mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Detroit on the Brink

The fate of Detroit could be decided this month.  Long suffering Detroit could run out of cash completely by spring, and has an unresolved $200 million hole in its budget through June.  Under Michigan law, when the city’s bonds drop below the BBB level, the governor can appoint an emergency manager with broad powers to put the city back in fiscal shape, including the power to annul existing union contracts.  The mayor and city officials say they can manage things on their own; the state treasurer says the city is failing its legal obligations and has announced a financial review that could be completed by Christmas.  Under agreements Detroit signed with banks when negotiating an earlier loan package, the city could face $400 million in penalties if the state takes control.

That’s not the only problem: if the review determines that the city is broke, white Republican officials could end up making decisions that change the fate of a predominantly African American city — imposing cuts in employment, pay, benefits and services that will affect almost everyone who lives in Detroit.

Detroit Free Press columnist Jeff Gerritt lays out what the governor will face if the takeover goes forward:

“Plantation” is a word he’ll hear a lot — in fact, Councilman Kwame Kenyatta already invoked it to describe what would happen if the state took control of the city’s finances in an effort to keep it from running out of money by spring…

Nothing happens in this region outside the context of race. Our often-painful history is the oxygen we breathe, even when we choke on it. We’re all finding it a little hard to breathe just now.

This is what happens when politicians and stakeholders bicker while debt problems mount, and Detroit is far from the only place that could lose its autonomy to outsiders.  It is no more than what Italy, Ireland, Greece, Portugal and Spain have faced in recent months, and unless the United States gets its fiscal act together, the time could come when the whole country could understand what Detroit is now going through.

Features Icon
show comments
  • John Burke

    Wait, is Detroit broke because politicians “bicker?” isn’t it because generations of Democratic politicians have continued to shovel money out the door as the economy of the city and the tax base supporting city government was steadily crumbling before their eyes?

  • Richard F. Miller

    While I have no special expertise in Michigan municipal practice, there is a federal alternative: Chapter 9 of the Bankruptcy Code.

    Essentially, this would move the venue from Lansing to the U.S. Bankruptcy Court for Michigan’s Eastern District, which covers Detroit. I believe that the court could then appoint a United States Trustee (fellow posters, please correct me if memory does not serve) to reorganize the city.

    Under Chapter 9, the U.S. Trustee (perhaps chosen from the ranks of Detroiters) has significant leeway to set aside burdensome labor contracts as well as impose the usual penalty for imprudent lending: cram down.

    This would remove pressure from the state–just as Chapter 9 was designed to do.

  • John Burke

    Richard — Michigan is fortunate to have a proven system for state appointment of an emergency financial manager to take control temporarily. Bankrupcy could be initiated only by the city whose leaders have no inclination to do anything so drastic or anything at all, for that matter. There are now five Michigan jurisdictions with emergency financial managers. It’s a simple, effective process.

    Detroit leaders and their supporters are already playing the race card. Rep. John Conyers yesterday called on the Justice Department to weigh in on the constitutionality of the emergency law on racial grounds. That likely will go nowhere but illustrates how the people who are destroying Detroit are not about to give up.

  • Toni

    “Nothing happens in this region outside the context of race.”

    Wrong. Nothing happens in Detroit and some other benighted cities without black political hacks like Kenyatta and Conyers accusing whites of racism.

    Atlanta has plenty of blacks and a horrendous racial history, and I think it’s doing fine. Houston, which has plenty of blacks and Hispanics, elected one incredibly ineffective black mayor who went on to be black NYC Mayor David Dinkin’s incredibly ineffective police chief. NYC then elected as mayor moderate white Republican Rudy Guiliani, who brought the city back from the near-dead. Houston later elected moderate white Democrat Bill White and, most recently, fiscally conservative, lesbian white Democrat Annise Parker.

    Effective government in America is what happens when you stop letting hacks put people in racial and sexual-preference boxes.

  • Saleboter

    Lansing – don’t take it over. You’ll just get the blame for everything. Just let it quietly die.

  • http://RealClearPoliticslinktoAmericanInterest Brian Reilly

    Detroit has been ahead of the curve for the last 100 years or so, in ways good and bad. From a quiet manufacturing center,to the site of Labor’s victory, to the Arsenal of Democracy and the flowering of an industrial middle class. Next up we saw incredible hubris combined with amazing increases in productivity, capital mobility, and machine politics disguised as racial discrimination. Finally, Detroit ate financial and social seed corn for three or four decades, and is now financially and culturally barren. Here we are.

    Detroit is going away. There will still be a geographic area known as “Detroit”, but the municipal organization as it exists will shortly be gone to history. Nobody knows how this is going to work out. We have not seen a huge city (and Detroit was a huge city) simply go away. The world has not indicated any real need for Detroit, and there is no apparent reason (or resources to be charitably extended by State or Federal sources) for the City to be preserved in it’s current form.

    Detroit is just ahead of the curve, Cleveland, Gary, Pittsburgh, many, many more. Watch what happens in Detroit legally, economically and socially. That show may be coming to a city or state near you, and soon.

  • Michael Saunders

    Maybe we can send busloads of schoolchildren on class trips to Detroit. They can see what unchecked progressivism brings given enough time. Unfortunately, they are being indoctrinated by the progressives in our schools and libraries nationwide.

  • gommygoomy

    As long as there are DEMOCRATS in control, NOTHING can be done to “Help” Detroit. Or, Michigan. Or, ANY Blue State. Or, this Country.
    It really is, that simple.

  • Frank Griffin

    I love to hear unionistas say that everyone should be pulled UP to my wages and benefits. The only problem is that the only reason the union guy makes what he does is because he is a parasite upon the general population. The union guy needs to stand on top of the average guy to get his blood money.

    This does not even begin to coverup how inefficient union shops are. Step one to solve the problem would be to strip out union contracts and to remove the burden of governing from the poor democrat’s incapable hands.

  • Tom Murray

    I wonder if what’s driving them is the fear that an outside entity will expose a system of graft and embezzlement with a corrupt Dem political machine at the heart of it. The machine doesn’t want it to get out […]

  • alan guillaudeu

    Credit junkies will always scream, yell, throw temper tantrums, etc. to get their way. They “need” more credit and will always promise anything to get their next fix. You see this happening with Detroit, Greece, Italy, Portugal, etc. The reality is that they have to crash and hit bottom and suffer for a while before they are willing to pick themselves up and start over. Then they learn what made them junkies in the first place. The people, the lenders, who gave them their “fix” will take their losses and the junkies will have to move on and learn new ways to improve their lives.
    The credit junkies deserve our sympathy and empathy, but when you live a life of dependency, it has to end some time.

  • section9

    Think of Detroit as California writ small.

    Or Rome, 2000 years in the future. Progressives make the mistake of believing that human nature changes over time. It doesn’t. They also make the capital mistake of believing that greed and villainy are confined to the GOP.

    This is why Progressivism is destined to go the way of Communism, National Socialism, and Fascism. It’s a world view that is based on a fundamentally flawed understanding of human nature.

  • TellsItLikeItIs

    No, that is what happens when city leaders do nothing for 30 years except live on excuses and rationalizations. The problem for Detroit and many other urban areas across America is they never thought a day like today was coming, where the man-made economic messes would destroy the country and welfare and entitlement packages would last forever.

  • hamidog

    “Plantation”? “Plantation” is a colloquialism for a prosperous place where white people live good and make money from the back-breaking labor of black people.

    Detroit is a place where the predominantly black population doesn’t work but receives handouts from white middle and upper-middle class taxpayers in the form of food stamps, welfare, health benefits, etc. Rather than being prosperous, the whole thing is collapsing. “Plantation”? OK, you can start calling me a racist now. Just remember, I wasn’t the one who made this a racial issue.

  • Kenny

    Disslove Detriot. The people there are too incompentent for self-government.

  • Steve Teagan

    Race IS everything in Detroit. Black Detroiters cheered when mayor Coleman Young declared the Motor City a black-run city. How’s that working out for those of you south of Eight Mile Rd.? Keep electing charlatans like Conyers and watch your continued slide. Detroiters do not deserve any better. The city’s decline can be laid at the feet of the blacks who are incapable of voting for the best candidate.

  • mr.kink

    detroit is already a demo plantation and that is why they have failed. socialist policies do not work even in a slum like detroit!!!

  • Cyraneau

    The use of racism to gain ones political ends is an unfortunate reality of political discourse. I suppose the answer that could be asserted by those who make references to “the plantation” is that it works. Barack Obama was elected in exactly this way; his unspoken but nonetheless clear message was that “your racist sins will be forgiven if you do the right thing and vote for me”.

  • CobbleHill

    RE: Toni’s comments. The reference to Lee Brown has the timing backwards. He was NYC’s police commissioner and then was elected mayor of Houston. He actually wasn’t a bad police commissioner. He got cops out of their cars on to the street. He implemented Safe City/Safe Streets. He did behave badly with respect to Crown Heights, but as riots go, that was pretty tame. The one person who was killed was stabbed at the outset and died essentially because of malpractice at a public hospital. The emergency room doctors missed one of his stab wounds. Brown didn’t get what Bratton did later, which was the importance of being highly pro-active, but to say he was “incredibly ineffective” is not fair. Plus the full story of the decline in crime in NYC has never been fully explained. Better policing is a big part, but there were other factors notably the decline in crack use. Plus I have always believed that the AIDS epidemic was an important factor that for various ideological reasons, no one was willing to acknwowledge. First a great number of drug addicts, maybe 50,000 or so, died from the mid 80’s to late 90’s, and second that had a huge cautionary impact on behavior going forward. Finally, I would note that Brown was very articulate.

  • Matthew Hall

    There are big differences between detroit and the other industrial cities mentioned here. Even Cleveland isn’t in the same league. Pittsburgh actually shows a way forward for older industrial cities. detroit really stands alone in its degree of dysfunction and failure. I think Detroit really does serve as a valuable object lesson to other cities on the damage that identity politics can do.

  • Mightycline

    My first job after college and Marine Corps was in a major insurance/finance company located downtown in Detroit. There was a few segregated areas of mostly poor blacks left over from the civil rights movement in 1964. In fifty years the Detroit area is now chaos with a basketball player Mayor and an ex-mayor seated in prison and the Congressman,s wife in prison. Blame the Republicans for the human nature of newly empowered “African-Americans”. I say let us start again and build a city to be proud of, and while it we just call all of us “Americans’ and skip the hyphenated garbage that tends to polerize all of us. Hate is a two way street and often just a smile away from change.

  • Randy4

    I remember well when Mayor Coleman Young, during his numerous terms, waged un-declared war on Whites in Detroit. His attitude was “It’s us versus them.” Well “them” left, along with the productive “us’s”. Hey Detroit, how has that attitude worked out for you?

  • Mike K

    Detroit is surrounded by prosperous white suburbs populated by refugees from Coleman Young and his cronies. Nobody will miss Detroit.

  • john werneken

    I am sure Detroit will be colonized, if not allowed to vanish entirely people and all. The Republicans probably would be an improvement. Unpleasant if you are addicted to Democracy or Socialism, but true. The public and private leadership in Detroit are like the officers of the Titanic, or the Exxon Valdez.

  • Distant-observer

    Simple question: Why on earth should the productive taxpayers of Michigan, or heaven forbid, the other states, send even a single dime to Detroit to bail it out? Let it die quietly, put a fence around the ruins which are too big to bulldoze and return the rest to farmland. At least there would be some hope of earning some income from crops. As for the citizens, perhaps they should try California. I hear the progressives are still in charge out there.

  • Craig purcell

    Hey! Isn’t Detroit the home of the Romneys? Glad to see they took such good care of things there.

  • mixplix

    This reminds me of when the Blacks blamed the farmers of South Africa for being greedy and ran the farmers off their land and took over and South Africa went into starvation.

    • Walter Russell Mead

      @mixplix: um, I think you might be thinking of somewhere else?

  • Jimmy Seven

    I have lived in Michigan 52 years. Detroit’s steep decline began with the election of Coleman Young as Mayor. It has continued in a downward spiral of democrats and union thugs walking hand in hand raping the tax payer while lining their own and constituent (read union bosses) pockets. The rest of the state pays Detroit’s bills and we are sick of it. Let the white republicans take the wheel from the power drunk unions and democrats. They can’t do any worse.

  • JIm Palazzolo

    You are all missing the key point to the right solution in Detroit.

    Step 1) Increase Teacher salaries and perks thereby making the profession far more attractive to new teachers.

    Step 2) Make Charter schools, religious schools and home schooling illegal in the city limits, exempt Muslim schools from this law.

    Step 3) Turn all union pension funds for city employees, private comapnies and not for profits over to union management.

    Step 4)Increase salaries of Police and firefighters by 10% per annum.

    Step 5) Bring in real proven experts from Washingtoon D.C. to assess and rennovate the city. Allow them to live in Windsor Canada where they can get a better view of the city accross the Detroit River and hotel/food/travel prices are cheaper.

    Step 6) Hire Kwamme Kilpatrick as executive consultant to create an additional job.

    Step 122) Relax, Rinse and Repeat if necessary.


    This is a conservative publication. It is interesting,mostly for the comments.

  • Vagabundus

    Detroit should be split up into a dozen or more separate towns, each allowed to thrive or fail on their own. Existing liabilities apportioned per person.

  • jim

    @mixplix is referring to Mugabe, perhaps?

  • irish19

    That would be Zimbabwe to be exact.

  • Toni

    Mixplix is thinking of Zimbabwe and Robert Mugabe.

  • Harold

    Post war, the jobs went away. Several reasons for that: economics and logistics call for spreading out, the threat of nuclear attack call for spreading out, unions bring spreading out, etc.

    Urban renewal and the precipitous destruction of segregated communities likely played a part. If the Civil Rights Movement had left “Black Bottom” in place, as poorly plumbed and whooping coughed as it was, a thriving black community could have helped springboard a legitimate black middle class into SE Michigan. Instead, that thriving black community was suddenly fragmented and driven into white neighborhoods, which accelerated the post war depopulation of Detroit, and channeled it into racial form. Sudden black majority status was an even greater catalyst for that. We fought segregation with methods that further exacerbated segregation.

    Change is best if it comes slow. Precipitously destroying Black Bottom, and the shopkeepers, merchants, teachers, ministers, engineers, architects, dentists, doctors, entrepreneurs, families, and yes, some ne’er do wells, was a massive mistake.

    Also, Detroit is a border town, don’t forget, with all that comes with that. It’s no different than Laredo, in many ways, and in fact that may be what it’s reverting to. A place you pass through, a transitory place.

  • Jeff

    Detroit is a perfect example of what happens when race baiting Democrats get to run a city.

  • MojaveMax

    For the life of me I don’t understand why would ANY entity would step in and try to save Detroit. Detroit ought to be left alone to fend for itself. The rulers of Detroit will quickly learn all they need to do to point Detroit in a healthy direction.

  • Skifool

    A city of white flight and poor uneducated minorities is all that remains…Bulldoze it
    call it a day and move on.Pittsburgh you are next.

  • Gone to Iowa

    @WRM@mixplix: Pretty sure he’s referring to the former Rhodesia, but South Africa is indeed following down that slippery slope.

  • mertsj

    Let us not forget the federal government’s role in destroying the US auto industry.

  • CaliforniaNightmare

    For Distant-Observer –
    You are right. Progressives are still in charge out here in Cali. This state is about ready to fall of ionto the Ocean. And yet it will vote blindly for the Mail Room kid who ended up getting the CEO’s job again in ’12.

  • Toni

    CobbleHill@19: I stand corrected about the order of Brown’s career, and his being “incredibly ineffective.”

    But he was certainly insufficiently effective. I was taken aback by this comment: “He did behave badly with respect to Crown Heights, but as riots go, that was pretty tame.” Unlike L.A. and the R. King riots, Crown Heights doesn’t have wide open spaces where rioters can run amok. Most certainly, it wasn’t tame to the victims, including an Italian-American who was beaten to death for *looking* Jewish.

    I’m sure “the full story” has been told somewhere by professional criminologists.

    Finally, being articulate is not the same as being effective. I can tell you that as Houston mayor, Brown became best known for his boondoggle trips all over the world to “promote Houston.” By the time he left office, he was widely derided as Mayor Doofus.

  • wncchester

    ” Long suffering Detroit could run out of cash completely by spring,..”

    I don’t understand the problem. Detroit should elect some Democrats, they would raise taxes on the rich and everything would be fine, right? Maybe the city ‘leaders’ should ask BHO to come over and give them a ‘community organizer’ pep talk, if they’re not too lazy and soft to listen.

  • Rico

    The thieves were put in charge of the cash box. What did you think was going to happen?

  • Mark Anderson

    What I love about this site is it’s ignorance.
    The taking away of democratically elected officials, is the issue. The selection of only African/American run cities when other cities are in at least as bad shape is telling. We worship you oh princes, oh kings, oh dictators, oh Republicans who ignore the vote of the people. Goodbye America, your vote means nothing to Corporate America.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service