Following Detroit’s Denouement

By Doug Magill

I first came to Detroit as a child on a train from Washington, D.C.  When I first saw the city I thought we had entered hell.  Smoky, boisterous and busy, the city seemed to be nothing but factories and warehouses.

As I grew older I learned to be proud of the energy and excitement of being in The Motor City, automobile capitol of the world.  It was also home to Motown Records, and I became a teenager as the sound of the city’s soul reached its peak.

It was also the time when The Big Three dominated the industry, and the pro-labor policies of the state were ascendant.

In the early days of the automobile industry, the city throbbed with ambition, entrepreneurship, and enterprise.  Today, as William McGurn wrote in the Wall Street Journal, “A once-great American city today repels people of talent and ambition.”

The riots of 1967 were a turning point.  The tanks and soldiers of the 82nd Airborne on downtown street corners cooled the ardor of the city’s professional class for downtown living.  Subsequently, the 20-year reign of the confrontational and pro-black Coleman Young along with forced busing caused the city to empty of professional and middle-class people.  Including Motown Records, which is now just another New York City-based label owned by Universal Music.

Recently it was announced that the population of Detroit has decreased by 25 percent in the last decade.  Today’s mayor, Dave Bing, is heroically struggling to consolidate services and rescue some livable portion of the city.   But, the dynamic that would enable any rescue is missing.

I mentioned on Cleveland Business Radio a couple of years ago that Detroit had basically become a city eating itself.  More than 40 percent of the city’s economy was based on the public and non-profit sectors.  At number 9, the top private-sector employer in the city is General Motors.  Well, wait.  Actually, now that both GM and Chrysler are government-owned DTE Energy is the largest private employer, at number 13.

The tipping point may have been reached where the government monopolies and unions exist for themselves and are entirely dependent on largesse from the state and federal governments to survive.

The Reverend Robert Sirico , president of the Michigan-based Action Institute recently wrote “Detroit is a classic example of how a culture that was legendary for enterprise and innovation was slowly eroded by toxic politicization from the 1960’s on.”  The destruction of Detroit is entirely attributable to the actions and policies of a number of people who said they had good intentions.  In the long run, economics always trumps intentions unless coercion is involved.

Cleveland has many of the same historical characteristics as Detroit, and still maintains a machine 1930s mentality relative to enterprise.  But, it doesn’t have to follow the same downward spiral of our neighbor to the North.    We have to realize that a different approach is needed, now.

Surprisingly enough, it was recently reported that some cities in the country are rallying, and seeing population growth.  The main drivers appear to be access to good jobs, and a dynamic that includes shops, restaurants, and entertainment.

Relying on that information Michael Barone recently noted that his analysis of the Census Bureau data for 2010 provided some interesting insights as to where growth is occurring.

“….high taxes and strong public employee unions tend to stifle growth and produce a two-tier society like coastal California’s.”

“The eight states with no income tax grew 18 percent in the last decade.  The other states grew just 8 percent.”

“The 16 states where collective bargaining with public employees is not required grew 15 percent in the last decade.  The other states grew 7 percent.”

In a number of discussions with executives and professionals that have chosen not to stay or to invest in Cleveland the same issues govern their decisions.  No, it isn’t the weather.  Taxes, education, safety, growth potential, regulation and perceived quality of life.    Forbes latest issue has a pullout section on the best places to retire.  Ohio is shown in red as one of the highest-tax states.   It is not considered a good place to retire.

Governor Kasich’s modest efforts at reform, notwithstanding, Ohio has a long way to go.  Cleveland’s issues are related to the state’s, but it compounds them with its lack of vision and leadership as to what a 21st Midwestern city should look like.  Mayor Jackson manages the city well, with integrity.  But, he is not the leader that can transform the region.  We need someone who sees potential, gets excited about it, communicates a vision that attracts growth-oriented and committed people, and finds a way to develop that entrepreneurial dynamic that becomes self-sustaining.

There is a lot to be done: we need to crawl in some areas before we can fly and we will have to convince a lot of people that the potential is here. But, as Buckminster Fuller wrote “There is nothing about a caterpillar that tells you it is going to be a butterfly.”

Doug Magill is a former Detroit-area resident and has worked in the automobile industry.  He is currently a consultant, freelance writer, and voice-over talent.  He can be reached at doug@magillmedia.net

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Comments

  1. J.F. McKenna says:

    Doug calls for a new kind of leadership in Cleveland, a leadership directed by “someone who sees potential, gets excited about it, communicates a vision that attracts growth-oriented and committed people, and finds a way to develop that entrepreneurial dynamic that becomes self-sustaining.”

    I would like to ask fellow CBR readers to recommend likely candidates. I suspect the best candiates would come from the entrepreneurial community and not be familiar political names.

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