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The Detroit Disaster

Great disasters are usually the product of a concatenation of happenings that synergistically interact with tragic results.

Had April 14, 1912, not been a moonless night with a completely calm sea (unusual in the north Atlantic), had the binoculars that were supposed to have been in the crow’s nest but were instead locked up in a locker to which no one on board had a key, had the wireless operator on board the Californian not gone to bed, had the captain of the Californian not, out of habit, tried to communicate with a Morse lamp instead of the wireless, and half a dozen other minor matters, the Titanic’s maiden voyage would have been ordinary or, at least, most people would have been rescued.

It’s the same with the great urban disaster of today, Detroit. This once-mighty city, with 1.8 million in population and the highest per capita income of any major American city, is now a waste land, its parks closed, its streets unlit, its crime rate astronomical, its population only a third what it was in 1950. As Michael Barone, a Detroit native, wrote, looking at Hiroshima and Detroit today it’s easy to wonder which country won the war.

What happened? Several things. Here are four:

1) Even by big city standards, Detroit’s government has been both wildly corrupt and wildly incompetent for decades. At least in Chicago, the Daleys knew how to run a city.

2) The mainstay of Detroit’s economy, the auto industry, faced so little competition in the decades after World War II, that it became effectively a cartel, and fat, dumb, lazy and uninnovative, as cartels and monopolies always are. It generously shared its easy profits with the workers. But when foreign competition arrived in the early 1970s it proved unable to adapt to the new marketplace, while the UAW refused to surrender benefits that had become unsustainable. The auto industry began to move to the burgeoning, and non-unionized, South.

3) Public service unions, which should never have been allowed in the first place, used their political power to force contracts on Detroit that the economically challenged city could not afford.

4) The suburbanization that followed World War II caused the middle class to leave the old central cities and their population (and tax base) began to decline. Every city that had a major-league baseball team in 1950, which is to say the big cities of the northeast quadrant of the country, has had a significant decline in population since then, except New York (which is always an exception).

Put that together with the tendency of politicians to kick difficult problems down the road so that they become someone else’s problem, and the bond market’s willingness to buy high-coupon Detroit municipal bonds, confident that the state of Michigan or Washington would bail Detroit out, and make them whole, and you have the greatest urban disaster that didn’t involve nature or war.



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