Plenty of cities have survived the loss of major industries. Pittsburgh survived the collapse of steel. Properly run cities plan for the futuire, diversify their industrial base so they aren’t reliant on one industry, maintain a tax and regulatory structure that remains competitive to attract new businesses, work to keep crime down and the quality of education up so that educated workers will move to the city, etc.
Detroit did very little of this. Instead, it played race politics for two decades and gave plenty of perks to special interests. It made promises it couldn’t keep, then instead of renegotiating and working to contain costs when the revenue started to dry up, it borrowed money and raised taxes to the point that it drove out the tax base.
And what will you do when the taxes drive away the people in the suburbs? Pass a law preventing them from moving? Seize their money if they try to take it out of state? Isn’t the lesson of what happened when Detroit raised taxes in the city sinking in yet? Do you think those wealthy people lack the resources to move elsewhere?
Also, is it even legal to simply ‘expand the boundaries’ of a city for the purpose of taxing people? Presumably, these bedroom communities they live in already levy their own property taxes and such.
The suburbs are already been stressed by seeing the deterioration of the city hurt their property values, and inner-city crime is slowly being exported into those suburbs. One of Detroit’s bigger worries should be that they’ll lose what’s left of their productive population if the suburbs become too much like the city.
You never did explain how these people are ‘parasites’. They presumably pay the property taxes that are levied on them. If they commute into the city they are presumably working for city businesses that still pay tax. They probably go to hockey games and restaurants in the city and pay for other city services. So exactly how are they being parasites?
Right wingers typically overestimate the importance that people attach to taxes by several orders of magnitude. I dare say for every 1000 people that left the city, you could count on your hands the number that were driven out by taxes. Crime probably outranks taxes by several times, if you raise taxes to adequately police the city, people have more incentive to stay.
Let’s say it would take $20 billion for the federal government to bail out Detroit. To date we’ve spent about $645 billion for the war in Afghanistan and about $814 billion for the war in Iraq. I’m sure the Pentagon could shake $20 billion out of its couch cushions. Let them do 1% as much for Detroit as they have for Kabul.
Bail out Detroit, and there are about a dozen other cities that are going file bankruptcy and demand the same thing. Gonna bail them all out? How about the state of California? What if it declares bankruptcy? Bail it out?
In the meantime, you’re creating a huge moral hazard: Cities will have no incentive to curb over-generous pensions and other expenses, because they know that ultimately they won’t be on the hook for them.
Bailing out Detroit is the worst idea I can think of. President Obama apparently agrees, since he already told them to take a hike.
Left wingers typically underestimate that distaste for taxation is due to their inevitable corruption. Is it really shocking that most of the worst run government entities are blue? And that left wingers have drained the life blood out of them?
Detroit doesnt deserve to be bailed out. It must serve as an example of what happens when you have corrupt/incompetent leadership. It sends a message to locals that they are responsible for their electoral choices.
I think there are a lot of factors involved with so-called White Flight beyond taxes and/or racism.
For one thing, it couldn’t have been just white people fleeing. You don’t go from being the 4th largest city in the US to less than a million only by having a single demographic group move away.
For another, housing stock in Detroit has always been bad. Even in white neighborhoods, there’s a lot of small, slab-built, aging Cape Cod style houses that are basically tract housing. If you wanted something else, you would have looked in the suburbs, where new housing was available.
And let’s not forget that Detroit was an industrial city. That industry was not limited to the waterfront or a few outlying parks, but ringed the entire city. If you wanted to move away from the factories, you had to move out of the city.
My main thought about Detroit is that if such a disaster as happened there (and to other cities) happened rapidly, like a flood or fire, people would gladly see to it that aid was forthcoming. As it happened slowly, due to bad decisions-- some of which date back to before the turn of the 20th century, it appears-- there is nothing to be done but to expect Detroit’s leaders and people to just start making better decisions, I guess. Meanwhile they’ll suffer and be a drain on everybody. Sucks to be them. And everybody.
Again, it’s not that people leave. It’s that people “leave”.
Detroit can’t unilaterally absorb the surrounding area. This would have to happen at the state level. The state government could prevent further suburbs and exurbs from developing by zoning to avoid irresponsible growth. So people could still move away from Detroit if they really wanted to get away. They just couldn’t set up shop in a nearby tax haven.
Irresponsible growth cuts both ways. Older inner suburbs are being churned through in turn. My solution works for them as well.
Are you under the impression that people in the suburbs pay the same property tax and local income tax rates as people in the city of Detroit?
Sarcastic? Where do you think state and local governments get money from? The State of Michigan is not flush with tax dollars. At one time, Detroit had over a million residents. A majority of them were paying taxes. Where did the heads of households get the money to pay those taxes? They had jobs.
At one time, Detroit had many employers who hired employees to perform whatever jobs the employers needed to be done. Those employers paid taxes.
The more motivated residents invested in their own businesses. Businesses that sold furniture, donuts, washing machines, lawn mowers, shoes, prepared meals, built/repaired roads, fixed cars, etc, etc, etc. Those residents paid taxes also.
The old jobs left because they were outmoded by newer and better run companies. Companies that did not want to operate in Detroit. Some businesses failed because of a lack of customers who could pay for their products. It’s been a downward spiral for decades.
Where did Detroit’s residents flee to? To some place that offered jobs. Many left family homes that they could no longer afford because they didn’t have jobs. The housing market in Detroit collapsed long before the last housing bubble. People walked away from homes they couldn’t sell.
If you want to save Detroit, go to Detroit and create jobs. Build something, create somthing, design something that others will buy. Hire people to work for you. The more sucessful your product, the more people you will be able to hire. And you will all be able to pay taxes.
The idea, create jobs, is a simple one. Actually creating jobs is going to take a lot of work.
The only problem with what you wrote is that it has the timeline wrong. The employees started leaving Detroit long before the employers began their exodus.
doorhinge seems to believe that Detroit’s problems are entirely or even mainly the result of the own mistakes. I don’t see what the city could have done to stop people from moving to the suburbs and continuing to benefit from Detroit while contributing less resources to maintain it. I mean, I guess they could have tried setting up checkpoints at the border to quarantine vehicles moving to and from tax havens for a few hours so that the nearby municipalities were in effect in “Outstate Michigan”. That doesn’t really seem practical to me. The failure was on the part of the state of Michigan. For decades it has been painfully obvious what irresponsible growth was doing to the city. Only the state government could address those issues and it did nothing.
That’s not to say that there weren’t plenty of things that could have been done in Detroit to help. Doubtless mistakes were made. But the basic paradigm was set up by the state and it left Motown to bleed.
What they could have done is to create a livable city where people would want to live. Nobody moves to the suburbs because they enjoy driving to work and want to spend more time on their commute. The reasons people left, were crime and disorder, poor schools, high taxes, and fewer jobs.
It is up to the city to police the neighborhoods and keep criminals from preying on the law abiding. Here is a comparison of the crime rates of all the large cities in the US. Detroit is the most violent large city by a very large margin.
It is up to the city to provide safe, effective schools for families to put their kids into. 77% of Detroit eighth grader score below basic on a nationwide math test. The scores recorded were the “the lowest performance in the history of the National Assessment of Educational Progress.”
It is up to the city to provide tax rates that are commensurate with the level of services provided. Detroit has the highest property tax rates in the country. They have the highest commercial tax rates in the country and the second highest industrial tax rates in the country. pdf
It is up to the city to provide business a friendly environment so that they can thrive. Detroit was named worstin Best and Worst Places to work for a small business ranking.
If the city has failed to provide these services they have no one to blame but themselves when people move away. The purpose of the city government is to provide services to the citizens. Government is there to help the citizens and not the other way around.
Either way, people and employers left because they didn’t have a reason to stay.
Does it really matter, at this point in time, why Detroit collapsed? There’s plenty of derfingerpointen to go around but the only question that matters today is - How do you bring taxpayers back to Detroit?
This isn’t rocket surgery. Detroit can’t pay it’s bills. Detroit doesn’t seem to be able to get its collective act together and make a go of being a city.
Why would anyone hold Detroit responsible for its own mistakes? That’s just silly.
Detroit, or any other city, can’t “stop” people from leaving. What the “Detroits” can do is make their city a place where people want to stay, or want to relocate to, and want to work in.
There are some 25,000 cities in the U.S.A.. Many cities have faced similar problems to what Detroit has had to face over the decades. Most of those cities survived. Some died but other cities welcomed and absorbed their residents. Those cities grew.
I never said that Detroit’s employees are underpaid; I said they’re paid less than the extremely overpaid government employees in certain other places.
In truth, I should not have said that salaries for those workers were “generous” and I retract that statement. However, the main point that Detroit had far too many government workers stands, and nobody seems willing to address that.
Detroit needs to appoint a dictator like Lee Kuan Kew, the man who turned Singapore from a drug infested, crime infested dump, into one of the best cities in the world.
Declare a tax holiday for firms building plants in the city, fire the city employees and hire people who get the job done. Then give them 25 years-it can be done!
If you read the Curley Effect by Glaeser and Schiefer from Harvard and the NBER they argue that Coleman Young intentionally drove voters who would not vote for him out of the city so he could not be defeated in his reelections. He was elected by a narrow 4% margin and then set out to rid the city of people who did not vote for him. He was reelected with 18%, 32%, 20%, and 12% margins. Unfortunately the people he helped drive out of Detroit were the ones who paid the taxes.
I give a lot of credence to the people living in that area, which I do not. However, I can speculate on what to do, like most here are doing.
A lot of the comments here so far talk about “saving” Detroit. You cannot save what has already been lost. The bankruptcy is not the end of a long period of failure – the failure occurred over a long span of time, and this is a natural point on the continuum – if nothing changes, then eventually Detroit will look like Pripyat, Ukraine (near Chernobyl), or Hashima Island, Japan.
Nothing can be done to “save” Detroit. However, things can be done to “change” it. So the history shows that businesses and people moved to the suburbs. Why did they do that? Jobs, businesses, better schools, lower crime, better infrastructure, more space, and efficient leadership. The suburbs leveraged the things they could offer to become attractive – the suburbs beat the big city, and people noticed.
If Detroit wants to survive, it needs to become attractive. Mow down all the abandoned neighborhoods and rip out all the old infrastructure – let the land go fallow for a year or two. Then, start beating the suburbs at their own game – sell the fallow land for cheap to housing developers and make it attractive for people to live in Detroit and commute to their job in the suburbs. Make these new neighborhoods attractive, safe, and modern with good schools. Eventually, businesses will start to follow – you may see suburbs of the suburbs cropping up within Detroit’s city limits – as long as these new areas are clean, safe, and cheaper than the existing suburbs.
Of course, people will need confidence in the city leadership before anything positive can occur. The toxic leadership of the past will scare people away just as good as the radioactivity in Pripyat.
Leaving everything as it is now and hoping someone will come in to clean it all up is not going to work.
Suburbs have a big advantage. They can be located close enough to a city so its residents have access the city - but remain outside of the city so its residents don’t have to pay taxes for the stuff they have access to.
It sounds great. But how would they pay to do this?
My understanding is that the few remaining people in Detroit are being asked to support a large city all by themselves and just moving out. Would you tax them even further to pay for demolishing the rest of the city? Raise their taxes to build schools and idyllic neighborhoods for the newcomers while their own schools rot? I find it unlikely Detroit will be able to borrow a lot of money at this point.
It takes money to make money. And you’ve got to invest to turn things around. But when you’re flat broke, where does the investment money come from?