The Real Story of Detroit’s Economy

Frank Joyce, Salon, September 3, 2013

As a life-long Detroiter who has lived both in the city and the suburbs, I’ve been fascinated by the media frenzy over Detroit’s bankruptcy. Like most big news topics these days, Detroit has become a screen onto which people project whatever political viewpoint they have.

First off, it’s worth considering why the bankruptcy is getting so much attention. Is there really that much there, there? After all, as with any bankruptcy, isn’t it just an argument among some people about some money (or artworks, real estate and other assets).


Admittedly municipal bankruptcy is not as common as private sector bankruptcy. (Not yet anyway.) So, up to a point, the “look, look, a man is biting a dog” scenario is justifiably in play. Further, because cities are units of elected governments, there is understandably a different sense of the stakes.

In that context, what the MSM is mostly missing is the extent to which bankruptcy is but the latest incremental step in a long running destruction of democracy for African-Americans. As of this writing more than 55% of Michigan’s African American population lives in communities under some form of Emergency Management. That means state government has already taken away the authority of locally elected officials. Bankruptcy just moves that disenfranchisement to the federal level.

That does make news though because unlike state “emergency manager” laws, Chapter 9 federal bankruptcy puts the banks, bondholders, bond insurers and hedge funds who lent the city money at risk. That is something Michigan Governor Rick Snyder had worked very hard to avoid. {snip}

Predictably, what also excites and dominates MSM coverage is the blame game. The liberals did it or the blacks brought this on themselves, scream the “conservatives.” It’s the racists and the right wing’s fault, say the “liberals.”

The noise can be deafening. What follows is I hope a quieter version of what the “bankruptcy” of Detroit means.


If Detroit is so bankrupt and dysfunctional, how can that be?

Government? Apparently, we don’t need no stinkin’ government. {snip} That’s the lesson to be learned from watching what people do as opposed to the hand-wringing things some people say. Want to see a close up of the shared dream of Karl Marx and Grover Norquist? Come to Detroit where the “state” has truly withered away, or been drowned in the bathtub. Take your pick.

Well some of government as we know it anyway—the part where Detroiters had some say in their own destiny. The reality is that Detroit has been “governed” for some time by a dizzying array of state “emergency managers” and other state agency takeovers; private/public partnerships; private services for security, waste management, worker training and many other things formerly done by elected government and regional authorities of various kinds, not to mention many foundation invented organizations. (Detroit Free Press reporter John Gallagher does a good job of describing some of these dynamics in two books, Reimagining Detroit and Revolution Detroit. He also profiles many of the authentic grass roots initiatives underway in the city.)

Illustrating the theory that the exception proves the rule, the sound of wailing recently heard about the possible sale of artworks from the Detroit Institute of Art (DIA) is an example of one Detroit asset suburbanites care about that they did not get around to protecting or relocating.

Does all this rearranging of the chairs mean that Detroit is now the promised land? Of course not—it is anything but. For most residents, life is difficult at best. Exhibit A would be the impact of fourteen years of control of Detroit Public Schools by the state government in Lansing. The results have been disastrous, despite the best efforts of Detroit’s teachers who give new meaning to the term public servants.

The physical devastation of the city is breathtaking. Much of what you have read from self-proclaimed Detroit haters and defenders is accurate. The debt accumulated with the aggressive help of Wall Street over the decades is staggering. Repeated lay-offs of city workers have severely curtailed even basic services.

To be sure, corruption and incompetence from elected officials has played a role. It has made already bad situations even worse than they needed to be. It has diverted needed resources to addressing the corruption instead of dealing with other problems. And it has been like catnip to whites who like to argue that it proves Detroit can’t govern itself.

Imprisoned former Mayor Kwame Kilpatrick provides the best and most well known target of all. But what most whites don’t know or won’t admit is that he was well on his way to being defeated for reelection until a cadre of white businessmen with major interests in the city came up with hundreds of thousands of dollars in 11th hour campaign funds.

None of Detroit’s problems showed up suddenly. Seen from a long term perspective, the bankruptcy filing comes into clearer focus. As with Ronald Reagan’s firing of unionized air traffic controllers (PATCO) or the Supreme Court’s validation of big money control of politics in Citizen’s United, Detroit’s bankruptcy is the effect of democracy’s power already lost—not the cause of it. It is but one more small step in a decades-long process.

And yes, race does have everything to do with it. There are three counties that make up the political economy of Southeast Michigan. Wayne County encompasses Detroit but also includes large suburbs such as Dearborn, Livonia (the most segregated city of more than 200,000 residents in the entire country) and most of the affluent Grosse Pointes. Oakland County immediately north of Detroit is the 4th most affluent county of its size in the United States. Nearby Macomb County is predominately working class and the “birthplace” of “Reagan Democrats”.

Much of the Detroit punditry one reads or hears conveniently ignores race altogether, concentrating instead on the decline of the domestic auto industry or macro economic trends. Usually when race is included on a list of “causes for Detroit’s decline,” it is described with weasel words such as “racial tensions” or “the racial divide.” Nonsense. What it was and what it remains, is white racism pure and simple. Bloviators love to talk about the “unsustainable legacy” costs of pensions for city workers. They never talk about the “legacy” costs of racism.

By 1980, African Americans out numbered whites within the city limits of Detroit. Yes, capital started leaving Detroit in the 1940’s. But the population disinvestment is just as important. Make no mistake about it. The extreme segregation that has long characterized Southeast Michigan was anything but accidental.

For decades, it was the policy of the Federal Housing Administration to deny loans to African Americans trying to buy houses in the suburbs. To this day, if you buy a suburban house that hasn’t changed hands in a long time, the deed may well contain a “restrictive covenant” that explicitly prohibits the sale of the house to Negroes.

That’s not all. Twenty-three out of twenty-three attempts to create a tri-county transportation authority to improve region-wide public transit went down to defeat in the white controlled state legislature. So, not only was it impossible for African Americans to buy homes near where the jobs were moving, it was difficult to get to suburban jobs that came along with suburban growth.

And just to add insult to injury, the financial institutions that wouldn’t lend money to African Americans to move out of the city wouldn’t lend it for home improvement in the city either. But they would charge more, far more, for home and car insurance. For those too young to remember, that practice was called redlining. It’s still prevalent today.


Zooming out our historical lens even further, we see the unbroken pattern of white supremacy even more clearly. The counterrevolution to the civil war was the Jim Crow system. The counterrevolution to the end of Jim Crow is mass incarceration and other components of the institutionalized racism that perpetuate and in some ways intensify white privilege today. Detroit’s history as the national leader in residential segregation and all that flows from it definitely underpins today’s Detroit crisis and that of Flint, Pontiac, Benton Harbor and Muskegon as well.

While observers sometimes notice that a majority of predominately African American cities in Michigan are under some form of emergency management. The question they don’t ask is, why are there predominately African American cities in the first place?

The beauty of this “willful ignorance” for many whites is that as the quality of life declined in Detroit, the decline itself became the moral justification for whites for the inequality itself. It’s an old story. Slave society did the very same thing. Slaves were routinely portrayed as lazy and shiftless. To put the meme in contemporary terms, the slaves were demonized as the takers and the slave owners were the makers.

If you want to see how this dynamic plays out today, just read the abusive and sickening comments following any news story local, or national, about Detroit’s troubles. For that matter just read the Detroit News—the “official” newspaper of white flight. Back in the day it was editorial policy of the News to publish a front page story every day about a crime committed by an African-American.

Recently Detroit News Editor Nolan Finley, who has built his career on being the most steadfast and flamboyant carrier of the “white man’s burden,” published a much hyped editorial titled “Can Detroit Govern itself?” You can guess how he answered his own question.

And his coded speech is unmistakable. Everyone knows that what Finley really means is can African Americans govern themselves? To which my answer is absolutely, if you and your one-percent pals were capable of allowing such a thing. A step in the right direction would be for the News to publish a reflective piece on how its coverage of the city and its hate filled comments section helps perpetuate racism and segregation.


Whatever the ultimate outcome of Detroit’s municipal bankruptcy drama, we can be certain of one thing. It won’t fix any of the underlying problems of systemic racial, political and economic dysfunction.

For that, we will have to rely on ourselves. And more and more, we are doing just that. For those of us who believe the current dominant order is not only not working, but a menace to life on earth, Detroit is exactly where we want to be. We are proud and grateful to be in the place and the time where we get to have a part in making another world happen.

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