Everyone loses if Detroit's course doesn't change

Oddly, the first question the politicians asked after the Detroit City Council finally voted to approve the consent agreement with the state of Michigan was not “will it work,” but “Who won?”

Short Answer No. 1: Too early to tell.

Short Answer No. 2: Wrong question.

Third Answer, a little longer: Sadly, in most cases, political culture trumps common sense and any willingness to collaborate.

One Lansing insider told me he was calling the deal between Detroit and the state “consent agreement lite.” (Others said that an consent agreement would be “emergency manager lite.“) Indeed, both Gov. Rick Snyder and State Treasurer Andy Dillon talked about their aim to work out “the lightest possible touch” on the city and their joint interest in avoiding the much-dreaded emergency manager.

No one doubts for a moment that this is so. But under the consent agreement, as written, there is an awful lot of diffusion of power. The governor, the mayor, the City Council and the state treasurer are all entitled to have their hands in the pot.

So are three powerful positions yet to be created -- the chief financial officer, the program manager and a nine-member Financial Advisory Board. But while the governor may have a slightly stronger hand than anyone else, no one person is in charge of the controls.

Detroit's culture can't be ignored

Which brings us to Detroit’s political culture. To be sure, a lot of the fierce rhetoric leading up to the agreement was political grandstanding. But apart from that, the long record of bad blood between Mayor Dave Bing and the City Council doesn’t encourage optimism that reaching agreement on anything will be easy.

When you add the racial politics that have pervaded the relationships between Detroit, the suburbs and the state for decades, you have to worry this whole thing could come apart at the seams.

That’s not being alarmist. Consider these potential flashpoints of friction yet to be worked out as part of the Consent Agreement:

Appointments: Detroit has a week to create chief financial officer and program manager positions. Within 30 days, the mayor must make appointments from two lists of three names, each selected jointly by the mayor and state treasurer.

Public Act 4: The act allows the governor to impose an emergency manager on the city. Nobody wanted that. So for everybody, a Consent Agreement was better than an EM. But without the threat of an EM, no Consent Agreement.

Yet, in a new wrinkle, it now looks very likely that enough signatures will be certified to put repeal of PA4 on the November statewide ballot. The second that happens, the law is suspended until after the vote. No hammer, no agreement?

Unions: The Consent Agreement calls for city employee unions to agree by July 16 to concessions on pay, benefits, bumping rights and work rules that go beyond those they negotiated last month with the city. The unions are furious, to put it mildly.

Revenue projections: Detroit’s future budgets must dovetail with independent revenue projections. Forecasting revenue is a tricky business, and for everybody to agree on such forecasts seems unlikely.

What is clear is that everybody -- including Detroit officials willing to be quoted -- agrees that restructuring the city is going to take a very long time. Pervasive illiteracy and poor skills mean that only half of Detroit’s adults are even in the labor market at all -- the lowest rate of any major city in the nation. Curing those problems won’t happen overnight, especially with the Detroit Public Schools in such a mess.

When you combine a combative political culture, racial  politics and terrible economic problems, you get a highly combustible mix. Frankly, I fear the most optimistic prospect is for years of quarrelling. Any progress will be herky-jerky, at best.

Critics and protesters against the Consent Agreement decried the loss of “democracy.” Fair enough. But, as anybody who looks at the hostile gridlock in Washington can see, democracy alone all too often isn’t a good way to get things done.

So, back to the questions at the top of this column:

1. No one won, which is probably the best outcome possible.

2. Asking who won is the wrong question; the right one is how  a structure with very diffuse decision-making can be made to work.

3. Finally and sadly, political culture tends to trump almost everything, including everybody’s very good intentions.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.

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Scott Roelofs
Thu, 04/12/2012 - 4:46pm
The consent agreement has sealed the fate of Detroit, and it will not be a good result for Michigan, nor for Detroit. The only hope to fix the systemic problems was an emergency manager. The unions will never, never, never yield enough. It seems they prefer bankruptcy for the city; although, ironically, bankruptcy will hurt the union members far more than a negotiated settlement. How can Detroit survive when it has to deal with 47 unions? Negotiations will never yield a financially viable benefit package for the city employees and retirees. The City Council and Mayor have proven to be unwilling to do what needs to be done. The consent agreement also makes it far more likely that out-state taxpayers will have to infuse the corrupt City of Detroit with hundreds of millions of dollars. The state will avoid a bankruptcy of Detroit at all costs. And Michigan taxpayers will pick up the tab.
Fri, 04/13/2012 - 3:22pm
Yes phil, everyone losses with a failure of Detroit. But blaming the unions and painting the workers as the devil isn't going to make the job any easier. Lately we have heard so much about those greedy workers and their union that it must be all their fault that Detroit is broke. While the media and the gov and friends have been trashing these people we are not told what they are paid, or what their benefits are, or their retirement, just that they are bad and greedy. Recently all 47 unions entered into cocession contracts, and the gov and his friends said not good enough yet we were not told what was niot good enough or just what the gov and company wanted for it to be good enough. The gov and friends have been silent about the 2/3 of businesses and citizens that have failed to pay there city taxes. The gov and friends have been silent about the lack of leadership form the mayor and city counsel, and what he expects each of them to give up inthe same fashion as the workers and unions are to give up. The Gov clearly does not want to run Detroit, but if you want people to trust and believe in your plan perhaps you should be honest it telling the people what you want and how you are going to get there, .first.