Stokes 1

Eddie Stokes
Professor Utych
Political Science 200
March 28, 2016
Detroit: From Prosperity to Misery in 55 Short Years
What happened that caused Detroit to go from Americas wealthiest
city in 1960 to Americas poorest city in 2015? In this paper I will answer this
question by providing several key insights into what drove Detroit into an
unmitigated economic death spiral. It is vital that we understand Detroits
downfall so that we can better prevent the same from happening in the
future. Detroit first appeared on many Americans and foreigners radars as
an economic powerhouse following the end of the second world war. After
the war Detroit was at both the center and forefront of manufacturing for the
world at large. This manufacturing boom created a supply of jobs which
resulted in a population boom within the city as well. However, this period of
economic prosperity was not long sustained as Detroit soon found itself in a
downward trend in nearly every facet of society. Detroits population would
peak, and jobs would vanish in what would appear be in unison with the
flight of a middle class that supplied Detroit with a large portion of its tax
revenue. These factors combined with poor economic planning and
implementation of an unrealistic monetary policy, helped push Detroit
towards an untimely demise.

Stokes 2
In order to better understand Detroits downfall, we must first examine
how political parties have played a major role in shaping the city altogether.
It is no secret that since 1962 Detroit has been a city primarily sculpted by
the vision of Americas Democratic party, seeing as every Mayor since 1962
has been a Democrat. The mayor played a crucial role in Detroit, that is
according to researcher Paul Lawless where he writes in his 2002 paper titled
Power and Conflict in Pro-growth Regimes: Tensions in Economic
Development in Jersey City and Detroit, that, The administrative structure is
based on a strong Mayor together with 9 at-large councilors (Lawless,
2002). Why is a matter of political party affiliation important in regards to
how a city operates? Because in the United States political parties are
divided across sharp ideological lines in regards to economic policy, city
planning, and a plethora of other crucial policy matters. Political parties in
America exist as platforms for which citizens can vote to elect people to
governmental office-both federally and locally-that they believe best
represent the interests of the party. The United States can best be described
as a majoritarian party system, one in which two major political parties hold
a significant amount of power. This in turn makes it exceedingly difficult for
third parties to gain-let alone hold-any power within government itself. As it
exists today the United States has two major parties that each can be traced
back to the early and mid 1800s. These two parties are formerly known as
the Republican Party, or the GOP (Grand Old Party), and the Democrat Party.
The Democrat Party tends more towards the ideals of modern liberalism,

Stokes 3
while the Republican Party embraces classical liberalism. Although, within
the Republican Party there has been a sharp rise of traditional conservatism
over recent years. Since the Democrat party has controlled Detroit for the
better part of 50 years I will explore how Democrat policies have contributed
to Detroits decline. As a matter of course Democrats support increases in
taxes for the top 1% of income earners but not the middle class and lowincome individuals. However, the difficulty of this policy is that the lines
between the top 1% of earners and middle class earners is often blurred and
there is no clear cut divide. In Detroit during the 1960s and 1970s following
the introduction of several Democrat mayors, tax increases were shackled on
all individuals regardless of socio-economic class. According to analysis of a
Detroit Free Press investigative article, Joseph Henchman from The Tax
Foundation found that Detroit increased its income tax in 1969 from 1% to
2%, then again from 2% to 3% in 1982 (Henchman, 2013). These new tax
increases drove middle class earners out of the city and to the suburbs, and
eventually out of Detroit altogether. Individual income tax increases were not
the only area of taxes that saw a raise during this period of Democratic
mayoral rule. Henchman also notes that in 1972 Detroit increased its
property tax by 30%. These tax hikes were felt by all citizens of Detroit and
forced many to abandon the city en masse. Detroits population in 1960 was
roughly 1.6 million, that number fell to a staggering 1.2 million by 1980 and
currently lies at a dismal 688,000 today according to The United States
Census Bureau. The large abandonment of Detroit meant an even larger

Stokes 4
decrease in the citys ability to generate tax revenue from its citizens.
Detroits astronomical drop in population continued well into the 21st century
where the New York Times stated in 2011 that, Detroits population had
plunged by 25 percent over the last decade (Seelye, 2011). In the same
article, The New York Times also points out that the population reached its
lowest point in 2010 since 1910 and that more than 237,000 people had
abandoned the city within the previous year alone. Without the ability to
generate a reasonable amount of income the city could no longer afford to
fulfill its commitments, most importantly to government employees and
union workers. Simply put, Detroit had more money leaving the city than it
had coming in, which inevitably results in economic instability. Another key
insight into Detroits collapse was its embrace of unions. Similar to that of
increased taxation Democrats also support unions, as did the citys many
Democratic mayors from 1962 to 2015. Kyle Smith of Forbes detailed just
how costly unions have been to Detroit over recent years in his piece titled
Detroit Gave Unions Keys to the City, and Now Nothing is Left. Smith writes,
last year it [the city] was discovered to still be paying for a horseshoer (or
farrier) on the Detroit Water & Sewer Department payroll. This individual
costs some $56,000 in pay and benefits, despite the city not having any
horses to shoe in the department. Union bosses insisted the DWSD (average
compensation: $86,000) needs more, not fewer, such unionized employees
(Smith, 2013). The problem itself lies in this sentence, that despite the
employee providing absolutely zero meaningful services to the city, the city

Stokes 5
continued to employ the horseshoer and individuals like him. Smith also
writes, four out of five employees in the bloated department were
redundant and discovered a thicket of union regulations driving up costs
(Smith, 2013). Be it a city or a business, neither can thrive when hundreds of
thousands of dollars are being squandered on fruitless labor, Detroit learned
this the hard way. In 2003 philanthropist Bob Thompson tried to donate $200
million to the Detroit public school system to help improve educational
standards for Detroits youth. Thompson wanted to use the money to build
15 entirely new high schools and implement a policy of 90-90. This 90-90
policy stated that the school would have to show that they accomplished, a
90 percent graduation rate and 90 percent of those graduates going on to
college. It is also important to note that in 2006 Detroits high school
graduation rate was a wretched 21.7% according to Greg Toppo from USA
Today (Toppo, 2006). Thompson was met with harsh criticism, so bad in fact,
that he was forced to go into hiding for a brief period of time, or so says a
TIME Magazine article by Joe Klein. Klein notes, On Sept. 25 the DFT [Detroit
Federation of Teachers] held a work stoppage, which closed the public
schools, and staged a rally at the state capitol on Lansing. The mayor
withdrew his support, and Thompson withdrew his offer soon after (Klein,
2003). The unions opposition to the proposal was that the students who had
not been selected for the newly built schools would have been left behind.
This logic is deeply flawed and ultimately reveals how unions did indeed play
a direct role in wrecking Detroits economy. First and foremost it is incredibly

Stokes 6
cruel to force all of Detroits youth to suffer simply because some have an
opportunity that is not widely available to others. Secondly, the teachers
recognized that the new school instructors, who were not union, would have
provided them with competition. This in turn would have forced the city of
Detroit to reevaluate the unionized teachers high salaries in relation to the
non unionized workers and their substantial pension packages. All of this
occurring at a time when Detroit was approaching bankruptcy and
desperately needed the money which could have been used to pay off large
portions of the citys debt. The Democrats combined support of increased
taxation and unionization resulted in the main contributor to Detroits
collapse, atrocious money management skills and doltish spending habits.
On the state of Michigans website it lists 3 significant factors revolving
around spending that lead to Detroits financial inconceivability, 1.
Overestimated its revenue, 2. Spent more than it takes in, 3. Borrowed
money to pay off its debt (The Financial Crisis, 2009). In particular relation
to the second point, unions are partially to blame for overspending in Detroit.
A New York Times article by Mary Williams Walsh mentions that, Detroits
municipal pension fund made payments for decades to retirees, active
workers, and others above and beyond normal benefits, costing the
struggling city billions of dollars and helping push it into bankruptcy (Walsh,
2013). Neither the article nor the review of the payments were able to
provide specific numbers in relation to exact dollar amounts that union
employees were paid. However, the truth remains that these nonsensical

Stokes 7
payments added to the massive stockpile of debt the city had been
accumulating and continued to accumulate. As is self evident by examining
Democratic policies we are better able to understand the reasons for
Detroits decline, that range from high tax rates to mismanagement of funds
in regards to unionized workers. The advantages of looking at the question
through this concept are numerous, first it helps by giving us a basic idea of
what policies work and what policies dont. Detroit laid the framework for
large American cities and set a guideline that explicitly tells other cities what
not to do in times of both hardship and success. The second advantage of
looking at the issue through the concept of political parties is that it makes a
strong case for bipartisanship within American politics. While it cannot be
said definitively that Republican policies would have worked better, it is likely
true that a difference of opinion in several instances may have helped to
prevent from the economic destruction of the city. Lastly, we are able to
draw conclusions about what to expect from candidates of specific political
parties and what decisions they can be expected to make with regards to
economic and social issues. This is important because it gives the voters an
idea of what direction their cities or states need to be headed, by being able
to draw on previous actions and consequences of members of a particular
party. The limitations however of looking at this question through the
concept of political parties is that it doesnt provide us with a greater sense
of the parties themselves and it is not fair to say that what happened in
Detroit can be accurately applied to all other scenarios. In regards to the

Stokes 8
former, within political parties it is the individual that ultimately decides how
liberal or conservative they may choose to mold their policy matters. The
Democrat party simply presents itself as a platform that advocates policy
positions. It does not however release specific set in stone tax rates, hiring
procedures, etc.; that is for each candidate of the party to decide on their
own basis. In regards to the latter, Detroit is but one instance of these
particular policy failures and one instance is not enough to definitively say
that these policies can be to blame and accurately applied to all other
scenarios similar to that of Detroits.
The second concept that directly relates to Detroits collapse has to do
with power, specifically power through persuasion, manipulation, and
exchange. Power is simply the ability to influence an event or outcome so as
to get what you desire out of it, whilst making the other person forfeit more
than they had previously hoped to. There are several types of power, the
most common being power through force, however for this particular case
we will be examining nonphysical means of power. Power through
persuasion, is a nonphysical type of power in which the agent using power
makes its intentions and desires known to the agent over whom power is
exercised (Magstadt, Grigsby, Wilson, Diulio, Bose, 2015, p. 53). Power
through manipulation is a bit different, it is the nonphysical use of power in
which the agent exercising power over a second agent conceals the aims and
intentions motivating the exercise of power (Magstadt, Grigsby, Wilson,
Diulio, Bose, 2015, p. 55). Lastly, power through exchange, is a type of

Stokes 9
power involving incentives in which one agent gives another agent an item in
return for another item (Magstadt, Grigsby, Wilson, Diulio, Bose, 2015, p.
58). Several methods of power were utilized, in most cases illegally, by
Detroit public officials between 1960 and 2015. The most infamous case of
corruption involved the mayor himself, Kwame Kilpatrick who was mayor of
Detroit from 2002 to 2008. On the FBIs website they give a detailed instance
in which Kilpatrick used power through manipulation to line his own pockets.
According to the FBI, Kilpatrick and Ferguson obtained more than $500,000
from the state of Michigan and private donors for non-profit organizations
they controlled. The organizations were supposed to help the community.
Instead, the mayor spent large sums on himself for luxury vacations, spa
treatments, and golf clubs (Public Corruption Inside the Kwame Kilpatrick
Case, 2013). This perfectly illustrates how Kilpatrick and his contractor friend
Bobby Ferguson used power through manipulation, in which they concealed
their intentions and diverted the money to an alternative location. However,
it doesnt stop there, the FBI also notes that, Kilpatrick and Ferguson
established a pay to play system that made breaking the law standard
operating procedure. Kilpatrick extorted city vendors, rigged bids, and took
bribes (Public Corruption Inside the Kwame Kilpatrick Case, 2013). All three
of these infractions directly correlate to the three types of power mentioned
previously. First, to extort city vendors is a classic example of how Kilpatrick
employed power through persuasion. Kilpatrick was able to smooth talk his
way into getting what he wanted and to get the city vendors to fork over

Stokes 10
more cash than they had previously hoped to. Kilpatricks intentions were not
concealed, they were instead revealed and he was able to use persuasive
words to influence the minds of the vendors into giving him what he desired.
Secondly, rigging bids is a prime example of power through manipulation. It
was made to give the heir that everything is being done for one purpose,
when in fact it is being done for something entirely different, the very
definition of manipulation. By rigging bids Kilpatrick and his buddies were
able to achieve their wildest desires whilst also being able to maintain an
illusion that things were being done legally. Lastly, taking bribes, for there is
no better example of power through exchange than bribes. People that
needed a favor from Kilpatrick were able to achieve this by lining his pockets
with large sums of cash. In this scenario both parties walked away better
than when they had started and each with a different item in return. All of
this plays as a direct contributor into Detroits collapse as Kilpatrick was able
to syphon off millions of both tax payer and state dollars that was
desperately needed to help the city fulfill its outstanding debts and
obligations. Kilpatrick was later sentenced to 28 years in prison and his
accomplice Bobby Ferguson 21 years in prison. Power plays an important role
in helping answer the question of why Detroit collapsed because it provides
us with a sense of reasoning. For it is through power and the several
methods of it mentioned in this paper that the people in charge of Detroit
were able to drive the city into economic ruination. Some advantages are
that it can provide us with a realistic sense of human nature, that money is

Stokes 11
at times a motivator for good and bad, and that too much power in the hands
of a few select individuals can be damaging. For many I simply confirms what
they had previously thought; which is that people can be easily corrupted
and influenced by large swaths power, thus leading them to make decisions
that not only act only in their self interest, but do so regardless of potential
consequences. Detroit suffered from this illness as many of its elected
officials were unrelenting in changing or reversing course on policy that was
detrimental to the city. Secondly, money proved to be the most crucial piece
to solving Detroits puzzle that was economic stagnation. Yet somehow it
rarely or never found its way to its intended location, much in part due to
people that ranged from self-interested union employees to corrupt city
officials. Finally, Detroits citizens embrace of a singular party for more than
50 years emboldened said partys leadership and it was able to exploit the
very people that had voted them into office. A limitation of observing the
question through the concept of power is that power is not as important
some as it is to others. In Detroits scenario money was the clear motivator
for Kilpatrick which also happened to be crucial to Detroits plan for success.
However, not all corruption can be attributed to money as there are
instances where supreme power is held by an individual or minute groups of
individuals and no such detrimental situations similar to that of Detroits
emerged.
While it is true that a wide range of factors are to blame for Detroits
fall from grace, political parties and power did indeed play a large role. It was

Stokes 12
in large part due to 55 years of Democratic rule and the Democrats ability to
wield such power by implementing destructive policy proposals. It is my
personal opinion that much of Detroits ills can be attributed to two major
contributors, poor policies that drove away the citys tax base, as well as an
abundance of money mismanagement across the board. Increased taxation
made it harder for the ordinary individual to live in Detroit which in turn
forced them to abandon the city and the city was left with little to no source
of revenue. Coupled with an unfathomably poor allocation of city funds
ranging from overpayment of union workers to flat out corruption made it
vastly difficult for Detroit to recoup and recover from its losses.

Works Cited
"America's 11 Poorest Cities." CBS News. N.p., 18 Feb. 2015. Web. 9 Apr. 2016.
"Democratic Party on Tax Reform." Democratic Party on Tax Reform. N.p., 1 Jan. 2016. Web.
09 Apr. 2016.

Stokes 13
"Democrats.org." Democrats.org. N.p., n.d. Web. 09 Apr. 2016.
"Detroit Bankrupt: To See Detroit's Decline, Look at 40 Years Of Federal Policy." Mic. N.p., 18
July 2013. Web. 09 Apr. 2016.
"The Financial Crisis." (2009): n. pag. Michigan.gov. Web. 9 Apr. 2016.
Henchman, Joseph. "Detroit Free Press Explains Why Detroit Went Bankrupt." Tax Foundation.
N.p., 16 Sept. 2013. Web. 09 Apr. 2016.
"Inside the Kwame Kilpatrick Case." FBI. FBI, 08 Nov. 2013. Web. 10 Apr. 2016.
Klein, Joe. "How the Unions Killed a Dream." Time. Time Inc., 26 Oct. 2003. Web. 09 Apr.
2016.
Lawless, Paul. "Power and Conflict in Pro-growth Regimes: Tensions in Economic Development
in Jersey City and Detroit." Urban Studies 39.8 (2002): 1329-346. Web.
Magstadt, Thomas M., Ellen Grigsby, James Q. Wilson, John J. Diulio, and Meena Bose.
Introduction to Politics. Boston: Cengage Learning, 2015. Print.
"Population of the 100 Largest Urban Places: 1960." Census.gov. N.p., 15 June 1998. Web. 09
Apr. 2016.
"Population of the 100 Largest Urban Places: 1980." Census.gov. N.p., 15 June 1998. Web. 09
Apr. 2016.
Seelye, Katharine Q. "Detroit Census Confirms a Desertion Like No Other." The New York
Times. The New York Times, 22 Mar. 2011. Web. 09 Apr. 2016.
Smith, Kyle. "Detroit Gave Unions Keys To The City, And Now Nothing Is Left." Forbes.
Forbes Magazine, 21 Feb. 2013. Web. 09 Apr. 2016.

Stokes 14
Toppo, Greg. "USATODAY.com - Big-city Schools Struggle with Graduation Rates."
USATODAY.com - Big-city Schools Struggle with Graduation Rates. N.p., 20 June 2006.
Web. 10 Apr. 2016.
Williams Walsh, Mary. "Detroit Spent Billions Extra on Pensions." DealBook. N.p., 25 Sept.
2013. Web. 09 Apr. 2016.