A federal judge just recently approved Detroit’s use of the bankruptcy laws to deal with the city’s staggering financial problems. This ruling will allow the city the freedom to pay pennies on the dollar to its creditors, and to significantly reduce its current and long term employee pension obligations. The decision is but the latest chapter of the fall of what just a few decades ago was one of the most thriving American cities. Detroit’s population has been shredded—not just white flight but green flight as more and more people with even a modicum of wealth fled the crime, corruption and breakdown in city services. What remains is a skeletal population made up of a disproportionate number of residents living below the poverty line with no jobs and no prospects.
The cause of the collapse has been well covered. The auto industry suffered from foreign competition and poor quality, but nevertheless negotiated rich union pay and benefit packages —both for current employees and retired employees. City employees followed suit and union-supported city leaders handed out retirement goodies to stay in office. Costs went up, tax revenue went down. It was only a matter of time before the chickens came home to roost.
Reaction to Detroit’s downfall, sadly, has been predictable. Liberals blame the state for not doing more to take care of the poor still residing in the city, and the conservatives point with not so hidden glee and say, “I told you so, this is what happens when politicians ignore the future costs of employee entitlements.” The conservatives invariably add a coda: “Detroit is the canary in the mine as every American city will suffer the same fate if ” Yada yada yada.
Beyond the politicians, perhaps even more disquieting is the lure of the city to so called, “urban explorers.” These visitors pose with a wide smile next to a blighted house as if they were standing next to the Parthenon, in each case posing in the quiet stillness where once existed a thriving, bustling metropolis. Anthony Bourdain, who produced “Parts Unknown” which featured the city, accused these visitors of engaging in “Ruin Porn,” and I can see his point.
In many respects, Detroit deserves much of the criticism it has received, and there’s truth to the assertion its fate can and should serve as a warning to other American cities. But Detroit is not ancient Greece, it’s America, and we shouldn’t take joy in its suffering.
Hopefully, the bankruptcy strategy will work and, while short-term pain will be inevitable, the city can rise again. It’s in everybody’s best interest Detroit is restored to its rightful place as a great American city.