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Who is at fault for Detroit's bankruptcy - Detroit

by Samuel Genson, published

Detroit's bankruptcy has been all over the news recently. While there all sorts of theories as to why or how this happened, that there was one magic bullet that could have saved the city, the truth is much more complex. Detroit did not wake up one morning and realize that bankruptcy was upon it. It has been a process years, decades in the making. While a confluence of events have led to it, one reason is greater than all of the others. Detroit residents allowed this to happen.

In so many articles, the blame is cast upon the city unions  for roles they have played in the downfall of the once great American city.  Its true, they are not blameless. Unions negotiated pensions that have tied up a lot of the city's finances. However, the public sector unions in Detroit are no different from any other large city in the U.S. The union employees eschewed pay raises for greater retirement security.

Many others place the collapse of Detroit on the shoulders of the "Big Three" (Ford Motor Company, General Motors, and Chrysler Automotive) and the United Auto Workers (UAW) Union. To these people, Detroit and cars go hand-in-hand. However, the US auto giants are experiencing significant growth after going through their own bankruptcies (GM and Chrysler) and restructuring (voluntarily by Ford...and government order for GM and Chrysler) and yet Detroit is still on the decline. while the perception is that all of the cars made by the "Big Three" are built in, or around, Detroit, that is hardly the case anymore. They have manufacturing plants spread all over the United States and scattered in counties such as Mexico, China, and Australia. The UAW is lumped in with this by having demanded more benefits and greater salaries which then drove the car companies to expand their operations beyond Detroit and the surrounding areas.

While these two factors have played a role, the fact is that no greater role was played in this disaster than by that of Detroit's lawmakers - and by extension its citizens and the citizens of Michigan. Detroit's economy has been trending downward for years upon years. It was so bad that the State of Michigan had to step in to assign an "emergency manager" to take control of Detroit's purse strings. Things were so bad though that by the time Kevyn Orr took on the role of emergency manager, bankruptcy was all but inevitable. Bankruptcy was not a surprise for Detroit. it was projected and predicted for years. Yet, the lawmakers and citizens did very little to stop it...outside of demanding that President Obama bail them out.

Detroit elected the people who helped drive them into bankruptcy. For years, they continued to elect people who mismanaged city funds, either through neglect, purposeful fraud, or just lacking any knowledge of how economics operates. Detroit citizens elected Kwame Kilpatrick to a second term as mayor despite rampant reports of misuse of taxpayers dollars and being named the worst mayor in America by TIME. For the record, Detroit's two-time Mayor is now in prison.

Detroit, a city of 700,000 (less than half the size it was in its heyday) has some citizens that step up to meet these challenges, but not enough. If Detroit truly wants to emerge from this as a better city, then a massive collective of its citizens need to work to make that dream a reality. Other cities in the so-called "rust belt", such as Pittsburgh, have climbed back into nation prominence while some, like Chicago, never left. The only way Detroit can truly reemerge from this is with a dedicated citizenry, motivated to make their city great once again.  The city needs its people to become involved - not to wait for handouts from the President. The companies of Detroit love to make claims of having hardworking, tough, motivated, driven people. Now is the time for these people to prove it to their state and to the country.

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