Tragedy of Detroit shows 'big unit' America is out of gas

Reuters

Detroit's Emergency Financial Manager Kevyn Orr talks to members of the media outside the Detroit Newspapers building about the report he delivered to the State of Michigan about Detroit's finances in Detroit, Michigan May 13, 2013.

Article Highlights

  • Detroit, once one of the nation's most vibranty cities, faces imminent bankruptcy.

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  • Detroit's 78k vacant structures and 60k vacant land parcels "present an ongoing public safety & public health concern."

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  • Detroit is an extreme case, but similar problems afflict many of our central cities.

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  • Now Detroit has ineffective public services and overwhelming public obligations. Bankruptcy looms.

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Detroit, once one of the nation's most vibranty cities, faces imminent bankruptcy. That's the headline from the report last month of Emergency Fiscal Manager Kevyn Orr, issued 45 days after he was appointed this spring by Gov. Rick Snyder to take over the city's government.

"The path Detroit has followed for more than 40 years is unsustainable," Orr said, "and only a complete restructuring of the city's finances and operations will allow Detroit to regain its footing and return to a path of prosperity."

The police department, his report says, "is in disarray," nearly one-quarter of fire department operations could be "largely inoperational" on any given day, the city-owned electric grid "has been a disaster" and the city's water system, which serves a 4-million-person region, "has a history of dysfunction."

The city's 78,000 vacant structures and 60,000 vacant land parcels "present an ongoing public safety and public health concern."

It's a tragic situation that could be regarded as just the fault of corrupt public officials. The most recent former mayor of Detroit, Kwame Kilpatrick, has gone to jail.

So has former City Council president pro tem Monica Conyers, the wife of 48-year Congressman John Conyers.

But Detroit's problems are more fundamental. Detroit is an extreme case, but similar problems afflict many of our central cities.

As it happens, I was in some small sense present at the creation. I grew up in Detroit and in affluent suburban Birmingham and in the summer of 1967 I was an intern in the office of liberal Mayor Jerome P. Cavanagh.

That was the summer of Detroit's six-day riot in which 40 people were killed. Part of the time I found myself in the misnamed command center with the mayor and Gov. George Romney.

In my childhood, Detroit was proud of being the fifth largest American city, the center of the auto industry, and home of Hudson's, the nation's second largest department store.

Detroit's inventors, entrepreneurs and financiers made it the second fastest growing city from 1900 to 1930, behind only Los Angeles, which started off much smaller.

Newcomers poured in from eastern and southern Europe, from the farmlands of the Midwest and Ontario, from the hills of Appalachia and the Black Belt of Alabama to work in the factories.

Detroit was the prime example of what I have called "Big Unit America," in which the heads of large organizations -- Big Business, Big Labor, Big Government -- made the big decisions, and the hundreds of thousands of people below them, small cogs in a very large machine, carried them out.

For a time Big Unit America seemed to work splendidly. The Big Three auto companies, with some cooperation from the United Auto Workers and at the behest of Big Government, made Detroit "the arsenal of democracy." Arthur Herman tells the story in his recent book Freedom's Forge.

The Big Units' prestige continued high for a generation after the war. General Motors's president was Time's Man of the Year in 1955. John Kenneth Galbraith's 1967 book "The New Industrial State" argued that big automakers could manipulate demand through advertising and should share more of their inevitable profits with union members and the government.

That was just about the time the Big Units started to sputter. But Detroit's leaders didn't notice.

White flight to the suburbs accelerated after the 1967 riot, and in 1973 Detroit elected its first black mayor, Coleman Young -- smart, charming, politically shrewd.

But his 20 years in office were disastrous for the city. He ended what he considered police brutality and crime rates soared. There were hundreds of arsons every year on Devil's Night, Oct. 30.

Young relied on Big Units for economic growth -- Big Government paid for projects like a People Mover that moved few people, and the city condemned one of its few viable neighborhoods for a General Motors plant. Unions were given a stranglehold on city finances.

Numbers tell the story. In 1950 there were 1,849,568 people in Detroit. In 2010 there were 713,777. White flight was followed by black flight: There were fewer black residents in 2010 than 20 years before.

General Motors and Chrysler were forced into bankruptcy in 2009 and Hudson's downtown store was demolished in 1998.

Now Detroit has ineffective public services and overwhelming public obligations. Bankruptcy looms. The Big Unit model doesn't work any more.

 

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