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Dueling explanations for Detroit collapse reflect ideology

Published: Monday, July 22 2013 12:30 p.m. MDT

Ingham County Judge Rosemarie Aquilina adjourns a hearing on a lawsuit filed by Detroit pension funds trying to keep city retirees' payments from being cut during bankruptcy proceedings at the Veterans Memorial Courthouse in Lansing, Mich. on Monday, July 22, 2013. Aquilina adjourned the hearing and said she will hear arguments in her Lansing courtroom in a week. (AP Photo/Detroit Free Press, Kathleen Galligan)

Kathleen Galligan, AP

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After Detroit filed for bankruptcy, drawing into even sharper relief the complete collapse of one of America's great cities, the finger-pointing began.

At MSNBC Melissa Harris-Perry argued that that Detroit collapsed because of the Republican advocacy of lower taxes, as reported by Mediate.

"In the case of Detroit, the reason that the tax base has become so small is because a loss of population, right? So folks out, they are not there to pay the taxes on the homes, and the kind of deterioration is what you see in the numbers you’ve suggested," said Harris-Perry. "But this lack of tax base is also exactly the kind of thing that many Republicans would impose on us, even when our cities have sufficient populations, even when our communities have sufficient populations. This is what it looks like when government is small enough to drown in your bathtub, and it is not a pretty picture."

Her colleague Ed Schulz later elaborated on the point, as captured by Real Clear Politics.

"Make no mistake," Schulz said, "Detroit is exactly what the Republicans want. They outsourced manufacturing jobs, attack unions, cut public services, and this is the result. Now they can wipe the slate clean because now they can start privatizing city assets."

Daniel Hannan at the UK's Daily Telegraph begs to differ, arguing that a key problem is overspending on government employee benefits, which destroyed current investment.

"Of Detroit’s $11 billion debt, $9 billion is accounted for by public sector salaries and pensions," Hannan noted. "Under the mountain of accumulated obligations, the money going into, say, the emergency services is not providing services but pensions. Result? It takes the police an hour to respond to a 911 call and two-thirds of ambulances can’t be driven. This is a failure, not of the private sector, but of the state. And, even now, the state is fighting to look after its clients: A court struck down the bankruptcy application on grounds that ‘will lessen the pension benefits of public employees.' "

Meanwhile, the conservative Investors Business Daily editorialized that the collapse of Detroit stems from union demands driving away jobs.

"Detroit, however, is dead, and unions and government killed it. Michigan recently became a right-to-work state, but it was too late to save a city that had become beholden to unions," IBD wrote. "As the United Auto Workers helped destroy the auto industry in and around Detroit, it's no accident that Mercedes-Benz decided to build its flagship SUV in a shiny new facility in Vance, Ala."

"Labor overhead was an albatross around Detroit's neck," IBD added. "Until recently, total pay and benefits for a full-time worker at the Big Three averaged $140,000 a year vs. $80,000 for their foreign competitors. Add an estimated $2,000-plus per car for retiree health care and pensions for the Big Three, and you wonder not why Detroit failed, but why it didn't fail sooner."

Email: eschulzke@desnews.com