Wednesday, December 04, 2013

Detroit as a National Bellweather

Today, President Obama gave a speech in which he called economic inequality and the resulting lack of social mobility "the defining challenge of our time."  This comes right on the heels of Amazon announcing that they were seriously looking at using drones within the next few years to deliver packages to customers' doorsteps (what will happen to UPS and FedEx drivers?), and the news that the city of Detroit has been given the go-ahead to proceed with a bankruptcy filing which is very likely to put existing public pension commitments at risk.

We've been hearing for quite some time about Detroit's long slow slide from decline to outright implosion.  I just finished reading former NYT correspondent Charlie LeDuff's book about his home town, Detroit: An American Autopsy.   LeDuff is well aware that as far as Detroit is concerned, there is a fascination on the part of the rest of the country which he recognizes and dismisses as "ruin porn," but behind his stories of personal tragedy, ruined and abandoned neighborhoods, corrupt politicians, arson, drugs, young lives cut short by senseless murder, underfunded and understaffed police departments, and firemen with holes in their boots and water-pumping trucks that don't work, he teases out a broader cautionary tale.  In looking at other cities like LA, Baltimore, Philadelphia, Cleveland and Harrisburg, he sees Detroit as a canary in the coal mine.  As Detroit goes, so he warns, so the rest of the nation might go.

I fear there may be more than just a grain of truth in what he says.  For all of the political noise we hear about deficits, the national debt, and whether or not a universal health insurance mandate is constitutional, the real problem this country faces is a lack of meaningful and renumerative work.  Globalization has a lot to do with that, and so does robotics and automation, like the Amazon example I mentioned above.  A great deal of it also has to do, however, with the fact that we have willingly embraced a winner-take-all brand of turbo-capitalism that has made it acceptable for this country's executive class to wage war on the middle class and on the poor.

One particular passage in the book I found poignant was a recollection Charlie LeDuff had when he visited his brother Bill, who works in a screw factory on the outskirts of Detroit.  Correction -  it would be more accurate to say that they buff and shine up screws that are actually made in China.   As Charlie's brother tells the story of how his own fortunes have dramatically declined from his days as a subprime lender to his desperate days on the floor of the screw factory, Charlie recounts an observation made by a co-worker of Bill's, an illiterate man named Mike Straw, whom Charlie and Bill uncharitably call a "retard."  Now, that's just wrong.  "Retard" is a term that should never be used about anyone, but even Charlie had to acknowledge Mike's wisdom is summing up the plight of the country so succinctly. 
My brother pointed to the guy working at the next table over. “Go talk to him,” he said. “That guy’s actually paying off his debt. He’s an honest guy, I’ll give him that. But he’s sort of retarded. He’s too dumb to know he should just walk away from the debt.”

The man working next to my brother is named Mike. A functional illiterate, he earns $8 an hour but takes home about $75 a week. Up to his neck in house payments on a house that was no longer worth what he owed, Mike decided to pay the bank instead of walking away. Why? I asked him. A lot of people are walking out on debts. “A lot of people do, but I don’t,” he said. “If everybody walked away on what they owe, where would we be?”

He was potbellied, sported a poor Moe Howard “Three Stooges” haircut and was missing his lower plate of teeth. But he wasn’t complaining about the slow pace of a national dental plan. He was worried about his job.

“What happened?” I asked him as he fiddled with the same bolt I had seen him fiddling with for fifteen minutes.

“Happened where?”

“Here, in America. What happened to the economy? What happened to this screw shop?”

“Well,” he said with gummy exasperation, “a guy used to make plastic cars, see. Then they found a guy someplace else who can make forty plastic cars. But the guy that used to make the cars still likes the car. He wants to buy one for his son for Christmas. So he buys one with a credit card. But he don’t have no money to pay for that credit card. After a while, the man with the credit card wants to get paid, but the guy that used to make the plastic car don’t have no money to pay it.” He stopped abruptly and shrugged his shoulders. “That’s what happened, I guess.”

The illiterate understood it. And he told it as well as the New York Times ever did.