Corporate Subsidies

The state has played a critical role in Detroit’s decline. Snyder has repeatedly said that the state will not “bail out” Detroit, and the federal government has echoed this sentiment. As former Michigan treasurer Robert Kleine argues, the state pushed policies that encouraged the city’s failure, especially through cuts to revenue sharing that, he asserts, “doomed the city,” including cutting business and income taxes in 2000 and then giving business yet another $1.8

billion tax break in 2011. This further eroded the tax base and contributed to the advancing decline of city services while doing little or nothing to create jobs.39 A 2013 study by Good Jobs First shows that Michigan leads the nation in massive corporate tax breaks over the last thirty years.40

The kinds of bailouts that were available to the banks and auto companies during the 2008 economic crisis are clearly not available to the poor black city of Detroit. Those massive bailouts, which served to increase the profits of the banks and auto companies, were followed by plant closures and mass layoffs, clearing the way for investment in production facilities elsewhere in North America and the hiring of new and temporary workers at half the pay of senior workers. As David Harvey points out, it would be far better to reverse the politics of wage repression and to raise real wages in order to bolster consumer demand, but most capitalists are unwilling to contemplate such a solution. The Republicans in Congress blocked the initial plan to bail out the Detroit auto companies on the grounds that it did not reduce the wages and benefits of unionized labor low enough to match the nonunionized labor of Japanese and German auto companies located in the American Souths1 The negotiated bankruptcy of General Motors led to the creation of the two-tier system in which people joining the labor force are paid lower wages and benefits than those who are already employed. This two-tier system has spread throughout much of the United States, but the implementation of this plan only depressed consumer demand further.

The net global loss of jobs during the recession of 2007-2009 is estimated at 30 million, with three-quarters of those located in the advanced economies. The United States accounts for 7.5 million in newly unemployed, constituting a vast labor reserve that puts further downward pressure on wage rates and working conditions. Profits for corporations, however, have rapidly revived, helping to spark a recovery in the stock market as well as in the lavish lifestyles of corporate CEOs and Wall Street executives^2 This corporate resurgence explains why the auto companies are thriving while Detroit continues to decline. City mismanagement, while real enough, has become a convenient scapegoat for the main perpetrators of Detroit’s decline—the auto companies, who shut down the plants to pursue nonunion labor and higher profits elsewhere; the state, which delivered massive tax cuts to corporations while cutting education and social services; and the federal government, which has failed to support its cities while pressuring the auto companies to squeeze greater concessions from the labor force. As George Packer ruefully observes, some financial leaders who defended the banks, such as Henry Paulson or Timothy Geithner, “have suffered damaged reputations; a few have seen their net worth drop; none have had to hunt for food in garbage cans.”43

To make matters worse, Republicans in the House of Representatives passed a farm bill that, if it had become law, would have slashed $20.5 billion from the Supplemental Nutrition Assistance Program over the next ten years, removing a total of 14 million people from what is known as the food stamp program and preventing school children from getting free lunches.44 Instead the 2014 Farm Bill cut “only” $8.7 billion in food stamps, affecting 850, 000 households, about 1.7 million people, even as census data shows that nearly 47 million people live in poverty in this country. The federal poverty line, however, does not reflect the cost of living; if it included the cost of housing, transportation, and health care, researchers estimate that about 100 million Americans would qualify as poorT

The loss of manufacturing jobs and jobs in related industries in the traditional manufacturing centers have also caused millions of home foreclosures, many of them based on bank fraud and deception. The situation was dire in Detroit. In 2007 nearly one hundred homes were foreclosed upon every day, with an estimated two thousand people moving out of the city each month. Crowds grew unruly when they could not get into overcrowded Cobo Hall job fairs, and ten thousand people lined up on the first day when one of the city’s casinos advertised for new workers^6 For decades, more buildings have been demolished than built in Detroit, a practice of “unbuilding” that has become the city’s primary form of architectural activity^7 The average price of homes dropped from $97,900 in 2003 to $12,400 in 2009.4® The banks are also responsible for “zombie” properties, affecting thousands of people in Detroit and some three hundred thousand nationwide. These are created when banks start foreclosure proceedings but then decide not to finish the foreclosure process, walking away from vacant homes whose owners they have forced out. The banks are not required to notify the city or the borrower that they have abandoned the foreclosure process, leaving the owner legally and financially responsible for property tax payments, with tax bills sometimes arriving a year later, while the banks themselves avoid payment of city taxesT

In 2014 the Detroit Blight Removal Task Force found that 84,641 homes and buildings across Detroit, 30 percent of the total stock, are dilapidated or heading that way, with 114,000 vacant lots and 559 big empty industrial buildings.5° The task force, established by the Obama administration following the city’s bankruptcy, is the most elaborate survey of the city, performed neighborhood by neighborhood. It recommends demolishing forty thousand derelict buildings but does not address what should become of the tens of thousands of empty lots left behind. Yet even vacant lots create voids that serve as counterparts to standing ruins, becoming “negative ruins,” as graphically demonstrated by aerial photographs such as Julia Reyes Taubman’s East Grand Boulevard between Saint Paul and Agnes Streets (figure 7)?1 The large structure near the top of the image is the seventy-three-apartment El Tovar Apartment Building, designed in the Spanish Moorish-Art Deco style. It was built in 1928 and represents a shift toward high-density housing at a time

Julia Reyes Taubman, East Grand Boulevard between Saint Paul and Agnes Streets, from Detroit

FIG. 7 Julia Reyes Taubman, East Grand Boulevard between Saint Paul and Agnes Streets, from Detroit: 138 Square Miles, 2011. Courtesy of the artist.

when Grand Boulevard was a prestigious address. Located near the Saint Paul Manor Apartments and Kingston Arms Apartments in the East Grand Boulevard Historic District, all three buildings face an increasingly depopulated area, with razed houses creating large empty spaces.

The power monopoly ofthe Big Three automakers of Ford, General Motors, and Chrysler was broken in the 1980s when the Japanese and Germans entered the American auto market. The auto companies, like capitalism itself, which initially developed within nation-state frameworks, had to become internationally competitive. This greater competition forced the use of labor-saving technologies as well as the use of state power to undermine organized labor and permit corporations to continue to make easy profits. Maximizing profit meant allocating surplus capital to wherever the profit rate was highest, which was not the traditional centers of production in the advanced industrial countries but in the poorest regions of the world, where labor and resources were cheap. Although Detroit has long functioned as a metonym for the auto companies, almost all of the auto plants have moved elsewhere, first to the suburbs and small towns, then to other parts of the country, North America, and overseas. The auto bailouts therefore did nothing to prevent Detroit’s financial crisis; that is, it did nothing for the actual impoverished city as opposed to the fictive entity “Detroit,” meaning the car companies.

As critical theorist Eric Cazdyn argues, we have entered a “new chronic mode” that maintains an acutely debilitated status quo in order to avoid the danger of sudden death. Cazdyn writes, “The maintenance of the status quo becomes, if not quite our ultimate goal, what we will settle for, and even fight for. If the system cannot be reformed (the cancer eradicated, the ocean cleaned, the corruption expunged), then the new chronic mode insists on maintaining the system and perpetually managing its constitutive crises, rather than confronting even a hint of the terminal, the system’s (the body’s, the planet’s, capitalism’s) own death.”52 Revolution, he suggests, becomes unthinkable as the chronic mode is managed and death held off. The present, despite its brutality, becomes naturalized, making it easier to choose the limits of the known than an unknown future that is difficult to imagine.

To maintain this chronic mode in Detroit, the state counts on the isolation of the city’s poor, black population from the mainly white workforce in the rest of Michigan, and the rest of the country, in order to push through severe cuts against public sector employees that will then become the leading edge of an assault on all workers. The Detroit plan continues the battle by both Democratic and Republican parties against public employee unions, which now comprise about half of organized labor due to deindustrialization in the Midwest and Northeast and the precipitous decline of private-sector unions.53 According to the Bureau of Labor Statistics, the total union membership rate in 2012 and 2013 was only 11.3 percent, or 14.5 million, down from 20.1 percent, or 17.7 million, in 1983, the first year for which comparable data was available^4

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