Motown

So if you've heard the news at all recently, you've no doubt noted that Detroit is bankrupt.

A bankrupt city is an interesting animal for a number of reasons. Detroit's woes stem from a long history of local, national, and even global events - most of which the city itself could have done little to remedy.

First off, Detroit became a manufacturing hub in the early part of 1900s. This is due to a series of happy accidents - it was on Lake St. Clair and Lake Huron, which means that it has easy access to shipping of raw materials from the steel mills in Pennsylvania and beyond. It also was the place which - for some reason - saw a significant interest in the design and innovation of automobiles, with the associated start up companies. Ford, GM (including Cadillac, Pontiac, Chevrolet, GMC, and others), and AMC all began in and around Detroit. In a rapidly expanding spiral of growth, ancillary industrial expansion, and support services, together with great marketing and good prices, Detroit became the place to go for people to be able to earn a good wage. Here is where the labor unions of the 1800s really were able to flex their muscle, staging demonstrations and lobbying for better working conditions and wages.

All of this expansion meant a vast influx of people, which generated need for housing, schools, roads, water and sewer lines, parks, libraries, and on and on... The horizon was distant, and who would have ever thought the bubble would burst? The city expanded, riding the rising tide of industrial might.

WWII was generally kind to Detroit. Factories were converted to military purposes, and women entered the workplace filling roles vacated by men. Most of these women did not stay in the factories, but many did, which began the modern movement for workplace equality. But I digress.

After WWII, the returning GIs fell on Detroit like a tidal wave. Black folks, in particular, found the easy access to jobs, good/affordable housing, and the relative lack of stereotypes found in the South to be a boon. As a result, Detroit is now over 80% African American. This is in stark contrast with the rest of the state.

Detroit's population continued to grow through the 50s, when the expansion stopped and started to decline. Manufacturers, taking advantage of cheaper labor outside of urban areas, began to spread out their interests. Now you had people making parts all across the country, and even assembly plants were moved to different locations. As the plants moved,so did the workers, and the population declines have been dramatic. The population of Detroit peaked between 1950 and 1960, when there were over 1.8 million people in the city. By 1990, the population had decreased to 1 million, and in the latest census, the number is only around 700,000.

I haven't mentioned much about the impact of environmental legislation, both in the cost of raw materials and in the manufacturing processes themselves, and the energy crises. Really, these factors played a role in the decline of Detroit, but they were just additional blows to an economy already reeling from the relocation of factories and support services outside the region.

So now, Detroit is faced with a vast housing surplus, decaying and dilapidated infrastructure, a vastly diminished tax base, and a veritable ocean of debt. Bankruptcy, in Detroit, is really the only viable option. So who is to blame, and what can we learn?

As can be seen, blame is difficult to pinpoint. There were so many factors that led to the decline that it's impossible to single out one that had a stand alone significant impact. One easy thing to point out, though, is the shortsightedness of planners and city officials. When one city or region puts all of it's eggs into a particular economic basket, the fall is absolutely disastrous. We have seen that in places like Houston in the 1980s, where there was no actual decline, but the anticipated growth was reduced from 20% to 2%. Houston, however, along with many other cities across the nation, have continued to prosper. Indeed, the region surrounding Detroit has continued to prosper in ways that are very dramatic. The population of the Detroit region has continued to grow, while Detroit itself has contracted to the point of insolubility. So what are we to learn?

Economic diversity is important. Having jobs in as many different sectors as possible is vital to the long-term growth and continued relevance of any city. Being so closely tied to any one particular industry means that the city is also subject to the periodic ebb and flow of that industry. Having a broader base of support, having a variety of economic sources, means that there is greater resilience to the vagaries of the market.

Further, fiscal responsibility and conservative policy are important. Cities are NOT like the Federal government. There is no regional shift possible: the Feds can rely on the idea that if California is doing poorly, that New York and Texas will be there to pick up the slack. Further, the Fed can raise taxes relatively easier, and the spending policies are much more likely to reflect the very long term - even out to 20 years or more. Cities don't have that luxury. In my experience, five years is really the longest term that a city should commit to. Beyond that, the waters are just too murky, market conditions just too mercurial, to perceive well what will happen.

Finally, I would (humbly) suggest that the responsibility lies with the planners for Detroit. City planners are not the end-all, be-all of a community. But we have the specific and unique task of trying to read the tea leaves and decide what is best for our communities. We work to serve and to improve the lot of the folks we live with. We have been trained in policy, in theory, and in practice on how to make places work. It was an unmitigated failure on the part of the city planners in Detroit, which failure goes back to the 50s and continued to the present day. Why didn't someone notice the population trend? Why did no one notice the declining tax revenues? Why were the costs of maintaining dilapidated infrastructure in far-flung regions never considered? Why wasn't more done by city leaders to help stem the tide of folks abandoning the area? Why didn't they reach out to other industries in an effort to diversify job/tax base?

I have been to Detroit. I was there in the late 90s when things were pretty bleak - and looking bleaker. I have been to many large cities around the world, and the thing that scared me most about Detroit was the absolute lack of people. No vehicular traffic. No folks milling around. No business people waiting for a bus. It was eerie, like a post-apocalyptic nightmare. I felt very uncomfortable and couldn't wait to get out. Which is a feeling I have never had before, even in the most sketchy parts of the various large cities I've been to, including LA, Chicago, Houston, Seoul, London, Paris, etc.

Ultimately, Detroit's failure was due to poor planning.