Fear and Loathing in Detroit

Monty Pelerin * EconomicNoise.com

By now everyone interested probably knows that Detroit has filed for bankruptcy. I have a remote connection to Detroit (Dearborn, actually) in that my first job out of grad school was on the Finance Staff of Ford Motor Company. I was in corporate headquarters, otherwise known as the “Glass House.” My stay was short. The bureaucracy overwhelmed me and I moved out to another company in a little over two years.

Recent posts about Detroit have something to do with this small and insignificant connection. Detroit was still booming in the mid-1960s when I was there. A different reason to reflect on Detroit is that it is a sovereign bankruptcy and the largest this country has ever experienced (thus far). It is not a bad microcosm for what is happening in other cities and also in the Federal Government.

Michael Snyder does a remarkable job of collection data about companies, countries, economies and anything else worthwhile. His latest piece is 25 Facts About The Fall Of Detroit That Will Leave You Shaking Your Head. Not too long ago Detroit was one of the finest cities in the US. Here is some data from Mr. Snyder’s article:

What It Was

Detroit was once the fourth-largest city in the United States, but over the past 60 years the population of Detroit has fallen by 63 percent.

Back in 1960, the city of Detroit actually had the highest per-capita income in the entire nation.

In 1950, there were about 296,000 manufacturing jobs in Detroit.

What It Is

Economics:

n 1950, there were about 296,000 manufacturing jobs in Detroit. Today, there are less than 27,000.

Between December 2000 and December 2010, 48 percent of the manufacturing jobs in the state of Michigan were lost.

Detroit is facing $20 billion in debt and unfunded liabilities. That breaks down to more than $25,000 per resident.

There are lots of houses available for sale in Detroit right now for $500 or less.

At this point, there are approximately 78,000 abandoned homes in the city.

About one-third of Detroit’s 140 square miles is either vacant or derelict.

An astounding 47 percent of the residents of the city of Detroit are functionally illiterate.

Government:

continue article at EconomicNoise.com:

http://www.economicnoise.com/2013/07/22/fear-and-loathing-in-detroit/