Slate's Yglesias: How to Save Detroit

Thursday, 25 Jul 2013 09:15 AM

By Michael Kling

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Detroit clearly has serious problems. It can't get 40 percent of its traffic lights to work, and police take almost an hour to respond to 911 calls.

Saving the city and restoring vital public services will take more than just getting its finances in order.

The solution is to abandon large swaths of the city, according to Slate business and economics correspondent Matthew Yglesias. Simply put, Detroit needs less space and more people. It could provide public services more easily and cheaply if it had more people concentrated into less space.

Editor's Note:
The Final Turning Predicted for America. See Proof.

"I don't think Detroit can fund its current operations without shrinking substantially," David Schleicher, a George Mason University professor, told Yglesias.

The solution is to move residents from more remote areas of the city to the central core.

Yes, forcing people to move would be a drastic step, but it wouldn't be more drastic than moving people out of homes for new infrastructure projects. And with over 20 percent of its homes vacant, Detroit has plenty of available space.

A smaller city with a denser population would be better for retail stores, which would in turn generate more hiring and tax revenue, according to Slate. And it could help spark a downtown revival.

Another idea is to allow immigrants to repopulate Detroit, using region-based Visa program. "People have been leaving Detroit in droves, but for all its problems, there are billions of people around the world living in worse places," Yglesias noted.

Current law allows foreign workers to work in the United States if they stay with one employer. An alternative would let them work in this country if they stick to a particular region.

Because the number of foreign workers needed to revitalize Detroit is small compared with the millions wanting to immigrate, the city could be choosy, approving visas for only highly skilled workers. And having access to those skilled workers would encourage businesses to move to the city.

"Both of these ideas are long shots, and would require changes in Michigan and federal law to implement," Yglesias wrote. "But it seems unlikely at this point that bankruptcy and cutbacks will be enough to pull Detroit out of its downward spiral, and the idea of a federal fiscal bailout for Detroit is wildly implausible."

Although some suggest a federal bailout, such a rescue creates its own complications, argued Mohamed El-Erian, CEO and co-chief investment officer of Pimco, in an article for Fortune.

The underlying problems are lack of economic growth compounded by political polarization and dysfunction, he explained. The bankruptcy will hopefully prompt political leaders to address those issues.

"Maybe, just maybe, Detroit could be a new 'Sputnik moment' for American politicians and the electorate," El-Erian wrote. "But if this important hope remains just that — a hope rather than an evolving reality — Detroit's considerable human tragedy would end up also constituting yet another wasted crisis for America."

Editor's Note: The Final Turning Predicted for America. See Proof.

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