How Does Detroit Happen?

From the most prosperous, highest personal income city in America to the largest municipal bankruptcy to date all in the span of about 50-60 years; how does this happen?  Since Detroit’s bankruptcy filing the blame game has been in full swing. Looking for a single culprit or a smoking gun moment when it all went bad couldn’t be a bigger waste of time. This type of monumental fall is certainly not unprecedented and is almost always a gradual process during which some corrections to cushion the landing could have been made. Two examples from Southeast Michigan’s history show how incremental changes in situations, markets and personal decisions that do not trigger adjustments by those in charge can have devastating effects. In some cases even when action is taken the outcome is still unavoidable.

Consider Kmart Corporation once the second-largest retailer in America behind only their current partner, Sears. In the minds of those who lived here Kmart (much like the Big Three) appeared to be an invincible powerhouse in corporate America. Wal-Mart and for that matter Target Corporation didn’t just pop up overnight to dethrone these two former retail giants. Much like Detroit, this was a very gradual process during which there were numerous opportunities to react and adjust. Considering that the corporate culture and management structure of Kmart basically remained intact during this freefall, much like the city of Detroit, there was basically no chance that the massive changes needed to deal with the new realities could ever be implemented. In both cases it was far easier to deny what was going on and convince those affected that eventually the status quo would prevail and things would revert to their definition of normal.  As everyone knows now, the situation had changed so drastically that there was no chance either Detroit or Kmart could possibly return to their former dominant positions. In the case of Detroit the backbone of their revenue stream, the Big Three, had through their own brand of hubris and failure to even acknowledge the strengths of their new competitors, diminished the very financial backstop that had shielded the city from its own bad decisions.  In both of these cases there is no chance that anything can be done that would ever restore either to its former position because those they would have defeat to return to glory are now better equipped than they are to win the fight.

An even more interesting example might be another city that benefited from a single industry, tasted extraordinary prosperity and then watched it all ebb away with no real way to stem the decline. Mount Clemens Michigan is only a short distance north of Detroit but its rise, fall and attempts at reinvention are quite similar. From the late 1800s to nearly the end of World War II Mount Clemens had a Vegas like popularity with many health seeking vacationers, including some of the most famous and powerful people in the world. While drilling salt wells it was discovered that Mount Clemens was home to mineral infused waters with claimed healing powers. It soon became one of the two most (the other being in France) sought after destinations for those seeking the healing benefits of mineral baths. At its height the city was home to 23 major hotels and numerous smaller hotels and rooming houses. The largest of these hotels, called “The Fabulous Park” was three stories tall, had over 200 rooms, a grand dining room that seated 350 guests, lavish outdoor gardens and its own full bathhouse. Locals, politicians, business tycoons and celebrities of all types would engage in the three-week daily mineral baths and healing rituals.                Of course the sheer number of visitors also produced other businesses including an amusement park, boat excursions, restaurants, bars, racetracks and gambling venues. For quite some time Mount Clemens was also the nation’s largest grower of roses, an industry spun off from the mineral bath hotel demand for fresh flowers. When you travel through the well-kept rejuvenated downtown area of the city today, it’s hard to even imagine what that level of activity must have been like. Where did it all go and how could something so large, profitable and seemingly invincible just disappear? In the case of Mount Clemens, a lifestyle that allowed people to spend three full weeks in one location leisurely partaking in mineral baths and other diversions became passé in a far more time obsessed world. In the case of Detroit, the Big Three’s inability or lack of any real desire to respond to the oil crisis with credible small fuel-efficient cars gave competitors the foothold they needed and thus started the area on its path to diminishing manufacturing dominance. In both cases rolling things back to a simpler time is simply not an option.

The point of all this is that the game changed, the decline was steady but gradual and many of the causes behind these declines could not have been stopped. In a city as small as Mount Clemens it’s hard to imagine what if anything could have been done to replace an industry that dominant. When looking at Kmart and Detroit it’s obvious that adjustments could have and should have been made. Timely maneuvering would not have kept Kmart and Detroit in their relative positions but some course corrections along the way, although painful, would have kept them from the depth of their current predicaments. As for Detroit, the bulk of the blame needs to be squarely placed on one party rule. Before everyone hits the comments section to complain that this is nothing more than bashing of the Democratic Party or liberals or unions consider that this statement means nothing of the sort. It would not have made any difference which party or philosophy had been in charge these past decades, the effects of cronyism, graft, insider dealing and general inefficiency would still be there. Whenever one power structure remains in place on an uninterrupted basis the entire system itself becomes impervious to change. After a certain amount of time everyone at every level is a crony of, beholden to or shares a basic boilerplate philosophy with everyone else; going along becomes the only way to survive within the system. In order to put the needs of the citizens first, friends would have to fire friends, contracts negotiated with members of a tight insider circle would have to be restructured or voided and admissions would have to be made that the roadmap laid down by some of your like-minded predecessors just might have lead the city to its current fate.

Restructuring of Detroit under an emergency financial manager, the federal bankruptcy system and the pressure of stark financial reality may finally force some new ideas into the pipeline. The election of a new city Council with its more diverse selection of opinions may also hold some hope of breaking the cycle. Mayor Duggan promises a more businesslike approach to bringing the city back but early indications are that he intends to rely on advisors that have been part of the long standing Detroit/Wayne County machine. The problem with all this is that changing the system from the top down does little to influence the thousands of employees in place who only know the old Detroit way of doing things. The powerful hold a deeply ingrained culture can have on any organization is tough to break; just ask the Detroit Lions.