Traverse City Record-Eagle

Opinion

August 6, 2013

Stephen Dick: Capitalism laid Detroit to waste

In the past few years, I wanted to take a trip to Detroit. I’ve seen all the pictures and read all of the horror stories about the once-great Midwest metropolis turning into an impoverished shell of its former eminence, but I haven’t made it yet.

A couple of weeks ago, Detroit’s unelected city manager decided the city would file for bankruptcy to help alleviate its crushing $18 billion debt. It seemed only fitting that Detroit would be the first major American city to seek debt relief. The city, after all, was a monument to capitalism and capitalists like Henry Ford. It was different from Wall Street and the stock exchange in Chicago. Detroit was a place of creativity, where the birth of new models of transportation were hatched. To bring those ideas to fruition, armies of workers put together the engines and bodies of cars, trucks, vans and SUVs.

When the auto industry began to constrict in the early 1980s, layoffs and factory shutdowns abounded. Detroit, the conventional wisdom goes, just wasn’t ready for the rise of Toyota following the OPEC gas scare in 1973.

But there was something more nefarious afoot. The car companies did switch to compete head-to-head with Toyota’s more economic models, but mostly the Big Three elected to take the easy way out to maintain profits they might lose to the Japanese upstart. They shipped production to low-wage countries and left American workers stranded.

Conservatives lay Detroit’s demise on unions — first the United Auto Workers for demanding too much from the automakers, and now the pensions due public retirees, which amounts to only $3 billion of the $18 billion total.

Michigan Gov. Rick Snyder — a Tea Party favorite after signing the GOP-dominated legislature’s fast tracked right-to-work bill— brought in a lawyer, Kevyn Orr, to take over Detroit, leaving Mayor Dave Bing standing in the hall with his ear cupped to Orr’s door. Both Snyder and Orr agreed to file bankruptcy.

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