Wednesday, July 10, 2013

Detroit Isn't Greece

Remember that movie from a few years ago, where a kid grew increasingly neurotic and agitated about government debt until a psychologist teased out his secret, "I see Greek people... they're everywhere... and they don't even know they're Greek!" Well, neither do I, but had they made that movie the child might have grow up to be Charles Lane.

I have three basic problems with people who are inclined to point to units of government and declare, "That's like Greece". First, those making the comparison often seem to have little understanding of the situation in Greece. Second, their comparisons are usually spurious. Third, the gist of their argument usually has nothing to do with Greece or the circumstances that led up to its economic crisis, and usually have a lot more to do with a desire to cut social spending or to attribute some form of blameworthiness to the ordinary people who have profited the least and suffered the most from the mistakes and misconduct of their governments. I'm not seeing Lane as an exception.1

Greece's economic crisis did not emerge in a vacuum. If any nation in the Euro zone was not aware that Greece was playing games with its finances first to qualify for entry into the Euro and subsequently to nominally meet the limits on the size of its deficits, the ignorance would have to have been willful. Greece's governance was impaired by ineptitude, corruption, and a willingness to turn a blind eye to tax fraud. But the average Greek person was part of a culture that was more entrepreneurial than most - just oriented toward small, family-run businesses as opposed to the version we're used to - and on the whole they were paying a higher share of their income in taxes than a typical U.S. citizen. It's all too easy to shrug off the hardship they are experiencing, first from the economic collapse and second from austerity measures, while ignoring the fact that those who profited the most from the lead-up to the crisis are also typically those most insulated from its consequences.

A comparison between Greece and Detroit perhaps holds true in relation to the perceptions that lead to a mentality of austerity - a notion that the people are at best undeserving and at worst need to suffer. Never mind that most of them are trying to get through their lives under difficult circumstances. The City of Detroit has lost close to two thirds of its population since its peak. It's easy to look at Coleman Young, who chose to transform himself into a cartoon, and forget that he became mayor following a period of crisis and actually did good work during his first term. It's astonishing, how bad things became over his subsequent terms, or the culture of incompetence and entitlement that took over the City's government during his era.

It's easy to forget that when provided with the opportunity to do so, the people of Detroit made the very responsible choice of electing Dennis Archer as mayor - but (one might infer, when confronted with the entrenched corruption and incompetence left beyond by Young as well as the lack of resources and political capital necessary to effect a significant reform of the city and its government) he left office after one term and was succeeded by the young, charismatic,2 and (alas) corrupt Kwame Kilpatrick. It's also easy to forget that Kilpatrick was succeeded by Dave Bing, who is much more in the model of Archer, but by some combination of timing, personality and opportunity, more willing to take on the entrenched interests that have impaired the city. As they say, at least in relation to trying to forestall the appointment of an emergency manager and possibly to keep the city out of bankruptcy, too little, too late.

It has been painfully obvious for decades that Detroit needed serious outside intervention. That did not occur for three reasons: first, few people were willing to pay the political price associated with the necessary reforms. Mayor Bing was able to propose consolidating neighborhoods and essentially shutting down the sparsely populated ares of the city because things had degenerated well past the point of sustainability - but the need for those measures were obvious more than twenty years ago. Second, change isn't cheap - and nobody wants to pay for it. For example, there are huge, slowly decaying buildings and structures in Detroit that remain in place, eyesores that stand in the way of brownfield redevelopment, because they're too expensive to remove and nobody in their right mind wants to develop land that sits next to a decaying hulk or contaminated land. The state is unwilling to divert that type of money into Detroit, and it's not even on the federal radar screen. Third, it's very easy to blame the people of Detroit for their own plight, even though things get far more complex when you start looking at individuals. Our nation's approach to its anachronistic large cities3 and the problems of the inner city is largely one of disinterest and neglect - and that's not likely to change as long as the nation, as a whole, perceives the residents of those areas as undeserving of help.

Still, Detroit has its bright spots. If Lane ever actually makes it to the city, he may want to check out Greektown.
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1. For example, Lane waxes poetic about the union-busting powers granted to Detroit's emergency manager then complains, "German chancellor Angela Merkel could only wish for such quasi-dictatorial power over her Greek clients", seemingly unaware that Germany has been a driving force behind the failed austerity measures that have been imposed upon Greece to the extreme detriment of ordinary people; he argues "Greece’s state-owned money pits include a railroad and ports. The political class in Detroit saw fit to own water works and parking garages", as if it's unusual for a municipality to own a water utility or parking structure and as if the comparison between that type of service and owning seaports and railroads has any validity, and in ignorance of the fact that Detroit's water utility produces high quality water and sells its services to other area communities; he suggests that Detroit's pension obligations are somehow analogous to the cause of Greece's economic crisis, never mind that pensions had nothing to do with Greece's crisis and the relative size of Detroit's pension obligations to its tax revenue is far more a creature of its collapsed tax base than of the fact that city employees receive pensions.

2. I did not personally find Kilpatrick to be appealing - I would label his style and swagger as appalling - but I can't deny that many others thought he was charming and liked his bravado.

3. Many cities that were once important, even crucial, hubs for trade are now largely irrelevant. Many of the industries that were once consolidated in major cities have shifted to other states, and even to other nations, with little to take their place. Detroit has lost 60% of its population, leaving behind a tax base insufficient to support its infrastructure, but without enough jobs or opportunities for the people who remain behind. As huge numbers of capable workers have left the city, a disproportionate number of those left behind have marginal jobs skills, physical or mental illness, drug addiction, or some combination thereof - with a predictable effect on the community, its schools, and its attractiveness to employers.

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