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A Bold Call To Bail Out Detroit

Should the federal government bail out Detroit?

Detroit City Councilwoman JoAnn Watson thinks so, and she's saying as much to anyone who'll listen (and even to those who won't). Speaking at a forum for city council candidates this morning, the councilwoman called for the Obama Administration to provide Detroit with a one-time, $1-billion bailout to wipe away our $300-million budget deficit and help jump-start revitalization. And then she said it again -- just to make sure you heard her and know that she's deadly serious.

Watson realizes that this a bold idea. She knows that there will be howls from critics who say the city doesn't deserve it or that the federal government can't afford it or that a bailout won't keep us from winding up right back in these same dire straits. She is well-versed on the counter arguments. And she's not paying them a bit of mind, because she thinks it can work.

Admittedly, I was surprised when I first heard the comment, not because I don't think Detroit needs the money, but because of the boldness of the request. No politicians in this town -- even those with twice Watson's clout -- have even shaped their lips to suggest this kind of relief, even though few of them seem to have any real plan for the city beyond not being Kwame Kilpatrick. So I called the councilwoman's office to see if she would be willing to elaborate.

A long-time activist known around the country for her work with the Detroit NAACP, Watson doesn't back down much, if at all. And she certainly didn't when I rang her up and asked her to further explain her proposal.

"If the federal government can get a loan from China, if the state of Michigan can get $2 billion in federal stimulus money, why isn't it obvious for the city of Detroit?" she said. "Why not establish us as an important precedent? They've bailed out Wall Street. They've bailed out General Motors. When are they going to bail out the workers? And Detroit's problems are a direct result of the economic meltdown and the crisis in the auto industry. Michigan's problems are.

"And don't tell me we don't deserve it. Of course we do. The city of Detroit has been a leader in industry, in labor. We built the vehicles in World War II. Our unions have helped lead the nation to more humane work conditions, whether it be in terms of sick pay or the five-day work week. We have led the nation, and we've been dependent on an industry that's been hit hard. So if the federal government sees fit to bail out GM -- and I'm not mad about that because I went to Washington to help ask for bailouts for the car companies -- then the government needs to bailout the city that depends so much on GM. You cannot allow this to continue to happen to one of your largest cities."

In addition to getting rid of the deficit, Watson says, bailout funds could also be used to further a new vision for the city, something she's laid out in a document she calls "The Marshall Plan for Detroit," a plan she's been working on for several months now. Among other things, the plan calls for strong public transportation, job creation for the heads of Detroit households, investment in neighborhoods and -- my favorite -- reduction of the operational size of Detroit to promote greening of the city and to better provide services to residents. She also speaks in realistic terms about right-sizing the city workforce, stemming excessive real-estate speculation and making other hard -- and politically unpopular -- choices to get Detroit moving again.

In discussing her plan, she doesn't talk about Detroit in terms of blight and decay. She talks in terms of its potential, of what she believes geography, history and circumstance have positioned Detroit to one day become. She talks big.

"This is a Midwest megalopolis," she says. "We've got waterways. We've got land. We sit on an international border. We have everything it takes for this city to be great. But the federal government should partner with Detroit. This isn't a handout. This is an investment in the biggest city in the hardest hit state in the country, a state that has traditionally never gotten back in federal dollars and assistance what we've sent to Washington (as tax dollars). We should stop this hand-wringing. We need to get people together, the citizens, the workers, the people who believe in Detroit, and we need to go to Washington, D.C. and say to them that we deserve a bailout, too."

Frankly, I don't disagree with much of this -- but what are your thoughts? Do you agree with the councilwoman that Detroit should be bailed out? Why? Or why not?

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  • 1

    Bailouts are loans. What's her plan to pay it back?

  • 2

    Would this plan be open to other cities across the country? How do you justify giving this $$ to Detroit and not Yuma, AZ or the Rockford, IL?

    • 2.1

      Realistically I think Detroit would qualify since it's reportedly on the brink of receivership (which we've been hearing for years without receivership happening), but there has to be a plan going forward to get economically stable and pay back the funding to the Feds. It's not a "giving" of money - that would never happen in the form of a bailout. There are other ways to get free money to the city if the Feds wanted to do it, but city officials and local Congressional representatives have to properly play the game to get it.

      (crosspost to another Kilpatrick screwing up the system)

  • 3

    Was this before or after she drove onto a movie set downtown, disregarded staffers who told her to leave, and then used a police escort so she could "go to the bank"?

  • 5

    I can see it now. People across the country already think the city should be thrown out with the bathwater (due to the auto "bailout"), I can only imagine what they would do if the city itself was given one dime.
    And rbpoe is right, other cities need it too.

    • 5.1

      Now, see, this is a problem with the way people recognize "Detroit." While the auto bailout money went to the manufacturers very little of it benefited the City of Detroit proper. Even though Michigan as a state may have benefited the most that auto bailout money was spread nationwide since the auto manufacturers function nationwide (did you know that the largest single employer in Malibu, CA is a joint venture between Boeing and GM?).

    • 5.2

      I agree with you detroitice

      free forums

  • 6

    [...] Cleveland to Detroit: “At Least We’re Still Not You” in Latest Safe City Ratings Forbes has published its list of America’s safest cities, which should bump traffic in Seattle, Portland, Boston, Madison, and Milkwaukee, the highest five ranked cities in the list. Of course that’s fine and dandy till the full list reveals that Detroit ranks number 12, just under the Denver area. Why? While violent crime scores are maxed out, they’re lucky enough to have low workplace and traffic fatalities, along with occurrences of natural disasters. So although you might get stabbed in the face during an armed robbery, you can rest assure your chances of bleeding to death in your job at the deli or getting swallowed by a tornado isn’t quite as likely to happen. This is great news for politicians in Detroit looking for ways to encourage people to invest in an utterly dead real estate market, something that made it’s own headlines earlier this week. [...]

  • 7

    this would be a perfect example of throwing good money after bad. Detroit is a cesspool of corruption, violence and poverty and is the result of people and the politicians they elect making bad choices. Detroit has proven itself incapable of governing itself, yet they want more money. the answer is to abolish the inefficient government bureaucracy and rules, lower taxes and effectively protect the citizens from crime. then Detroit and revitalize itself.

    • 7.1

      Agreed but study the disaster that is Washington, DC. Thanks to your HipHop mayor, Detroit now looks a whole lot like the mess that Marion Barry left in his first or second wake. You can't swing a dead cat without hitting some cronied, ossified city employee protected by seniority rules.
      Look at the fight going on between the DC Council and school chancellor Rhee: frantic territorial warfare only further acidified by a teacher's union far more concerned about tenure pay than the shameful lack of standards in the classroom.
      Ugh, what a mess. Maybe Watson can get some traction but just who will oversee disbursal of any possible bailout $$$$$...... HER?!!

    • 7.2

      The point that is often missed when there is talk of Detroit's dysfunction (especially from those that have never been residents or participants in Detroit City life) is that Detroit is also a city of incredibly friendly people that often live in well tended relatively safe neighborhoods – not only the mini-mansions of the historic areas but the neighborhoods of thee bedroom bungalows with postage stamp lawns. While no one would argue that tremendous poverty doesn't exist, there are also large numbers of hard working people and families trying to do their best. They send their kids to charter schools or schools of choice (many by the way, that are excellent) and help them when possible go to college or get the training necessary for good jobs. I am always confused by those on the right that simultaneously call for lower taxes and government to live within its means and then in the next sentence call for protecting citizens from crime. I have news for you cruddycat, citizens that have access to appropriate resources are not the ones that cause most crimes. Eliminating the safety net only makes things worst not better and without additional revenue where are the dollars for extra officers to provide additional public safety? Oh maybe Councilwoman Watson is on to something…

  • 8

    Nothing less than a Marshall Plan is needed, not only for Detroit, but everywhere else urban decline has occurred in the US. But unless seriously bold action is taken to learn from the century of mistakes made in urban development, I can't see Americans trusting one another enough to get this done. A modern day Homesteading Act needs to be created, as well as US Fed backed Reconstruction bonds with Fed/State/Local tax exemptions for incentives.

    As a gay American living in Canada, I can't participate in Detroit's renewal, because my marriage isn't valid there, I'd lose my single payer health care, and I can't legally immigrate my Canadian spouse to the US to live. Unless those actions are taken, I will have to view "The Detroit Experiment" from across the river, because I can't risk my families well being.

    Good luck Detroit... you are going to need it.

    • 8.2

      I agree that a plan that could help the many struggling urban areas in the United States would be bold and welcome action. But as pointed out there are many people who would BENEFIT from such an action and the resulting social programs that would be absolutely against it. Many working class folks have the illusion that they are better off as they are just because they are not (fill in the blank depending on your area.) It is a sad but often true that often the only thing that unites us is what we are against not what we are for. It is also sad that to live comfortably you have had to make the personal choice to live outside the US. I am sure there are many interesting reasons why Canada and much of Europe have safeguards that the US can only dream of. For example, for all of those that proclaim their belief in the family where is the outrage that working women can't find decent affordable daycare? Where is the outrage that the US doesn't mandate paid maternity leave? On the subject of maternity leave one Harvard University study of 168 nations show that 163 had some form of paid maternity leave, leaving the United States in the company of Lesotho, Papua New Guinea and Swaziland. There is a lot of anger out there fueled by the belief that someone is getting a “handout.” What if instead everyone had access to the help they needed? No county is perfect and no system is perfect but it is clear that what Detroit has access to now is not working. I am not at all a fan of Councilwoman Watson but maybe she has a point that putting real money into doing something different could create some much needed change. Change has to start somewhere why not Detroit? We put the world on wheels and helped create decent working conditions for all maybe creating something that works in Detroit can be the next chapter of the urban story.

  • 9

    I LIVE in Detroit.

    I cannot in good conscience ask for a DIME from the Feds or the State unless, and until Detroit shows it is capable of making real HARD decisions.

    The only reason she is asking for this money is so the council does not have to make the cuts we need to make. Giving Detroit money would be like giving a heroin addict enough dope to keep him high for a year, but only in exchange for a promise that "You'll use that year to wean yourself from the drug."

    It's not going to happen. There are plenty of cities that "deserve" a bailout as much as Detroit. The government cannot afford to bail them all out.

    These cities need to do what needs to be done, and that is cut their budgets, take the pain, tell the citizens to GROW UP and accept some personal responsibility. Just giving them cash only furthers the sense of entitlement many counsel members have right now. And that's something we need to STOP. Mayor Bing is getting HAMMERED by the Unions because he has the stones to step up and say, "we cannot afford to pay Union scale any longer". Of course that's not really a big problem for Bing, as most Union personnel moved from the city when our "live in Detroit to work in Detroit" law was removed. So they have to voice in the matter on the day of the election.

  • 10

    Alright so here's a Buffalonian's opinion. The stated reasons for a bailout fall far short of Detroit's reality. The council woman wants a bailout because she says that Detroit suffered from this recent economic downturn. Which is true, however, is hasn't suffered a much as other places due to this recession, because, simply put, Detroit has been receiving an economic beating for the last 30years or so.

    And economics is not its only problem. When you look at many of Detroit's statistics it simply sucks to be there. I know that's not a technical term but it is true. It is vying for the "most dangerous city" title. It's got a terrible history of corrutpion within it politics and the educational and societal support for many of its people is not there. And when I visited it a few years back I also saw that many of its people had simpy checked out. Garbage stacked many yards, litter was everywhere and any public space was wrecked or in some form of disrepair. And this is right as you enter Detroit from the Canadian side, which also provides a sharp contrast.

    My city of Buffalo has the same things going for it as Detroit; has barely any more money than Detroit; and is also a much safer and nicer place to live yet I wouldn't make the arguement that it needs a bailout or should get one because its economics are so bad. Quite frankly Detroit hasn't done anything to deserve a bailout and currently is set up to squander any relief that would be provided. Until its people make the effort of change, then Detroit is on its own.

  • 11

    Instead of giving money to a city, or any more businesses (who then give it to executives in the form of huge bonuses), give bailout money to the american public. Give, say, $100,000 to each individual with the restriction that it must go toward bills (mortgage, credit cards, student loans, etc.), or toward furthering your education if you are one of the few individuals that do not have any bills. That is the quickest and easiest way to jump start our economy.

  • 12

    Detroit was laid low by corruption both in government and in unions that should have been part of the solution. The city is in a process of renewal. It was 1.6 million and is now 0.9 million, sitting on an infrastructure footprint it cannot afford. Detroit needs a bulldozer, not a bailout. For the moment it is too corrupt and too dangerous to fund with tax money. Maybe the new mayor can make a good case. That will take new politics or bailout money may as well be burned on witches night with the usual house burnings.

  • 13

    Joanne Watson?!?!? You mean the city council member that only paid $68 a year in property taxes while her neighbors paid thousands? She did this for ten years based on a fraudulent claim that a mysterious tornado had destroyed her home so all she was paying was vacant land tax. Meanwhile, her home is in perfect condition and no one can find any proof of a tornado ever coming close to her home.
    She paid back 2 years worth of property tax and claims that she will pay back the other 8 years on some kind of payment plan.
    Hey, somebody hook me up. I wish I could pay $68 in property tax for ten years and then slowly pay it back.
    Joanne Watson is just as crooked as the rest of this city government. She wants an easy bailout so she doesn't have to make the REAL cuts to balance the city budget. Why not start by cutting city council members salries from $87,000 per year to say $50,000, take away their city owned cars and then eliminate each council members' $600,000 a year staff salary? Joanne Watson is a big fat Phony Fraud!

  • 14

    I would really be interested in what the details are for this government loan would be. How would the money be used in a productive way to get a once great city back on its feet again. Hopefully the money would not be spent on keeping Detroit a city of single mindedness as it has been for the past 30 some odd years.

    Detroit has essentially alinated its self for the suburbs, and vice versa as well. I would hope that the plan would include bringing all of Detroit and the greater meto Detroit area back on solid gorund.

    Good honest leadership, as well as hard work by the people and the government is whatt is needed for all of this to succeed if it were in fact to ever happen. No more silly special projects that bring no value to the city.

    Use the money to clean it all up, get rid of the blight and the criminals will have no where to hide. Bolster the school systems so the children have a place of learning that will allow them to succeed in life, not just pass thru it. Bring a sense of comunity back to the city for all to enjoy, bot residents of the city as well as those who are not.

    If all of this could happen Detroit would once again prosper as a fully functioning city, instead of the disfuctional ghetto that it has become.

  • 15

    Money has been provided to bail out many people. It's called the American Recovery and Reinvestment Act.

    If you go to various websites you can locate how the money has been granted to various schools, cities, and businesses in any county in Michigan. This is money meant to help the country and it's citizens recover from this serious economic situation. The last time I looked, Wayne County shows grants for low income housing assistance, Pell grants and voc training grants for community colleges, private colleges, several beauty schools (which is hard to understand.....who knew there a shortage of beauticians?), and new business opportunities.

    If Ms Watson, or any other city resident, wants to receive money, there are ways to validate the reasons, and request the funds.

    • 16.1

      Sorry, meant to add, you can add up the millions of dollars received just in the city of Detroit. Whether the council has control of it or not is not the's there for the use, and I'm sure additional grants. As long as quarterly reports account for the usage.

  • 17

    Detroit... "is a cesspool"......"needs a bulldozer"...."is a disfunctional ghetto" and "it simply sucks to be there".

    I guess I'm being overly sensitive, but when I read these statements they override anything else, however intellilgent, in the posts. I wish it weren't that way, but it is. While the majority of their content is trying to be helpful, they also contain a kick in the teeth.

  • 18

    If Detroit had a functioning, non corrupt government, I'd be willing to listen to this. But to think that $1 billion would not be mismanaged by this disfunctional city is naive. I'm a supporter of Detroit (hell I live here) but going through the city government to revitalize is the wrong way to go.

  • 20

    [...] federal bailout, Joann Watson, Kwame Kilpatrick, Monica Conyers, politics My post yesterday on JoAnn Watson's call for a federal bailout for Detroit sure got both supporters and opponents fired up yesterday. It also prompted some [...]

  • 21

    To address the matter of giving Detroit a large government loan to revitalize itself, is there a market for this in another context -- asking surrounding suburbs to annex parts of the adjacent, outer rim of the city and as part of a revitalization loan, and agree to restore these areas ceded under a comprehensive plan? This could help constructively shrink the city landmass while leaving a vital and governable core business and dense urban center. It would also leave intact the region's identity, if not more quickly improve the entire metro region. The cities would participate in the loans provided they follow the plan and otherwise secure the area's neighborhoods, schools, roads, etc.

    This is an out-there idea, but I don't think just asking for money on a doing-business-as-usual basis, in this case billions will result in any takers. It will take more than one billion to credibly address the city's overall revitalization, and it will need patience, 10-15 years minimally.

    Just a thought.

  • 22


    Only if the City Government was abolished and replaced by a governing body or board appointed by congress - just as is done for Washington, DC.

    The residents of Detroit - as has been demonstrated by their failure to govern and manage their city - have waived and forfited their right to 'home rule' should people from outside of Detroit and Michigan elect to provide a bailout. Only with overseers for providing oversight and management charge of such a large and important investment should a bailout even be considered...

    • 22.1

      Oh, please. Was New York City required to do that when they needed a bailout? How about Cleveland when they entered receivership?

  • 23

    Darrell, it's not just a matter of it being "I don't want to pay for your______."

    It's a matter of it being Constitutional. I understand that people like to bring up good old Amendment number 10, when that is asked. But we also have to keep READING after 10, and we can see what the 10th amendment specifically allows the Feds to do. And providing, or even FORCING citizens to get insurance is not on the list. I know good "bleeding hearts" such as you just called yourself don't like it. But there's a good reason why the founding fathers set up the Constitution the way they did.

    But the GOOD news is it doesn't prevent the STATES from enacting their OWN healthcare. Look at Mass., they did it! They increased the amount of people covered, and prices are only a little bit about national average, though they ARE going up faster...

    The real fact of the matter is we don't need the kind of heath bill offered up in Congress right now. It won't stop price increases, and it won't cover ALL Americans either.

    Tort reform dropped prices in Texas, and oddly enough caused more doctors to move into the state. But certain legislators aren't being ALLOWED to add that to the bill.

    Letting people pick state to state would help, but that isn't being ALLOWED in the bill.

    Allowed "PLPD" type coverage, as in "catastrophic" only would lower costs for those that don't need. or think they need abortion/birthcontrol/pregnancy/or heck even cancer and other types of diseases. But that's not being ALLOWED either.

    There are a LOT of things that can reduce the costs of healthcare. This bill is not really about that at all. It's about power.

    If the current bill is enacted, and allowed to go forward what will be the battle cry in the future?

    "Don't vote for "x" party, because if you do you'll lose your "free" healthcare. That's a pretty powerful tool. Especially if it does do as feared and causes most private insurers to go out of business, leaving more and more people depending on the Feds. It's already used today to rally AARP members, and even NRA members, really any special interest group. And it works!

    And finally it comes down to trust. Do you really trust the same entity that has bankrupted every OTHER government program to not do the same here?

    I don't. Let it be Constitutional. Let the states decide. If they can make it work, good for them. But if they don't and they end up like California, then there ya go...

  • 24

    [...] on GM. You cannot allow this to continue to happen to one of your largest cities." Read more: Detroit City Councilwoman Joann Watson Urges The Federal Government To Bailout Detroit - The Detroit... [/B] Read more: Detroit City Councilwoman Joann Watson Urges The Federal Government To Bailout [...]

  • 25

    […] The moral hazard of bailing out the city of Detroit is even worse. If cities know that the federal fairy godmother will save them with a well-timed bailout, what’s their incentive for facing tough choices and making tough changes like GM did, when the feds forced it to lose brands and even fire its CEO, Rick Wagoner? It’s tough to imagine that the people who think a gubernatorially-appointed emergency manager means a “loss of voting rights” for Detroiters would suddenly be OK with a federal overseer with similar powers. And the idea that Detroit might just get the help it needs without any oversight to go with it? Councilwoman JoAnn Watson, who suggested something similar in 2009, could’ve told you that wasn’t going to happen. […]

  • 26


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