For Cause Of Detroit Bankruptcy, Look to Citizens

Detroit’s impending bankruptcy has dominated national news since last Thursday, when the city’s emergency manager, Kevyn Orr, took the step of asking a federal judge for Chapter 9 protection.

Since then, hundreds of thousands of words have been written and spoken about how Detroit got where it is, and what it needs to do next. Should we let the city fail and impose draconian cuts on city employees and pensioners? Should the president find a way to prop up Detroit until it can find its way out?

In last weekend’s New York Times, Steve Rattner, who managed another Detroit bailout — that of the auto industry — urged the Feds to step in and save the Motor City from itself. He noted several of the differences between the auto industry and the municipality, but left out the biggest one: governments don’t make anything that someone might want to buy. Governments give out things that people want to take.

If we believe that municipalities do, indeed, serve "customers," residents of Detroit have been voting with their feet for the past 40-odd years. At some point, the city’s elected officials and unions (who continually demanded more and more from their host) should have recognized what was coming and done something about it.

Back to Rattner’s piece. He notes that, "apart from voting in elections, the 700,000 remaining residents of the Motor City are no more responsible for Detroit’s problems than were the victims of Hurricane Sandy for theirs.” I'm pretty sure the folks down on the Jersey shore would have voted for Sandy to land someplace else.

As Americans, we’re actually asked to do very little as citizens, other than make sure our taxes are paid on time. But voting is the core component of a free society.

Every two or four years, Detroit’s residents have had a chance to pick their leaders — and they’ve picked badly, time and again. Detroit is, unfortunately, a good example of citizens not voting in their own best self-interest.

Despite the financial mismanagement — and the poor showing by the populace, from mayors to everyday citizens — the most worrying thing about Detroit is that it shows what happens when social mobility disappears.

Those who could afford to leave Detroit have done so. This is much more than white flight. Anyone with the wherewithal and the opportunity to get out of town has left. Has anyone done a study to examine how many of the city’s pensioners still reside within the Motor City’s limits, or even within Michigan?

While manufacturing has historically been Detroit’s biggest source of employment and provided its tax base, economic changes didn’t come overnight; they occurred bit by bit, over several decades. Institutional and municipal blindness prevented the realization that most of those jobs wouldn’t come back. But that was no reason to just stop working.

Unfortunately, too many did. Too many companies fled overseas or to the American South, where cheaper and more stable labor agreements could be forged. Want to find the American auto industry? Go to South Carolina, Tennessee, or Alabama.

The massive unemployment numbers, illiteracy, and blight didn’t happen last Thursday. They occurred as a result of decades of poor governance. Where were any of this town’s elected officials, as they saw their citizens either disappearing or falling further and further behind even the minimum standard of living for an American city?

Any resolution, good or bad, will also take time. It will be years before Detroit has wound its way through its labyrinth of lawsuits, countersuits, and political windmill tilting, all of which will drain still more dollars from an already empty fiscal well.

The state and people of Michigan and a bankruptcy court have the immediate responsibility to determine what, if anything, should be done about their flagship city.

This is what the law dictates and how our republican, representative system of government is supposed to work. For Detroit, it’s been too long coming. Asking Washington for help will only drag out an already painful process, and once again put the capital into the business of picking winners and losers.