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article imageOp-Ed: What can be done about Detroit?

By Alexander Baron     Aug 17, 2013 in Business
Detroit - The City of Detroit is broke. Can alternative economics solve this problem, or must it go down the tubes because of the lack of finance?
The plight of the City of Detroit is now well-known. The causes of its decline are complex, but for those of you who have the time, this nearly forty minute video gives both some historical context and incisive analysis.
Predictably, the usual suspects have tried to blame its decline on racism; in view of the ethnic make up of the city council, this is a poor cop out indeed.
Here is Richard D. Wolff on why Detroit is where it is today. For once he has something intelligent to say: the American Government bailed out General Motors (under the Bush Administration), and the banks, and now the city's pensioners are going to get screwed. Unfortunately, he goes on to parrot the usual nonsense about the minimum wage.
So what is to be done about this very real problem? How about hiring a 22 year old as a financial analyst at $275 an hour to "restructure" the city's debt? If you don't think that's a good idea, you're not the only one.
One thing that could be done is to deal with the interest on its public debt, 38% of which is said to be for legacy costs. This includes pensions and debt servicing (ie to the banks). The city should honour its commitment to pensioners, but as banks create the money they lend out of thin air, then they should be repaid in kind, ie they should be forced to take a 100% haircut.
What else can be done at a local level? Well, teachers in Detroit are paid handsomely for turning out semi-literate students, so clearly it would be better to replace most of them with distance learning. Give schoolkids a laptop each and allow them to study from home over the University of YouTube. This would be no problem for homes where both parents or more often the sole parent is unemployed.
A city may have no money; it may have no natural resources; but by definition it has human resources. Not everyone can contribute in equal measure but most people can contribute something. There appears to be some bartering going on in Detroit, and this is something that should be developed through LETS and other networks. How about Freecycle and Freegle? There is indeed a Detroit Freecycle Group, and one called Trash Nothing.
These are only small things but every little helps if you have no money in your pocket. Then there are local currencies; Detroit does have a local currency experiment; Detroit Cheers have been around since 2009; the big question is, why has this not been developed?
Finally, there are things that can be done on a small scale that require minimal investment. Aquaponics and vegetable gardens are not the entire solution to feeding families, but they can help keep down shopping bills.
Last year it was reported here that in Kenya people were making wind turbines from scrap metal. Even though there should be plenty of scrap metal in Detroit since the trashing of its car industry, wind turbines are probably not the best solution, but there is definitely scope for developing solar energy to cut down on household bills. Surely the city council could fund a scheme of this nature, perhaps in cooperation with the Detroit Cheers people or a similar citizens' activist group?
The latest op-ed in the New York Times identifies a shortage of skills as the biggest problem behind the decline of the city, something it blames on a cooperative effort between CEOs and the unions. (No prizes for guessing who took the lion's share). If the big motor companies had reinvested in new technologies and training, Detroit need not have declined to the extent it has today, or may have still been prospering.
The article goes on to point out that rebuilding Detroit will require "decades of concerted effort on many fronts, by many national, regional and local actors, including collaboration among companies, government, trade associations, schools, colleges and universities."
This is hardly surprising, because like Rome, Detroit was not built in a day. Something must be done to attract this long term investment, and realistically this can be done only with some if not heavy Federal Government cooperation. Whether or not that materialises, aquaponics, barter, LETS, local currencies and most of all telling the banks to shove their loan "repayments" are the things the city needs most in the short term.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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