Category Archives: Economic Crisis

“Do the Right Thing” Detroit!

spike lee“Do the Right Thing”, Spike Lee’s critically acclaimed film about racial tensions leading to a riot in Brooklyn is a poetic description of tensions brewing again in Detroit. In his movie, the heat of the summer drenched the neighborhood in frustration as racial prejudices simmered and then snapped in a triggering event that led to a rioting climax.

Detroit is a city, region, and state that seems destined to repeat its failures of the past. Embroiled in its latest crisis, the answer seems once again that a white majority will impose its will on a black, oppressed minority. How fairly that the white majority’s will is imposed will be critical to the measure of civil reaction, but nonetheless, unless found to be unconstitutional, it’s voting majority will be imposed. Rather than work to build revenues through a viable plan, the state has hired an emergency manager whose responsibility will be to impose austerity on the city.

Detroit’s fiscal problem of too few citizens covering pension and infrastructure costs of a bygone era that had 250% of its current population will be met by a state that has drawn a battle line with Proposal 2. The short term solution, given this paradigm, will be to impose some austerity. In Greece and in London, this solution has created riots. In London, the first riots occurred just because meetings were occurring to discuss what austerity measures would be imposed later. Could the sweltering summer of 2013 be the breaking point for Detroit?

Voicing this issue will no doubt raise the ire of Detroiters that may be concerned that merely mentioning the word riot could inspire would be rioters to carry on Detroit’s tradition. However, if the slightest possibility exists that racial tensions are now such that civil unrest could be a result of future measures to be imposed, then reasoning in relative safety of pre-action discourse is a safety valve on the issue. Raising the question should be viewed dispassionately as part of the solution to the potential problem that is brewing.

The white majority, now living in the suburbs, left Detroit. The city now must pay for pensions and infrastructure that were incurred to support suburbians, their parents and their grandparents, before they left for the suburbs. Now after having used Detroit’s infrastructure, and after having left the legacy costs to a much smaller, entrapped, vastly black population of Detroit Proper to pay for them, the white majority is going to impose austerity on this entrapped population to pay for those past services and infrastructure.

This scenario, however correct or flawed in its interpretation, is what will be the match that lights the tender box of continuing institutional racism in Michigan. History has shown that a small youth gang disturbance, or a police scene at a party is all that is needed to leave scores dead and hundreds injured when such rife brews undetectable at the surface.

In Spike Lee’s movie, a wise elderly town drunk with a good and decent heart that the neighborhood calls “the mayor” tries to stop the riot that begins to build through reasoning with the people on the street. But by the time a riot erupts, reasoning is an obsolete tool of political leadership. Kevin Orr must do what he must do now that the state has imposed its will. The time for reason, community involvement, understanding, and hope for a future after austerity is now. The time for a viable plan for Detroit’s citizens to rise from this bottom is now. The time to add such a plan that brings real hope is now!

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Filed under American Governance, American Politics, City Planning, Economic Crisis, Racism, Social Media Democracy, social trajectory

Disability Has Decreased Our Unemployment from 10.2% to 7.5%!

Cumulative Foodstamp Disability vs Jobs

Unemployment exploded from 4.7% in 2007 to a high of 10.2% in 2009 before falling to 7.5% this month. Our government would have us believe that America is slowly on its way to fixing its joblessness problem. Yet, between 2009 and now, the percentage of Americans working has actually dropped from 59.8% to 58.5%!

Down from 63.7% before the economic implosion, 58.5% is the real number the government is touting as job improvement when our joblessness is actually worsening. If you think the way the U.S. government represents joblessness figures is purposely confusing, raise your hands.

Let’s break it down….

Since 2009, the U.S. population has grown 10 million from 305 to 315 million people. The number of working age people grew by 10 million during that time to 245 million people.

Multiplying 305 by 59.8% and 315 by 58.5%, the economy added 3 million jobs, not enough to keep up with population growth. So far, so good….

But if unemployed people dropped from 10.2 to 7.5% during that same time even though the percent of people working did not increase, what happened to this 2.7%, or 5.5 million people?

Well, states smartly put 4.7 million people on disability. States pay for welfare but the federal government pays for disability. So, at a cost of $2,500 per worker, states have geared up to pay private companies to dubiously transfer people that would have been on welfare to federal disability. Historically, 99% of people added to disability never leave it. The remaining unemployed have been absorbed by the welfare system.

Before anyone stands up to bash the current administration for obscuring how bad our economy really is, kindly settle your tushes back down and listen. This disability scheme has certainly been used as a buffer for the economic implosion, but it is not new to this administration. Since China opened its doors in 1979, our disability ranks have swelled from 2.3% of our workforce to 6.1%.

This is a hidden cost of owners of capital investing in jobs overseas. This is a hidden cost of Detroit’s economic policies. Unemployment is getting WORSE, NOT BETTER! MORE people are idle, NOT LESS! The economic implosion created a nation of disabled. If a broken spirit is a disability, perhaps the numbers don’t lie.

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Filed under American Governance, Economic Crisis, Federal Budget, Full Employment, Jobs

Detroit and America Must Choose to Banish Catch 22

Catch 22 is a phrase in the book by the same name that has come to mean a problem that has no solution, for it contains a circular argument, like those that have plagued Detroit for the past 63 years. These problems have been blamed for the misery of millions. Are they truly Catch 22?

Problem #1

To bring more business and population to Detroit, crime must be reduced. But crime cannot be reduced unless there are jobs that pay living wages. And jobs will not be created unless there are incoming businesses, which will not come because there is too much crime.

……………………………………………Catch 22….

Problem #2

Crime will not be reduced unless would be criminals can find jobs to replace benefits of crime. To do so, those jobs must pay living wages. But a majority of the unemployed are illiterate and undereducated and do not qualify for jobs that pay living wages. Therefore, they cannot obtain jobs that will pay living wages. Without a living wage, crime will not be reduced.

……………………………………………Catch 22….

Problem #3

America’s unemployed need jobs. To employ Americans, a minimum legal wage must be paid. But the world competes to make and sell widgets, and world wages to make widgets are less than America’s minimum legal wage. Therefore widgets must be made overseas and sold to Americans. Making widgets overseas keeps Americans unemployed and without jobs.

……………………………………………Catch 22….

For the past 63 years, since the peak of employment and population, the leadership of Detroit, as well as most major cities in America, has accepted the Catch 22 paradigm that their economic problems are unsolvable and therefore, not really a burden that is theirs to carry. Accepting the Catch 22 paradigm means they condemn America to high unemployment and high crime in our inner cities. Accepting the Catch 22 paradigm means that millions of lives will go unfulfilled and wasted, that millions of children go unfed each night, and that our nation suffers as we commit the least of ours to an arduous lifelong pursuit of happiness.

Catch 22 paradigms are roadblocks that keep America’s political leadership from helping America to reach optimal output and productivity. Catch 22 paradigms are impediments that keep Americans from reaching their highest opportunity for all to pursue happiness.

Catch 22 paradigms, however, are merely paradigms that are placed in the collective consciousness of America by those that wish them to exist. America is conditioned to accept them yet they need not be accepted. Owners of capital benefit from them. Political leaders benefit from them. The rest of America does not benefit from them. If America accepts these paradigms, they continue. If America simply rejects these paradigms, they vanish.

Catch 22 paradigms support the efforts of owners of capital to create maximum wealth but cost trillions of dollars and millions of jobs in the American economy. America could force American capitalists to spend their dollars in America. But our history, principles, and laws support the freedom of owners of capital to spend their dollars in whatever part of the world provides the highest returns.

To force owners of capital to spend their dollars in America would require a change of laws that would turn on our principles of freedom for all Americans. We cannot turn our back on our heritage of freedom. Therefore, we accept that the economic engine of America, the capital of our wealthy elite will be spent in other parts of the world, costing trillions of dollars of loss and millions of jobs in our economy.

…………………………………………………Catch 22

Solutions do exist to Catch 22. American owners of capital can make profits in America to employ our workforce without forcing them to spend dollars here if political compromise is made to allow equivalent profit. Jobs can be created that include a living wage, if political compromise allows for living wages. Crime can then be reduced and the pursuit of happiness can be lifted to a higher plane. And believe it or not, all of this can be accomplished without spending more tax dollars, which is the ultimate cry of those shouting Catch 22.

These real and viable solutions, however, require political compromise. America’s economic problems have arisen from deep seated differences of vision that drive conservative and liberal parties alike to pursue their own visions without compromise, producing the political vacuum that must exist for Catch 22 paradigms to live.

In Detroit, one vision is for all that have made it through the gauntlet and that have risen at least to the middle class to escape to the suburbs, and to make Downtown a playground fortress against the poverty of the inner city, while giving up the rest of Detroit’s citizens to Catch 22. The other vision is to form a grass roots effort to fight the plight caused by Catch 22 to all of Detroit’s citizens, yet without attacking Catch 22 as a mere paradigm. They therefore accept its paradigm that economic suffering must continue. Detroit’s two opposing visions have fought compromise since the riots of 1967 brought their opposing views into the political light.

Problems that such a lack of compromise creates in Detroit then cause the city to fester without solution. Polarized city political leaderships acquiesce to the meager capital investments left for their cities as they pursue their opposing political visions. Polarized state political leadership compete with other states for limited capital investments by promising owners of capital that they will not have to share the tax burdens of the state. And polarized federal political leaders pass legislation to allow for owners of capital to make maximum profits overseas at the expense of jobs at home.

Political leaders become convinced that their political interests lie closer to the owners of capital than to those of the rest of their constituency. Without having to compromise across the aisle, they pass Catch 22 legislation that make it easier for owners of capital to invest dollars overseas while escaping the uncompromising political fighting that continues at home. Political leaders’ efforts on behalf of America’s elite become an easier route to remaining in political power than having to bend in political compromise on behalf of America.

Detroit’s solution rests in ending Catch 22. America’s solution rests in ending Catch 22. The solution to ending Catch 22 rests in political compromise that puts Detroit’s future, America’s future ahead of political expediency. Viable solutions exist. Jobs can be created. Owners of capital can be rewarded in America. Much suffering can be banished. The American economy can return to prosperity.

No Catch 22….

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Filed under American Governance, American Politics, Bureaucracy, Economic Crisis, Free Trade, Full Employment, Jobs, Multinational Corporations, social trajectory, U.S. Tax Policy

If Detroit Will Follow these Principles, Detroit Crime will Drop

crimeDetroit’s future hinges on reducing its high crime rate to allow newcomers to venture back into the city. The city has restructured its police department, putting more police on the streets, and has adopted state-of-the-art multifaceted programs that other cities like Chicago are implementing to mitigate youth violence, yet crime persists. Modifications to the status quo will not affect crime quickly enough to curb what has become a violent roadblock to Detroit’s future. What is required is a radical departure from past practice. Detroit needs a major step improvement toward a safer community if it is to recover.

The city is collapsing in debt and depopulation. Yet, a radical departure from the status quo seems almost too dystopic a medicine to take, even for a city that faces bankruptcy. Detroit is just as polarized as the country over how to reduce crime, and Detroit’s community reaction to past police performance has been a divisive obstacle to major change. So without a clear path forward, radical change seems daunting. However, a comparison of the extreme right and left views of America’s think tanks regarding crime suggests that while their viewpoints may differ, the similarities of their stances indicate that a clear path forward might be possible.

While their solutions may be different, they both speak of the same root causes of crime. They couch them differently for each side’s solutions must fit the entirety of their differing political views. Therefore, each side focuses on different symptoms of the root cause, and their solutions focus on resolving those different symptoms. A holistic solution, however, must encompass the root of each extreme’s problems and solutions.

What do conservatives suggest is the root cause of crime? The Heritage Foundation suggests that crime is the outcome of failing families. They cite numerous studies that show that crime is committed most by those raised without fathers. Yet, the Heritage Foundation seems to negate the nexus between crime and poverty.

The Cato Institute supports the Heritage Foundation’s conclusion regarding single parent families stating that, “the relationship is so strong that controlling for family configuration erases the relationship between race, low income, and crime.” Yet the Institute also states that both violent crime and property crime are highly related to economic conditions.

The National Academy of Sciences agrees with their positions regarding single-family households and further suggests that jail policies, which create a lack of young, marriage age males in a third of Black families, excessively exacerbates the problem of fatherless homes.

The progressive think tank Economic Policy Institute does not disagree that dysfunctional families lead to crime. In fact, EPI suggests that dysfunctional families lead to poor school performance, high dropout rates, and then to crime. Yet EPI suggests that poverty is the root cause of disruptive families.

The liberal think tank Economic Policy Research reasons that dropouts do not qualify for 90% of jobs, leading to high unemployment, and argues that unemployment is directly correlated to burglary, rape, robbery and assault.

The progressive think tank Center for American Progress supports EPI’s claim that poverty is a root cause. They point to President Clinton’s policies as having been the solution that drove a drop in crime rate more than any other time in U.S. history. They state that lack of work, lack of police on the streets, high poverty rates, a shrinking middle class, underperforming schools, and lack of affordable housing was a combined reason for higher crime rates that Clinton’s policies corrected.

The above examples suggest that conservatives focus on the destruction of the family as the root cause of crime, without then connecting the impact of extreme poverty and lack of hope for any change of circumstances to the destruction of the family. The examples also suggest that liberals point to social disruption caused by poverty as the root cause of crime without acknowledging the breakdown of family as a key component in that social disruption. But both political parties are just emphasizing aspects of the root cause and solutions that align with their party’s platform. Detroit, however, must cut through the political clutter and create a bold solution that will reverse the city’s plight now.

To create a clear path forward, Detroit’s factions must agree on principles of crime reduction. In the spirit of survival, acknowledging that each sides understanding of the issues may not be mutually exclusive, is in order. By doing so, the left and right might agree to the bold solution that meets each other’s political needs while restoring the City of Detroit. Disregarding for the while how to achieve them, the following principles are critical to Detroit’s crime transformation and should be supported by Detroit’s bold solution:

.1. Families remaining intact
.2. Detroit’s single-parent families gaining community support
.3. Detroit’s youth having safe and successful learning opportunities from pre-school through high school
.4. All teens graduating from Detroit’s high school, functionally literate
.5. Teens delaying marriage, cohabitation, and child rearing until financially secure
.6. Kids having financial and social alternatives to crime during school years
.7. High school graduates having a reasonable expectation of a living wage job if they choose to work after
high school graduation
.8. High school graduates from all socioeconomic backgrounds that academically qualify, having access to
.9. In the decade that Detroit is transitioning to a culture of less crime, the existing subculture of
crime that has grown in a vacuum of viable alternatives, must be curbed through both preventative and
policing means.

Once clear principle are in place, a bold solution set that will meet them fast enough to sustain Detroit will be the commitment that is required by all that would have Detroit recover.

These principles outlined above must now be added to those of Detroit’s other stakeholders to achieve a holistic solution that meets the needs of all stakeholders, not the least of which are the 700,000 citizens who are struggling each day to raise their families in a hostile, crime filled environment in which 60% are either victims or witnesses to crime.

After years of decline, Detroit’s murder rate has risen for several years, peaking at 411 in 2012. Detroit is named the most dangerous city in America. If following the principles outlined above will curb Detroit’s high crime rate but Detroit is the most dangerous city in America, then a gap should exist between the stated principles and how well Detroit fares against them.

How well does Detroit compare to principles for low crime?

Principle 1. Keep Families intact

From 9% in 1960, 80% of families in Detroit are single parent today

Principle 2. Give community support to Detroit’s single-parent families

Detroit communities have been damaged by blight and depopulation. Detroit is focusing on bringing communities back together and Corporate sponsors such as Ford have prioritized investment in community development. Organizations from Jewish Federation to Goodwill organize to support single parents. Yet, 40% of single parent families in Detroit are living in poverty.

Principle 3. Ensure all students pass each grade proficiency and are safe from pre-school through high school

Mt. Elliot neighborhood is listed in top 25 most dangerous neighborhoods in America. Chances of being victim of a violent crime in any one year is 1 in 9. Organizations like Take Action are actively working to reduce violence against Detroit Youth. Yet only 4% of Detroit eighth graders can pass minimal standards in math and only 22% of Detroit kids graduate from High School. 79% of Detroiters do not want their kids to attend Detroit Public Schools. Detroit has formed an organization, Excellent Schools Detroit, committed to bringing Detroit’s graduation rate to 90% by 2020.

Principle 4. All teens graduate from Detroit’s high school functionally literate

.47% of Detroit Adults are functionally illiterate.

Principle 5. Ensure Teens delay marriage, cohabitation, and child rearing until financially secure

Since 1990, Detroit’s teen pregnancy rate has been cut in half to 103 per 1,000, yet is still 300% higher than the national average of 31. Detroit ranks #1 of American cities in the rate of unmarried births.

Principle 6. Kids having financial and social alternatives to crime during school years

In 2012, Detroit youth unemployment was 42%.

Principle 7. High school graduates having a reasonable expectation of a living wage job if they choose to work after high school graduation

.50% of Detroit’s workers age 25 and under that have jobs make minimum wage.

Principle 8. High school graduates from all socioeconomic backgrounds that academically qualify, having access to college

In 2012, only 2% of Detroit’s graduating seniors were deemed capable of performing college level work.

Principle 9. In the decade that Detroit is transitioning to a culture of less crime, the existing subculture of crime that has grown in a vacuum of viable alternatives, must be curbed through both preventative and policing means.

In 2012, the Police union spokesperson stated that Detroit is the most dangerous city in America and to enter at your own risk. He said that police officers are understaffed, overworked, demoralized, and sometimes fear for their lives. The department has reorganized to emphasize gang management.

Mitt Romney, son of Michigan Governor George Romney and recent presidential candidate stated, “for those who graduate from high school, get a full-time job, and marry before they have their first child, the probability that they will be poor is 2 percent. But, if those things are absent, 76 percent will be poor.” Detroit’s kids must have the opportunity to acquire the three ingredients that Romney says will put them in the 98% probability of making it out of poverty.

With such recent Detroit statistics, Detroiters should agree that drastic actions are required. What is needed is a bold, new plan.

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Detroit Must Now Roll Up Her Sleeves and Attack Her Root Problems

wayneCity lights continue to be an issue in Detroit. No matter how much effort is seemingly thrown at fixing them, half the city stays in darkness. Yet lighting is only a visible symptom of Detroit’s crumbling infrastructure. The same infrastructure problems that can be seen by Detroit’s citizens in broken lights exist below in the belly of the city’s networks.

Detroit is barely surviving on high cost, obsolete infrastructure that was constructed in its heyday to meet the needs of a million more people. Old infrastructure can be maintained and replaced but at increasing costs as time goes on (compare Detroit’s maintenance to maintaining an old car).

Detroit’s small population cannot continue to indefinitely maintain its large, failing infrastructure without increasing city taxes. Yet, Detroit taxes are already the fourth highest of any city in the nation, and 47% of the population is already not paying their property taxes. Many say they refuse to pay taxes because they are not getting the services that their infrastructure is supposed to support (a catch 22).

Without growing Detroit’s population, the city cannot repair its infrastructure, and infrastructure becomes another cause of spiraling city failure. A minimum population that is growing and paying taxes, therefore, is not only needed to manage growing city pension costs, but also to maintain the city’s infrastructure and to ultimately reduce infrastructure costs through reinvestment.

So, how does Detroit reverse the trend and grow its population? And since the city is already years into deficit spending, how does it accelerate growth to a minimum sustainable population? Millennials have been targeted as a group that will populate the downtown district. They have lost interest in owning homes and gentrification can create livability standards that will attract them. Yet, their increase will not be at a rate great enough to thwart the city’s deficits. Gentrification is not a solution to a citywide problem. Creating an attractive downtown might create a functioning commerce district but it does not impact choices to live in other parts of the city. Downtown reinvestment has been tried now for 40 years in Detroit without success.

Some Detroiters hope that that low cost citywide housing and a recovering America will combine to reverse the city’s exodus. Citywide, housing prices have precipitously dropped to the extent that they have slowed depopulation. Those wanting to leave Detroit cannot sell their houses for enough to leave, and low prices have brought some newcomers to Detroit.

Yet, crashing home prices are a horrible alternative for attracting population back into the city. Besides devastating Detroit’s citizens, falling housing prices devalue the city’s tax base that it needs to increase. While the fire sale of homes has brought balance to the population, the massive difference of home prices between Detroit and its suburbs is still not enough to bring people back.

If Detroit wants to save itself from fiscal suffocation, the city cannot hope that downtown reinvestment or housing price equilibrium will save it. Detroit must finally deal with the root causes that devastated the City’s population. For now that the city sits below a minimum population for recovery, only fixing its root causes of depopulation will help it to repopulate.

Certainly, loss of autos and ammo started the slide, and highways and FHA insurance provided the means of white flight. Detroit was dealt several suffocating blows that would cause its minimal sustainable population to drop from 1.8 million to perhaps 1.2 million from these two factors alone. But Detroit’s depopulation has been unlike any other city.

While Detroit’s suburbs were engaging in economic transformation along with the rest of the country, Detroit missed the opportunity in its midpoint of depopulation to bring in new innovators to change its business profile. Cities like Akron and Pittsburgh stopped their rustbelt bleeding through investment in new, job-based innovation and came back to life. Yet, key investors in the Detroit metro area instead sought reinvestment outside the city proper, choosing instead to invest in entertainment branding within the city. Sports and commerce brands are important to a City’s livability but these investments did not add enough to the city’s tax base to survive without adding businesses that could support a minimum population.

So, part of the city’s fall can be explained by a lack of restructuring the city to attract new business. Yet, other cities that failed in this mission simply stabilized at a smaller size without imploding as Detroit did. Detroit’s white flight, however, was greater than any other city. Detroit’s black population continued to grow from the 1970s until the 2000s, but the city’s white population dropped to 7.8%, leading the city’s drop in population from 1.8 million to 700,000.

Detroit has a unique history of racial prejudice due to its 20th century migration patterns and its development of institutional racism in response to its dramatic increase in Southern migration. Repeated efforts by many thoughtful civic leaders failed to turn the tide of how Detroit would repeatedly manage racial conflict. The result of years of missed opportunities to repair the city’s racial tensions resulted in a Detroit whose negatives now overwhelm its positives.

The average citizen that wants to raise their family in safety, to give their kids a decent education, to see their kids get a decent paying job, and to watch their children then settle down in town to raise their grandchildren, this average citizen simply could not see a way to continue his basic American dream in Detroit, and sought refuge outside the city.

Detroit became overwhelmed with crime. Violent crime expanded and now dots all parts of the city. Detroit’s schools have failed the city miserably. Half the city’s population is functionally illiterate and lacks the skills needed for the types of jobs that some see as the savior to city revitalization. Revitalization cannot ignore the base of Detroit’s citizenry or the root issues of education and crime will remain unresolved.

Jobs that could provide a living wage are not available to current residents. This broken pattern that causes city flight must now be reversed in a city that only graduates 22% of its kids and that has the highest crime in the country. Without vastly reducing crime and undertaking massive restructuring of the city’s schools to create successful outcomes, and without creating livable wages for the city’s high school graduates, no urban planning or investment will reverse the city’s loss of population.

Ok, so let’s get to work. Detroit can be the first city in the nation to reverse such a trend. Detroit MUST be the first city in the nation to reverse such a trend for its own survival. The institutional and structural impediments that have kept the City from struggling back must now be removed. Root causes of Detroit’s plight must now have bold solutions that attack root causes. A system-wide solution that supports all of Detroit’s citizenry must now be employed.

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This emergency manager phase for Detroit Should not be about loss or regret but about hope and rebirth

Yet an important phase of rebirth must be letting go…When memories of what Detroit was, or visions of what one hoped it might become are released, then we can be free to see Detroit as it is and to plan for what it can really become.

After the economic burdens of Detroit’s collapsing past are lifted, the city must be ready to finally let go of old paradigms that have kept Detroit from transforming. We are free to state the starting point.

* Detroit is not safe

Detroit will initially still be a city that few will want to move to or to invest in until a clear path is created for Detroit to grow and to prosper. In fact, many will still want to leave if they can if crime is not dramatically reduced. But Detroit can become a very livable city if opportunity replaces hopelessness and if strong incentives for a prosperous future are introduced for newcomers. These are not just platitudes but very achievable goals.

* Detroit is blighted

After Mr. Orr and Detroit’s leadership make the tough choices, Detroit will still not be the vibrant city that downtown represents it to be. But it will have pockets of strong neighborhoods and it will continue to craft a fairly clean, brownfield canvas from which to build a future. Blight will continue to be cleared. Building exteriors, yards, sidewalks and vacant lots can be vigorously maintained by incentive and enforcement, main thoroughfares can be maintained to represent Detroit’s future, key growth centers can be enhanced to seed growth.

* Detroit is spread out and unwieldy

Detroit has three times the land that Walt Disney World had when it acquired 47 square miles in Central Florida. Speckled throughout the city, Detroit’s has liabilities but many can be transformed into assets. And Detroit’s land is one of its biggest assets. The West was settled by the draw of land. Given a well-defined land use vision, clear principles of growth, strong incentives for investment, and a culture recreated to support growth, Detroit can rapidly emerge, and positive signs of growth can simultaneously spread throughout its various neighborhoods, while highlighting the call for entrepreneurs, innovators and industry to return to Detroit’s key economic centers.

* Detroit is Gentrified

In 140 square miles, Detroit’s master plan has room for gentrification. It has room for high tech, for entrepreneurial centers, for commerce, education, and art. But Detroit is already the residence for 700,000 people, many of whom have been the forgotten ones, downtrodden, unemployed, poorly educated. Many have experienced the violence of Detroit. Most are hoping for opportunity and a better life.

Many of Detroit’s residents travel outside the city each day to give of their talents. Most can produce viable products and services right in Detroit, once employed. Yet, from Detroit’s existing population, workers must be matched to work they can readily perform. High wages for low skilled work is gone. Yet, the paradigm that living wages for low skill work cannot exist in an America that must compete in the world, that paradigm must be obliterated to put Detroiters back to work. There is a way.

* Detroit has stagnated in stalemate for decades.

A dynasty of political structures that preserved Detroit’s old economy must give way to equitable sharing of political powers for a new economy. A workforce power structure of high union wages for low skill work must give way to an economy that provides a living wage for low skill work and a city that promotes education and training for higher wage opportunities. Old prejudices that allowed Detroit’s neighborhoods to be underserved must be isolated through economic incentives that change behavior until prejudiced views can be reduced by stereotypes of a new economy.

* Detroit is isolated

A metropolitan region that has walled off communities from one another must be reconnected and interconnected to allow regional collaboration and regional growth. Solutions that can bring innovators, investors, and employers, those key components of growing economies, into the heart of Detroit will require agreement from regional, state, and federal governments, as well as support from entrepreneurs, local, national, and international industries to be dynamically effective.

As age-old paradigms are let go, Anticipation and new expectations can be formed to start rebuilding Detroit’s identity and to create a productive economy that provides jobs and a thriving future for all.

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Kevin Orr – Detroit’s Emergency Manager – Vulture or Savior?

orrKevin Orr has now been sent by the State of Michigan into the City of Detroit as an Emergency manager. He will most definitely slash costs and raise revenues by whatever measures necessary to solve Detroit’s budget crisis. Why is Mr. Orr what some may call a necessary evil? Why were the city’s elected officials unable to balance Detroit’s budget?

Detroit was established in 1701 and later incorporated in 1815. Through incorporation, the town established its own city government to provide the city with services. The city government became in essence a public business, funded by taxes to provide services to the residents and businesses located within the city’s limits.

As the number of residents and businesses grew, the size and complexity of the Detroit city government grew to support them. Detroit was densely populated with auto companies, companies that supplied them, and thousands of laborers who banded together in unions within this compact town.

In the boom years between WWI and the decade after WWII, Detroit grew rapidly, and workers enjoyed union wages that were 33% higher than most parts of the country. Workers claimed boom wages from growing business profits.

Intent on acquiring the financial gains that private union members enjoyed, public workers unionized within dozens of unions and their wages and benefits swelled as well. At the height of Detroit’s population in 1950, the City of Detroit employed 29,004. The ratio of citizen to city employee was 64 to 1.

Faced with boom wages and a highly organized union, the Big three began to move plants outside of Detroit over the next 15 years, and manufacturing jobs decreased by 138,000. As the city’s population shrunk, Feeling the pinch, Mayor Cavanaugh added the city’s first income tax to city funds in 1962.

Shortly after, Detroit’s public workforce began to shrink but the ratio of citizen to public worker continued to condense. By 1980, the ratio was 54 citizens per public worker, and this ratio was maintained until the 2005 crisis of government deficits. Why was this ratio maintained for forty years without causing a city finance deficit until 2005? The ratio actually was a problem well before 2005, but public unions were strong enough that politicians dare not dilute them further.

Detroit had excess public employees compared to other cities but Detroit’s population kept her police busy with the nation’s highest crime rate and her firemen busy with double the average fires due to blight arson. While Detroit had 54 citizens per public employee, the average of comparable sized industrial towns had twice that ratio.

But the excess number of employees wasn’t the only problem. Detroit was growing an excess number of retirees. Public sector employees could retire with significant health and retirement benefits after 25 years, police and fire after 20. By 2010, the city had 20,000 retirees compared to half that of active ones, severely crowding out funds for city services.

To cover increasing imbalances, Detroit added a utility use tax of 5% in 1965. The state began sharing its sales tax with Detroit in 1971. But with a local economy in free fall, the city needed more. By 1970, Detroit’s population had fallen 35%. As critically, Detroit’s housing stock that was its tax base followed the decline in population, dropping 100,000 units.

Detroit chased its falling population and housing stock with additional taxes but was consistently in arrears. Between 1973 and 2006, the city passed 46 obligation bonds to cover basic city services, increasing its outstanding debt load to over $12 billion dollars.

After considerable debate, the city allowed the opening of three casinos in the 2000s that added $180 million in tax revenues. Detroit also increased charges for services and pursued grants and private contributions. Yet, during the 2000s, the value of housing stock plummeted. By 2010, the average home sold for a mere $10,000. A third of housing had been torn down or burned by arsonists. The state reduced it revenue share to Detroit, and incomes of Detroit residents decreased, markedly reducing the city’s income tax collections. With 8 years of continued deficits, the city is now backed against a wall.

Kevin Orr is now faced with “rightsizing” Detroit’s government at a time when murders are rampant, when Detroit fires burn at double the rate of other cities, when 25% of Detroit’s lights don’t work, when emergency services are dangerously slow to react, when the city is plagued with wild dogs and feral cats, and when Detroit’s neighborhoods are blighted.

He must face the city’s unions, not only to reduce their workforce, but also to reduce their pensions. Detroit will most likely suffer through the work disruptions and slow downs that result.

He will also most likely sell some Detroit assets and lease others, while cramming down some of its long-term debt on bondholders. In addition, some of the 47% of residents that currently are not paying their property taxes should expect to pay them or face foreclosure.

This is the ugly point from which Detroit will painfully start. The question is whether Detroit can fix its structural deficits to turn the corner on its way back to a prosperous city, or whether Detroit will further decay. If Detroit’s leaders, union leaders included, choose to take the important steps to restructure Detroit’s future, then Kevin can play a pivotal role in giving Detroit hope.

However, he must not gut the assets that Detroit can use to lever its future. If his true goal is to help the city and not to carve it up for asset vultures, then Detroit will be poised to create a livable city. The future for those that have been left behind is either of creating a violent island of economic oppression from which there is no recovery, or, with Kevin’s crucial choices and sacrifice by all, of setting the path toward a brighter future for all of Detroit’s citizens.

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Filed under American Governance, American Politics, Bureaucracy, Economic Crisis, Racism, social trajectory, Unions

Mayor Dave Bing Tweets His Progression Of Thought Toward Revitalizing Detroit

Dave BingMayor Dave Bing, 2009 to present

After Mayor Kenneth Cockrel briefly assumed office in Mayor Kilpatrick’s absence, Dave Bing was elected Mayor in 2009. Mayor Bing had been a 12 season basketball star, played for the Detroit Pistons, Washington Bullets and Boston Celtics, and was a successful businessman, having owned an auto parts manufacturing business prior to moving to Detroit to run for Mayor. He took office in May 2009.

Selected tweets from Mayor Dave Bing show his progression of thought toward getting Detroit on Track…

2/4/10 Yes, Governor Granholm we are indeed on the path to creating a new Michigan…and a new Detroit!

3/2/10 The plan to address land use changes for Detroit is still being developed. The complete plan will be introduced before any action is taken

4/23/10 Detroit we still need your help in identifying SPECIFIC illegal dumping site for attention during Motor City Makeover.

7/8/10 The residential structure demolition program continues to make progress

7/30/10 Mr. President today was a great day for the nation’s auto industry. I look forward to your next visit FOR DETROIT!

8/16/10 Welcome to Detroit Quicken Loans! And, thank you Dan Gilbert for your vote of confidence.

9/9/10 Thank you for continuing the land use conversation. We are not “rightsizing.” We intend to plan for ALL of Detroit’s 140 sq mi.

10/4/10 This year alone 2,085 abandoned and dangerous residential have been demolished. We plan to continue at that pace through 2013

11/18/10 The success of Turino’s philanthropic partnerships may provide a model for Detroit

12/9/10 The City of Detroit cannot continue to operate as if we are 2 Million residents strong.

1/26/11 The Detroit Works Projects beginning meeting with communities to discuss specific neighborhood concerns and needs.

5/11/11 Yesterday I shared with City Council a detailed plan to eliminate the City’s deficit.

5/25/11 GM confirms it will build Impala at Detroit-Hamtramck plant, add 2,500 jobs. Good news!

6/3/11 Detroit’s greatest asset beyond people is its land. Land presents a great opportunity for the city not a liability.

6/19/11 Lighting is a major issue. We are working to improve the 100 year old system and provide every neighborhood with reliable lights.

8/22/11 Citizens Banks has partnered with the City of Detroit offering grants and loans to help area residents purchase homes

12/1/11 Detroit needs to be run by Detroiters. We know what needs to be done and we are ready to do it.

12/12/11 I look forward to working with the Detroit Delegation on legislative reforms in the MI Legislature that move the City forward.

12/14/11 We decided that RRT [rolling rapid transit] would be the most effectively means to connect Detroiters to job centers throughout the region .

1/11/12 We are working to stem crimes committed by 16-24 y/o through the Youth Violence Prevention initiative. We are also making changes that will put more DPD officers on the street.

2/1/12 The City of Detroit of Detroit has no plans to close any city recreation centers.

2/2/12 Members of the City’s non-uniform coalition of unions have reached tentative contract agreement. This agreement is the first meaningful step in achieving the necessary concessions and structural changes.

2/21/12 Mayor Bing is in Lansing today presenting his budget stabilization plan to the Senate Democratic and Republican caucuses.

3/7/12 500 letters sent to Detroit property owners saying they can buy adjacent vacant lots for $200.

3/9/12 The Citizens Bank Home Grant Program Was A Success

3/15/12 The nine-member advisory board resembles an emergency manager with majority of the votes going to the state. My staff began meeting Wednesday with Detroit City Council staffers to draft a counter-proposal to Gov. Rick Snyder’s draft Agreement.

4/4/12 The Detroit City Council’s vote tonight represents a pivotal moment in Detroit’s history. It is time now to begin the monumental task of stabilizing Detroit’s financial operations, which has always been [my] mission.

4/12/12 The budget reflects a new fiscal reality for Detroit. We can no longer spend money we don’t have.

5/18/12 We’ve got to figure out how to make people who live in Detroit feel safer.

6/7/12 Transforming Detroit is an ongoing interactive campaign highlighting the transformation of Detroit

7/18/12 I want to thank the four council members who took a tough vote yesterday in their efforts to restore financial stability to the City.

7/26/12 the consent agreement process isn’t perfect, but it was our best option to ultimately, avoid an emergency manager and allow us to continue to work to financially stabilize the City and transform Detroit.

9/25/12 The lease creates a cooperative agreement between the City of Detroit and the State of Michigan to manage Belle Isle as a state park

9/26/12 Chrysler’s move to downtown an indicator of confidence in the long term economic growth of Detroit

12/5/12 Breaking News: Mayor Bing Announces Six New Police Mini Stations:

1/23/13 If we can’t hire more police officers then we must restructure and redeploy the officers we have.

2/21/13 We have reduced the number of employees on the City’s payroll from 13,420 to 9,696. As a result, the City‘s payroll and benefits’ costs have been cut by nearly a half-billion dollars.

3/15/13 Kevyn Orr, told The Detroit News they plan to work quickly to turn around the troubled city

3/121/13 ATF, FBI, State Police and others working together along with the community will make Detroit One successful

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Filed under American Governance, American Innovation, American Politics, City Planning, Economic Crisis, Racism, Social Media Democracy, social trajectory

Mayor Kwame Kilpatrick, 2002-2008, Detroit Diverted…

Mayor Kilpatrick was a promising son of Detroit, a the captain of his college football team and a Juris Doctor degree graduate from the Detroit College of Law when he took office as Mayor of Detroit in 2002. While his mother served as the U.S. Congresswoman from Detroit. Kilpatrick had been elected the state of Michigan’s first African American to hold the state senate position of minority party leader prior to becoming mayor. He became the youngest man to be elected Mayor of Detroit.

In Detroit’s difficult times, Mr. Kilpatrick became involved in sex scandals and criminal activity that eventually forced him to resign in 2008 amid efforts to have him removed from office. Mr. Kilpatrick was convicted of numerous charges and was incarcerated. During his time in office and criminal trials, he stirred racial controversy and dissension.

On his Facebook, December 12, 2012, Mr. Kilpatrick wrote, “Detroit, I deeply regret my role in yet another distraction from the far more critical issues of Crime, Finances, Morale & Progress that must be addressed.” On March 11, 2013, Mr. Kilpatrick was convicted of multiple felonies and awaits sentencing in prison.

As Mayor, Mr. Kilpatrick’s focus was on improving Detroit’s neighborhoods. He established “Next Detroit, a five year project to enhance six neighborhoods through improved maintenance and investment. He also instituted property tax cuts to aid homeowners.

During his two terms, 75 buildings were renovated downtown and 80 new businesses were established there. He also worked to ease the process of opening new businesses in Detroit, collaborating with the Detroit Economic Growth Corporation. He also used casino revenues to create a loan fund to assist neighborhood businesses.

During Mr. Kilpatrick’s tenure, Detroit experienced deficits for the first time in 2005. When he took office the population was 922,426. In 2005, the first deficit, the population had dropped to 836,056. The majority of the decrease came from middle class blacks leaving the city.

Foreshadowing the concerns of some Americans regarding what they perceive as America’s dire future financial predicament, in 2005, Mayor Kilpatrick was forced to make drastic cuts to city’s services and layoffs of city employees to avoid bankruptcy. While making the cuts, he failed to address Detroit’s longer-term structural deficits, instead using long term bonds to cover the city’s short-term deficits. In addition, the mayor resorted to raising taxes on constituents, 40% of which already were already refusing to pay taxes in protest of prior cuts to city services.

In parting, Mayor Kilpatrick exclaimed that he, “ Built more houses in the city than any mayor in the city of Detroit, fixed more streets, built more parks, built more rec centers, brought more national events to the city of Detroit than any mayor in history, more economic development than any mayor in the history of the town…We brought casinos, we brought the Major League Baseball All-Star game. Detroit took a giant step forward while I was mayor.”

With Detroit housing units having dropped from 530,000 in 1970 to 375,000 units at the start of the Mayor’s first term, 1,581 new house permits were issued during his time in office.

Unemployment remained relatively stable during Mayor Kilpatrick’s term rising from 12.8 to 14.4 until the economic implosion of 2008 when Detroit’s unemployment spiked to 24.8%. During His time in office, Murder and violent crime rates were fairly stable. Other crime was stable with burglary having the most visible increase of about a 33% rise after cuts to police in 2005.

Take Away from Mayor Kilpatrick’s term:

The writing was already on the wall, when the mayor took office. Yet still, no comprehensive long lived plan would be put in place to deal with Detroit’s turn around. Instead, reactionary responses of budget and service cuts were implemented.

Mayor Kilpatrick did have the right focus of aiding businesses into the neighborhoods of Detroit. Detroit needs growth and jobs to survive. His vision was too narrow and his implementation was ineffective.

His Next Detroit initiative was the nascent beginnings of an attempt to revitalize Detroit neighborhoods into more vibrant, livable communities capable of being integrated in a plan for regrowth of the city. Yet the concept must be tied to an integrated plan for reinvestment in industry, communities, and land use to make Detroit a growing, livable city. And Detroit’s neighborhood intiative must entail a detailed vision that encompasses best practice of urban design.

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Filed under American Governance, American Politics, City Planning, Economic Crisis, Racism

The Job Auction Plan For America Ends Detente

detenteFor the last thirty years, ideologues on the left and right have kept an easy peace over subsidizing what each thought was excessive war or excessive social engineering by allowing the other to have their pet spending and by borrowing from the Chinese (and others) to pay for it. That way their constituency did not have to fund the other’s extremist views and their would be no wealth or income redistribution in the mix of continuing both policies without compromise.

Unfortunately, this short-sided thinking got America to the brink of collapse it is in today. There is no way we could have expected to run up our debt without effect. That debt funded our international competitors and took 15 million jobs and 40,000 factories offshore. More importantly, the elites outfoxed the masses in that massive wealth transfer did occur from consumers to investors at the expense of the middle class.

The poor remained poor at the level of the safety nets in place. Millions more joined them. Millions more joined the ranks of the working poor and the wealth of the middle class was taken in the housing collapse as middle class wages stagnated. This wealth was then redistributed to investors and overseas ventures. The detente between left and right must end with the wall coming down. We just haven’t figured out who is on what side of the wall.

The Job Auction Plan ends detente. It ends wealth transfer overseas. It ends jobs transfers overseas and begins to reverse the trend. Now the wealth transfer issue only get resolved if we balance the budget. For if we do not then the government will fund my plan just as it is funding the current plan of social safety nets and big war and nothing else will change except that at some time, the dollar will simply become worthless.

If the Government does not balance the budget, then my plan will result in everyone that is able to have a job will have jobs, businesses producing products that are exportable and as inexpensive to the American consumer because they were produced at international wage rates, Therefore America will shift purchases to American manufacturers and exports will go up to absorb the increased production.

The wage differential will be paid by the government. The wealth transfer in this case goes to the small business owners and the millions of new workers as opposed to the elite, who essentially have been taking a share of the debt as their payment for detente for the last wo years. Yet the cost to the taxpayer remains the same, zero, because just like the current plan is being paid for with debt, this one will be too.

If the Government chooses to balance the budget, then whomever is responsible for paying for the budget balancing will pay for the plan. Yet the cost of this plan will be no different than what we are paying now, if anything, I expect it to be less. We will simply transfer costs of unemployment and social safety nets now being paid for by taxpayers and transfer them to the auction process. The only difference is that instead of paying people to sit in their homes without jobs, we will now be assisting all to get real productive jobs and to contribute to our country.

Therefore the issue of who pays becomes moot, and the issue of balancing the budget goes back to solving detente. That may mean either that elites pay more, or everyone along the tax chain, flattening out wages in income redistribution. It may be consumers of social services that are cut to balance the budget pay for the program. Nonetheless, solving detente makes us all finally decide how big a military is big enough and how much subsidizing of the capitalist system flaw that keeps so many people idly out of work we will accept.

Consider The Job Auction Plan an adjustment to capitalism that actually improves the current system flaw while reducing the cost, inefficiency, and lack of empathy of our current patchwork of social safety net programs.

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Filed under Economic Crisis, Job Auction Plan, Job Voucher Plan, Jobs