Detroit's fall

[nairiporter]

Detroit has amassed a $ 327 million budget deficit this year, and the amounts the city owes to various public employees, pensioners and institutions, already exceed $ 14 billion. Detroit is at the brink of bankruptcy. The Michigan governor Rick Snyder knows this very well. And he may have looked determined to do everything possible to prevent the worst from happening. But, as could be expected, the measures he was planning were insufficient - even though they included everything from drastic cuts, to tearing down the union agreements, to selling out public property. These desperate steps fail were doomed to fail, and now Detroit is heading toward a bankruptcy that would be the biggest in recent US history.

But it would hardly be the first. Last year two towns in California, Stockton and San Bernardino also declared bankruptcy, and they surrendered their fiscal management to their state. And the state of Michigan had to take over six troubled towns, among them such famous centers of automobile industry like Flint and Pontiac.

This whole situation looks absurd from first sight, having in mind that after the 2008-09 crisis the US car industry recovered in a most remarkable way. For example, last month Ford announced that it had reached a peak in its sales rates that was unprecedented for the last 6 years. General Motors (in Detroit) and Chrysler (in nearby Auburn Hills) also announced that February had been their most successful month in 5 years, the latter announcing a continuous growth for 35 straight months.

But the excellent development of the automobile industry obviously cannot stall the free-fall of Detroit as a city. There is a constant flight of jobs to the southern states and to Mexico, and the workers are naturally following the tendency. After this, shops, cinemas and schools and other businesses and institutions are shutting down one after another. The city has now become too large for its waning population. And desolation is creeping in everywhere.

Detroit has experienced trouble with guaranteeing the normal functioning of its police and firefighter protection for years; there are also serious disruptions in the public transport and the garbage services. More and more neighbourhoods are succumbing to anarchy; crime is rampant. People only feel partially secure within the walls of their homes. This is magnified by the social insecurity as well - people are losing jobs at a stunning rate, those who remain at work are seeing their salaries cut; various essential social services are shutting down. And people who live in fear and insecurity, tend to want to flee. And so they do. In swaths.

Just a year ago the governor Rick Snyder (R) used to say that there was no way Detroit could go bankrupt - if not for anything, because of the concerns for social and political tensions that would arise as a result. And these concerns might be more than justified from his point of view, given the fact that the majority of Detroit residents are African Americans who overwhelmingly support the Democrats - while the governor is a Republican.

But today Snyder is left with no choice. The city was pressed against the wall to do something and prevent the arrival of an emergency manager whose only task would be to facilitate the cutting down of most services. The bad news is that Detroit has reached a point where the process is irreversible and the city cannot deal with its problems without help from outside, which is probably what made mayor Dave Bing defy his colleagues at the city council and announce that he would agree on a cooperation with the emergency manager if they could help overhaul the finances and restart the city, ultimately helping improve life in Detroit. This sounded much like a promise. But it could also be taken as a threat, depending on who you ask.

Many still desperately believe that Detroit could be rescued. And there is no lack of ideas - like, for example, growing tomatoes in deserted factories, and using desolate spaces in all sorts of ways. But beyond that, the picture does not look good at all. Poverty is creeping into the lives of the locals, and deepening ever further. And meanwhile, the city is being sucked dry of potential tax revenue, not just because of the exodus of capital, but also for a lack of enough tax inspectors who could possibly collect it.