Gov. Rick Snyder has a few good ideas for how to deal with Michigan’s stagnant economy and the expensive and economically wrenching dilemmas of high taxes and joblessness. His plan to establish an Office of Urban Initiatives for Detroit and other distressed cities is not one of them.
Michigan’s problems are the result of the economy contracting and wasteful, inefficient and unchecked government spending. To bring this state back, according to the conventional fallacy, “you have to have thriving, viable urban centers.” It’s a good sound bite.
Economic distress, however, has proved to be a stubborn and largely intractable phenomenon in Detroit, Flint and Saginaw, even as other cities were positioning themselves to boldly move into the exciting and expanding world of high finance, high-tech or research. More than another dose of state-sponsored paternalism, cities in distress need forward thinking ideas and the political will to create economic momentum in an anti-growth, urban marketplace.
The track record for state government to force-feed investment and development in cities isn’t good, particularly in those intellectually or politically handicapped in crafting homegrown solutions. Crime in urban areas, for example, has transformed flourishing commercial strips into desolate wastelands. Businesses — stressed and unprofitable — fled crime-infested neighborhoods. Some left out of fear, others for survival as trying to maintain business activity in a war zone became a costly proposition. Although criminals proliferate, city officials refuse to re-prioritize and make that extra investment to hire more cops.
It should surprise no one that cities that accept educational failure would be immune to growth. Never in the modern history of Detroit has an education system perversely functioned as a brain-deadening instrument that subjugates an entire class of people in so many sinister ways. Even a state takeover couldn’t prevent many children from being turned into walking time bombs. When they morph into misfits, killers and drug dealers a social explosion of incredibly destructive force is locked, loaded and explodes with everyday vengeance.
Bad public policy also creates uncertainty that erodes business confidence. One of the most important functions of government is to create an environment in which opportunities to attract badly needed investment to start new businesses and expand old ones is encouraged. Business expansion in Detroit is radically curtailed by regulatory straitjackets.
Detroit residents are soaked with high costs and diminishing returns in the form of poor services. Squandered are opportunities to make a fresh determination of which ones the city should and should not be providing. As such, the leadership contributes mightily to the economic and social upheaval that unleashes a terrible tide of economic despair.
In its current condition, Detroit is obviously not an attractive place for business even with a plethora of longstanding, albeit ineffective, business attraction and retention efforts. It is difficult to see what a state urban czar can add to ongoing efforts by the Downtown Development Authority, Detroit Economic Growth Corporation, Detroit Brownfield Redevelopment Authority, Economic Development Corporation, Local Development Finance Authority, Tax Increment Finance Authority, etc.
The formula for generating investment in the back yard of urban policymakers starts with the adoption of free market principles and investor-friendly policies that reverse capital flight and gives growth a chance to take root. Revitalized, re-gentrified communities grow organically – from within.
Businesses throughout Michigan would benefit from an easing of the state’s stifling corporate tax burden and regulatory relief. For Detroit to cut its income taxes would be an excellent way to retain and attract new business and tax base.
If the establishment of an urban czar takes shape at all, it should be with clear expectations of what can be reasonably achieved. The last thing urban communities need is their hopes raised by another bureaucratized utopian gimmick under the guise of economic master planning.