Someone knocked on the door at city hall in Detroit last week and there stood the repo man, coming to take possession of the city. Everyone who has ever bought a car knows you have to keep up the payments. Miss three or four and the car, with all its bells and whistles, is gone.
Detroit has built a lot of cars and so should have known better, but it had ignored the frantic calls. There’s not a lot to repossess in Detroit, a city that nobody wants.
Detroit isn’t the first city in America to suffer the stigma of bankruptcy, not that there’s much stigma about anything any longer in America. Nor will Detroit be the last, as municipal bankruptcy and stigma are the new reality. Scariest of all, Detroit is a hint, and a persuasive one, of what lies ahead for the rest of us. Only yesterday, who could have imagined a repo man coming after America.
“Yeah, we’re broke, we’re not naive,” Mitch Albom, the best-selling novelist (“Tuesdays with Morrie” and “The First Five People You Meet in Heaven”) writes in the Detroit Free Press. “We know it. We expected it. We watched for years as our leaders mismanaged funds, made patchwork repairs, borrowed and borrowed and didn’t pay back. Does that sound familiar? Hasn’t our federal government done the same?”
Only four decades ago Detroit could still revel in its reputation as “the arsenal of democracy,” as FDR called it on the eve of World War II. Detroit built the trucks and tanks that won that war. Everybody who wanted a job had one. Now it has been reduced by profligacy, corruption and dissolution to a punchline for jokes by late-night television comics. “It was a perfect storm,” Mr. Albom says. “We’re built for 2 million. We’re down to 700,000 people. We’re too big for our numbers. We’re too small for our britches.”
Gov. Rick Snyder discourages hope of a federal bailout like those given to General Motors and Chrysler, saying “It’s not about just putting more money in a situation. It’s about better services to citizens again. It’s about accountable government.” But even if the Republican governor wanted to try for a bailout, he wouldn’t find anyone in Washington eager to oblige him. Even though spending more than you have and arranging bailouts for the profligate is what President Obama has been about since he was a “community organizer” — that was then.
The president, who only yesterday was full of big talk about all the good things he would do for Detroit, doesn’t want to get any closer to Motown now than the suburbs of Toledo. Jay Carney, the president’s mouthpiece, curtly dismissed a question about whether there could be a bailout, since Mr. Obama in the past has wanted to bail out everything.
“I would point you to what we have said and what leaders in Michigan and Detroit have said, which is that on the matter of their insolvency, that’s something for the city and the creditors to resolve. We’re concerned, obviously, about the citizens of Detroit and of the state, and continuing to assist Detroit in moving forward,” he said.
Vice President Joseph R. Biden headed for a hiding place, too. “Can we help Detroit?” he said, responding to a reporter’s question. “We don’t know.” This was small help from an administration that insists it knows everything, and champions the governing philosophy — spend what you have and borrow as much as you can from whatever suckers you can find — that set Detroit on the road to ruin.
Dire and precarious as Detroit’s condition may be, some people have learned nothing. The unions, whose demands wrecked the city, are suing and Rosemarie Aquilina, a county judge, tried to stop the bankruptcy last week, attempting to suspend the federal proceedings because bankruptcy would imperil pensions, “cheating good people who work.” Besides, the proceedings would not “honor the president,” who once posed as the man who would save Detroit.
The imperiled pensions are not outrageously high. They average only $19,000 a year for city employees and $30,000 for cops and firemen, though a retired chief gets $92,000 annually. The emergency city manager wants to make “significant cuts” to the pensions of current holders of those pensions, though the state constitution calls them contracts that “shall not be diminished or impaired.”
It’s the accumulation of incompetence, fraud and years of graft and boodling that has made city hall a casino for bunco artists, and brought once-great Detroit low. It’s an object lesson for the rest of us.
• Wesley Pruden is editor emeritus of The Washington Times.