Sunday, March 01, 2009

Want A House For $7,500? Do You Want To Move To Detroit?

Ah, Detroit, Michigan.
A once great city that boasted at the beginning of the 1950s 1,800,000 people. A city that became the home of the greatest car manufacturers in the world. Ford, General Motors and Chrysler/Plymouth. It was a growing and vibrant city.
Until about 40 years ago.
It was in 1967 that race riots occurred in the Motor City. The riots lasted five days and left 43 dead, 467 people injured and 2,000 buildings burned and or destroyed.
What followed has been 40 plus years of hell and people fleeing a once great city faster than one can say "Boo!"
This item in the Chicago Tribune is a sign that this once great city is truly on the brink of disaster and that would be a disaster for the whole nation.
The low light of this story is that the median home price in the city of Detroit is $7,500. Not $75,000. That would be bad enough. But $7,500.
How did this come to be?
Part of the problem was that Detroit became overly dependent on the auto industry. And why not? Besides the "Big Three" mentioned above, there were some small companies such as Packard, Hudson and Studebaker. And, Mitt Romney's father, George Romney, was the chair of American Motor Company, or AMC. But, eventually the marketplace shoved most of these car makers out of business and or mergers. AMC was eventually merged with Chrysler/Plymouth.
When there were a lot of car makers, there were a lot of jobs. But, when the first one went by the wayside, there was no vision that maybe Detroit should prepare for a time that there would not be a lot of car makers.
By the time the 1967 riots occurred, Detroit was well on its way to becoming an economic and social basket case.
A New Deal Democrat mayor, Jerome Cavanagh, tried the big government approach and coerced the federal government to pump millions of dollars into failed programs such as Head Start and so-called urban renewal. However-SURPRISE!-targeted areas saw poverty increase rather than decrease.
This only accelerated the white flight from Detroit to the suburbs. But, many blacks left as well. Detroit had the highest black home ownership in the United States at the time.
In the subsequent years, more and more people, black and white, fled the city for the suburbs or other areas of Michigan and the United States.
What has been left is a shrinking ownership class and an increasingly government-dependent class. And with the possibility of one or all three of the American car makers left possibly going into Chapter 11 bankruptcy protection, the situation is getting increasingly dire.
According to the Chicago Tribune article, one third of Detroit residents live below the poverty line. Fifty percent of children fit into that category. The school system is all but non-existent. The economy of Detroit is now based on rib joints, hot dog stands and liquor stores. Not exactly a large tax base to budget from.
And if that is not enough, there are actually 15 candidates running for the mayor of Detroit. I would think that these candidates would be running from Detroit. But, look at some of the proposals these candidates seek to bring Detroit back from the brink:

More cops on the street.
Make high school graduation mandatory.
Grow your own food.
Bulldoze large stretches of the city and turn them into wind farms.
Procreate like there's no tomorrow.

Now, a couple of these proposals make sense. More police may bring about a feeling of safety in a city that is chronically unsafe. Making high school graduation mandatory is a laudable goal. But again, how can one do that when few want to even teach in a school system such as that of Detroit?
What is missing from all of this is maybe, just maybe, some real incentives for companies to go into Detroit. The kind that are looking for areas to grow. No, they may not be manufacturing companies. But, who says that a car maker such as Toyota, Nissan, Hyundai, Subaru or maybe BMW, Porsche-Audi, Jaguar would not take a look at locating a plant in Detroit? Or maybe an insurance company? Banking? Any service sector company?
One reason there would be corporate resistance is because the kind of employee base will be not exactly well educated. Hell, not educated at all. Another is the safety factor. Or lack thereof.
A city such as Detroit can not survive on rib joints as its tax base. It needs a lot of help. But, there may not be much in the way of constructive help anytime on the horizon.
Or maybe, maybe people buying homes in Detroit can be a start.
At $7,500, it is a bargain. But if there can be more home ownership and a tax base, it maybe a kick start that Detroit needs.
It sure needs something. But more of the same is not one of them.

HT: Gateway Pundit @


skeneogden said...

Detroit could represent a microcosm of what the U. S. in general could look like in a few years.

The same policies that were tried to re-invigorate Detroit are the same policies being touted for the renewal of the nation. It doesn't instill confidence, does it?

Without real reform in D.C. the U. S. could become the largest banana republic. I am not sanguine about our chances.

However on the positive side, Detroit might make a great wind farm (although it would just be replacing blight for blight). At least that would get some stimulus money heading their direction. We all know how much "green" jobs pay because the pols keeps telling us so.

Anonymous said...

"Detroit could represent a microcosm of what the U. S. in general could look like in a few years. ..."

Ha! My thoughts exactly. Democratics in charge, a union stronghold, welfare for all: predictible results.

And damn, $7,500 for a HOUSE? Hmm, wouldn't it be cheap to buy 'em all up and ... I dunno, what useful thing could we do with 'em?