Relax, America's not Detroit

They’re also misreading Detroit. Detroit is an outlier, not the median. There’s a line from the Lisa Loeb song “Stay (I Missed You)” (sorry, I date myself) that goes: “some of us hover when we weep for the other who was dying since the day they were born.” Well, Detroit has been dying since the day I was born in a hospital in Lansing, Michigan, in 1967. Detroit’s collapse and bankruptcy are the result of a unique set of economic, geopolitical, and geographic circumstances. Literally built on the car, Detroit was built to sprawl. The city had an industrial monoculture—autos—that dominated the prosperous midcentury in part because it faced no foreign competition. The jobs the car company offered to relatively unskilled workers were so well-paying that the city of Detroit had to compete by offering very generous wages, pensions, and health benefits. Unlike other struggling Rust Belt cities—Cleveland and Pittsburgh, to name two—Detroit lacked great universities or health-care systems that could serve as ballast when heavy manufacturing declined. (If the University of Michigan had been located 20 miles to the east in Detroit instead of in Ann Arbor, the city’s economy and finances would look much different.) And because Michigan has plentiful, flat land, it was easy for citizens to flee into adjacent Oakland County. So Detroit lost people, and then jobs and companies, and then more people, and then more jobs and companies. Eventually, it lost hope and the capacity to function.

But this is not the story of every large American city. Far from it. In fact, it is comparatively hard to find direct analogues to Detroit in the U.S. Most large cities in the U.S. continue to grow, many are thriving, and most are surviving. No state has lost 10 percent of its population, much less 50 percent. Of course there are jurisdictions with very serious fiscal issues—Illinois comes to mind. And we will have a rolling problem with municipal and state pensions; retirees will likely end up with less than they are entitled to, and less than they deserve. But all the states and the overwhelming majority of cities have the ability to adapt—they can raise taxes, or cut spending, or fire people (state and local governments have axed 1 million jobs over the past few years), or offload costs to the federal government.