Detroit needs emergency action, not an emergency manager

DETROIT – The appointment of the emergency manager to rule Detroit will not turn the city around. Nowhere in Michigan have emergency managers worked because their intent is to punish a city or town, its unions and its residents for problems not of their making.

Detroit is far from the only community feeling the shock of the economic crisis. From Stockton, CA to Scranton, PA to Providence RI, the problems hitting urban areas, and many rural and suburban communities, spreads across the entire country.

It is no surprise that Detroit has a fiscal crisis. Economist Vic Perlo as long ago as 1961 referred to Detroit as a “one crop” city ruled by the auto industry, a rule that purposely made it harder for other industries to take root.

Almost from the beginning Detroit was going to sink or swim with the fortunes of its one cash crop. No other major city in the United States was so tied to a single industry.

Globalization, automation and the seeking of ever greater profits caused all auto companies, domestic and foreign, to move production. All contributed to Detroit losing almost 90 percent of its jobs and tax base.

Another huge factor, too often overlooked, is that Detroit’s Black residents have endured a long history of racism and extreme segregation. Southeast Michigan is one of the most racially segregated areas in the entire nation.

The practice of redlining, backed by Federal law, prevented African Americans from getting the government backed mortgages available to white people buying homes in the suburbs.

This practice greatly spurred the white exodus from the city contributing to a growing polarization between the city and it suburbs. While this has lessened in the past decade as attitudes regarding equality and racism have improved, the blaming of the city’s elected leadership and residents as the cause of the problem resonates with far too many.

“We are all Detroit” should be everyone’s cry.

With a dwindling population and tax base, Detroit, as did many other cities, took out loans to keep up with expenses, hoping a better day would come. The Wall Street caused economic crisis robbed any hope of recovery.

With the funding of essential services, like health care, retiree benefits, police, fire, and education left to local bodies, the expense becomes insurmountable when population and tax base have been eroded.

Detroit has already downsized it workforce, going from 30,000 public employees in 1970 to well under 10,000 today, but the city is still responsible for the benefits they have rightfully earned.

A more equitable way of funding, national or regional in scope, is needed.

Federal action is a must. Unemployment is at crisis levels. Mayor Dave Bing has said the unofficial jobless rate is probably close to fifty percent. Finding a job in the city is next to impossible. While it’s known as the motor city, many residents cannot afford cars and rely on a poor transit system that does not connect to jobs in the suburbs.

Further austerity measures and cuts should be unthinkable.

We need a national program to rebuild our infrastructure, winterize homes, develop renewable energy, build energy efficient mass transit and more. Detroit is a logical place for such initiatives.

Since they helped create the crisis, let’s give Wall Street banks a “haircut.” The principal and payments of Detroit’s outstanding debts to the same banks that foreclosed on the city’s residents should be written down.

The real problem facing the nation is not budget deficits but growing inequality. Since the early 1980’s fifteen percent of our national income has transferred from the bottom ninety percent of households to the top ten percent.

The main problem we face as a nation is not a lack of money; the problem is too much of it is in too few hands. A tax structure based on trickle down has not worked. It’s time to increase taxes on the one percent.

Military spending far exceeds what is needed to safely defend our nation. Almost all of it ends up in the accounts of large corporations whose interests have more to do with making profits than providing security or fighting terrorism. Cuts are needed and money saved can help transition toward rebuilding our communities.

Finally, the auto industry profited hugely from Detroit in it’s hey day. A tax on the entire auto industry, both the domestic and foreign producers, to finance transition in cities abandoned by that industry sounds reasonable.

Author and educator Diane Ravitch speaking in Detroit said school districts like Detroit, which tend to end up on the bottom of standardized test scores, are districts with “intense poverty, intense racial isolation.” She said, “Schools alone cannot right the wrongs of our society.” The same can be said for the city as a whole.

Art Perlo contributed to this article

Photo: John Rummel/PW