For those who view economics as a morality play, Detroit's bankruptcy is another example of an economic sinner in the hands of an angry god. For those who view economics as a Darwinian test of survival, Detroit is just another species that didn't make the cut. The truth is that Detroit illustrates the consequences of the economic policies of the last thirty-five years. For the city -- like the American middle class itself -- has been hollowed out. Consider, Robert Reich writes, the following:
Detroit is a devastatingly poor, mostly black, increasingly abandoned island in the midst of a sea of comparative affluence that’s mostly white. Its suburbs are among the richest in the nation. Oakland County, for example, is the fourth wealthiest county in the United States, of counties with a million or more residents. Greater Detroit — which includes the suburbs — is among the nation’s top five financial centers, the top four centers of high-technology employment, and the second-biggest source of engineering and architectural talent. Not everyone is wealthy, to be sure, but the median household in the region earns close to $50,000 a year, and unemployment is no higher than the nation’s average. The median household in Birmingham, Michigan, just across the border that delineates the city of Detroit, earned more than $94,000 last year; in nearby Bloomfield Hills — still within the Detroit metropolitan area — the median was more than $150,000.
The median household income within the city of Detroit is around $26,000, and unemployment is staggeringly high. One out of 3 residents is in poverty; more than half of all children in the city are impoverished. Between 2000 and 2010, Detroit lost a quarter of its population as the middle-class and whites fled to the suburbs. That left it with depressed property values, abandoned neighborhoods, empty buildings, lousy schools, high crime, and a dramatically-shrinking tax base. More than half of its parks have closed in the last five years. Forty percent of its streetlights don’t work.
It's true that Detroit failed to adapt to the globalized automobile industry. But, unquestionably, a good deal of the blame for that failure rests with the car companies. They chose bean counters as presidents -- men who were mesmerized by numbers, but who knew nothing of the two most important parts of the automobile industry -- cars and customers.
That said, it is still true that the best way to face a challenge is to pull together. Unfortunately, in the last thirty-five years, Americans have been pulling apart.
This entry is cross posted at The Moderate Voice.