Federal aid: another dead-end for Detroit


Let’s see if I have this right: Detroit political leaders lack the talent to fix the myriad malfunctions of the city. So help is sought from a federal bureaucratic hierarchy that is even more inept at running programs, delivering services efficiently, balancing budgets and reining in wasteful spending.

Am I missing something here?

The Strong Cities, Strong Communities Initiative is intended to ignite economic development to ensure millions of federal dollars flowing into the city are used for intended purposes. In theory, as many as a dozen federal professional managers will bring a level of competence seldom seen in the city administration. But while officials from the departments of HUD, Transportation, Labor and Commerce and the Small Business Administration will be on the ground, the arrival is no reason to be dancing in the street.

Yes, decisions made by Mayor Dave Bing’s administration and the City Council expose a tangled, self-defeating web of hopeless desperation. But there’s nothing in the federal repertoire to suggest it is better qualified or equipped to assess the magnitude of the city’s problems, let alone cure them. At best this kind of aid is an outmoded concept.

Mayor Bing may be is hoping to revive the myth perpetrated in the 60s and 70s that cities couldn’t survive without large doses of federal aid. As part of an urban strategy, the feds created grants for every conceivable purpose. The prevailing wisdom was that federal largesse and expertise would help finance development projects, serve as a catalyst in attracting private investment and stimulate large-scale growth that would create jobs and generate revenue.

Detroit was one of the principal beneficiaries of a slew of benevolent government programs aimed at easing tensions and erasing blight. In the 1980 fiscal year alone, the city budgeted almost $400 million in revenues from the federal government, or 26 percent of the total budget.

22461209_BG1Throughout the 90s, Detroit leveraged millions more in federal aid in the hope of sparking a revitalization of its downtown and its neighborhoods. The city took the money knowing full well that many of the programs offered did not reflect best practices or the highest priorities. In some cases, millions went unspent and was returned.

Detroit’s history as a federal handout recipient did more to kill local initiative than stimulate growth. Financial demands on the city administration were temporarily reduced. But the generous flow of cash skewed the city’s spending priorities, ultimately making management of the city more difficult.

Private investment without incentives was not realized. Large-scale economic growth is still invisible. The explosion of jobs never materialized and the local tax abatements that accompanied the federal incentives wiped out revenue that would have come into city coffers.

Clearly the feds didn’t establish much of a track record as a turnaround instrument. Nothing in the city works better as a result of their flawed urban strategy. When Beltway dollars dried up and the renaissance hoopla ended, the promises of federal intervention were exposed as utopian and extravagant. Without a federal nursemaid, the city couldn’t demonstrate it could be creative, inventive or entrepreneurial. It couldn’t compete for new development, or keep enough cops on the street.

Today, the federal government lacks the financial capacity to repair the damage and undo the consequences, let alone the technical skills to intervene in the marketplace to make Detroit more attractive. Help from the feds will be little more than a band-aid that will prolong Detroit’s status as a welfare state and validate the city’s failure to stave off insolvency.

Lansing, though, may have the solution.

Gov. Rick Snyder has been lauded as  “one tough nerd” because of his bold initiatives to bring the state’s expenditures in line with revenue. Now is the time to rescue hapless Detroit by pulling the trigger on an emergency financial manager.

Also see: http://detnews.com/section/miview

3 thoughts on “Federal aid: another dead-end for Detroit

  1. Mr. Johnson,

    I agree with your latest commentary up until your argument that an Emergency Manager will be a welcome intervention from the state. It’s hard to dispute your observations about the poor results from the Federal money that has flowed to Detroit.
    However, I am not convinced that an Emergency manager will solve the problem. I am apprehensive that an Emergency manager will find a cure for a termnal disease in Detroit or any other city that an EM is appointed to manage. I am fearful, however, that an Emergency Manager may well make matters worse. Detroit has suffered from terrible political leadership and management and the persons responsible for what created Detroit’s illness are the voters who have elected incomptetent and dishonest people to govern the City. In my opinion, the only positive in the last 25 years was the mayorship of Dennis Archer.

    If Detroit is to rebound it won’t be in my lifetime. To restore its’ greatness Detroit needs: Police and fire services that will eliminate the fear of crime and the image of inadequate fire protection and emergency medical services; Above average municipal services such as Sanitation, water and sewerage, well maintained parks, the elimination of blight, and street lights that work. I was in downtown last night and the street lights on Layfayette leading into Greek Town were not on. How can one feel safe walking a darkened street in any community?

    A quality school system is essential but Lansing is doing everything it can to destroy public education in Detroit and around the state with the move to eliminate the cap on charter schools and by its effort to discourage people from wanting to go into teaching as a result of the absurd legislation regarding teacher tenure that was just enacted.

    So I conclude my opinion with the question: How will an emergency manager deal with all of those afflictions?

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