Daily Ticker

Why We Should Care About Detroit’s Future

Daily Ticker

Detroit was the wealthiest city in America with a solid middle class, a booming auto industry and a population of almost 2 million in the 1950s. Fast forward 40 years. U.S. automakers General Motors (GM) and Chrysler were teetering on the brink of bankruptcy and had to be rescued by a government bailout. Nearly two-thirds of the city's residents have left.

Charlie LeDuff, a Pulitzer-prize winning reporter and author of the new book Detroit: An American Autopsy says the Motor City is still trying to dig itself out from hard times.

Detroit is plagued with political corruption and its future depends on cleaning that up, LeDuff says in an interview with The Daily Ticker.

Detroit's former Mayor Kwame Kilpatrick, his father and a city contractor are currently on trial for corruption. Kilpatrick has been charged with for racketeering, extortion, mail and wire fraud, bribery and tax evasion and faces more than 20 years in prison.

“The branch of government [in Detroit] that is functionally well and doing its work for the people now is the FBI,” says LeDuff.

Detroit has 70,000 abandoned buildings and an official unemployment rate of just over 18% but LeDuff says the actual number is closer to 40%. The city's finances are so bad that Michigan Republican Governor Rick Snyder is considering appointing an emergency financial manager to run the city because of financial mismanagement. The Detroit News, citing sources close to the governor, reports that Snyder has already chosen someone for the job and is just waiting to hear back.

Despite Detroit's troubles, there are signs of recovery. The last census shows a 60% increase in the number of college-educated residents under the age of 35 living in Detroit. The city offers solid, cheap housing and groups like movetodetroit.com are dedicated to attracting new residents. Detroit's Corktown district has become a dining destination, says Richard Florida, co-founder and editor-at-large at The Atlantic Cities.

Detroit Venture Partners is offering startup funding for tech companies. Bizdom U, started by Quicken Loans Founder Dan Gilbert, is marketing a boot camp for entrepreneurs. Moreover, Gilbert’s Rock Ventures has been buying up real estate in Downtown Detroit and now owns 2.6 million square feet of commercial real estate which Gilbert hopes to develop for residential, rail and retail purposes. And there are plans for a state and federally funded light-rail streetcar project serving downtown Detroit.

LeDuff is skeptical about Gilbert’s plans but hopeful about the city. Quicken Loans was the “No. 3 seller of subprime loans” in Detroit during the housing bubble, says LeDuff, and Gilbert “helped shatter the real estate market...this is just a guy who sells mortgages. What’s going on here?.. I’m on it.”

LeDuff will be following Detroit's comeback as a reporter and writer for Fox2News. He used to cover New York City for The New York Times but moved back to his hometown of Detroit because “I love it.” He says he hopes his new book will contribute to Detroit's revival. Stay tuned.

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