Remake Detroit, or Empty It

National Review ^ | 07/22/2013 | James Pethokoukis

[SeekAndFind]

If Detroit were its own city-state — a bizarro version of prosperous Singapore — it would be a place the U.S. State Department would regularly issue travel warnings about, where “long-term, protracted conditions make a country dangerous or unstable.” Detroit’s murder rate, for instance, would be higher than that of all but a handful of other countries. The Democratic Republic of Detroit would also be relatively poor, with annual per capita income of around $15,000, making it a middle-income country like Mexico.

Except Detroit would be a nation in decline rather than on the rise. Detroit would be a nation literally dying off, its shrinking population abandoning territory the central government could no longer afford to supply with basic services. Oh, yeah, its disastrous public finances. Well, maybe those would be a minor bright spot in this alternate reality: Detroit could always pay creditors, at least for a while, with devalued Fords, the local currency named after one of its founding fathers.

Eventually, however, this shrunken, crime-ridden, impoverished city-state — with no one willing to bail it out — might be forced to make a choice: capitalism or collapse. Out of options, it might just make the China choice. A key part of Deng Xiaoping’s pro-market economic reforms in 1979 was the creation of four Hong Kong–inspired “special economic zones” of liberalized labor laws and tax incentives to attract foreign investment. One of these little pockets of economic freedom, Shenzhen, located just north of Hong Kong itself, is now a center for technology manufacturing and one of China’s richest cities. The stunning success of China’s economic experiment showed economist Paul Romer how better rules and institutions could work wonders for economic growth. Romer has proposed that developing nations allow the creation of “charter cities,” where the host nation would provide a large, uninhabited piece of land to be governed by market-friendly rules and perhaps run by a foreign government. Workers, businesses, and investors from anywhere could move in and out freely. Basically, Hong Kong in a box, ready for delivery. For example, instead of giving foreign aid to some poor African nation such as Mauritania, New Zealand and Norway might partner together to run a charter city there. With good governance in place and cheap land and labor available, the theory goes, private investment would pour in.

Although Romer’s concept remains just a fascinating thought experiment — a deal with Honduras fell through in 2012 — and was intended for what used to be called “Third World nations,” why not turn abandoned Detroit into New Detroit, a business-friendly charter city where taxes are low and regulation light? Governance could be guaranteed by some outside entity. Although neighboring, well-run Canada is an obvious choice, maybe an American city could play the role in exchange for a cut of future tax revenue. Reason Foundation analyst Shikha Dalmia suggests Houston as a candidate.

All this may sound like it could be the plot from next year’s remake of the 1987 film Robocop, in which a bankrupt Detroit sells itself to a private company with plans to transform the city into an enclave for the 1 percent. But no one would be forced to live (or invest or create jobs) in New Detroit. As Romer said in a TED speech addressing criticism that charter cities are a neo-colonialist plot, “This model is all about choices, both for leaders and for the people who will live in these new places. And choice is the antidote to coercion and condescension.”

And what’s the alternative? A decaying urban core surrounded by reclaimed farmland? As Edward Glaeser documents in Triumph of the City, Detroit spent decades trying to counter the decline of the auto industry by building things — a monorail, sports arenas, office complexes — rather than “trying to attract smart, wealthy, entrepreneurial people.”

If Detroit can’t fix itself, maybe Washington could help, with an idea proposed by economist Enrico Moretti, author of The New Geography of Jobs: People living in areas of high unemployment, such as the Motor City, could receive part of their unemployment check in the form of a relocation voucher. The idea might even inspire a film, Escape from Detroit.

— James Pethokoukis, a columnist, blogs for the American Enterprise Institute.

[Celtic Conservative]

I already did. see post 19.

CC

[Caliban]

The proverbial turd in the punch bowl...

[Jabba the Nutt]

Sell Detroit to the private sector.

[Gritty]

Can anyone name a majority black city anywhere in America that isn't a crime filled sewer of poverty?

I can't. Maybe somebody else can?

Is it racist to even ask that question?

Yup. That's why you can't ask it in public if you value your life or property...

[Gritty]

...Detroit gangs are falling on hard times - not much left to steal. Most homes have been stripped of anything that can be sold - copper, appliances, etc. - not much 'loot' left...

I had a friend who used to buy up old properties in Detroit and then rehab them himself for Section 8 rentals. It was a pretty lucrative business because the government always paid the rents on time - as opposed to normal tenants.

His major problem was the personal hazards during the latter stages of reconstruction. He said whenever he had the wiring installed and started to put in appliances (this was the final stage), he had to be there 24 hours a day armed with a shotgun. Otherwise, the place was likely to be broken into and looted before the next morning if he left for the night. Sometimes they didn't even bother waiting until he left before the thieves were breaking in. He felt fortunate he never had to shoot anybody, but he came close a few times (yes, he was white, and it could have been a problem).

That's a tough way to make a living.

[GOPJ]

Thanks for sharing... These are the stories that must be told. Your friend wasn't a racist - he was a realist... Someone has to speak truth to black poverty pimps - men who benefit from misery and strife. That's got to be us.

What's sad about all of this is it wasn't this way years ago. In the 40’s 50’s and 60’s when racism was everywhere blacks had about the same marriage rate as whites, and they kept their families together under horrible conditions. The kind of thing your friend had to put up with didn't happen like that in white or black neighborhoods in the past. The 'culture' liberals are imposing is turning the country into a hellhole... Detroit's an example of a city that tried every liberal idea ... every one. And look at the place - it's a horror.