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.

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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 March 06, 2015 08:26 GMT

ECONOMY

WASHINGTON (AP) -- A survey of economists ahead of the official Labor Department employment report due out today is predicting another good month, following the best three-month burst of hiring in 17 years.

Economists in the FactSet survey have forecast a job gain of 240,000 and a drop in unemployment to a near-normal 5.6 percent from 5.7 percent. That would be evidence of a job market that continues to outshine others around the world.

A bright outlook among employers has translated into a robust average of 267,000 jobs added monthly over the past 12 months. That means there are 3.2 million more Americans earning paychecks now than at the start of 2014. That additional income, along with sharply lower gas prices, has left more Americans able to spend.

The steady hiring may also finally be forcing wages up.

ECONOMY-DAY AHEAD

WASHINGTON (AP) -- The Labor Department releases its February jobs report today.

Even though harsh winter weather may have discouraged some hiring, economists foresee a solid job gain of 240,000 and a drop in unemployment to a near-normal 5.6 percent.

Also this morning, the Commerce Department releases international trade data for January. And this afternoon the Federal Reserve will have January consumer credit data.

FED-BANK STRESS TESTS

WASHINGTON (AP) -- All of the nation's 31 largest banks are adequately fortified to withstand a severe U.S. and global recession and keep lending, the Federal Reserve says.

Results of the Fed's annual "stress tests" show that as a group, the 31 banks are stronger than they have been at any time since the 2008 financial crisis struck, thanks to a steadily recovering economy. The results build on positive outcomes from last year's tests.

The Fed will announce next week whether it will approve the banks' plans to issue dividends or repurchase shares.

The banks tested included JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo and Co. -- the four biggest U.S. banks by assets.

The Fed has conducted stress tests of the largest U.S. banks since 2009.

GOOGLE-AUTO INSURANCE

SAN FRANCISCO (AP) -- Google is helping California drivers shop for car insurance as part of a new service that could foreshadow the Internet company's latest attempt to shake up a long-established industry.

The feature unveiled Thursday compares auto insurance quotes from up to 14 carriers that are participating in the comparisons. The policies can then be bought online or through an agent. Google will receive a cut from the insurance sales. The Mountain View, California, company says the size of the commissions won't influence how it ranks the price quotes.

Google Inc. plans to provide car insurance quotes in other states, too.

A Forrester Research analyst suspects Google is trying to learn more about the auto insurance industry so it can possibly begin underwriting and selling policies on its own.

FDA-ANTIBIOTICS IN MILK

WASHINGTON (AP) -- A new Food and Drug Administration study shows little evidence of antibiotic contamination in milk after surveying almost 2,000 dairy farms.

The agency in 2012 took samples of raw milk on the farms and tested them for 31 drugs, almost all of them antibiotics. Results released by the agency Thursday show that less than 1 percent of the total samples evidenced illegal drug residue.

Antibiotics and other drugs can end up in milk when they are used on dairy cows to keep them healthy. Small levels of drugs are allowed in milk, but residues that go beyond certain thresholds are illegal.

The FDA said the agency will use the findings to try and reduce the drug contamination even more.

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