When I am traveling and people ask me where I am from I always tell them St. Louis, although that is technically incorrect. I have never lived in the city of St. Louis, I but I grew up in the suburbs, and I live there now. After high school (and for those St. Louis folks – Lafayette), I went to college and got married, and my wife and I moved to Detroit in the mid 80’s. We lived there about 5 years, and our two boys were born there.
We did not live in Detroit, of course. We lived exactly 26 miles from the Detroit River. I worked at an automotive plant on 16 Mile Road, and took some classes at The University of Detroit, which is on 6 Mile Road. The twenty miles separating my home from U of D were a fascinating drive, and not necessarily in a good way.
The University of Detroit was a beautiful place, a nice campus, and it was surrounded by a third world country. There were gutted buildings with no windows and folks sitting on a couch in front getting wasted. There were prostitutes and drug dealers and porn shops and a general feeling of malaise. The entire area was, well, dirty. U of D was surrounded by tall fencing, for good reason.
We did not live in Detroit because we did not want to be shot nor have our kids shot over tennis shoes. The evening news was a very depressing thing. It was mostly just a listing of the day’s murders. I remember getting pretty worked up over the comical antics of Mayor Coleman Young. He was mayor of Detroit for some 20+ years, and I have no idea why anyone would cast a vote for that man.
I like Dave Bing. I think it may be because I am a basketball guy, and I know he is a Democrat and we probably do not share a lot of views. I like him because he loved his city enough to take a job he did not need, he took on a horrible mess, to try to fix things. Sadly, Detroit was clearly beyond repair. I could have told Dave that 25 years ago.
It is not that Detroit could not have been fixed 25 years ago. They tried – they built the Renaissance Center and tried to clean up downtown from the center outward. They had a great basketball team but it is no coincidence that they were nicknamed the Bad Boys. Detroit had a reputation, and they were proud of it. Physically and fiscally they probably could have turned it around back then, but psychologically it was not going to happen.
I call it the Entitlement Mentality. It is no coincidence that Chrysler and General Motors and now Detroit all filed for bankruptcy. In many ways it was inevitable. First and most obvious is the simple reality that you cannot keep spending more than you take in indefinitely. I firmly believe that Detroit and it’s auto industry were simply so arrogant that they thought that reality did not apply to them. The facts were always there in plain sight. They saw deficit after deficit, year after year of declining population, and revenue not keeping pace with expenditures.
The people of Detroit could have elected someone with the skills and maturity to bring fiscal sanity to the city. They could have opted for austerity and a war on crime. They could have made sure their kids went to school and did their homework. But instead they kept re-electing Coleman Young and people like him, who promised goodies and no austerity and who supported the unions and entitlements and agreed to things that were not sustainable. Coleman Young has passed away. He never had to deal with the results of kicking the can down the road year after year. Poor Dave Bing came in too late to do anything about it.
Detroit has been a Democrat controlled, liberal progressive city for the last 60 years. I would like to blame all of their problems on that, but I am aware it is more complicated than that. There are a number of factors involved here, but in my opinion the worst thing is the apathy, the lack of concern for what has obviously been a ship on the wrong course for a very long time. Everyone refused to change, which is why I called them arrogant and said there was an entitlement mentality. Nobody was going to give up what they felt they were entitled to.
Now, with the filing of bankruptcy, Detroit will be forced to change. There will need to be a budget and they must spend only what they take in. The options are bleak but simply put they will either need to raise taxes or cut spending or somehow drive up revenues by attracting people back to the city. That will not be easily done. People are going to be hurt, including those with pensions from the city. Salaries will need to go down for city employees. The poor will be hurt disproportionately. Creditors are not going to get their money back.
You have heard the statistics, and I will provide some links at the end here, but let’s just say there is a dismal graduation rate from high school, an unemployment rate much higher than the rest of the country, a very high crime rate, and a disturbing lack of city services.
And now, let me give you the bad news. The United States of America is $17 trillion dollars in debt. The Social Security Trust Fund is empty. Our credit rating has been lowered. Our kids no longer rank near the top in math and science compared to others around the world. Graduation rates in our city schools (not just Detroit) hover around 50%. We have a heroin problem.
There is an entitlement mentality in this country and we keep electing people who promise to give us more goodies, and we reject those who speak of austerity and balancing budgets. And most people don’t want to talk about it. Most folks feel it is impolite to speak of politics and religion. Heads in the sand, they do not want folks like me depressing them with all this stuff. I am either an alarmist or a partisan or just simply impolite.
Bankruptcy is not the end for Detroit. It was not the end for General Motors or Chrysler either. In fact, it could be a fresh start. I say it could be, because it kind’ve depends on the people of Detroit what happens next. There must be changes made in behavior, or bankruptcy does no good. Michigan will try to help Detroit out, but there is going to be a lot of pain. Perhaps they will try to get the United States to bail them out, like they did with Chrysler and GM and all of the banks. That would be a very bad precedent, and a very bad thing for Detroit. As I have pointed out before, pain is necessary sometimes to get things straightened out. Without pain there is no incentive to change course.
Nobody will be around to bail out our federal government when we go bankrupt. Oh I suppose technically we cannot go bankrupt, because we have printing presses that can print off as many dollars as needed to pay off our debt. But there is pain coming. Just wake up and look at the numbers. We need to lift our collective heads out of the sand and take a look at what is happening here. It does not take a rocket scientist to see what is happening in the US, just as it did not take one to see where Detroit was headed.
This clip of Jeff Daniels speaks volumes to me. And it is perfect in a piece on Detroit.
And this video is a little more humorous, although it is dark humor.
This article on the bankruptcy from The Detroit Free Press is pretty thorough.
Jill Schlessinger of CBS with lessons learned, from a business perspective.
Alec Macgillis wrote a good piece and corrected some misconceptions.
Andrew Malcolm of Investor’s Business Daily wrote a good article on the bankruptcy. He also feels this is a “canary in the coal mine” for our country.
Sarah Lazare on why this really hurts the poor.
Rand Paul says there will be no federal bailout.
And finally, watch this YouTube video, which does a good job of taking us to Detroit and letting us have a look at how bad the city has gotten.
And now you are up to date, except that I think a judge has now thrown out the bankruptcy filing, saying it is unconstitutional. Stay tuned.
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