DETROIT TODAY, LEEDS TOMORROW: Where neoliberalism is going

I do find it fascinating that, now Detroit has finally defaulted, with other local administrations surely soon to follow, it doesn’t seem to occur to most American commentators that this is the beginning of the end for their country. If you move jobs offshore, then degradation, drugs and crime immigrate very quickly to replace them.

There are, of course, a thousand reasons why Detroit is broke, and the American Right is scribbling so much about it – in a hurry to blame the Democrat administration for everything – you could be forgiven for imagining their wrists might actually be engaged in a rather different activity. But at base level, the simple fact is that one President and Congress after another – starting with Reagan himself, easily the worst offender – carried on the myth of reducing the State when actually they were increasing the cost of it but delivering less to the Citizen. The cost increase was at least partly a result of borrowing money while pretending that America was still top of the heap (and so it was OK to strip out its home-grown assets to vultures like Romney) when in reality its traditionally global moneymakers were not moving forward at all.

After the American automotive industry’s boom years, investment in design and technology collapsed in real terms, investors and office-holders preferring to take the dividends and run. I watched this process take place from close quarters while Ford was a client in the 1970s, being taken apart  by the Japanese and the Germans. GM was no different. So let the neoliberal onanists construct their alternative version of history: Detroit collapsed because of Friedmanite greed, neoliberal short-termism, and fiscal incontinence from the City’s good burghers. It collapsed because Washington has been in denial (still is) about America’s decline. It collapsed because Greenspan said “Party on!” in 2004, when he should’ve read the riot act. And because a President – himself a black man – is too interested in the mirror to really care about America’s blue-collar class. And it will collapse totally when interest rates rise.

They are already doing so in India: as I posted last year, someone who needs something different from their currency will break ranks and spoil the Zirp hoot n nanny. That’s the trouble with ‘globalism’ – Levitt invented a global village that doesn’t exist. Sooner rather than later, this mad attempt at worldwide mercantile growth – based on credit stimulation nobody can afford – will implode. Then who will do the consuming so vital to the growth-model of capitalism? Better ask the people of Detroit.

The grisly details are as follows: the city of Detroit owes money to more than 100,000 creditors – it breaks down to more than $25,000 per resident.  One-third of Detroit’s 140 square miles is either vacant or derelict. There are lots of houses available for sale in Detroit right now for $500 or less.

In 1950, there were about 296,000 manufacturing jobs in Detroit.  Today, there are less than 27,000. Between December 2000 and December 2010, 48% of the manufacturing jobs in the state of Michigan were lost. Half the jobs in ten years.

In 1950, there were about 296,000 manufacturing jobs in Detroit.  Today, there are less than 27,000. 47% of the residents of the city of Detroit are functionally illiterate. Less than half of the residents of Detroit over the age of 16 are working at this point. 60 percent of all children in the city of Detroit are living in poverty.

The violent crime rate in Detroit is five times higher than the national average. About 40% of the street lights do not work. Roughly a third of the ambulances are running.

In half a century, Detroit has gone from having the highest per capita income in the US to the lowest. This is, of course, the ‘vision’ former Goldman Sachs beelzebub Mario Draghi has for the EU territories.

The fanatical Newscories hijacking the Conservative Party are offering us privatised education, selling the blood transfusion service to Bain Capital, creeping NHS destruction, cuts in police numbers, and making the Australian  anti-British owner of a criminal  Group the dominant figure in British media….so that we too can have our own set of ranters on Fox News. It’s obvious where it’s going: before long we will have at least one Detroit here – and I hope it isn’t going to be Leeds, because despite it being in Yorkshire, there are people I like there.

If, like me and a growing army of others, you think the road being taken is an offence against decency, stay tuned to this site. The Unaligned Front for Decency (UFD) is being formed as I write. It is an apolitical pressure group, not a political Party.

More details to follow.

Related: The best way to reform the Second Chamber

52 thoughts on “DETROIT TODAY, LEEDS TOMORROW: Where neoliberalism is going

  1. Did I read somewhere that something like half Detroit’s debt is pension and healthcare liabilities? That feels to me like writing on the wall.


  2. Well there you go,a lesson in what happens in the clamour to get ever cheaper cars or whatever,a nation exports it’s own jobs and then relies on borrowed money to pay for them,and unions ,who obsessed for wages instead of fighting to defend employment.


  3. Don’t worry about Leeds – that strong city’s a long way behind Bradford in the list of Yorkshire’s failing cities – on fact, it’s a list of one.


  4. On Detroit found the continual collapse in it population since the 70’s amazing from the point of view how do you service a debt run up in such a way with NO PEOPLE.


  5. Detroit is what happens when politicians write cheques today on the assumption of taxes to be paid tomorrow, and tomorrow arrives and the taxpayers have gone.

    Detroit is a metaphor for the entire Western lifestyle – living beyond its means on borrowed money. One day you can no longer borrow to consume, and that day has arrived for Detroit (finally). The same day has arrived for some nation states (Greece et al) and will arrive for the US and UK eventually. When exactly, who knows? As Adam Smith said ‘There is a lot of ruin in a nation’

    Be warned.


  6. Yes Dan Hannan has been rubbing his hands with glee over Detroit, comparing it to Ayn Rands ‘Starnsville’…


  7. Pingback: John Ward – Detroit Today, Leeds Tomorrow : Where Neoliberalism Is Going – 22 July 2013 | Lucas 2012 Infos

  8. Any pressure group will be hard pressed to achieve the impact of UK UNCUT. Singlehandedly and apparently without financial backing, they have brought the issue of no tax paid by big business to the forefront of politics. Unfortunately, the MSM have now installed Margaret Hodge as the Poster Girl cum standard bearer of this “pressure”. Typical of british politics; she’s done shag all but sail in on the coat tails of some very, very brave and determined people who were willing to put their freedom on the line to achieve their ends and when she spoke in Gloucestershire recently she didn’t even have the decency to acknowledge their contribution. I salute them (but have never been a member). Difficult to know what pressure you intend to bring John. Pressure about what? We know it won’t be criminal justice because that is an area which is verboten as the Home Affairs Committee (hacking by big business) and Leveson have amply demonstrated. Indeed, unreported by the MSM, David Davis MP – a man of supposed great conviction(not) – said in Committee Room 14 at the House of Commons 10 days ago, “Anyone contemplating becoming a whistleblower in this day and age is insane”. To apply pressure (to the Commons presumably) one needs two things: A) People willing to listen (MPs and the MSM won’t if it’s at all contentious) and B, something to rant about. But unless one has cast iron proof to back up the rant -as Peter Hain once memorably said – “Put your placards and slogans away and go home”. I look forward to the first march along Whitehall. Alternatively, your followers may like to attend “Stitch Up In Stevenage” on 21st/22nd August – a protest -by a pressure group – against the abject state of so-called British Justice in the 21st century. Details can be found on the facebook page of Michael Doherty. Your chance to make a difference awaits. See you there. And BTW; UKIP started as a pressure group but they quickly found that no one was listening until they declared themselves a political party.


  9. I apologise in advance for bringing a touch of optimism to the page and being the bearer of good news, not always welcomed by the muttering classes.
    Having run (and still are) for the past 30 years a SME, now based in Leeds, I can report from the front line that things aint half so bad in Leeds and most other northern towns (with the possible exception of Mudpluggers candidate), as imagined by those in the ‘theoretica’l more privileged parts of the country.
    Our business is doing well. All businesses that I know personally are doing well. I don’t know any builder, plumber, electrician, decorator and those in similar trades who are struggling for work. Those business that didn’t go down the pan in 2008/9/10 are, relatively speaking, doing OK. Of course there is unemployment but, and I don’t have the actual figures, It does not seem to be much worse than in 2007. The demographic has changed a bit. Whereas ‘B & Q’ and most supermarkets 25 years ago would have been populated by eager and helpful 16-18 year olds, the wrinkles are there (still helpful and eager). University seems to have replaced first rung jobs which makes it more difficult for an employer to ‘use’ 23 & 24 year olds (after uni and the gap year) who have higher expectations.
    The economy in the UK, at street level, is about to get better. Leeds is populated largely by that reliable asset – GBP. The Great British Public. The GBP, 95% of whom do not know much about Japanese bonds, mercantile growth, the Troika, QE and all the rest of the evils out there about to tip us into the brown sludge, have been quietly ‘down-debting’, paying off the mortgage, getting rid of the CC debt and foregoing a car and carpet upgrade. 6 years of personal austerity is enough and, for those who are not out of work, in spite of what the Archbishop of Canterbury says, have enjoyed wages that have been going up steadily over the past 6 years.
    Which brings me to the most important forecasting factor of why the UK economy (street level) is about to get better in spite of all the useless f**kers that rule over us and who will be crowing like puffed up peacocks telling us that their money grubbing, inefficacious policies have worked.
    On my 12 mile drive into work there are now as many ‘sold’ as ‘for sale’ signs on houses of all shapes and sizes.


  10. True, Detroit is a foretaste of the future for the entire Western World, when it finally hits it is going to be quick, nasty and extremely painful for 90+% of the population


  11. @Roger Gough. I have to agree with you, sadly. The status quo has always had the power to quash dissent. In Blair’s day they were secure enough in their power to ignore the more than one million people who took to the streets to protest against the war, in many towns right across the UK.
    Today they have even more power – the money and muscle that were always theirs – but in addition, powers to snoop on Internet traffic (including this blog), CID infiltrators into groups that might upset their cosy position, agents provocateur, and the MSM in their pocket.
    The Church that, nominally at least, was once our protector, is neutered and our Sovereign signed away our laws and justice system to the EU.
    We are what is technically known as buggered.
    Although pressure groups are growing and dissent is in the air, it is non-cohesive at the moment and lacks a target, just as you have described above.
    But we can either passively let the future happen around us, or make some efforts to mould it. JW’S proposal is all that I can see at the moment.


  12. What a waste of pixels. A Brit thinking the reason for Detroit is not enough government and taxes. Liberalism’s yield is Detroit. And there’s more to come. Destroy families. Raise illiterates. Elect incompetents, then protect them with unions. Grow government. Create unsustainable debt. Drive out business with punitive regulations and escalating taxes. What’s left is the crime-ridden cesspool called Detroit. Look at any failing big city in America and it will be run by Liberals. Thank God I live in Texas. Here’s your cue snobs . . . Go ahead and laugh now to make yourself feel superior.


  13. Richard North on has already set up the Harrogate Agenda with a number of other bloggers and concerned supporters. Maybe, rather than splinter the opposition to the current system, a concerted effort would have more of an impact.

    It’s already easy to see how different groups against our membership of the EU can be divided and turned on each other by the media’s manipulation of the narrative.


  14. Pingback: Is Detroit’s Bankruptcy Really a Feeding Frenzy for Privatization? ~ The Real News | Stop Making Sense

  15. So John Lewis is to bring his overseas sweatshops to a town near you?

    What is really happening, is people in the overseas sweatshops are beginning to say enough is enough. Costs are rising, both production and transport.
    People in the affluent west? have either ran out of money to spend. Or if they have any money are thinking, “if the production costs are so cheap? why is this not truly reflected in the shops.
    Who is pocketing the profits?

    As for UKIP as a political force, this is just smoke and mirrors.
    Nigel Farrage is from the same mold as Cameron etc [just check is CV]

    Maybe, just maybe, the voluntary withdrawal of the Trade Union Levies and the denial of New Labour not to be the creation of the Trade Union Movement. Might if someone as the gonads to set up a Trade Union led and funded Political Party in the pattern of the original political activists.

    But I doubt it, as long as people can get their daily fix of day-time TV and cheap booze, plus their benefit cheques still get paid nothing will happen. Until that is the final collapse takes place, then it will be too late.

    Situation will have returned to normality;
    10% have’s, who set the rules/policy and have most of the wealth and power.
    20% who do the bidding of the 10%. so long as they have a reasonable lifestyle, therefore sod everyone else.
    Whilst the 70%, me included, just moan and groan, whilst making the best of it.
    Get over it, what happened from 1945-70 was the exception, not the norm. The ruling elite developed a conscience after two major wars, a devastated Europe and the fear that they temporarily lost control and could have lost everything.
    So apart from the sabre rattling USSR + NATO v China or maybe China + NATO v USSR. Then again USSR + China v NATO, kept us all quiet until an agreement for our rulers to arrive at a new solution.

    For more info just read, The Managerial Revolution, by James Burnham written in 1945. Probably the most influential man no one as heard of?

    Sorry for my little rant, but keep up the good work John, we may have that revolution yet


  16. “in a hurry to blame the Democrat administration for everything”

    Detroit has been under Democrat control for over forty five years, without a break. Add to that that the main cause (c95%) of their debt are public sector pensions and salaries that the city cannot afford to pay. Quite simply, the worse the economic situation in Detroit got, the more the democratic administration pumped into its fiefdom there.

    Ring any bells? Gordon Brown USA style?


  17. Only to be expected,has economies fail,lines of supply fail,road,rail& shipping,just look at Detroit
    Those lines of infrastructure can only get shorter & shorter as private profit will not pay for it (not viable) & the taxes need to keep them open are lost or not paid
    Then the need to keep them open is lost
    The tide is already turned against the corporations,all of their own making,Oh sometimes don’t you just feel sorry for lemmings
    though paying for basic living standards with pay differentials & sharing the profits out equally is a modal with some merits


  18. Jeremyp99
    Whilst stating the obvious,why not try stating all the facts,most Banks without bail outs would not be meeting their pension obligations either,just Detroit isn’t to big to fail or have enough elites amongst them for special privilege me thinks


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  20. This also applies to Companies,If markets are destroyed economies devastated,how are companies going to honour theirs obligations,that’s the trouble with this economic modal,blaming the type of institution is only passing the buck


  21. You make some good points, but surely at least one reason for the disaster of Detroit must be the fact that the US car industry carried on making totally rubbish products long after it was obvious that DB, BMW, VAG, Toyota, and all the rest were busily eating their lunch?


  22. >>>How do you service a debt run up in such a way with NO PEOPLE.

    The debt arises BECAUSE there are no people. And this is a common problem with democracy.

    A population gets used to a certain ‘Western’ quality of services. But then the tax-base dissappears (ie, the people), but no politician ever gets elected by promising fewer services, and so the expenditure continues and the debt escalates.

    The same is happening with the UK. Camoron wants to be ‘nice’ to be reelected, therefore he tiptoes around the UK debt problem (which is still increasing at £120 bn a year). Meanwhile, we have been loosing people just like Detroit (onto sickness, unemployment, and non-jobs). Never mind Greece and Ireland, the UK (and the USA) are the next Detroits.


  23. Back in the eighties, the BBC put out a programme in response to the growing fear of nuclear obliteration after Reagan sent over his cruise missiles to counter the Russian’s SS20s. We all thought that Armageddon was on the way and it was only a matter of time before city ‘deconstruction’ arrived.

    That programme was ‘Threads’.

    Of course, the nuclear apocalypse was not likely given that the old Soviet Union was terminally ill from over-expenditure, whilst old Ray-gun was too tired from his afternoon naps (and suffering from Alzheimer’s) to press the red button. However, the programme did point out very succinctly that our society is so interconnected, that if one thread breaks, they all fall apart.

    We had a little taster of what is to come with the most recent credit crunch. When the ready supply of credit dried up, so did growth. When it tightened even further, house prices fell, no-one could get a mortgage, surplus people were thrown out of work, budgets slashed & horrendous austerity followed.

    This is nothing however, compared to the problems we will have when the REAL credit crunch arrives. Europe & America have been credit junkies for far too long. consumer growth was the only thing keeping our economies alive whilst most of the manufacturing was moved to China or other nations with cheap labour. The workers in these nations were exhorted to save their money, to build their wealth. China suffered many famines and lived in constant fear of poverty & hunger. As a result they’ve become natural hoarders.

    What happens though, when these hoarders want to spend some of their hard earned cash on some consumer goods?

    If China can not longer depend on sales of their consumer goods abroad (because no one can afford them) and they cannot recall the huge debts owed to them by the United States & Europe (without bringing about a deeper recession that hurts them more in the long run), then they can only turn to the same model that we’ve been using for too long and fuel a consumer led explosion to keep their economy moving. That’s precisely what they are doing.

    What should we and the United States be doing? I’m no expert, but I do realise that there are some very unfortunate truths. You can only spend what you earn & you if you have to save to provide for any unexpected events. Detroit knew for decades that they were producing the wrong cars. Gas guzzlers that were uneconomic. Americans naturally bought Japanese or European to save money. Mo-town suffered as a result.

    We only need to remember that Detroit’s urban deconstruction was lampooned in the Robo-cop movies of the 80s. The city fathers knew what was coming and should have asked the federal government to start relocating the population. However, Washington could only reply

    “Frankly, my dear, I don’t give a damn”

    So what can Washington do?

    Well, in times of war, the United States & Russia build most of the weapons used and get rich.
    In times of war, people tend to forget about their own petty financial concerns, because they have bigger problems – like the threat to their lives. In times of war, without imports, Britain cannot feed itself. Methinks instead of building windmills, HMG should have been encouraging the farmers to plant more British fields.


  24. “47% of the residents of the city of Detroit are functionally illiterate. Less than half of the residents of Detroit over the age of 16 are working at this point. 60 percent of all children in the city of Detroit are living in poverty.

    The violent crime rate in Detroit is five times higher than the national average. About 40% of the street lights do not work. Roughly a third of the ambulances are running.”

    Exactly what you would expect from a predominantly black-populated and governed city from which every white (barring hillbillies) has fled, along with every productive black citizen who could see the writing on the wall.


  25. You should always read JW’s comments – fully.

    “After the American automotive industry’s boom years, investment in design and technology collapsed in real terms, investors and office-holders preferring to take the dividends and run. “


  26. Thanks for that, John.

    And in the UK there is no better illustration of this same process, than the financial pages. Try any day, any week, and try to find a decent company reporting growth, products, research, innovations – or profits. It just does not happen.

    The financial pages are full, but with a second-hand shop opening in Bradford, and an online retailer doubling sales to £200 a week. The UK is locked in the same cycle as Detroit.


  27. Um. Difference. Banks private, Detroit public.

    Not that hard, really. The fact is that they have been awarding money to their own for decades which they have not got. Whatever banks get up to it makes not a jot of difference to the fact that this was Brownian mismanagement (embezzlment?) on just as grand a scale as the banks.


  28. Probably 20 billiion dollars of debt:
    Taxpayers should be fed up with ever-escalating property taxes, sales taxes, and fees to pay ridiculous retirement plans for unappreciative public union employees, especially police, fire, and teachers’ unions.

    So, look on the bright side. Public sector bloated pensions are going to start taking a haircut in the bankruptcy courts.


  29. Jeremyp99
    Banks are private,so why have they not failed like private enterprise should when they are bankrupt.
    Seems your just biased to protectionism of the private sector & your not capable of seeing the problems created by protectionist tax policies that are unsustainable,Free markets that allow money to freely fly from one sector to another for better returns without understanding the problems being left behind,i know of companies rather than face up,to just walk away to other pastures once they have extracted what they can gain from any project.whilst absconding from any responsibilities to their part in the mess, just blame the sick,poor & anyone else but the real culprits
    But do not worry your running out of places to invest to get the returns you need,your assets are disappearing down the plughole


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  31. We’re not the Judean Peoples Front, we’re the Peoples Front of Judea, F@#$ing Judeans Peoples Front…. Wank3r$


  32. How very generous of you. All those not very wealthy employees want is a reasonably comfortable life and retirement. The division isn’t public vs private sector. It’s between the greedy bastards at the top (who tell us that a comfortable life and retirement is unaffordable for us plebs, while at the same time they take a bigger slice of the pie & gorge themselves on taxpayer largesse) and the rest of us.

    Don’t beat up on unionised workers. If you think they have it better than you, then maybe you should ask yourself why.

    And what’s so wrong with people sticking together to defend & advance their interests anyway? Low wages are part of the problem; surely stronger unions are part of the solution.


  33. Martin Armstrong, pretty much the smartest guy in world finnace for the past 30 years, so smart the American legal system locked him up without trial for at least 10 years to keep him quiet, has written on his blog about the new element just discovered -Governmentium. Worth a read for all us fatalists.
    (21st July post, but read them all)


  34. Detroit went bankrupt for 1000’s of reasons.

    However, not all blame can be laid at the feet of unions, inept leftist party hacks, foreigners, etc.

    You know what really killed employment in the US auto industry?


    It takes many many fewer people now to make a car than it did in Detroit’s heyday. And the people who are still required need to be better educated and trained than the autoworker of years past. It’s a different game now.

    It’s as simple as that.

    Kim G
    Boston, MA


  35. Just because you live in Texas doesn’t mean everyone thinks you’re a twat. Maybe you look in the mirror too much, cowboy.


  36. Actually, I am referring to the widely recorded and consistent higher crime rates and welfare dependency of black populations in many Western countries. Name-calling from you or the idiot who calls himself ghost doesn’t change that. But than again, in the absence of rational argument, abuse is all you have, isn’t it?


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