Detroit: The Other Story

Finally, someone has told the other side of the story about Detroit.

After all the conservative crapola fed to us about the plight of one of America’s great cities (some of it involving the subtle suggestion that blacks have mucked it all up), after all the media hand-wringing regarding what to do about Detroit’s bleak financial condition, finally someone has come forth with another view, one that rings true for those of us who have followed conservative philosophy and policy over the years.

David Sirota, writing for Salon.com (“Don’t buy the right-wing myth about Detroit“) makes some counterpoints to the narrative that has been thrust upon us by reactionaries and their fellow travelers in the mainstream press, a narrative that goes like this: the problem with Detroit is that taxes are too high, corporations need more breaks, and, above all, public workers need their pensions cut:

It’s a straightforward conservative formula: the right blames state and municipal budget problems exclusively on public employees’ retirement benefits, often underfunding those public pensions for years. The money raided by those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers’ pension benefits are blamed — and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis. Ultimately, the extra monies taken from retirees are then often plowed into even more tax cuts and more corporate subsidies.

Sirota mentions a truly unbelievable situation involving the Detroit Red Wings hockey team and its quest for a new place to play:

By focusing the blame for Detroit’s bankruptcy solely on workers’ pensions, rather than having a more comprehensive discussion that includes both pension benefits and corporate giveaways, the right can engineer the political environment for the truly immoral reality mentioned at the beginning of this article — the one highlighted this week by the Associated Press story headlined “Arena Likely Still On Track, Business As Usual For Sports Teams Despite Bankruptcy Filing.” Yes, that’s correct: at the same time government officials are talking about slashing the meager $19,000-a-year pensions of workers who don’t get Social Security, those officials are promising that they will still go forward with a plan to spend a whopping $283 million of taxpayer money on a new stadium for the Red Wings.

I recommend you read the entire article, but if you don’t, and if you, like me, have heard for some time now that bondholders need to be protected in all this (remember the GM bailout? same argument) and those greedy public employee pensioners are going to have to take a big hit if Detroit is to survive, you need to know the power dynamics of the situation:

…with Wall Street bondholders intensifying their push to make sure all the pain is felt by public employees, and with the right’s blame-the-workers narrative preventing any real discussion of corporate subsidies and tax policies, it’s a good bet the $19,000-a-year pensioners are going to bear a disproportionate share of the sacrifice. After all, out of all of this situation’s players — corporations that want public subsidies, bondholders, rich folk who want more tax cuts, right-wing [Governor Rick Snyder] administration officials and municipal workers — the retirees earning benefits just above the poverty line have the least amount of political power.

Bottom line: Hockey arena? Yes. Paying promised pensions? Nope.

For all the talk  that has come from the right wing over the years about how powerful are the public employee unions in our large cities, compared to corporate power and the power of Wall Street bankers, those $19,000-a-year pensioners don’t have much of a chance.

9 Comments

  1. Anonymous

     /  July 23, 2013

    I will be very interested in what Redwings (and Tigers) owner Mike Illitch will do as far as a new stadium is concerned at this time. He has stood by the people of Detroit before, such as when he gave GM and the UAW free advertising at Commerica Park after the Auto bail outs and he has done a lot of work in revitalizing downtown. Unfortunately, the city lost most of that momentum when the corrupt Kwame Kilpatrick became mayor.
    That being said, we have discussed the the problems of Detroit in the past here. And I will offer again for all the Fox News Detroit 101 experts: Suppose Joplin did not get cleaned up by FEMA after the Tornado. Do you not believe that the economic decay that has torn down much of Detroit could not happen in Joplin? Imagine if the vacant homes still stood near Rangeline, Main, or Maiden Lane. How many businesses would have come back? How many more homeless people would there be if not for the job program that took place in Joplin? How much more crime? And who thinks that Detroit should get clean up funds that were caused by private industry like Joplin is getting for the “leaded” Tornado damaged yards? Joplin was also given property tax relief by the state to make up for the lost revenues. I wonder if anyone thinks Detroit should get such help? What if Kwame was given more funds than he asked for and did not return them? I mean, Detroit already has a hockey stadium, just like Joplin already has a Library and several city pools. But the pool at Schiff was greatly expanded and the new library is still on despite the fact much still needs to be done in the Tornado zone.
    Now the debate between a fiscal disaster and a natural disaster is an argument for another time. But before anyone dismisses these examples I urge you to really think about the examples that I have offered.

    Kabe

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    • Good points, Kabe. (And Duane.) It has long been clear to me that capitalism needs a critical mass of viable enterprises supported by a strong regulatory infrastructure in order to thrive, things like effective police, good roads and bridges, reliable utilities, and honest officials. (Not to mention a resident public that can actually afford hockey tickets.) That’s why it is almost impossible to jump-start the economies of third-world countries. The Michigan GOP have a prime example of what can go wrong right on their doorstep and they seem bent on making it worse. 🙄

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    • Kabe,

      I second Jim’s comments. And we don’t have to imagine what would happen if the debris had not been cleaned up in the tornado zone–funded largely by the federal government. We know what would have happened, since we know that many business and corporate folks waited to see how many folks would build back in the affected areas before they committed to putting their businesses back in. So, it goes without saying that if the rubble was still here, or even if substantial amounts of it was still around, that few businesses would have come back.

      RDG

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  2. ansonburlingame

     /  July 25, 2013

    Kabe and others,

    Comparing disaster relief in Joplin to the half century in Detroit is a stretch for sure. Check out the story of a town in Texas, a story told by Wallace Bejali during our TIF discussions last year. The point being of course is that local leadership is the essence of any recovery, not aid from others. I continue to call it the “Spirit of Joplin”. Note if you will that Joplin citizens vote FOR (very narrowly) a tax increase to rebuild better schools and not just cry to FEMA or others to undertake that task.

    So Duane and others, local others, did you not that some $40 Million in “aid” will probably be used to build a sports arena around here? Hmmmm? At least on the surface, I disagee with such use of outside funds. Do you? Even Joplin, which is doing quite well in its recovery, gets its priorities mixed up, it seems to me. But I doubt we will build a hockey arena for a private team!!

    What we are seeing in Detroit is a cumulation of a half century of terrible managementa and politics, using money for all over the place, illegally in many cases, and still demanding more and more from the pockets of others. WHO exactly took money from pension funds over that half century? Elected leaders seem to be the culprits over such an extended period of time.

    Who continued to elect those leaders? People wanting “free money” for all sorts of things, it seems to me. Get a dollar from the federal government today, spend it, and expect that same amount to keep coming in, “forever”, is a big problem in America today, is it not?

    BUT, Detroit folks will say, we NEED that money. To build a hockey arena, I ask?

    Anson

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  3. Anonymous

     /  July 25, 2013

    AB, Again, where would Joplin be without Federal clean up? I am just offering a little food for thought. Joplin would be in very serious trouble and you know it. I guess my point is people in glass houses shouldn’t be throwing stones.
    As far as Detroit’s problems, we have had numerous discussions here before and I do not intend to rehash it. But you have left out several other factors of Detroit’s demise. (demise of a single industry?) You only seem to parrot the same political lines. There is much blame and reasoning to go around. And for the record, DETROIT HAS NOT ASKED FOR ANY BAIL OUT. John Cornyn is the one stoking this rumor. Funny, didn’t his state ask for aid after the fertalizer explosion?

    Kabe

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  4. ansonburlingame

     /  July 27, 2013

    Kabe,

    How does a booming metropolis of 1.8 million people supported in large part by arguably the greatest American industry at the time go the the unquestionable bust we see in Detroit today?

    THAT is a complex issue, not subject to analysis in a couple of paragraphs in a blog. But for Detroit to go FROM what it was to what it is today is unquestionable, is it not?

    As for Joplin, the only numbers that I am aware of in terms of Joplin recovery is around $2.5 Billion from “private” (mainly insurance) sources and around $250 Million from government sources, about a 10% contribution to Joplin recovery. So if FEMA cleanup had not happened who knows what Joplin would have looked like today? !0% “less clean”?

    I suspect that absent the massive government aid to clean up the destruction would have resulted in a slower cleanup for sure. Maybe one pickup truck of thrash at a time instead of a fleet of bigger trucks, etc. But absent FEMA aid do you believe that the thousands of volunteers would have simply stayed home as well? Not in Joplin, I don’t. Elsewhere, well who really knows?

    Then consider pictures of many areas in Detroit now. Looks like Hiroshima to a degree, if you will, around Aug 1945. If the federal government came in and tore down all that “blight” in today’s Detroit, who do you think would come in to rebuild a better, modern city, today?

    Anson

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    • Anonymous

       /  August 1, 2013

      AB, I didn’t forget this, I have been on vacation and avoided politics and news in general. First off, the decline of Detroit was a slow death that started in the 70s as far as I can see, and possibly after the 68 riots. We have wrangled with this before when you blamed unions for the demise. Now you want to blame democratic policies. I suppose you believe both. I will be the first to say the politics there have been colorful (no pun intended) to say the least. The abandoned homes were an issue during Mayor Coleman Young’s tenure and only worsened. This started after the riots with the” white flight.” The tri- county area there still boasts some 5.5 million residents with many suburbs that compare with any in the country. Many are still run by Dems by the way. The number one reason for the decline to me is the down sizing of the auto industry. Foreign autos coming into America during the initial 70s gas crunch, automation, (which is greatly under reported) poor management decisions, unions which held too much power at that time all contributed to the down fall. How and why politicians in Michigan let this happen (singular economy) is baffling. The only comparison I can think of for you is NW Arkansas. Its growth has been side by side with the growth of Wal Mart. What if Wal Mart suffered some sort of slow, massive decline? What other industry at this time could carry it? Golf and tourism? No way, Michigan has plenty of that. It would look very much like SE Mich if this were to happen.
      While you focus on the negative, I would suggest to you or anyone else to follow this story a little closer. Look up the names Dan Snyder, Peter Karmonos, Mike Illitch, or Roger Penske. They are investing their fortunes heavily into downtown Detroit.
      Having lived and worked in the Detroit area for a short while in the 80s I have great memories of some of the people I knew and worked with. They were every bit as strong willed and of high character as anyone I have ever known and many were facing difficult times as the down fall was in full swing.They would qualify as “Boot Strappers” as they like to say around here. But people back then never seemed to want to tear down others as we see here today nor did they carry the hatred I see here on the internet. I have just as much hope for a Detroit as I do for a Joplin, I see that as our difference. You seem to relish Detroit’s downfall as if it proves you are correct in your assumptions. I make this point as I have seen that you now end all of your comments with a shot at Detroit. What the Hell is that all about? America would not be the same if not for the auto industry during WW2. Does anyone think Huyndai or Kia will retool for us if needed?

      Now, if Joplin were to be cleaned by one pick up truck at a time as you suggest, how many businesses would have came back? That would have been a slow death and you know it, boot straps or not!

      Kabe

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    • Anonymous

       /  August 4, 2013

      AB, One last question. West, Texas has now received FEMA assistance after being denied at first. I would guess the demographics there would be similar to that of Joplin. A private company caused this, why should they receive tax payer money? Why didn’t they pull themselves up with their boot straps? I guess the pick ups were not enough there.

      Kabe

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  5. ansonburlingame

     /  August 5, 2013

    Kabe,

    At least for me, Detroit holds great interest as I see it’s long and tortuous demise as indicative of bigger things happening around America today. As previously stated it is a complex subject, why Detroit became what it is today, a real mess.

    While I am in no way a student of the Rise and Fall of the Roman Empire, I suspect that Rome itself remained very strong for several centuries as the infrastructure of the larger Empire began to crumble. Is that happening today with America? My pessimism says yes, such is the case and I see Detroit as only a microcosm of that larger issue.

    Ballons can expand very slowly or very fast. As well such ballons can burst with a sudden pin prick or simply run out of hot air to keep the expansion going. But ballons and countries and empires expand, contract and some blow up suddenly with suddenly being defined in terms of years, like Nazi Germany, or much slower such as the British Empire.

    I will also freely admit that the past month spent in my home town, with people I have always greatly admired, has renewed my personal insight into what it takes at the individual level to both survive and even grow over time. I look at Georgetown, KY since 1960 and at the same time Detroit since that same year, the year I graduated from high school.

    They are dramatically different stories over a 50 year period. Why I ask myself. The answers are being seen in recent comments and blogs of my own. Right or wrong, they are current thoughts from me. The culmination of such thinking is wondering how the “spirit of Irene” can be redistributed elsewhere to begin to resolve some of our national issues pounding at all of our own “gates”.

    Anson

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