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The Death of a Dream

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I like some of things about the U.S.A., but a lot of what they do doesn't fit my values. This tension arose last during the attempt by the city of Detroit to declare bankruptcy. I shook my head at the finger pointing that followed.

It would be easy to ignore the Detroit bankruptcy. Our cities cannot go bankrupt as they lack the legal ability to take on debts. Our pension funds are well regulated and funded. Right to work (for less) union laws have yet to appear, even though the Hudak Conservatives have made it part of their platform. But, ignorance will not lead to bliss! Our cities face division as some parts (lower Hamilton or the lower east side of Vancouver, for examples) decline, while wealthier adjacent suburbs grow. Attacks on unions are also common. It is time to learn from the U.S.

I recently took a look at articles from Robert Reich, former Secretary of Labour in the Clinton administration. I agree with his blogs where he states that divisions, un-bridged by governments and community cohesion, have divided people and cast the less advantaged aside.

So, how should we see Detroit? Is it just failed negotiations between powerful groups about who would bear the costs for decline? Should costs be divided among the city's taxpayers, creditors, workers and municipal retirees? Should we blame unions and collective agreements with their "unaffordable" pension and health benefits? We know how the right wing media answered these questions. We should look deeper.

Americans once believed in equality, growth and prosperity. Employers felt a sense of social responsibility while unions, built on hard work, believe that collective action would enhance community wealth. This was Detroit.

Today, Detroit is surrounded by cities like Birmingham, West Bloomfield, Waterford and Sterling Heights. Its population has declined from 1.8 million (1950) to 710,000 today. Without social programs, fair taxation, debt sharing and community cohesion, Michigan is divided between the "haves" and the "have-nots".

Detroit has lost a quarter of its population when the middle-class left for the suburbs. This depressed property values, left abandoned neighborhoods, empty buildings, degraded schools and a shrinking tax base. Over half of the parks are closed, while 40 percent of streetlights don't work.

  Detroit Michigan
Those below the poverty line 36% 15.7%
Median annual household income $27,900 $48,700
Black or Afro-American population 82.7% 14.2%
Home owners 50% 73%

Bankruptcy has driven the wedge in further. Rather than building structures like strong governments, progressive taxes, social organization and unions, the opposite is true as the war between the rich and the rest continues. From free trade to austerity budgets and laws to diminishing the ability of working people to come together, the battle continues.

Americans are dividing themselves by income. Most U.S. cities (including Detroit) once had a mix of rich, middle-class, and poor residents. Now, each lives separately in their own city, with their own tax base. The rich have good schools and parks, strong police, good public transportation, and other first-rate services. The poor are left with terrible schools and parks, high crime, and fourth-rate services. Detroit, the poor, mostly black and abandoned enclave, is left to sink within a sea of comparative affluence. Its suburbs are among the richest in the nation.

Oakland County is the fourth wealthiest county in the United States. Greater Detroit, with suburbs included, is one of the nation's top five financial centers. While we know the median household income for Detroit is $27,900, the median household in Birmingham (next to Detroit) earned more than $94,000 last year. In Bloomfield (also in the Detroit metropolitan area) the median was $150,000.

Detroit's bankruptcy resulted from affluent areas unwillingness to support poor inner-city neighbours with tax dollars. No support — no rebound. By drawing a boundary around the poor inner city, and requiring those within the boundary to take care of their problems alone, affluent suburbs climb off the hook. "Their" city isn't in trouble. It's that other one: "Detroit" that is! This is how, in a time of widening inequality, wealthier Americans are writing off the poor.

This kind of thing has been happening for a while. Michigan was led by Governor George Romney, during Detroit's 1960s race riots. The riots exploded from long-standing racial tensions. The urban warfare that resulted from his calling up the National Guard hastened the departure of the white middle class from that city. President Ronald Reagan later brought reductions to government spending, lower federal income tax and capital gains tax, reduced regulations and greater control of the money supply. This was the recipe for Reaganomics, which was to provide prosperity through the "trickle-down" effect. Not for Detroit!

This brings us to July 2013, when the unelected emergency city manager Kevin Orr turned down a financial rescue plan, opting to instead offer municipal pensioners and workers with ten cents on the dollar, for health and pension benefits. The unions said no and bankruptcy proceedings followed.

Let's learn from this. Strong government, high quality public services, a vibrant middle class, strong unions, a healthy environment and reductions in poverty can bring a better future. These elements can and should exist together.

Hudak's Conservatives cannot be allowed to cut services, push austerity measures to lower taxes or pass anti-union laws. This will lead us to a situation we don't want to face — the one that now confronts Detroit.

In solidarity,

Warren (Smokey) Thomas
President

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