There should be a much smaller Detroit

"And it shows: According to Mr. Orr’s report, Detroit has more than 78,000 vacant structures, 66,000 vacant and blighted lots, thousands of non-functioning street lights and a demoralized police force that takes nearly an hour, on average, to respond to 911 calls. This is an unspeakably sad situation for Detroit’s 700,000 remaining residents, only a third of whom have jobs. It’s a crisis rooted deep within the history of a city that, for many years, rose and fell economically with the auto industry — while poverty, racial segregation, crime and official corruption festered. Wisely, Mr. Orr focused not on how Detroit got to this catastrophic crossroads but on where it goes from here. He leavened his dire picture of the present with a hopeful plan for the future. It calls for a 10-year, $1.25 billion investment in public services that would remake Detroit’s institutions, root and branch. The only way to finance this plan for rebirth is to seek concessions — deep concessions — from the public-employee unions and private investors that have claims on the city in the form of pensions and municipal bonds."  Washpost

----------------------------------

Detroit will not recover.  The statistics cited above are really reflective of a post-mortem situation.  To try to resuscitate the city is merely to pour good money down the drain in a vain pursuit of an industrial revolution that has deserted the place for more business friendly environments.

IMO, The state of Michigan should formally revoke the city's charter, seize what assets the city possesses and proceed to demolish large parts of the city.   Wrecking crews, grass seed and retraining programs for that portion of the city's remaining population that can be encouraged to relocate; These are probably a recipe for the rebirth of a much smaller town.

That kind of town could construct a new economy based on some form of enterprise that is essentisally unrelated to motor vehicles.  pl  

http://www.washingtonpost.com/opinions/detroits-recovery-plan-has-implications-for-all-of-america/2013/06/23/b92a9586-d9e2-11e2-9df4-895344c13c30_story.html 

 

Comments

[Tim Bassett]

Facetiously one could point out that Rome fell from a population of 1 million at the height of the empire to around 20,000 in ad 1,000 and made a comeback but realistically I think you are probably correct.

[William R. Cumming]

Or just declare a tax free city and admit 1M Chinese under 35!

[steve g]

WRC
You mean a tax free enterprise zone
like Jack Kemp suggested for Harlem
and other parts of NYC during Reagan's
time. We know how that worked out.
Just another campaign brainstorm.
Not to say it would never have succeeded.

[harry]

Or if you really want to make things interesting offer visas for 1mn Chinese women. Given China a headache (see how all those only child boys feel about the shortage of chicks, and make Detroit irresistible for American men with "yellow fever".

[nick]

Along those lines, Detroit has been an ongoing entity since the turn of the eighteenth century. Michigan has only been a state since 1837, by comparison. Detroit's not over, just moving on to its next incarnation, albeit painfully.

I think the big take away from this article is the challenge to the sanctity of the general obligation bond. Michigan doesn't have state provisions for municipal bankruptcy, ie: chapter 9. The Governor has the power to declare a financial emergency and impose a financial 'czar', like Mr. Orr, to fix the problems. Suddenly the decisions made, reflect not just upon the municipality, but the state as a whole.
Traditionally, municipal defaults on general obligation bonds have resulted in recovery rates of nearly 100%. Boiled down: even if the general obligation bond you owned defaulted, you were nearly certain of getting 100% of your principal back in the recovery.
If Detroit's state overseers let the city default and are able to impose recovery rates of pennies on the dollar, this would be a huge precedent. It would effect the ability of the entire state to borrow. As pointed out in the article, which I thought was quite good, this has national implications for the risk assessment of all municipal bonds.
It's worth watching.

[Steve]

Why not some sort of enterprise zone for truck farming and orchards? Seriously, Detroit has some relatively affluent suburbs that might pay a little more for locally produced organic tomatoes, melons, potatoes, apples, peppers, and more exotic stuff, etc.

On a small scale, urban farming is a big deal in some places.

Just make sure the regs are written so that a giant agri-conglomerate doesn't end up owning 10,000 acres.

Maybe draw from the old homestead act with parcels of 20 acres or so.

[CK]

Detroit just needs to import a new people.
It is working wonders for the rest of the USA.

[Tyler]

They just need to export the people they currently have.

The Paris of the West has become this wreck.

This is what is coming to a major metro center near you.

[Dr. K]

What do you mean?

[John Minnerath]

Export the unwanted excess where?
Big cities are in decline everywhere.
There are no jobs, the industries that employed huge labor forces have gone and the frustrated youth go deeper and deeper into a culture of drugs and handouts.

[bth]

There is a lot of good engineering talent and machining or tooling capability in the region. But the area can't survive the structural overhang of supporting 78K abandoned buildings and 66K debris covered lots. If around 200-250 lots or buildings were cleared per day it would only take about 2 years to create some enormous parks or green spaces. Until those structured are removed i don't see how the area will move forward.

[ked]

I was there 2 weeks ago... downtown & in the suburbs. while it certainly exhibits lotsa badness, the overall vibe was not as bad as I was lead to expect from recent years of bashing. yes, it has overextended itself & imploded, yet there remains a core built of past drive & near-future potential that, with some decent leadership & a bit of patience, might even yield a new flavor of Midwest urbanism. & the local auto industry seems to be doing ok...

[Ramojus]

"Detropia" a fascinating documentary about the city and its inhabitants.

Pay special attention to the owner of "THE RAVEN LOUNGE". I think that he says it all....

http://www.detropiathefilm.com/

[eakens]

We just need to import some better weather

[Al Arabist]

Maybe it's time for people to depend on themselves and not bend over backwards to be global citizens, an empty category in so many ways.

[Fred]

Governor Snyder is already asking for 11-B visas and special tax breaks for immigrants - the current residents evidently get to foot the bill - and spent the past week in Israel supposedly looking for investments - maybe we can get some of that $3 Billion/year back.

[The Twisted Genius]

Old Detroit will not return. That's not that unusual. Isn't the West full of ghost towns? My old hometown was a manufacturing center in the early 1800s. As a child, I played in the long vacant foundations of those factories surrounded by the New England forest. Life goes on.

[Jose]

Miami has better weather, but is not in any better shape. Perfection example of "Statist" mentality making things worse. None of those investments that caused the current mess paid off, PL is correct neither will the new ones.

[cal]

The gutting of American industry is nearly complete.
From GATT in 1965 to the latest TTP today.
Next up--gut the population.
I am consdering New Zealand.
P.S. Would the last American out of the country please bring the flag.

[William R. Cumming]

Thanks Steve G! Perhaps instead an outright sale to China or Canada?

[mbrenner]

Colonel

Here's an alternative to consider. Redirect to Detroit, Cleveland, etc. the tens of billions of federal dollars that lay the foundations for the modern economy of the Southwest via NASA, Sematech, sundry military bases, the Hoover Dam, the Central California Water Project`- among others. Allow Southern California, Phoenix, San Antonio, Houston, etc. revert to their natural state of sage, cactus and mangrove. Re-establishing an ecologically sustainable environment will require that a substantial portion of the immigrant population take their barbecues back up North - or, if addicted to sweating, to move across the border to Sonora and Chihuahua. A further benefit to the national economy would be a sharp reduction in the health care costs for treating the current epidemic of melanoma.

[Babak Makkinejad]

I think immigration to New Zealand requires one to be younger than 40 years of age.

[Babak Makkinejad]

That is fine but where would all these people who have now become redundant go?

Since being a private servant to a household is no longer acceptable in the United States, the surplused population cannot be hired as maids, nannies, gardeners, cooks etc.

This is in contrast to Brazil or India were the surplus population can eke out a living serving others.

[Babak Makkinejad]

Weather in Destroit is still more clement than Iowa, Nebraska, Illinois, Minnesota, the Dakotas, Colorado, and most aother areas of the United States.

Rome is on the same lattitude as Detroit - and it is a much nicer place.

In Rome, girls do not get raped in high-schools and people can walk around during day without fearing for their safety and security.

[CK]

In Dr. Putnam's opus Bowling Alone, he finds that: in places where racial diversity is high, community is uniformly low. But only in certain areas where racial diversity is low is community high; in other specific areas of low racial diversity there is also no community.
There is a marked difference between the community sense in places like the Dakotas, Idaho, etc. and prevailing community attitudes and behaviours in Detroit, Chicago, Magic City etc.. Tyler has the right of it but it is not currently fashionable to see certain things as Tyler sees it. Fred is correct also.
We are approaching 40 years of the Detroit experiment. It has failed.
The USA has been importing a new culture since 1965, Latino is not a race it is a culture, it is not a culture compatible with the Northern European cultures that built the USA, nor does it appear to be a culture appropriate for the "information age economy". Our rulers and the hostile intellectual minority that controls our cultural discourse, our legislative assemblies and infotainment industries have decided that making the USA a minorities nation is a good thing. I expect it to be as successful as Iraq.