Detroit's Emergency Financial Manager
Updated: Saturday, August 3 2013, 01:38 AM EDT
KALAMAZOO, Mich. (NEWSCHANNEL 3) - Detroit has reluctantly handed over the keys to the city this week to its new Emergency City Manager.
But even as renowned bankruptcy lawyer Kevyn Orr began his 18-month-term in office, there were angry protesters outside City Hall arguing that Orr's appointment is an effort to destroy democracy.
In tonight's Tom's Corner, Tom Van Howe says residents of Detroit, a city up to its forehead in debt, should instead be welcoming a chance to see what competent leadership looks like.
Detroit has been in the grip of incompetent and corrupt leadership for a long time.
Just about everyone in administration of Kwame Kilpatrick is off to prison, as well they should be.
Yet they still have their supporters. One can only guess that for those misguided souls it was something like growing accustomed to and accepting daily beatings as the norm.
Just take a look at what Detroit has become. Fifty years years ago it was one of the largest in the country with a population of 1.8 million. Now its residents number less than half that.
So many neighborhoods have been abandoned, and the houses torn down, that 40 of the city's 139-square-miles are vacant.
Forty square miles—that's about the size of all of Boston or San Francisco.
Local and state leaders, and just about anyone else who's cared enough to take a look, have known for years that Detroit is a city in peril, desperate for a total makeover.
Instead, the city chose to operate with its collective head stuck in the sand.
How else can you explain the incredible overspending, and then all the over-borrowing to pay for all the overspending.
If you or I did that, we'd be prosecuted.
But no. Everyone watched, shook their heads, and went back to their own business. The City of Detroit apparently took the silence as tacit approval and went merrily along its way.
As a result, Detroit's net debt-to-asset ratio is now an astonishing 33 to 1. For the record, a debt-to-assets ratio is essentially the city's total debt against its total assets.
When you add up long-term debt, what it borrowed over the past few years to fund its pension and healthcare obligations—obligations that are not gonna go away, by the way—the city's total financial burden is about $15 billion.
It's money the city simply does not have, and is not expected to have anytime soon.
And last week the Reverend Jesse Jackson had the audacity to stand on the steps of Detroit's City Hall and do his best to turn the entire matter into a racial incident. He described the appointment of a city manager as plantation-ocracy.
Cute. Inflammatory. And wrong. Jackson would do everyone a favor by staying home.
Governor Snyder had an obligation to do something. And he did. It would have been foolhardy for him and all of us to keep looking the other way while hoping the insanity of Detroit would heal itself.
A man named Kevyn Orr is now the chief executive there. Mayor Dave Bing, who was at odds with his city council over almost everything during his three years in office, has promised to help him out.
As for me, I wish them both the best of luck. Michigan needs that city to do more than just better. It needs Detroit to do well.
In this corner...I'm Tom Van Howe.