Friday, July 19, 2013

Motown's Bust No Blindside


Who's been blindsided by Detroit's bankruptcy filing?  People all over the world have seen it coming for years.  But today, Michigan Circuit Judge Rosemarie Aquilina used the term "blindsided" to describe the reaction of plaintiffs in Detroit's bankruptcy who've appealed to her with allegations that state law hasn't been followed in the matter.

Aquilina's power play, mostly on behalf of civil service pensioners who fear what Detroit's filing may mean to their incomes, will likely come to naught, as the city's seemingly inexorable slide into fiscal oblivion appears all but certain.

Legally, Aquilina and the unionized workers fearing the devaluation of their pensions are claiming that Michigan's governor, Detroit's mayor, and the city's emergency manager haven't worked hard enough to negotiate with them regarding the security of contractual liabilities and what the city can and can't afford to pay out.  But frankly, the fact that for all practical purposes, the city is broke is a well-known fact.  Desperation at salvaging one's primary source of retirement income is one thing, but nobody has been blindsided by Detroit's bankruptcy yesterday.

In fact, depending on the expert you talk to, the city's bankruptcy has been too long in coming.  Having an emergency manager brought in to overrule the notoriously incompetent city council at the eleventh hour should have been all the final warning, horn honking, flag-waving, coffin-polishing encore to the fat lady's singing that anybody needed.

If you don't live in America's rust belt, you may not appreciate either the gravity of the situation there along the Detroit River, or the risk factors Detroit had that might be taking shape in your community.  A number of smaller cities that used to be manufacturing powerhouses could be facing similar peril in the not-so-distant future, although Detroit will likely remain the textbook example of flagrant municipal demise for a long time to come.

Detroit didn't just lose its manufacturing base, and its approximately 200,000 jobs.  It lost over one million residents - a staggering number - to its suburbs and the South.  Unfortunately, while some other large cities facing a similar dilemma managed to replace some of the industrial jobs they were losing with white-collar work, thereby stabilizing their employment market, Detroit apparently sat around waiting for its blue-collar jobs to come back.  The fact that America's Big Three automakers churned out absolute garbage during the 1970's and 80's only sealed the deal against Detroit, forcing car buyers to imported brands, even as union bigshots back in Motown were putting the squeeze on equally-unrealistic corporate executives for ridiculously expensive pay packages.

Ironically, both the unions and car companies claimed to have been blindsided by the disloyalty they themselves engendered among American consumers.  Indeed, Detroit has a history of pretending like years of bad decisions will simply evaporate.

Racism also became part of the city's fabric; its first race riot wasn't in 1963, but in 1863, during the Civil War.  Thanks to its crossroads-type location in the heart of the Great Lakes, plus its easy access to Canada, Detroit was founded as a trading post and followed an entrepreneurial path into the Industrial Age that made it an ideal location for horseless buggy enthusiasts.  After Henry Ford's invention of the assembly line rapidly generated an explosion in the demand for laborers, blacks joined ethnic immigrants from Europe streaming into the city that, for nearly the next century, would dominate the automobile world.

By the 1950's, however, those early car factories were becoming obsolete, as the push for ever-greater efficiencies and modernization sent the Big Three out into what were then wide-open suburbs, or into the Southern states.  Jobs began evaporating back in old Detroit, and the ensuing economic stress encouraged whites to look for scapegoats, fueling racial strife that would climax in the 1960's, when it became impossible to tell if white Detroiters were reflexively following auto jobs out of the city, or were trying to get away from the city's blacks.

What happened next depends on who's telling the story.  To hear some tell it, bigoted middle-class whites preferred to leave rather than cede power to blacks, and took their tax dollars with them because they didn't want to live next door to blacks.  Others claim gross mismanagement of city services, rioting, and increased crime by under-educated and welfare-dependent blacks forced whites and employers to leave.  In reality, it's likely that both scenarios combined in varying degrees to permanently cripple Detroit.  These days, what's left of the city council and its power structure is a sprawling web of dysfunction, incompetence, myopia, and a refusal to acknowledge the reality that new leadership is desperately needed no matter how this bankruptcy case turns out.

The council's current president, Saunteel Jenkins, has only held the position for a couple of weeks, because her predecessor, Charles Pugh, went into hiding after allegations of an improper relationship between him and a male highschooler surfaced.  One councilmember has resigned for health reasons, and another jumped ship to work for the city's emergency manager.  Neither vacancy will be filled anytime soon.  Former mayor Kwame Kilpatrick resigned in 2008 after being charged with a slew of corruption-related crimes, the roster of which has only continued to grow.  Tales of other city hall scandals and abuses of power that border on the farcical have both entertained and enraged Detroit's suburbanites for years, but most of the city's black voters seem blind to it all.

For years, state and suburban leaders have been calling for substantive reform within the city's municipal bureaucracy, yet voters continue to play the victim card long after it lost whatever credibility it might have had in the 1960's.  Debts piled up at rates that alarmed everybody except Detroiters.  Municipal unions pushed for lucrative contracts to maintain a shrinking city with few voters wondering who was going to pay for it all.  It didn't take a genius to see all of the abandoned factories, homes, churches, stores, and theaters - literally walk-away, no-turning-back, unwanted, unneeded, abandoned - and figure a drastic response to the growing crisis was essential.

At this point, it is extremely difficult to maintain a egalitarian mind about the city's leadership and not point to the city's grossly over-burdened welfare system as a reason for a citizenry so dependent on social services to not want proactive change towards a self-sustaining city.  Graduation rates for the city's high schools have risen to 64%, but that's because a shrinking population is being educated on an oversized schooling budget.  Less than nine percent of all criminal cases ever get closed.  These and other problems have not simply materialized during the past decade, or since the Great Recession.  Logic cannot refuse the likelihood that they represent a mindset that has become endemic in the city after years of acquiescence built on the hope - or, more likely, expectation - that somebody else should be fixing these problems.  Maybe the whites who've abandoned the city?  Maybe employers who don't want to invest what it would cost to rehabilitate the dozens of brownfields pockmarking the city?  Maybe the federal government, since it seems to have so much money available to hand out to everybody else?

Should this bankruptcy ever make its way through the courts, and bring the city back out into a debt-free day, that still won't fix what ails Detroit.  In the best possible scenario, all this bankruptcy will do is resolve the payment problems related to its current outstanding debts.  The city will still need to figure out how to pay for successive obligations, such as keeping streetlights lit, and getting functional computers with essential software into the police department.  Private employers in the city are already funding the city's fleet of emergency vehicles, and Quicken Loans billionaire Dan Gilbert is funding programs to buy up as many of the city's crumbling buildings as he can to try and put them on the tax rolls.  Considering the ratio of limited wealth to staggering poverty in Detroit, not many pockets are left to pick for charity.

At some point along the way, might the ordinary voters of Detroit have to wake up to the reality that it wasn't just the meltdown of the Industrial Revolution that's caused their pain?  It wasn't just white flight - or suburbanization in general, which has lured plenty of middle-class blacks tired of fighting Detroit's dereliction.  It wasn't just the miserable winter weather, or the aging infrastructure, or that the state of Michigan or the federal government didn't give them more money.  It wasn't just the banks that they're bitterly deriding today, or even the pension funds, which could only take what the city gave them.

When you take away everything that's caused every other problem Detroit has experienced, and there's still no real way forward, who's left to blame?

Drive the barren streets of what's left of Detroit - if you dare - and you'll probably find at least part of the blame waiting at bus stops, or driving a fancy Cadillac, or holed up in public housing, or maybe mowing a field next to their tidy home, or maybe running a dank store where cheap liquor is the biggest seller, or working as a well-paid clerk in some city office.

No, these aren't people who are black.  Come on - this is no time to be racist.  No; these are voters.

Hopefully, in upcoming elections, they'll want to prove they've learned some valuable lessons about using the ballot box to their community's advantage.

Not simply their political party's.

Update - July 30:  Judge Aquilina's apparent meddling in Detroit's bankruptcy has been put on hold by the Michigan Court of Appeals until after the city emerges from Chapter Nine.

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