To Grow Detroit, Invest in People

To grow a city, one must have a blueprint…one that organizes the resources, that multiplies livability, and that increases the vitality of the city as it is progressively implemented each generation.

Detroit’s original blueprint was one of an iron muscle, people living in close quarters to their factories, with all basic amenities of a roaring blue collar town close by and with the energy of community in the forefront.

The definition of livability continues to adapt to the evolving way we interact with each other. The blueprint for a “New Paris of the Midwest” will be different than Detroit’s original footprint. In a way, the blight that has affected a third of Detroit’s acreage is a silver lining that makes way for a new, more vibrant Detroit.

Now, real, functioning structure must be laid atop the blueprint. The city must have the working infrastructure of commerce and community. Detroit must have functioning roads, trash removal, police, fire, EMS, courts, city planning, administration, and all of the means of governance that allow the city to efficiently grow, minimizing artificial impediments.

For a city to prosper economically, the city’s culture must be amenable to growth, to collaboration and innovation. Its people must want to share in the fruits of their labor so that everyone who contributes to the multiplying wealth of the city prospers as well. And the city must be inviting to all who would venture in with new ideas and capital.

With the rudiments of success in place, the city must commence preparing its people for growth. Each person is an asset that brings value to the city. How each person is molded as they pass through the infrastructure of the city from birth through adulthood will determine the wealth potential of the city.

A child can be nurtured through city’s infrastructure complex and can come out the other side ready to earn $250,000 a year contributing to the city’s growth. That same child can be trampled through the system and come out the other side a negative burden in the city’s welfare. The efficiency and focus of the city’s infrastructure in placing that child on a higher plane of earning potential then determines the ultimate wealth of the city.

Multiply the average preparation value of each child times the number of children exiting the preparation system and you can predict the direction of the city. If the average preparation value falls below a sustainable level, the value of the city will fall. I suggest that allowing a city to graduate only 22% of its students with only 2% ready for college is well below the level to sustain a city’s wealth.

No amount of Downtown facades will correct the deficiency of the city’s engine of growth, its people. Detroit, it is time to set your infrastructure on course with a thriving path.

DETROIT’S SOLUTION

If the key to a successful Detroit Revival is lowering crime, and if the key to lowering crime is to reform our schools and to put everyone to work making living wages, can we not just get on with putting everyone to work making living wages? Well, it is not that simple. For one, there is a cost to putting everyone to work making living wages. Yet putting everyone back to work also has benefits.

We will examine both the cost of putting people back to work and the benefits of doing so. Yet, before we get started, I can tell you that the benefits of putting everyone in Detroit back to work are at least 10 times the cost. If I am correct, isn’t it a slam-dunk decision that we should get on with paying the cost, and putting everyone to work. The short answer is of course, absolutely yes!

However, the political difficulty of such a decision is in determining fairly who will pay the cost and who will gain the benefit. For instance, all levels of government will benefit to some degree. Yet, no mechanism exists for government to share in the cost in proportion to benefits received.

Since the benefits outweigh the costs by so much, and in fact are the difference between Detroit thriving and withering, we absolutely must find the way to overcome the political obstacles that have held back the city for so long, and have cost Detroit a trillion dollars in the last half-century.

That said, let us start by just examining the direct costs and direct benefits of putting people back to work. Remember that the direct benefits are only a fraction of total benefits, and yet as we will see, direct benefits are already twice the cost even before determining fair payments and benefits.

What is the cost to put 100,000 people to work? If factories are profitable after employing them, then the net cost is zero. But we know that 40,000 labor-intensive factories have left our shores for the East, partly because the cost of labor in America made them unprofitable here.

Yet at $4 per hour, a factory might be able to compete with overseas factories that have shipping costs on top of labor. If a government were to subsidize the factory’s labor cost so that the factory could pay a worker $12 per hour and yet have an equivalent labor cost of $4 per hour, the factory could have a net profit and the cost to the government would then be $8 per employee hour worked.

If for instance, a government entered into contracts for companies to build factories in Detroit and those companies employed 33,000 workers, the cost to that government would be $550 million dollars annually.

What about the 140,000 businesses in the Detroit area, could they hire more employees? Businesses generally hire people in response to demand, yet there is a gray area of demand that makes businesses begin to think about hiring without actually making the decision to pull the trigger and hire.

What if businesses were given an economic incentive to hire? Could an additional 33,000 employees be hired this way? What would the incentive need to be to increase demand for employees? One way to determine an acceptable incentive would be to have each individual business tell the government what the incentive must be and for the government to decide whether or not that incentive was acceptable.

A formal method to accomplish this task would be to hold a job subsidy auction each month and to have companies bid on acceptable subsidies. Then the government could decide how many jobs to subsidize each month and what the clearing subsidy price must be each month to incentivize hiring. Suppose that 33,000 employees were hired through this process at an average $5 per hour incentive rate. The annual cost of incentives plus administration of the program might be $350 million.

In addition, as factories come to Detroit and as businesses expand, adding labor, the money spent by these business multiplies through the local economy. More money is spent in restaurants, more is spent at the barber, more is spent on Doctors. Additional labor is needed to cover the needs of an expanding economy. Suppose the remaining 34,000 are hired to support the growing economy without subsidy. The total gross cost then for a government to expand the economy by 100,000 workers would be $900 million dollars annually, or $9,000 per employee, a rather inexpensive investment.

So if the cost to government of creating a hiring mechanism for 100,000 employees is $900 million, what is the direct benefit just to government of having these 100,000 employees hired? These individuals will now be taxpayers and the direct costs of social safety nets will be lessened. The revenues generated through their new employment that is directly attributed to them is almost double the expense of employing them. Yet these benefits only begin to scratch the surface of benefits.

(in millions)
Federal Income Tax….100
State Income Tax…….175
City Income Tax…… …60
Utility Tax………… …..10
Additional sales tax……40
Social Security……… 375
Unemployment…… ….50
Social Services…… ..420
Bus fare…………… …..25
Health Care………… ..120
Property tax……… ….190
Corporate tax………….200
Total…………… ……1765

Still, just looking at the benefits to the governments that provide the initial funding, how many times do the incomes of these 100,000 individuals multiply through economy? I have assumed 0.5 in the hiring process, yet we know that it is much higher, perhaps 4 times, perhaps 7? At 4 times, the benefit listed about jumps to $7,060,000,000.

What about the benefits to the justice system? People working aren’t scrapping or burglarizing. They aren’t being arrested, arraigned, sent through the court system, or jailed. They are not causing property damage, maiming or murdering others. Cutting crime in half by employing Detroit’s downtrodden would save the city conservatively $500 million annually, half of which would be saved by government.

How about property values? Employing these 100,000 would improve neighborhood appearance, would reverse blight, would reduce crime, and property values across the city would increase conservatively $20,000 per house or $7 billion dollars. The 25,000 acres of empty lots would increase in value conservatively by $5,000 each or $120 million dollars. Now some of these properties are owned by the city, and those dollars directly translate. But one thing is for sure, tax collection would go up dramatically on tax sales. In addition, the mill rate value of an additional $7 billion dollars of property value would increase annual government revenues by $440 million annually. Plus the stamp tax on sold houses would also benefit by increased home values. More homes would sell as well. Stamp tax collections would increase by $50 million. And with city services now able to be provided, the collection of an additional $150 million in unpaid property taxes would be easier to collect.

We have only touched on benefits to the governments for we haven’t even explored the benefits of wage increases over time for employees that are gaining skills, nor have we even begun to explore the improved performance from school graduates, their increased income potential and all of the tax benefits that will accrue the governments from students that graduate high school, not to mention college. We haven’t even begun to explore the dollars spent by the businesses that enter Detroit and their tax implications, or of the taxes generated by the the businesses themselves. And these are just the benefits to government, not even calculating the value to the individuals, their families, and the community.

But thus far, the initial investment of $900 million has returned the governments $8 billion and will easily surpass the 10X figure I initially posited. The pay back is obviously enormous. The value accrued is different to each government entity, but all benefit. This investment in Detroit’s people is a no brainer. It is simply a matter of determining how this paradigm shift can be accomplished through the cooperation of all levels of government.

Detroit Must Commit and Go All In….

Reversing the plight of Detroit rests with integrating the economic success of all of Detroit’s citizens into the future success of the city. The city can no longer afford to do otherwise.

Integrating all Detroit’s citizens implies providing living wages to the city’s underclass, and to providing jobs to future high school graduates. It also implies reforming Detroit’s schools to give students a realistic hope for a brighter future.

Detroit has 100,000 out of work citizens that require living wages. Yet, Detroit’s history has left many functionally illiterate, high school dropouts with few employable skills.

To date, Detroit has had very limited success in bringing in companies that could provide jobs to Detroit’s unemployed. Most of the jobs that have been provided thus far are minimum wage jobs that cannot sustain living standards above the poverty line.

The type of jobs that Detroit must lure to reduce the city’s structural unemployment are labor-intensive jobs that require low skills. These are the very ones that China lured to her special economic zones in the 1980s and 1990s. These jobs pay low, internationally competitive wages that are much lower that what would be considered a living wage in Detroit.

* Detroit’s Revival ** rests in being the first major city to create a way to bring plants and jobs back to Detroit from Asia and that can simultaneously create a way for these returning plants to pay employees a wage that is livable by Detroit standards and that is much higher than companies are used to paying.

For plants to return to Detroit, they must be reasonably assured that they will make comparable (actually higher for taking on Detroit’s political and socioeconomic risks) profits. Detroit must make the benefits so enticing that 1,000 plants are willing to repatriate to Detroit. And Detroit must be prepared to act quickly on the plan that it conceives, so as to establish Detroit as the place to come above all other cities that might try to copy Detroit.

Detroit must gain the support of the State of Michigan for the idea and Detroit’s government must be willing to commit 100% to the effort. The city must be fully prepared to integrate hundreds of plants into the city.

Detroit must go all in….

Detroit Can Either Reinvent or Wither…I Vote For Reinventing!

My analysis of Detroit’s problem is that the roots of racism that exists in all of America was uniquely exacerbated in this city. For the past 40 years, Detroit has been in a stubborn conflict of philosophies that unless is finally resolved will keep the city from a much needed recovery. In fact, this deadlock has now thrust the city into a crisis of immense proportions.

One side has attempted to create a conclave of gentrification to push through the malaise, to grow Detroit in spite of the frustrating residue of the city’s blue-collar era. The other side continues to try to find an economic solution to the city’s problems despite a school system that has failed miserably and community that commits crimes against itself at appalling rates.

My analysis suggests that no city government could have turned around Detroit’s depopulation without resolving the city’s institutional racism, which until now, has been a suppressed issue that acts out in violence. And my analysis also suggests that no attempt to gentrify Detroit out of its decay will have the growth rate to overcome the city’s budget issues. Even if the city’s small growth of last year were tripled to maximize the potential of the millennials, it would take a quarter century to grow out of the city’s financial crisis. The city’s infrastructure and pension costs are just too great for any realistic gentrification population growth to meet the city’s growing needs for revenue, even if we ignore for the moment the violent reaction and tax collection difficulties that would accrue to such an apartheid policy.

At some point, the city is going to have to find a way to reinvest in the city’s existing population as part of a holistic solution. Mr Gilbert has done a masterful job of buying up real estate and creating a vision of what Detroit could become. He just has no viable pathway to get there without bringing along the city’s population. Detroit has 620,000 African Americans spread throughout who are part of the equation. Their history is one of oppression, defiance, and internal struggle in the face of exodus.

Social safety net policies will not placate Detroit. Only a solution that builds a real economy that includes the current population will work. Yet few businesses remain in the United States that can provide a living wage to a population whose educational system has failed them so miserably. A radical departure from the status quo is what will be required to turn around Detroit.

My suggestion is that the gentrifiers who are putting their hopes in Kevin Orr to bust apart the city and start over should stop thinking that this path has any chance of success. Can Detroit gerrymander its geography and carve out the parts of the city that would take decades to recover under a build out scenario, returning blighted areas to the historical township structure of unincorporated American lands? That scenario is vastly unlikely politically or realistically, and no other city would annex blighted sections of Detroit. The emergency manager will not choose such a path. Detroit must face its demons.

Yet, with the right strategy, one that is inclusive of all its citizens, Detroit can actually recover quite quickly, and in so doing, Detroit can provide the rest of the country a blueprint to find the gold buried in all of our inner cities, our people. The strategy must overcome the catch 22 circular arguments I have listed above. No current political or economic policy exists to do so. It must be invented. As such, the paradigm shift that is necessary to create such a political invention will be called radical by some.

Radical or not, with no other viable alternative in sight, Detroit can either reinvent or wither. My vote is for re-invention.

Is Saving Detroit Worth The Effort? (Yes)

Thus far, I have outlined Detroit school principles and Detroit work responsibility principles, two sets of principles amongst others that will be important to outline as the basis for a holistic solution. Yet already the solution set to accomplish just these two sets of principles might seem extremely difficult to some. To accomplish the two sets of principles that I have outlined thus far, for example, would take a great deal of cooperation between local, state, and potentially federal governments on both sides of the aisle and would force a paradigm shift that would be difficult to accomplish even with both major political parties working in concert. For this reason, many would simply scoff at my principles as unrealistic.

Yet, no other set of principles set forth thus far have been implemented in the past 60 years of Detroit’s decline that have resulted in the city’s turn around. And no principles being presented contemporaneous solve Detroit’s immediate growth problems either. Without a bold set of principles that sets the bar as high as the stars, Detroit cannot expect to even hit the moon. And right now, Detroit’s revival depends on hitting the moon.

I am suggesting that Detroit reach for a difficult task (that is reachable) to avoid a terrible alternative of bankruptcy and further decline. The alternatives thus far presented to Detroit by others show a strong and good future yet without a viable path forward. The thriving path forward requires that the city grow robustly, but the initiatives thus far presented project a slow growth.

Could Detroit achieve slow growth from Downtown and key city centers without a bold jobs initiative? Perhaps, yes, perhaps no….the answer depends on how deeply city services must be cut to balance the city’s budget and how much more crime and blight will be exacerbated by such cuts. The answer also depends on how many city assets will be sold off to forestall bankruptcy or whether bankruptcy will cause the city to lose its ability to borrow for the future.

A seemingly more complex but actually more viable solution is one that aggressively pursues a much higher rate of city growth. If a viable solution can project a realistically higher growth trajectory, it will also project a balanced budget at higher city revenue levels that can put Detroit in a position to borrow, not to pay for further operating deficits, but to create assets for the City’s future prosperity.

Since Coleman Young’s terms in office until now, Detroit has attempted to lure businesses to the city to provide jobs to keep Detroiters from leaving. The city has had some successes but not nearly enough to save Detroit from having to endure the emergency manager’s executions.

A net 1.1 million people have left Detroit since 1950, to find work and to escape Detroit’s growing crime. Now that the rate of exodus has slowed in Detroit, city leaders might be able to bring residents back if they can first bring businesses back. Yet to do so, they must convince business owners to relocate their businesses in Detroit instead of other alternatives. Detroit’s blight and crime rate make the effort formidable.

Even more formidable, the city’s leaders find themselves in two catch 22 dilemmas. First, without reversing its crime rate, Detroit will not bring in new businesses quickly enough to overcome mounting deficits. If the city cannot grow quickly enough, it will resort to selling off assets to pay debts and the sale of those assets could cripple the city. Yet, without bringing in enough businesses to provide good paying jobs, Detroit cannot reverse its crime rate. This is the circular argument that has haunted the city’s mayors for the past four decades, the catch 22.

The second circular argument is even more insidious than the first in that to lower crime, jobs must provide living wages. Yet, the type of jobs that most unemployed Detroiters qualify for pay the lowest wages. Half of working Detroiters aged 25 and under have jobs that pay minimum wage. Minimum wage is already too low to keep a worker out of poverty. Bringing in more jobs that pay minimum wage to hire unemployed Detroiters does not take them out of poverty. Without reducing Detroit’s poverty, crime will not significantly decrease. And if crime is not lowered, even those minimum wage jobs will not come to the city, hence catch 22 squared.

Since jobs could not be lured into the city to decrease crime, city leaders resorted to entertainment businesses like casinos and sports arenas, and gentrification, creating mini-walled off cities within the city, to increase the tax base, yet the pace of growth from these pursuits did not compensate for the losses due to depopulation, and now Detroit faces the impending possibility of bankruptcy.

The principles I have outlined for schools and business development will lower crime but both depend on breaking the circular arguments. If they can be broken, jobs can be brought in that provide current residents with livable wages, and Detroit can significantly lower its crime rate.

With lowered crime, the vision that Detroit is now presenting to the business community of a better Detroit will be viable. Detroit’s vision of the future city, combined with significant incentives for businesses to invest in the city, can then help the city bring in more jobs. More jobs will increase property values, which will in turn create higher city revenues that will lead to reinvestment in the city’s livability and a path toward a thriving Detroit.

To break the circular argument, however, two things must simultaneously occur. First, businesses must be convinced to hire 100,000 employees from the ranks of Detroit’s largely illiterate unemployed. Second, businesses must be convinced to pay new hirees a living wage that is above minimum wage, when half of Detroit workers under the age of 25 are being paid minimum wage. This is the herculean task that has perplexed a good many people without a solution. Therefore, Detroit faces bankruptcy.

Yet, the fact that no viable solution has been proposed in 40 years does not mean there isn’t one. The solution requires a paradigm shift. It requires the collaboration of both sides of the political aisle, and of local, state, and possible federal government leaders. Is saving Detroit worth all that effort?

Detroit Should Radically Redesign Learning, Safety, and Socialization of Students

Pre-school:

My oldest daughter is now 24. When she was 2, the very first interactive games were coming out for the computer that featured live action similar to today’s quality, combined with learning games. Being a first time dad with some disposable income, I bought this computer based on the games.

Sarah played the games constantly and interacted with the characters. Of course, her mother and I read her favorite bed time stories to her every night, which I understand is cognitively important. Yet my mother read to me each night as well and I did not do what Sarah did that amazed me.

When she was three, I took her and her little dog down to the park for a walk. For some reason, I wanted to go into the baseball field, perhaps just to expose her to it, I don’t remember now. But as we approached, Sarah saw a sign, and said, “Daddy, we can’t go out onto the field.”

The sign was a list of rules, one of which said – No Pets allowed On the Field-

I asked her why and she read the sign for me. I was flabbergasted. At that point, I knew the power of computer games. Inner city kids come to school the first day with cognitive skills behind those of some that have had more opportunities to learn. Yet at 5 or 6, the mind is a sponge.

Every night, my child would pick from a pile of books her favorite ones for me to read. It was a task for me to put feeling into the same words over and over but memories that parents cherish later in life. In Detroit, 47% of adults are functionally illiterate, meaning they cannot perform that parental task of reading to their children.

Since 1996, the government has provided free cell phones to those that qualify for assistance. This idea would gain the ire of most on the right, but perhaps if cell phone users are footing this bill anyway, the phone could be a smart one, integrating the power of computing into every home.

Loaded on the phone would be 6-10 game apps, all games having to do with entry level reading and math skills, which would be available for both parents and child. nightly bedtime would now not be the avoidance of books but encouragement of the app.

School Principles and Design:

Safety

Principles:
1. Students should not have to fear outside threats
2. Students should not be disrupted by other students who have not yet learned to self regulate

Design
1. All school structures and systems designed to provide safety from outside threats
2. All school structures and systems designed to ensure threatening weapons do not enter school premises
3. All schools provided security personnel
4. Work systems and school systems time and calendar schedules integrated to allow communities to safely
see their kids to and from school.
5. School environments layered to separate disruptive or aggressive children from others but always within
a learning environment.

Socialization:

Principles:
1. Students should not be separated in social environment from others their age
2. Students should be engaged throughout learning years
3. Only students involved in farming should have time allotted for farming
4. Student and parent time should coordinate
5. Students should not be hungry when they attempt to learn

Design:
1. All children mandatorily remain under school authority until they are 18 years of age or pass minimum
required skill attainment
2. All children mandatorily advance grade levels by age.
3. All children remain within school-managed environment during parent’s “first shift” working hours
(eg.8-5, set by community).
4. Students remain under school authority during vacation dates and school supervision is available during
those dates as well. Summer vacation limited to one of two four-week blocks.
5. School breakfast and lunch available

Learning:

Principles:
1. Students should not fall behind for an entire year of school.
2. Students should not be subjected to a teaching method or teacher for too long if learning is not
advancing.
3. Multiple methods of learning material should be tried until student achieves an understanding of the
material.
4. Until adulthood, jobs should be designed to learn work skills and the community should be responsible
for any student that enters the work environment

Design:
1. Student advance by skill block rather than grade level. Skill blocks are designed to be completed in 6-
week increments. Skill blocks must be passed. Many are mandatory and cannot be skipped.
.2. Minimum skill blocks for release from school authority -320 blocks and graduation (or 18 years)
.3. Maximum skill blocks obtainable – 570
.4. Minimum pass is 75% – remedial training required if 85% is not obtained.
.5. Students cannot retake skill block with same teacher
.6. With daily learning hours now increased, students not attaining pass level are provided various levels
of additional instruction and variety of teachers and teaching methods, but learning blocks are not
skipped.
.7. At higher grade levels, learning blocks can include outside paying work assignments involving on-the-job
training and employer acceptance of responsibility for administering block skills.
.8. Learning blocks can include in-home, parental supervised learning assignments

If Detroit Will Follow these Principles, Detroit Crime will Drop

Detroit’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
college
.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.

Detroit Must Simultaneously Balance The Needs of All Its Stakeholders in Three Phases to Survive

Detroit has competing visions of its future that must finally meld if it is to realize Detroit’s great potential to re-create itself. Re-creation involves three distinct phases that must all begin immediately and in parallel, with each having different goals and differing endpoints, but with all participants in Detroit’s posterity understanding the importance of each phase being complementary of the others.

The first phase is Orr’s emergency planning phase. It should be expeditious and its pain and discord should end as swiftly as possible. All must sacrifice, but their sacrifices must be in keeping with optimizing the next two phases.

The second phase is the turn around phase. Detroit will not have the opportunity to grow if it cannot repair the structural impediments that are draining the city. For the turn around to succeed, crime will have to be dramatically reduced, 100,000 jobs will need to expeditiously return to the city targeting existing residents, schools must dramatically improve to contribute to reduced crime and to support an influx of new business, and home ownership must immediately be stabilized. What must be done to quickly implement these requirements? What impacts will they have on Detroit’s stakeholders?

The third phase is the most exciting for it is the growth phase in which Detroit has the opportunity to recreate itself. To sustain and to grow Detroit, the city must be re-tooled into an interwoven blend of modern livable communities that support existing and newcomer residents, including innovators and millennials who demand world-class standards in the cities they call home. How will Detroit integrate livability standards to compete as a growing, world-class city while meeting the needs of all its stakeholders?

Who are some of the stakeholders of Detroit who will demand that a collaborative solution for Detroit meet their needs as well? An optimal system-wide solution will ethically balance the best alternatives of each stakeholder, given the real alternative that Detroit’s sinking population might force dissolution if urgent actions are not taken to create a best effort model that can begin to go forward:

Current residents: Seek jobs, preservation of existing neighborhoods, lessening of crime, and better services

New residents: Must make up the remainder of a sustainable target population and want a highly livable city that meets professional, social, community, health, safety, and development goals

Detroit communities: existing and newly developed as part of a future envisioned Detroit

Property owners: Whether homestead or remote, that must upgrade and maintain their units, plus banks and trusts that must work with Detroit in the best interests of a master plan

Existing Businesses: Detroit’s Legacy industry and community businesses that anchor will key commerce zones in the new Detroit layout

New Businesses: Growth industry targets that will lure the innovators and entrepreneurs, and manufacturing industries that can optimize existing assets and fully employ Detroit’s existing citizens

Creators: Detroit professional and community planners such as the Downtown Economic Growth Corporation, Rock Ventures, Detroit Works, Greenways Coalition, and the Universities, Developers such as Detroit Venture Partners, and businesses that will tear down and construct, move homeowners, reuse and revitalize Detroit’s assets

Community activists that speak for the disabled, the elderly and the young, that seek balance against issues such as environmental injustice, and industrial racism, who will react to the solutions involving 100,000 feral cats and wild dogs.

Political activists that will protect against a shift in political and economic power that can isolate the minority as Detroit changes direction from decay to productivity and livability.

Philanthropists and Historic preservationists that seek a better Detroit and a preservation of Detroit’s character

Investors, shareholders, bankers, all who seek the profit motive of an optimal solution, ensuring efficiency of effort

Detroit services such as Detroit Emergency management, Police and Fire

Disenfranchised youth and organized crime that will be impacted by a shifting economy

Governments: City government, interconnected regional, state, and federal governments

People of United States who have a stake in the outcome as can be modeled by those that follow and Citizens of the world who have a stake in America living up to our ideals.

Mayor Dennis Archer – Detroit Mayor 1994-2001, Democrat

Dennis Archer, previously a Michigan Supreme Court Justice, was elected mayor for two terms from 1994 through 2001. He promised to “build coalitions of all races, creeds, and economic levels to produce real improvement in the troubled city” and blasted Coleman Young for having run a political machine that “defended Detroit against the hostile forces from the white suburbs.”

In his campaign, Mayor Archer stated, “I represent. I represent the people who can’t get their garbage picked up on time … their streetlights to stay on all night … their phone calls answered at city hall. I stand before you representing children who are more concerned about surviving the school day … the homeless, the disenfranchised and the working poor who want affordable housing, and a clean and decent place in which to live.” He was an honorable mayor with a good record.

Mayor Archer was credited for ratcheting down animosity between black political leaders and white business leaders during his term. His accomplishments included:

• 11 billion in projects
• $100 million for empowerment zone
• Facelift to the downtown Renaissance complex when GM purchased it and moved their headquarters there.
• New Tiger Stadium
• Three Downtown casinos

Downsides listed included:

• A cumbersome bureaucracy facing new businesses
• Running thin on city services including police

The three casinos employ 8,000 people and provide $150 million in taxes to Detroit.

The baseball stadium was financed partially by Detroit taxpayers who went in debt $115 million to fund the stadium. The stadium added about 1,000 jobs in and around the stadium and added about $5 million a year in city revenues.

During Mayor Archer’s term Unemployment dropped across the United States from 6.1 to 4.0 %. In Detroit, unemployment dropped from 15.8% to 7.3% as Detroit’s population dropped from 1,000,000 to 904,000. Murder rate dropped from 58 to 44 per 100,000.

The figures suggest that in 1994, 421,000 people were working in Detroit, and in 2000 417,000 people continued working. Now 270,000 are working in Detroit out of a population of 730,000. The combination of job growth in the United States and Mayor Archer’s implementation of Downtown growth staved off unemployment.

The type of jobs from the casinos and ballpark fit the demographics of Detroit’s unemployed population, low skilled workers, and provided recreation that add livability value. The empowerment zone jobs added similarly. The saving of the downslide of the Renaissance saved such jobs and added surrounding service jobs. Mayor Archer did well in slowing the decline of jobs.

Yet, the loss of population due to crime continued its rapid downward slide.

Detroit’s Budget deficits started in 2005 and have grown to $387 million this year of a $1 billion budget.

Takeaway from Mayor Archer’s term:

Decent paying jobs added that can be readily absorbed by available unemployed workforce, will be when offered

Crime rates went down as employment went up…..

Detroit’s black population during the term stopped growing for the first time in a century and white flight continued its steep rate of decline. The following decade, middle income blacks would leave the city as well. And with their flight, a dropping population would finally cross the threshold that would thrust Detroit into deficit spending.

Livability added by a sports stadium, 3 casinos and an upgrade to a downtown shopping complex were peripheral to the population’s livability perception of Detroit. Crime was the overriding factor. Even though the murder rate for instance dropped from 58 to 44 per 100,000, it was still 10 times that of the suburbs. A better economy made migration more possible, white flight continued and Black in migration stalled.

A Confused Oligarchy Stagnated Innovation and Starved America’s Parasite Industries, Further Weakening Detroit

A Confused Oligarchy Stagnated Innovation and Starved America’s Parasite Industries, Further Weakening Detroit….

With such a tax base as afforded by the auto industry, Detroit offered the latest amenities of cities of the era and was called the “Paris of the Midwest”. The name implies that Detroit, at one time the fourth largest city in America, had the leading livability standards of the age. We know this was not the case for many of the underserved communities within Detroit, which led to a social cancer. Yet for others in Detroit, a booming city meant rising property values, good schools plus social and cultural benefits.

In the 1970s, even though domestic competitors were not a threat, foreign competitors emerged with a better mousetrap. With OPEC’s manipulation of high fuel costs, Japanese cars found an entrance into the U.S. market. Having established a foothold, they brought in better cars that competed against the Big Three’s higher quality vehicles.

What happened to Detroit’s innovation in the face of foreign competition? It seemed that the oligarchy was dazed by the machinations of OPEC and Washington’s tepid response. Prices would rise for a bit and then fall. Successive waves of price manipulations led to multiple calls for a national energy policy that never emerged, yet signaled confusion in the American industry. All the while, America’s love of big muscle cars survived the frustrating fluctuations in fuel prices. The confusion of Washington’s signals and America’s flip flopping sentiments left Detroit faltering in strategy.

The auto market eventually shifted, but in the confusion, Detroit lost its way, waiting to respond with real innovation and instead doling out body style and grill changes as substitutes for competitive innovation. U.S. buyers now perceived that true technological shifts were coming from foreign competitors, and the big three lost market share.

Detroit saw some of this impact, and the region surrounding Detroit suffered even more. All of America was impacted as the auto industries’ parasitic industries declined with autos. Detroit’s jobs fell, resulting in declining home values as people left. Taxes then declined, followed by a cut to city services, suffering city budgets, and higher crime, all exacerbating the flight to the suburbs, as the fall of Detroit spiraled on.

Could innovation have been a key to turning Detroit around? Yes, new businesses not tied to the falling auto industry, could have replaced the void if Detroit government was not so lockstep tied to the Big Three. While cities like Pittsburgh and Akron began to find ways to reinvent themselves, Detroit clung to autos in a mutual death spiral.

Innovation is a key factor but innovation comes from people, and people want to live in a city that brings to them a vibrant place to live. Thriving cities cater to innovators by fostering livability. Detroit has recently been given the “Un” honor of being the most unlivable city, the most miserable city in America. Therefore it has a severe innovator recruitment gap.

Detroit cannot go from the bottom of the livability scale to the top without enduring years working a plan for turn around. The beginning years will entail efforts to correct the cancers that are killing Detroit. They will also include years implementing a city plan that creates a land use of a highly livable city that can be Detroit 20 years from now.

The rebuilding will begin with a concerted effort to bring the right businesses to the right locations within Detroit as outlined in the 20-year plan. The right businesses will be those that can hire the right people with the level of education that exists now, plus those that can capitalize on the assets that Detroit has now. Detroit can then grow the city piece by piece back toward a Paris of the Midwest, if that is its vision of a livable city that can be enjoyed by all its citizens.