OT: City of Detroit Epic Comeback? (Business Insider)

It is possible that Detroit's long slide into oblivion has reached its terminus, and that the long road to prosperity is ahead.  However, there are a multitude of factors diminishing this view.  Let us proceed into the void.

First and foremost is that Detroit is in the state of Michigan.  Michigan is a state of few prospects.  It is the only state to lose population in the last decennial.  It is fairly remote geographically with few resources left that are valuable.  What made Detroit a 20th century powerhouse - the iron ore, timber, and proximity to coal and navagable waterways - have either disappeared or become irrelevant.  Many of Michigan's small cities such as Flint, Pontiac, and Lansing suffer a similar dysfunction as Detroit.

Detroit is a city that has roughly the same geographic size and population as Portland Oregon.  But the two cities could not be further apart in terms of their economic health.  Why is that?  One need only look at the cost of downsizing.  For all the talk and speculation about Detroit downsizing its infrastructure (exactly how much money will the city save by this?  They already don't mow, don't plow, and don't patch large swaths of the city.) few are talking about downsizing its pension obligations.  Like many industrial cities Detroit has legacy costs of its retirees that are dragging down the city's finances.  Similar to other Rust Belt cities like Chicago, Milwaukee, and Cleveland, Detroit granted generous retirement benefits to employees that it can no longer afford to pay.  The result is similar:  higher taxes and lower government services than other cities or even their own suburbs.  This pay more and get less scenario is crippling the city and driving the exodus of citizens and any reasonable plan for Detroit needs to address this issue.

Also, when people talk about downsizing Detroit keep in mind that the city's borders haven't changed since the mid 1920s.

I have lived in many different places and visited many more, but I have never experienced a region with as dysfunctional a city/suburb dynamic as metropolitan Detroit.  There is, at times, an almost visceral hatred from the city of its suburbs and likewise the suburbs of its city.  Often when I meet someone from the Detroit suburbs they try and divorce themselves from the city entirely.  "Oh I'm not from Detroit, I'm from the X suburb" is a common refrain.  I'm sure student at Michigan from other states found this experience a bit strange, they always looked askew when I observed it. 

The differences are apparent when you look at the demographics:  one of the most economically and racially segregated metro region in America.  This dysfunction spills out into almost every facet of life in Detroit.  The airport is not in Detroit but Romulus and people are sure to refrain from calling it Detroit airport but rather metro airport...as if someone would mistake it for the city's diminutive airport.  The Palace - home of the Detroit Pistons - is sure to remind you that it is of Auburn Hills.  And so it is colloquially known as the Palace of AUBURN HILLS lest you forget.  Even here people are quick to point out what Fortune 500 businesses are and are not in the city limits.  Let me say this again:  I have never experienced a more dysfunctional city/suburb than Detroit.  And it cuts both ways.  The city hates the suburbs and the suburbs hate the city in ways I have not seen anywhere else.

And let us not be so myopic:  the built places of the region are a total failure.  Detroit is, by many metrics, the sprawliest region in America.  The most autocentric, car dependent urban and suburban environment anywhere.  The young demographic, the under 30 cohort, drives and owns cars much less than any demographic in three generations.  The current roster of young people under 20 drive and have licenses less than any cohort in more than 50 years.  How many of the young people in metropolitan Detroit are going to stick around a region that spent the last 80 years or so build communities completely dependent on the car?  Even if self driving cars become a reality tomorrow, the mass adoption of that technology won't happen until this current crop of young people have already matriculated and fled the region.  And despite new fuel efficient cars like the Prius and the Volt, high gas prices have been the reality for the under 30 cohort as long as they have been licensed.  Your economics professors failed you when they told you that people are rational actors.  They are not.  What they meant to say was that people respond to incentives.  And they do.

For all the talk of a resurgent US Automotive industry the reality is that new car sales still aren't to their 2005 peak and show no signs of climbing it.  Instead the industry as a whole looks to face a terminal decline.  And why wouldn't it?  Overall purchasing power declined over the last decade, and purchasing power for young people is even more crippled.  Combined with increasing congestion and commuting times as well as the aforementioned higher fuel prices the incentives are clear as crystal.

Let me be understood.  I hope things go well for Detroit.  The long suffering citizens deserve to live a life with the same dignity and opportunity as any other citizen of this great nation.  But a slew of hypocritical hipsters will not fix the fundamental dysfucntion of metro Detroit.  If things don't turn around in the next few years I could see a permanently reduced Detroit of around 500,000 people as the stable base of the core city as a 20 year long term projection.  The city doesn't have the job growth prospects to sustain much more.  The skills mismatch between the citizens of Detroit proper and the needs of 21st century industries is profound.  A shocking 47% of Detroiters were surveyed as functionally illiterate by the Detroit Regional Workforce Fund in 2011. 

This great failure of Detroit to educate and train its scions for the 21st century is tragic.  As David Hume once opined "Manufactures, therefore gradually shift their places, leaving those countries and provinces which they have already enriched, and flying to others, whither they are allured by the cheapness of provisions and labour; till they have enriched these also, and are again banished by the same causes."  Manufacturing will not come back to Detroit in a state resembling its former self.  And yet the denial of this reality is a bottomless well with which the region constantly refreshes itself.  As recently as 2009 Michigan governor Granholm publicly stated that Michigan was poised to manufacture new train cars for high speed rail even though David Hume predicted 200 years ago that they would likely be made in China.  And even if they were mandated to be made in America there are regions better qualified to make them such as Illinois and Minnesota amongst others.  But that dream of manufacturing will not die.  It is so sad it breaks my heart.