how to make the product in a proper way and that can give the better performance , in the auto industry same thing happen. The US auto makers also try to do the better in 70s and they also success in their rally.
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