Tuesday, July 23, 2013

Pulling Apart

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.


Lorne said...

A portrait of startling contrasts, Owen. The day the manufacturing industry abandoned the basic wisdom of Henry Ford was the beginning of the end for so many communities.

Owen Gray said...

The basic wisdom behind any business used to be know your product and know your customers, Lorne. Now that wisdom is know how to read a balance sheet.

You have to be able to read a balance sheet. But that's not what makes a business successful.

The Mound of Sound said...

What Reich describes is the culmination of a white exodus that began in the 70's. Detroit was evacuated, abandoned to its black population. The city's plague of derelict homes was a product of this depopulation.

Consider it a reverse or economic apartheid. As blacks moved into what had been white neighbourhoods, the whites bailed out. The whites built affluent satellite cities and abandoned the downtown core.

The neighbouring city of Dearborn, the home of Ford, has become an Arab community, the largest by far in the U.S.

Something similar is just beginning elsewhere in America - the evolution of gated municipalities. Cities of the rich complete with their own police, fire and other municipal services and utilities. The well off live in ease, safely removed from the poor and lower working classes. Most importantly they're spared the expense of social services, welfare, low-income housing, etc. What's next, Versailles on the Hudson?

What we're seeing (and I wish I was confident it couldn't happen here) is a physical stratification of society, the shattering of social cohesiveness. Is this the restoration of peasantry and aristocracy, the advent of a form of economic feudalism?

We have always had rich and poor neighbourhoods often situated in close proximity within the same municipal entity. Now the ladders of social mobility are being pulled up and hidden safely behind the walls of gated or quasi-gated municipalities.

Owen Gray said...

The latest twist, Mound, is that people like George Zimmerman patrol the streets, to ensure that the poor and indigent don't get too close to the gates.

And to people like Zimmerman, the poor and indigent all look just the same.

The Mound of Sound said...

Driving while black, now walking while black, what's next - simply being black? I know for a fact that there were parts of the Detroit area where a black man driving an older model car would be automatically stopped by police without the slightest reasonable cause. Even affluent blacks got the same treatment.

Linda Shellington said...

Owen, to paraphrase Jimmy Carter--If you don't want your tax dollars going to help the poor, then say so. Just don't say you want a country built on Christian values.

Owen Gray said...

When I was a grad student in North Carolina, Mound, a guy told me that -- if I did a little Biblical research -- I'd discover that, after Cain killed Abel, God marked Cain and his descendents and sent them all into the Land of Nod.

The land of Nod, he said, was Africa. And the "mark of Cain" was their back skins, which used to be white. It was always easy ever after, he said, to identify the descendents of the first murderer.

Some garbage just keeps getting recycled.

Owen Gray said...

When they gave Carter the Nobel Peace Prize, Linda, they knew exactly why he deserved it.

e.a.f. said...

Looking at pictures of Detroit almost made me cry. One picture was of a Catholic cathederal which the church had abandoned. The building has once been beautiful. There were houses which had once been lovely, looking like something which had been bombed out. Actually, Baghdad looks better than many sections of Detroit You wonder how it got to be so bad.

The American government spends billions on Pakistan, which doesn't like the Americans, spends billions in Afghanistan and iraq but in their own country, nothing. It is beyond comprehension that such a once lovely city could be destroyed in such a manner, with no assistance to remedy the problem, from the federal government.

It then occured to me that there was a lot of land just sitting there, with nothing on it. So who owns it? What will happen to it? Is a corporation buying it all up? Does the city own the land now?

At some point I expect some developer will go in and start building gated communities and making a great deal of money,.

what the city of Detroit could do is insist those who work for the city of detroit, live there. They could also offer land to habitat for Humanity. They could offer land under something akin to a homestead act. people would qualify for the land if they built their homes and stayed there for a min. of 5 yrs. It might bring people back into the city.

This is a classic example of what happens when state/provincial governments fail to keep cities alive and happening, even if it means supporting services.

What is interesting, is the city tried to declare bankruptcy with an $18B debt. When you roll in the money B.C. Hydro owes, B.C. has a much larger debt. When all of the lieberals schemes, to make money, fail, B.C. could also be filing for bankruptcy.

Owen Gray said...

What Detroit lacks -- in fact, what North American society lacks -- is a sense that we're all in this together, e.a.f.

Detroit has lost its sense of community and bought into Margaret Thatcher's idea that there is no such thing as society -- just individuals.