Leftist policies drive an iconic American city into bankruptcy.
Last Friday, Michigan Gov. Rick Snyder, a Republican, announced that the state will proceed with a takeover of Detroit's Democratic city government. “The current system has not been working. We have not stopped the decline,” said Snyder. “This is time for us not to argue or to blame, but to come together as Detroit, Mich., not Detroit vs. Michigan, and bring all of our resources to bear.” Snyder may not want to point the finger, but it is obvious that decades of Democratic rule and economic policies have brought this once great city to its knees.
The move, one step short of declaring municipal bankruptcy, means Snyder will be appointing an emergency manager with sweeping powers similar to that of a bankruptcy judge. Such powers include the ability to toss out unaffordable contracts with public employee unions and vendors, put city assets up for sale, consolidate or eliminate government departments, make further service cuts, or recommend municipal bankruptcy--all of which can be implemented with little to no input from local elected officials.
Democratic Mayor Dave Bing has a 10-day window to request a hearing on the decision. If he does the hearing will take place on March 12 in Lansing. If the appeal is denied, Snyder will appoint the manager. As of now that person hasn't been identified, but the Governor says he has someone in mind. After 18 months, the emergency manager would be subject to review by local officials, at which time he could be removed or replaced.
Mayor Bing sounded like he was leaning towards appeal. "The Governor has made his decision, and it was his decision alone to make,” said Bing. “While I respect it, I have said all along that I do not favor an Emergency Manager for the City of Detroit. I will look at the impact of the Governor’s decision as well as other options, to determine my next course of action.”
Democratic politicians and civil rights organizations in a city where the population is 82.7 percent black were far less sanguine. "For one individual to be able to wipe out the duties of our duly-elected officials, that’s more or less a dictatorship, and it’s against everything that America is supposed to be about,” said the Rev. Wendell Anthony, president of the local NAACP.
The "dictatorship" meme was echoed by other Democratic officials. State Rep. Brian Banks, who represents parts of northeast Detroit, contended the Governor should not have the largest voice when deciding what's best for Detroit." State Sen. Bert Johnson (D-Highland Park) characterized the appointment of an emergency manager as "a death in the family." Activist minister Malik Shabazz claimed that the "governor and the right wing in Lansing are destroying democracy and moving us into plutocracy." And Rev. D. Alexander Bullock, president of the Detroit Chapter of Rainbow-PUSH, claimed the development "will add to the growing tension in Michigan." “We wait to see if austerity will trump democracy and prosperity," he added.
What prosperity? Detroit's downward spiral has been legendary. Once the fourth largest city in the nation, and home to its largest industry, Detroit's population has been cut in half, from 1.5 million in 1970, to less than 700,000 in 2012. Median household income is $27,862 compared to the state median of $48,669. The poverty level is 36.2 percent compared to a statewide level of 15.7. The murder rate is 11 times that of New York City, and the unemployment rate is above 18 percent, more than double the national average. Detroit Public Schools (DPS) have been under emergency management since 2008. In late February, the state review board revealed that the city faces a short-term cash $327 million budget deficit and an estimated $14 billion in long-term debt, primarily driven by unfunded pension and retirement health care obligations.
As a result, the city can't provide basic services. The Detroit Fire Department is so short of critical resources, rotating "brownouts" of fire companies are required. Forty percent of the city's street lights are broken. For the past two years, the Bing administration has slowly adopted a city "triage" system, best described by the Detroit Free Press. "Infrastructure improvements, demolition activity, outdoor maintenance and development incentives will henceforth be concentrated in a relatively small number of neighborhoods that boast the high numbers of owner-occupied homes and little evidence of residential and commercial blight," it reports.
To accord with this plan, the city's 139 square miles have been broken down into four categories by Detroit's Planning and Development Department: "steady," as in little blight and a high number of owner-occupied homes; "transitional," as in a neighborhood on its way up or down; "varied" as in some streets are stable and others are not; and "distressed" as in large amounts of blight, and few amenities, such as grocery stores.
Detroit residents have responded in kind. A staggering 47 percent of the owners of Detroit's 305,000 properties didn't pay their property taxes in 2012. Homeowner Fred Phillips illuminated the frustration many of those residents feel. "Why pay taxes?" he asks. "Why should I send them taxes when they aren't supplying services? It is sickening….Every time I see the tax bill come, I think about the times we called and nobody came."
Yet it's even worse than that. Detroit has some of the highest big city property taxes in the nation, and property assessments remain overly inflated, amounting to as much as ten times the market price of the property, according to recent research compiled by two Michigan professors.
This has led to another phenomenon. Property owners are allowing themselves to be foreclosed upon, and then re-buying the same property at a reduced price, legally eliminating their outstanding debt in the process. Six hundred properties were repurchased in this manner in 2012, triple the number that occurred in 2010.
In short, Detroit is a city on the brink of ruination. At the center of that ruination is 50 years of Democrat rule. The last Republican Mayor the city had was Louis C. Miriani, who lost his reelection bid in 1961 and ended up spending 10 years in prison for tax evasion. Incoming mayor, Democrat Jerome Cavanagh, brought the "Model City" program -- fashioned after Soviet Union centralized efforts to transform entire urban areas at once -- to a nine-square-mile section of the city. Using a commuter tax and a new income tax as his vehicle, Cavanagh promised residents "the rich" would pay for it all. Yet because people were being told by government how to run their businesses and their lives, in exchange for government goodies, the program ended up failing spectacularly.
In 1967, after police broke up a celebration at an after hours club, an enraged neighborhood began to riot, igniting the worst race riot of the decade. Black-owned business were looted and burned to the ground. Forty people were killed and 5,000 were left homeless, and the "white flight" out of the city center, totaling 140,000 people over an eighteen month period, ensued. The city was never the same.
An unbroken series of Democratic mayors followed, all of whom had a hand in implementing the full panoply of progressive policies, highlighted by the giveaways to public service employees. Their outlandish salaries and benefit packages, coupled with highly inefficient work rules, killed the golden goose: the auto industry, and its attendant industrial community headed South, where lower taxes and right-to-work rules kept their businesses afloat.
The same swath of progressive policies destroyed the public school system as well. Perhaps nothing illustrates the corrupting influence of those policies better than the Detroit Federation of Teachers' success in scuttling a $200 million offer by businessman and philanthropist Robert Thompson to build 15 charter schools in the city in 2003. Ten years later, the Detroit Public School (DPS) system remains a cesspool of failure, corruption and bankruptcy, all of which is chronicled here.
Considering some of the men who have run this city, Detroit's descent into socialistic ruination should surprise no one. From 1974 to 1993, Coleman Young, who was subsequently revealed to be a member of the Communist Party, was mayor of the city. He failed to stem Detroit's descent into chaos, and in 1992 his police chief was convicted of stealing $2.6 million from city taxpayers, even as Young defended him. Michigan's hard-left U.S. Senator Carl Levin was Young’s chief supporter, serving as Detroit City Council president.
Kwame Kilpatrick, who served as Mayor from 2002 to 2008, represents the epitome of corruption. In 2008, he pleaded guilty to two felonies and no contest to a third one, receiving a sentence of 120 days. In 2010, he received a five year sentence for probation violations stemming from his obstruction of justice conviction. Currently Kilpatrick, along with his father, Bernard Kilpatrick, and his longtime contractor friend Bobby Ferguson, who got millions of dollars in city work, are awaiting a jury verdict on racketeering, bribery and tax charges that could send them all to jail for 20 years.
All of these polices and politicians have had their effect. In 2012, Forbes Magazine rated Detroit the most dangerous city in America. A Detroit News poll revealed that "Detroit's crime crisis" has gotten so bad, a staggering 40 percent of its residents intend to leave the city within five years. Another two-thirds say the city is on the wrong track. The poll also found that all of Detroit's public officials were held in low esteem, except for Police Chief Ralph Godbee--who retired due to a sex scandal after the poll was taken.
Now one might think that those living in the epicenter of Democrat-inflicted misery for fifty years might consider changing course. One would be completely wrong. On Nov. 6, Barack Obama received 98 percent of the vote. On the same night Detroit voters elected a convicted felon, Brian Banks, to serve in the state legislature. Other election results show overwhelming margins of victories for Detroit Democrats as well.
Thus, the self-inflicted misery continues, even as it is almost certain that Detroit's Democratically-dominated city government will resist the efforts of Gov. Synder, and the Republicans who run the state legislature, to keep the city from going under. It is also likely that much of that resistance will be framed in racial terms, a theme that has already been stoked by U.S. Rep John Conyers (D-MI), who has represented Detroit for 47 years. “How come all of the jurisdictions put under emergency management are majority African American? Has anybody noticed that?” he wondered. Here's what some people have "noticed," Mr. Conyers: the top ten most dangerous cities in the nation are each led by a Democrat mayor.
Gov. Snyder frames the issue correctly. "There's probably no city that's more financially challenged in the entire United States," he said. "We need to start moving upward with the city of Detroit." Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, put it even more bluntly. "The city could stop doing all of its current operations today--no more police and fire, no more garbage collection, no more street lights--and the city would still have billions of dollars of debt and promises made for future payments that it would have to pay."
Detroit residents have had fifty years to fix their own problems. They've elected Democrat after Democrat, bringing the city to the brink of bankruptcy. It is hard to imagine an emergency manager could do worse.
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