The fate of Detroit

Updated: Saturday, August 3, 2013
The fate of Detroit story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - On Wednesday, one week after it declared itself bankruptcy, the City of Detroit celebrated its 312th birthday.

Tonight, in Tom's Corner, Tom Van Howe says Detroit's troubles, decades in the making, are only just beginning.

=====================

I'd like to be a rah-rah guy for our state's largest city. But the truth is, no matter how I twist it and turn it and shape it...I Just can't.

The City of Detroit is the result of a train-wreck 50 years in the making. We all watched it happen, one slow-motion, hair-raising leg at a time.

How many times have you seen someone shake his head and say, helplessly, "well...that's Detroit."

And there are so many things to blame it on. Blame it on incompetent or corrupt leadership. Blame it on an auto industry that seemed unable to compete with the rest of the world. Blame it on unfunded pensions.

Blame it on NAFTA that did take hundreds of thousands of jobs south. Blame it on OSHA, which required companies to spend millions to make workplaces safer. Blame it on the cost of oil from the Persian Gulf. Blame it on white flight.

Blame it on loss of tax revenue.

Blame it on what or whomever you please.

The fact is, Detroit is a gigantic mess. It is a failed city.

In 1960 it was the fifth largest, and richest, per capita, city in the country with a population of nearly two million.

Now, with a population of just 700-thousand, 60 percent of its children live in poverty. Unemployment plods along at nearly 20 percent.

Some 30-thousand current and retired city workers are wondering if they'll have any of the pension they helped pay for.

A full third of Detroit's 140-square miles—an area the size of Grand Rapids—is now vacant or desolate.

It's a city that finds it difficult to even maintain street lights.

In the city itself, there is anger and outrage at the predicament people are finding themselves in...as if they believed the city could go on borrowing and running up bills that it never intended to pay. That day is now over.

I thought the defiant column by Mitch Albom, the celebrated Free Press writer, was terrific.

"Yeah, we're broke," he wrote, "But we got up this morning and had breakfast. Yeah we're broke. But we'll carry on...We'll still be here. We're not going anywhere."

It's nice and its easy to be defiant. But its not going to pay any bills. Its not going to bring back people who've already left. It's not going to raise tax revenues. Its not going to make leaders anymore honest.

For the record...Stockton, California, declared bankruptcy 13 months ago. And its parks are reportedly populated with drug dealers, its courts with lawsuits, its business districts with boarded up windows—with little relief in sight.

Are there positive signs in Detroit? Yes.

The Tigers are in first place. Consumer Reports says the new Chevy Malibu is hands down the best car on the road in just about any price range. Private developers want to build a new soccer stadium downtown. The state has agreed to issue $450 million in bonds to help develop a new Red Wings hockey stadium—and $200 million more to help develop 45 blocks near downtown.

So yeah...some things have the patina of progress.

But bright spots aren't enough.  Detroit is in for a long painful recovery. If, in fact, its up for it. There will be no bailouts.

We know that now.

So, in a very real way, Detroit is a new frontier—an urban frontier—waiting for courageous and creative private investment to mold something new from the rubble.

We have our fingers crossed. In the meantime...Happy birthday.

In this corner...I'm Tom Van Howe.

Business News

Last Update on October 22, 2014 17:29 GMT

CONSUMER PRICES

WASHINGTON (AP) -- U.S. consumer prices edged up slightly in September, with the overall increase held back by a third straight monthly decline in gasoline prices. The tiny gain was the latest evidence that inflation remains dormant.

The Labor Department says consumer prices rose 0.1 percent in September after having falling 0.2 percent in August. Core prices, which exclude volatile food and energy, also rose 0.1 percent after no gain in August.

Over the past 12 months, overall prices are up 1.7 percent and core prices are up a similar 1.7 percent. Both increases are well below the 2 percent target for inflation set by the Federal Reserve. The absence of inflationary pressures has allowed the central bank to keep interest rates at record lows to boost the economy.

SOCIAL SECURITY-COLA

WASHINGTON (AP) -- The government says millions of older Americans who rely on federal benefits will get a 1.7 percent increase in their monthly payments next year.

It's the third year in a row the increase will be less than 2 percent.

The annual cost-of-living adjustment affects payments for more than 70 million Social Security recipients, disabled veterans and federal retirees.

The government announced the increase Wednesday, when it released the latest measure of consumer prices. By law, the increase is based on inflation, which is well below historical averages so far this year.

Congress enacted automatic increases for Social Security beneficiaries in 1975. Until recently, the increases were rarely less than 2 percent.

AIR BAG RECALL

DETROIT (AP) -- The U.S. government is adding more than 3 million vehicles to a rare warning about faulty air bags that have the potential to kill or injure drivers or passengers in a crash.

The National Highway Traffic Safety Administration on Wednesday put out a new list of vehicles, increasing the number from 4.7 million to 7.8 million. The agency urged people to get their cars repaired if they're being recalled, especially in Florida and along the Gulf Coast.

The air bag inflators made by parts supplier Takata can rupture, causing metal fragments to fly out when the bags are inflated. Safety advocates say at least four people have died from the problem.

The warning covers many models from BMW, Chrysler, Ford, General Motors, Mazda, Honda, Mitsubishi, Nissan, Subaru and Toyota.

EBOLA MONITORING

WASHINGTON (AP) -- Federal health officials are significantly expanding the breadth of vigilance for Ebola, saying that all travelers who come into the U.S. from Ebola-stricken West African nations will now be monitored for symptoms of illness for 21 days.

The director of the Centers for Disease Control and Prevention says the program will begin Monday and cover visitors as well as aid workers, journalists and other Americans returning from Liberia, Sierra Leone or Guinea.

The program will start in six states: New York, Pennsylvania, Maryland, Virginia, New Jersey and Georgia.

CDC Director Tom Frieden says state and local health officials will check daily for fever or other Ebola symptoms.

Passengers will get kits to help them track their temperature and will be told to inform health officials daily of their status.

J&J-EBOLA VACCINE

J&J to spend up to $200M on Ebola vaccine program

NEW BRUNSWICK, N.J. (AP) -- Johnson & Johnson will start safety testing in early January on a vaccine combination that could protect people from a strain of the deadly Ebola virus.

The health care products maker says it has committed up to $200 million to speed up and expand production of a vaccine program being developed by its Janssen Pharmaceutical Companies.

J&J is developing the vaccine with the Danish biotech company Bavarian Nordic. It involves a regimen in which two vaccines are delivered two months apart. The combination provided complete protection in animals against a virus strain similar to the one causing the current outbreak in West Africa that has killed thousands of people.

The New Brunswick, New Jersey, company says it will also determine whether its vaccine protects against the version causing the outbreak.

MORTGAGE RISK RULES

WASHINGTON (AP) -- Federal regulators are proceeding with new rules that ease guidelines for banks selling mortgage securities and could mean fewer borrowers will need to make hefty down payments.

The Securities and Exchange Commission voted 3-2 Wednesday to adopt the rules, which six federal agencies have been working on since 2011. Three other agencies adopted the rules Tuesday, and the Federal Reserve has scheduled a vote for Wednesday afternoon.

The rules govern the amount of risk banks must take on when they package and sell mortgage securities in a multitrillion-dollar market. In the final rules, the regulators have dropped a key requirement: a 20-percent down payment from the borrower if a bank didn't hold at least 5 percent of the mortgage securities tied to those loans on its books.

MINI-OVERSTATED GAS MILEAGE

DETROIT (AP) -- The U.S. government has told BMW to reduce the gas mileage estimates on window stickers of four Mini Cooper models.

Testing by the Environmental Protection Agency lab in Ann Arbor, Michigan, discovered the overstated mileage.

The vehicles affected are the 2014 Mini Cooper three-door and Mini Cooper three-door S models with manual and automatic transmissions. BMW must cut the highway mileage by one-to-four miles per gallon depending on the model. Estimates for city driving and combined city and highway fuel economy also must be reduced.

The EPA says it audited the Mini gas mileage and came up with lower values than BMW, which makes the cars. It's the fourth time in the past two years that the EPA has found discrepancies in the gas mileage estimates provided by an automaker.

PEW-ONLINE HARASSMENT

NEW YORK (AP) -- A new study confirms what many Internet users know all too well: Harassment is a common part of online life.

The report by the Pew Research Center found that nearly three-quarters of American adults who use the Internet have witnessed online harassment. Forty percent have experienced it themselves.

The types of harassment Pew asked about range from name-calling to physical threats, sexual harassment and stalking. Half of those who were harassed said they didn't know the person who had most recently attacked them.

Young adults -- people 18 to 29 -- were the most likely age group to see and undergo online harassment.

The survey was conducted between May 30 and June 30 among 3,217 respondents.

advertisement
Washington Times
advertisement