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

Kevin 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.

Hat’s Off To Mayor Bing

I want to pause and say that I am quite impressed with Mayor Dave Bing.

Detroit has been in a free fall for 50 years. After saddling Detroit with institutionalized racism and after pulling out the core of Detroit’s economy, centralized industrial military, and auto manufacturing, after having created an obsoleted urban housing system, after having swelled racial divisiveness to a tender box, and after having incited generations of oppressed black youth to react in desensitized violence, whites packed up their belongings, built highways, and skedaddled out of town.

Now, quite understandably, Mayor Coleman, who had dabbled as a youth in socialism as his potential answer to oppression, when elected the first black mayor during white flight, reacted with a sense of indignity. “Who needs deserters” was perhaps a normal reaction to have. But Detroit found during his 20 years that it did need investment, the very type of investment that had fled the city before his arrival.

And Mayor Archer, understanding the need for collaboration, did enlist the help of white business leaders in his efforts. It’s just that the generation that had just left Detroit hadn’t yet figured out that what Detroit now needed was transformation, not simply architectural monuments to lure shoppers back into a dying industrial town.

When their efforts failed, Detroit brought in what could have been fresh thinking to revitalize the city when they elected their youngest Mayor ever, Kwame Patrick. Yet, he turned out to be the poster child for white bigotry. Mr. Patrick gave into his base desires and missed out on the glory of raising up Detroit.

In his stead, Detroit elected a man of principle to follow the character of Mayor Archer. Mayor Bing had earlier shown his tenacity and leadership in the NBA, and he had proved his business leadership with his successful company. Mayor Bing was the right leader for Detroit. Yet he was taking the helm of Detroit in its final throws.

When Mayor Bing came to office, Detroit was already bleeding $150 million a year in deficits. When he came to office, the United States of America was already on its knees in the greatest recession since the Great Depression.

Read the tweet posts from above and you can see into Mayor Bing’s mind. He learned quickly what must be done. Within his powers, he orchestrated a great deal more than his predecessors had done in the previous 40 years tp redirect Detroit’s future toward a thriving path forward. Detroit is on the brink of being able to exercise a posterity that can either be aided by this emergency manager or obliterated by him.

A red flag of urgent observation and participation has now been thrown into the arena….

My hat’s off though to Mayor Bing!!!

Mayor Dave Bing Tweets His Progression Of Thought Toward Revitalizing Detroit

Mayor 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

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.

Root Cause Analysis Of Detroit’s Problems Leads to the Following Growth Principles

Detroit will finally have to face her problems that have been endemic to the city for the past century. if Detroit continues to deny, or worse to defiantly continue her stalemate of opposing political philosophies, the city will finally pay for its stubbornness by imploding into a smaller footprint. The remaining lands will either return to their historical township designation or they will be absorbed in part by surrounding cities. The absence of a viable solution will create a dramatic end to this once vibrant city’s history. The vultures will descend on Detroit’s assets in the aftermath to divvy up what could otherwise have been the basis of Detroit prospering once again.

Why is it that Detroit’s problems have grown for the past 60 years without correction? Many talented people have strategized and struggled to reverse the city’s declining trend. Yet, the city is finally in severe crisis, and is on the verge of bankruptcy.

It turns out that some of Detroit’s largest problems, which absolutely must be solved to save the city, are actually symptoms of other “root” problems, which have gone unchecked for 60 years. Until we expose these root causes, we cannot hope to find viable solutions that will turn around Detroit’s plight. And once exposed, Detroit’s political, business and civic leadership must finally commit to implementing system-wide solutions that up to now they have ignored.

We know the problems that Detroit is experiencing. Yet leaders have fruitlessly spent billions of dollars on solutions that have not reversed them. If money and effort are spent on solutions that do not address the problems that are the root of all remaining problems, then their efforts are in vain, for the root will then continue to nourish its branches of destruction, and Detroit will persist in continuing its decline.

What are the root causes of Detroit’s problems? Let’s list symptomatic problems first and then peel the onion deeper and deeper until we reach some root causes:

Symptomatic Problems:

A. Detroit Citizens are leaving the city in epidemic proportions, creating a hollowed out city.

Symptomatic Causes:

No jobs
High crime
Poor Schools
Lack of city services
Lack of livability qualities

B. Detroit Government cannot afford to provide the City Services that a city government is required to provide and will not be able to sustain itself without drastic changes.

Symptomatic Causes:

Smaller population to tax
Fewer businesses to tax
Decreased property values
Poor collection of taxes that are owed

C. The citizens that remain in Detroit are forced to live in what Forbes magazine calls the “most miserable city in America”

Symptomatic Causes:

Terrorized by crime
Live in blighted neighborhoods
Have low paying jobs or no jobs
Send children to schools that don’t educate them
Are denied basic city services
Wait too long for emergency services
Lack decent transportation to city amenities
Live in obsolete housing

Now, each of these symptomatic causes only scratches the surface of describing the cause of Detroit’s problems, and each symptomatic cause has more deeply rooted causes. For instance, one symptomatic reason people are moving out of Detroit is because there are no jobs. Certainly the trend started with the loss of auto and armament jobs but many more jobs have left since. Why?

• Some jobs leave Detroit to follow people that are leaving
• Some jobs are eliminated as businesses such as national grocery store chains refuse to
cater to the distillation of remaining citizens.
• Some business decry the lack of City services
• Others leave because of high taxes
• Some leave to find educated potential employees
• Other businesses are uprooted because their owners are unhappy with Detroit’s
livability.

Yet even these more deeply rooted causes are symptomatic of even deeper causes:

• Grocery stores claim that a lack of population density, higher crime rates, and a lack of
qualified employees make them unprofitable.
• The City claims that higher taxes on businesses are necessary to offset others that have
left and that city services have been cut because of falling city revenues.
• Detroit businesses have found that the existing potential employee base has a low
degree of education, that 47% are functionally illiterate, and that most have worked in
jobs that did not provide high skill level training.

And yet, even these more deeply rooted causes have deeper causes. Those that point to the city’s high crime rate, for instance, state several reasons for the higher rate:

• Black subculture of violence
• Street gangs
• Drug trafficking
• Poor policing

Yet these are all symptomatic of even more deep root causes. For instance, the black subculture of violence goes back to:

• Colonial times of slavery
• Post civil war terror and oppression
• Treatment of blacks in Detroit during the transition into the industrial era
• The failure of schools to educate
• For the failure of businesses to provide a living wage
• For intergenerational, institutional racism that has denied blacks equal opportunity for
jobs and housing, for neighborhoods, decent healthcare, and equal protection under the
law.

So Institutional racism drops out as one of the root causes of the downfall of Detroit. Once this analysis of root causes is complete, then a set of solutions can be generated to combat these root causes. However, as in all systemwide solutions, any set of proposed solutions must create a desired outcome that is best for all citizens of Detroit to be optimal.

A cursory root cause analysis suggests a few patterns of future success for the city of Detroit, without creating the plan for how to achieve these patterns. Some might even suggest that these patterns are unachievable. Yet, remarkable solution sets can be created once the objectives are outlined.

In isolation, my initial assessment suggests the following. I will next compare this solution set to recent historical patterns of solutions and contemporary solutions being proposed.

Based on the constraints of what I expect to be true, to solve the immediate issues of turn around, Detroit will have to:

• Restructure existing debt
• Soften expectations of entrenched unions
• Reduce unsustainable city pensions
• Enforce collection of current taxes
• Resize from the now unsustainable level of city services
• Create fair alternative to foreclosures

To stop stampeding exodus, the city will have to:

• Dramatically and quickly reduce high crime levels
• Limit the impact of the illegal drug market
• Lower city tax rates to compete for business and new homeowners
• Provide alternative to failing schools

To quickly reduce high crime levels will require:

• A dramatic early increase in law enforcement in transition to sustainable levels of crime
• That the city provide freedom for potential emigrants to seek viable alternatives to public
education while Detroit public schools are dramatically overhauled so that all kids have
an incredibly higher probability of academic success
• That the city immediately begin to provide highly probable access to higher education or
to higher paying income jobs to transitioning upperclassmen and to graduating high
school seniors.

To rebuild, Detroit will have to begin to:

• Initially repopulate the city with jobs appropriate to the educational and job skill level of
its population, which will begin with a high number of illiterate, uneducated, unskilled
persons in the workforce
• Transition from failing schools that will start with very poor results even if they transition
to success
• Provide highly probable, well paying jobs to students who graduate from college and
from high school
• Create a plan for compact city service zones and reduced services in outlying areas that
can transition with increasing population.
• Exercise a city land use plan that incorporates a citywide pattern for a livable city in all
neighborhoods as the city repopulates.
• Immediately dialogue with surrounding cities to formulate an understanding of what
benefits (and potential threats) are availed through cooperation, collaboration, and
synergies with surrounding governments.
• Reform government services to eradicate institutional racism and multigenerational
diminished expectations
• Assess all Brownfield properties for assets that may have intrinsic value for any potential
reuse as part of a citywide plan to use assets, including land as draws for new
businesses and workers.
• Rid city of blight through integrated coordination of credit, loans, and jobs, tied to blight
enforcement and city confiscation for redistribution.
• Create a viable foreclosure alternative tied to credit, loans, and jobs.
• Create citywide access to credit for city’s public and private growth.

America is Experiencing the Dangerous lead in the Capitalist-industrial Era Trending Assault on Marriage

With each generation in Post Civil War America, a greater percentage of parents divorced, and, as a result, a greater percentage of children were raised by single parents. What do we know about children raised in the aftermath of divorce?

We know that the majority of single parent homes are working mothers raising children. We know that a greater percentage of their daughters, lacking self-esteem from the absence of fathers, practice promiscuity to regain a sense of belonging. We know that young boys, troubled from their lack of a father, have a higher tendency to multiple factors of delinquency.

We also know that children from divorced parents are a third less likely to marry themselves but to choose cohabitation or living singly, that those that do marry are more likely to marry as teens and to marry other children of divorced parents. We also know that that their marriages are more likely to end in divorce, and that spouses who both come from divorced families are 300% more likely to end in divorce than those who both came from families in which divorce was not present.

This divorce and cohabitation cycle then becomes intergenerational. Each generation that this pattern exists causes more people to live in cohabitation and more to divorce. The intergenerational divorce trend’s asymptotic trend is fortunately slowed by a decreasing marriage rate, a delay in marriage age, and an increase in cohabitation before marriage, as each generation defiantly vows not to repeat the mistakes of their parents.

Yet here we are raising half our children in single parent homes. For blacks, who started further up the curve, the figure is a staggering 72%. What is the impact of this phenomenon? The inflationary crippling of the value of labor created through America’s currency manipulation makes living in a home with only one income a difficult economic choice. Yet, women’s entrance into the workforce was met with resistance and their work is paid 20% less than men’s, even when taking into account their work gender clusters which are paid less than men’s. And their career choices are hindered by single mother circumstances. As a result, 63% of single mother homes live below America’s poverty line.

Divorce begets poverty begets cohabitation begets more divorce. Poverty forces people to choose cohabitation and marriage at younger ages to meet financial needs. Cohabitation is favored when financial needs are immediate and marriage commitment is uncertain. Whether in marriage or in cohabitation, the first child is born within a median of two years. The median is sooner lower income families. Therefore a correlation of poverty, cohabitation, and out of wedlock children increases as the intergenerational cycle expands.

Add to a higher starting point of Blacks after slavery the financial oppression of post Civil War, and the resulting 500% disparity of Blacks in extreme poverty conditions in our inner cities for reasons enumerated in previous posts, the reasons for subcultural patterns of cohabitation and divorce become clearer.

I have avoided the divorce issue throughout this thread because it is a topic that should have its very own deep, deep discussion, and because I am far from expert on the subject. Yet it seems clear that individuals, classes, races, ethnic groups and other factions that take comfort in their relative lower position on the trend line of divorce and other marital norms should, I say emphatically, not.

Where we as nation are headed along this trend line away from the social patterns that have represented social stability for millennia toward the experiment in self actualization is anyone’s guess, yet we are all trending.

During the Viet Nam war, each man in the platoon would take their turn walking in front of the others on point during patrols. Their odds of survival dramatically decreased during their turn. As the leader in the capitalist-industrial era of societal shift toward self-actualization, America is has been placed by the lieutenants in our platoon in this war against marriage, on point.

Yep, blacks in the inner city are on the fragging point of marriage. It doesn’t bode well for the rest of us. And how we adjust our economic system on their behalf and for the rest of us will have dramatic consequences for the trajectory of the American family.

The Industrial Revolution Made Capitalists the Puppeteers of Divorce

The industrial revolution placed stress on this arrangement for capitalism would now draw the vast majority of the 95% of people who had lived on dispersed farms engaged in the hard life of farming into the cities, small towns and burbs to sell their labor. While women would still play their traditional roles, their home labor would gradually ease through the products of the industrial era. And Men would find that they could now provide more to their families with less labor.

Yet a curious tool of the modern capital era seemed to be at odds with this newfound freedom. Modern industrial warfare would require massive labor efforts, drawing women into the workforce. And to curb the benefits that additional labor might bring to the masses, money inflation followed re-entrance of military men into the increased women workforce at every turn. After WWI and again in the 1940s, inflation ate away the family benefits of increase labor and of the gains that unions made by collective bargaining, handing the benefits of increased labor over to owners of capital.

Even so, the increased productivity, health and lifespan brought about by the industrial era increasingly gave the American family new freedoms to participate in an upward societal shift on Maslow’s hierarchical scale toward self-actualization. With this shift came a correlating trend of divorce. From the end of the Civil War until 1964, divorce rates in America would trend upward from 5% toward 36%.

Self actualization, personal gratification, and individual choices toward happiness now became luxuries that did not exist in a world consumed with meeting the basic necessities and having to meet these needs with lifetimes that before the industrial era had spanned only half as long. Then came the paradigm shift made possible by the birth control pill and abortion. The sexual revolution expanded the possibilities to take the experiment of self actualization to new heights.

Post WWII, only 12% of women attended college. Post Viet Nam War, 45% of women entered higher education. And traditionally lower paying jobs open to women were quickly being replaced by other gender workforce clusters that then dissolved into fields across the workforce spectrum. Women now demanded and gained financial freedoms hitherto unknown. With financial and sexual freedoms secured, the divorce rate skyrocketed from 36% in 1964 to 48% in 1978.

The shift up Maslow’s hierarchy placed a burden on the role of traditional families and hit black families hardest. Black men were the least able to rise in the shifting economy and their family lead roles were the most threatened. Interestingly, inflation followed the entrance of women into the workforce during the 1970s and 80s as well, dramatically drawing their labor efforts back toward the owners of capital.

From 1978 on, the inflationary tool of capitalism has drawn the benefits of American labor away from the modern family toward the owners of capital. Since then, Divorce rates have stabilized and actually retreated, yet less people have married, more have waited to later ages to marry, and cohabitation rates have increased dramatically.

Blacks were Forced to the Head of the Divorce Trend Line Ahead of Whites

While the United States has a very high divorce rate compared to most of the rest of the world, divorce rates, cohabitation rates, and single parent families are trending higher worldwide. This trajectory suggests that divorce trends higher for generations until being reset by cultural crises such as the collapse of nation or major pandemic.

Major religions stress marriage and lifetime monogamy. Whether based on God’s law or on thousands of years of empirical evidence of how best to create a stable society, religions have stressed marriage and family as the basis of society, yet all seem to have provisions for divorce, mainly stemming from infidelity. Studies suggest by the way that infidelity is involved in 90% of all divorce.

The majority of societies have historically begun with strict restrictions on cohabitation and divorce. Yet they have tended to relax restrictions over time, sometimes repeating these patterns if the society lasted long enough, the easing of restrictions paralleling what is occurring across the world today.

In the United States, subcultures have significantly higher levels of cohabitation, out of wedlock children, and divorce. Black rates are highest today followed by whites, then Hispanic immigrants and finally Asians have the lowest rates. Amongst each group, socioeconomic factors tend to differentiate divorce rates as well. Younger, less educated, poorer couples tend to marry or cohabitate earlier and divorce at a much higher rate than others.

Between blacks and whites, blacks have had higher rates since the end of the Civil War. Yet both subcultures are trending much higher, especially since the 1960s. Could it be that the black and white subcultures, as well as others, are just at different points on their trend lines moving away from America’s beginning mores toward whatever end point these trend lines trend toward, perhaps some hoped for greater self actualization and away from some perceived societal enforced responsibility to the tribe?

For centuries, the traditional social contract of marriage has been that man has left the home to farm, fish, hunt, or perform labor in a trade and the woman has performed labor in the home and tended to children and the elderly. This social norm created stability in society if for no other reason that it limited potential for infidelity and created a financial bondage of the wife to the husband.

In America, Blacks were the first to have this social contract disturbed, sadly obliterated in many ways. Men slaves no longer could provide for their families by traditional norms. They could not protect their families from the horrors of slavery. Black slaves were powerless to decide who would work in the home, or in the fields, how their lives would be disciplined, or even to keep their loved ones from being sold and in the process having their family units destroyed. Post slavery, the burden of survival, which we know in modern society creates more divorce, was prevalent amongst ex slaves. The black starting point on the trend line had been significantly altered from that of whites. From this point, all of America would continue on down the trend line together, with blacks having been forced to take the point.

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.

Detroit Failed to Adapt to the Major Threats to Cities During the Twentieth Century

During the 1900s, cities dealt with the issues surrounding institutional racism with various degrees of success. In the midst of these internal issues, external threats to survival would emerge that would threaten American cities’ survival. The Great Depression hit America’s capitalist system hard, causing a drastic reset of economic principles that would remain intact for another half century as economic tools for city growth. Many cities used these tools successfully. Some cities, like Detroit, used them to excess.

The civil rights movement of the 1960s would begin a dramatic shift in the hierarchy of needs requirements of cities that would leave those cities failing to adjust with worsening economic consequences. The entirety of the South suffered as boll weevils destroyed their cash crop and investors shunned Southern industrial enterprises during the second reconstruction era.

After the Viet Nam War, business migration and emigration began draining cities of lower skilled jobs and exposed a rust belt as the most visible sign of maladaptation. Some cities reformulated strategies for economic success better than others during the transition.

The latest threat to city survival has been a series of financial boom/busts that created misguided incentives and that misdirected investments into real estate assets rather than productive capabilities. Some cities survived the lure of building excess housing, office, and retail real estate stock better than others in the transition.

Detroit was one of the cities that did not adapt through the maze of external threats as well as some of America’s other major cities. While Detroit prospered initially as a result of the New Deal, unions created excess gains that did not adapt to the external threat of business migration. Detroit’s highly ingrained institutional racism became more militant in response to the militancy of those it oppressed during the civil rights era. And in a desperate attempt to correct for its inability to heal racial tensions, Detroit fell headlong into the temptations of investing in real estate as a cure for lack of productive industry.

Detroit failed to adapt those attributes of a growing, or indeed thriving city that were necessary to overcome both internal and external threats of the last half of the twentieth century.