Thursday, July 18, 2013 the city of Detroit filed for bankruptcy protection. This is the largest municipal insolvency in U.S. history. The chapter 9 filing violates Michigan’s Constitution. The bankruptcy was filed in federal court, which typically trumps state laws, the injunction will be heard today or tomorrow. Also, to be presented this week is the city’s unfunded pension and healthcare obligations for the 20,000 retirees. Many are predicting the bankruptcy will take years to settle with over 100,000 creditors.
Because of Henry Ford establishing Ford Motor Company in Detroit, 1903, and the likes of Walter Chrysler, Packard and Dodge Brothers following suit, by 1950 Motor City was the fourth most populated city in the United States. According to the 1950 census Detroit peaked at 1.8 million and has been in a nose dive since. I remember the influx of Michiganders to Atlanta in the mid-seventies when Detroit’s finest were designing their worst and assembly line quality had gone to hell during the unions’ strangle hold on the automobile manufacturing industry.
Moving to the country a year and a half ago I quit my news addiction cold turkey. It was the wisest decision I had ever made for my frame of mind. An occasional scan of the headlines has been sufficient to keep me adequately informed. In March when Michigan’s Governor Snyder appointed an emergency manager to oversee Detroit’s finances my interest was sparked. In my very limited experience working with law makers I knew nothing in government moves swiftly. Detroit’s issues did not occur over night, but I was shocked to learn the blueprint of this bankruptcy was drawn over 100 years ago.
Having grown weary of all the racial tensions created by the George Zimmerman acquittal, I looked forward to writing about something financial. Dissecting the bankruptcy and discovering the factors that led to Detroit defaulting on 20 billion of debt, good Lord, it is race related again!
Innovator Henry Ford wanting total control of the manufacturing process of his affordable Model T, going as far as growing rubber trees in South America, recruited black assembly line workers to Detroit. Though the city played a pivotal role in the Underground Railroad during the Civil War with its border in close proximity to Canada, Ford’s actions birthed racial hostilities which came to head in June, 1943. The Packard Car Company was retooled and in war production. Management promoted three blacks to work side by side with white employees. This resulted in 25,000 white workers walking off the job halting the manufacturing of critical war supplies. Three weeks later The Detroit Race Riot took place. Killing 34 and injuring 600.
Detroit was a racial pressure cooker that exploded in the summer of 1967. The Twelfth Street riot ended with President Johnson sending in Army troops, 43 dead, 467 injuries and over 7000 arrested. This initiated Detroit’s white flight. Over 2000 buildings were destroyed causing thousands of businesses to relocate to safer neighborhoods never to return. The destruction could be seen for decades. Detroit’s first black mayor, Coleman Young, elected in 1974 wrote years later regarding the ’67 riot: The heaviest casualty, however, was the city. Detroit’s losses went a hell of a lot deeper than the immediate toll of lives and buildings. The riot put Detroit on the fast track to economic desolation, mugging the city and making off with incalculable value in jobs, earnings taxes, corporate taxes, retail dollars, sales taxes, mortgages, interest, property taxes, development dollars, investment dollars, tourism dollars, and plain damn money. The money was carried out in the pockets of the businesses and the white people who fled as fast as they could.
The Supreme Court decision of Milliken v. Bradley 1974, Detroit’s board of education attempt to desegregate schools resulted in whites moving to the suburbs by the droves. The population and demographics of Detroit changed drastically. From the population peak of 1.8 million it is now 700,000 living in the city limits of Detroit. 1,400,000 whites have abandoned the city devastating the tax base by 2/3. In 2011 of the 305,000 properties in Detroit over half failed to pay property taxes. In the same year there was a 77 block area of Detroit where one individual paid property taxes.
The urban decay has left 70,000 buildings, 31,000 houses and 90,000 lots vacant. The failure to provide consistent city services, average police response time on an emergency call is 58 minutes, has made Detroit the most dangerous city in the United States four years running with little chance of losing the distinction.
The remaining workforce in Detroit is burdened with pathetic literacy levels. A 2011 report stated 47% of the workforce was functionally illiterate. That means tens of thousands unable to complete the necessary paperwork to obtain a job!
When I began contemplating today’s post I was certain I would be writing extensively about unions. Initially labor unions made the assembly line survivable with 8 hour shifts, 5 day work weeks, 40 hour work weeks, health insurance, but greed and corruption in union leadership destroyed the American automobile manufacturing industry leaving Detroit jobless.
In summation, Detroit is a microcosm of our founding fathers’ sins compounded by generations of segregation, racism and denial. Can you imagine how you would feel if in your lifetime another race refused to work beside you, refused to seat you in a restaurant, had separate restrooms, separate schools? On the other hand I have never seen a minority run city or town maintain prosperity much less improve. Detroit is a prelude to our nation’s future unless we take drastic measures to change minority education and cultural decay. Thanks for reading. Have a great day! DJ