Thursday, March 31, 2011

Detroit Implodes

One of the more striking findings in William Easterly's writings about Third World Aid is how little is learned, just the continual call to double down: it was just not enough or to the wrong people. Similarly, when Detroit recently announced they lost 25% of their populace over the past decade, the solutions sounded the same: double down. A friend of mine drove me by his childhood home in Flint Michigan and every corner strip mall highlighted two products: lottery tickets and alcohol. His old home now had security bars around its first floor windows.

There are two obvious features about American inner cities and neither are talked about very much (see the NYT discussion, no mention). First, most have long and deep Democratic political rule. That is, not only the mayor, but the police chief, school superindendent, and every other head bureaucrat is a Democrat. Five of the 10 cities with the highest poverty rates (Detroit, Buffalo, St. Louis, Milwaukee, Philadelphia and Newark) have had a Democratic stranglehold since at least 1961, and most dangerous big US cities are strongly Democratic. Why isn't this relevant?

The other feature is these cities are predominantly black or Hispanic. Few can even mention this without being called a racist, and most important writers have legitimate reason to avoid even being accused of racism, which can cost you your career (meanwhile, Spencer Ackerman, who was caught red handed advocating the racist libel as a progressive strategy, has been unaffected, highlighting its potency). So, as a non-professional, I'll ask: Why are these minorities performing so poorly when concentrated?

Honest Italian-Americans ended up greatly benefiting from the collapse of the briefly-lived Italian American Civil Rights League in 1971. These were the people who would say with a straight face they didn't know what the word 'mafia' meant. With the danger of being accused of racism removed, the federal government during the Reagan Administration hammered the Mafia and left it a shell of what it once was. Since the Mafia preyed most of all on their co-ethnics, that was a huge win for Italian-Americans. This issue is not whether or not one group is more prone to nefariousness than any other. The issue is that if any group is exempted from criticism, the temptation for members of the group to do bad things increases. We all have urges that are worthy of criticism, but if we can arrange matters so nobody is allowed to criticize us, then the temptation to give in to those urges can be overpowering.

American minorities don't need money, pity, or special rights, they need temperance, diligence, thrift and other bourgeois virtues, exactly what their community leaders are telling them are orthogonal to their position. The last thing you should tell someone in really bad straights is that his problem is the indifference, if not cruelty, of others, because it doesn't help him.

Democrats and black leaders bear most of the blame for the Detroit, and this should be a teaching moment. Yet, I see no such re-evaluation, and so I have little hope for American Cities, which I assume in a generation will be like the favelas of Brazil, places the police won't even go.


Jakob Nebeker said...

Agreed on the democratic party. Not agreed on the race comments. Look at ATL, many wealthy suburbs with high concentrations black professionals.

Dave said...

You've omitted a pretty big variable here, Eric: the rise and fall of the manufacturing sector in most of those cities. Most of the ancestors of the current residents of those cities migrated there for good-paying factory jobs. Bourgeois virtues were more prevalent in those communities then as well, which makes sense: people are more likely to practice temperance, diligence, etc. when they have something to lose (like a good-paying job).

People also respond to incentives, and here there is room for legitimate criticism of Democratic policies (for example, a study reported in the NY Times Magazine a few years ago determined the reason why there was so little thrift in these communities: fears that accumulating a little money would make one ineligible for government transfer payments). But mainstream Republicans and Democrats share blame for the bigger causes of urban blight, which are our trade and immigration policies.

It seems naive to expect that the average resident of Detroit or Camden will make it to the middle class today simply by practicing temperance, diligence, and thrift. Diligence at what? Most people don't have the aptitude to create their own livelihoods out of nothing, and even good entrepreneurs usually need some sort of economic core to build on. The factories in Detroit, Camden, etc. were that economic core: factory workers with discretionary cash became customers for entrepreneurs who started restaurants, record labels, barber shops, stores, etc. to serve them. Who would be your clientele if you built a business in Camden today?

Similarly, you shouldn't be surprised that those with virtually no private sector prospects would vote for the party that promises to give them more government money: that's really just common sense on their part, when you think about it.

Think back to the Reagan Democrats of the '80s. Why did they vote Republican? Because they had good-paying manufacturing jobs, so their economic interests were taken care of by the private sector, and they could afford to vote their cultural affinities for Reagan.

Anonymous said...

"It seems naive to expect that the average resident of Detroit or Camden will make it to the middle class today simply by practicing temperance, diligence, and thrift. Diligence at what?"

Well they could start by

1) Not doing drugs
2) Not having a child out of wedlock
3) Taking a job, "Any job" and not relying on govt handouts.
4) Finishing highschool.
5) Staying married
6) Not engaging in illegal activities
7) Not having children till you can afford them
8) Showing up to work on time with a good attitude
9) Living frugally so you can save a nest egg (You can live very cheaply if you really try)
10) When you get some breathing room invest in a trade (Auto mechanic, Plumber, Welder, Truck Driver etc)

None of those activities will make you rich and probably will not even make you middle class. But they will almost guarantee that you do not live in poverty.

M.R. said...

Culture plays a big role in outcomes. Attitudes towards free markets, entrepreneurship, unions etc, vary widely among Latin-American countries. I wonder how the picture would look once you disaggregate the data by country of origin. Similarly, I think which “American culture” immigrants are exposed to matters. There is some evidence that Hispanics attending schools with a lower concentration of African Americans have better outcomes than Hispanics enrolled in schools with a high number of African Americans. That is, Hispanics in schools with a mostly Hispanic population do much better than Hispanics in schools with a mostly African American population.
Finally, assessing the mobility of poor Hispanics as a group is difficult since their ranks are constantly being replenished by new immigrants with very little accumulated human capital. Moreover, you could very well argue that Hispanics already enjoy very high social mobility: the average hourly wage and wealth of Latino immigrants is much higher than that of those who did not emigrate.

Anonymous said...

In econometrics terms, you have a number of omitted variables and the analyses suffer from endogeneity problem.

Clearly there are other forces aside from being exempted from criticism and democratic leadership that is causing blacks to underperform.

Go back 40-50 years, when blacks were not exempt from criticism (to put it mildly) or suffered from democratic leadership, They must have been flourishing, right?

I agree with Dave, the death of certain cities have a lot to do with technological and global trends that are beyond any government's control.


stephen said...

I agree with Dave, the death of certain cities have a lot to do with technological and global trends that are beyond any government's control.

True, but the strong correlation between city decline and demographics doesn't go away when "controlling for" these factors.

I would bet (too lazy to look up data) that 40 to 50 years ago the black marriage rate, and employment rate were higher than they are now. I would also bet the crime rate was lower. Whether that measn "better off" I don't know.

Steven said...

I live in the 'inner city' of Seattle. When it turns into a favela, it will be a favela with lots of expensive condo buildings and trendy coffee shops.

Eric Falkenstein said...

You could raise their per capita GDP 100% by following these simple rules: 1) don't have children out of wedlock 2) finish high school and 3) show up at work and be alert and agreeable. You can't blame others when these simple life skills explain so much of their poverty. They are choices.

Patrick R. Sullivan said...

Go back 40-50 years, when blacks were not exempt from criticism (to put it mildly) or suffered from democratic leadership, They must have been flourishing, right?

As a matter of fact, yes, they were better off then. Their neighborhoods and schools were comparatively safe, for one thing. I've heard Diahann Carroll lament the decline of her old Harlem neighborhood. Tom Sowell too.

Blacks were making steady progress from the end of WWII on. Until the unintended consequences of the Civil Rights movement killed it.

And, Steven, it was only a few years ago that the Seattle police stood back and watched a young man beaten to death during Mardi Gras. They'd been ordered to ignore lawlessness by their political leaders. Guess which party.

Steven said...

Patrick, I won't defend Seattle police, but that one tragedy was not representative of any broader trend. My point was that Eric generalized the decay of a few rust belt cities to all American cities. In doing so he missed the renaissance that is happening in many inner cities (SEA, PDX, SFO, NYC are the ones I've had the pleasure of visiting). Density has become much more valued in recent years, as evident by skyrocketing land values in these places. The trend is likely to continue if energy prices keep rising. I don’t foresee gangs in Bushwick shooting down police helicopters anytime soon, the property taxes will be too high.

I didn't address the other parts of the post because I think our worldviews are too disparate for a constructive discussion.

Anonymous said...

You should double check your spelling of "imploads." If you're going to write something like this, you need all the credibility in the world. Silly mistakes like that one don't help.

Eric Falkenstein said...

I'm not a great speller, but try my best...

Anonymous said...

"You could raise their per capita GDP 100% by following these simple rules: 1) don't have children out of wedlock 2) finish high school and 3) show up at work and be alert and agreeable. You can't blame others when these simple life skills explain so much of their poverty. They are choices"

Eric, of course they are choices. We are trying to understand the underlying forces that lead people to make those choices. Is it genetics? culture? history? exemption from criticism and the rise in democratic and black leadership? Because of the inherent endogeneity problem, for what you are saying to be true, the correlation you cite has to remain robust to cross-sectional and time-series changes. For instance, if exemption from criticism is the key determinant, if we look at different income groups, should we expect to see differences between whites and blacks in high school drop out rates to vary with income group? Suppose the difference narrows for higher incomes, wouldn't that imply that there is something else going on there. Or if as you argue both exmeption from criticism and democratic/black leadership has increased over time, wouldn't that imply that difference in high school drop out rates between whites and blacks increase over time as well? Or is there something else going on?


Eric Falkenstein said...

I don't know what looking at B-W differences by, say, higher income would tell you. Obviously these groups are less different than across the entire population in many ways.

I think there's a greater feeling in minority communities that their situation is outside their control, the fault is from 'society', and they deserve the meritless patronage jobs that predominate these areas. Lip service is played to the simple skills needed to be a productive person. History has baggage but even if life is completely deterministic, it seems you can determine a better outcome by rejecting that idea.

A lot of life is unfair, especially at the individual level, but these large concentrations of deprivation seem primarily self-inflicted.

One thing you had 40 years ago was optimism that the black-white distinction would be like Methodist-Lutheran today, and instead we see greater separation and distrust. It's like Palestinians blaming everything on Israel, which doesn't help them.

Dave said...


"You could raise their per capita GDP 100% by following these simple rules: 1) don't have children out of wedlock 2) finish high school and 3) show up at work and be alert and agreeable."

Sure, but you and the anon above exhibit an "assume a can opener" approach when it comes to jobs. I don't think either of you realize how scarce any jobs are in those cities. You also don't seem to appreciate the extent to which unskilled immigrants have displaced native unskilled workers from first rung jobs.


"I agree with Dave, the death of certain cities have a lot to do with technological and global trends that are beyond any government's control."

I hate to disagree with someone who's agreeing with me, but our government doesn't have to be helpless when it comes to responding to global trends. It choose to, due to a continued embrace of flawed economic policies.

Michael Meyers said...


Right on!!! Everyone knows that the inner city minority culture is terrible.. yet no one talks about it. And when a few do they are ostracized [e.g. Bill Cosby].


Anonymous said...

This is the product of the capitalist system. These people are now unnecessary. They are surplus people. No different than an obsolete machine.

"Black leaders" have nothing to do with it. That's right-wing cant.

Unknown said...

You usually are very rigorous in your analysis. But this is utter bullshit. You fail to understand the role that the exodus of manufacturing base, of white flight, and overall demographic growth trends out of the Midwest and towards the sunbelt. These cities you mentioned granted failed to diversify. But you need not look far to find a perfect example a minority majority city, ingrained democratic machine - Chicago. A city that by almost any measure has been very successful.

najdorf said...

Treating finishing high school, not having kids while unmarried, avoiding drug use, and getting a decent job as relatively simple choices that can be made by a mere expression of will ignores the effect of someone's upbringing on their ability to understand cause and effect to make healthy choices. A lot of the individuals who look so shameful as adults from an outsider's perspective literally had their brains broken as children and young adults, whether due to parental abuse, neglect, early exposure to drugs/alcohol/unhealthy sexual relationships before their decision-making faculties were fully formed, mental illness, learning disabilities, violence, etc. When a local culture has a large mass of such individuals producing more children due to impaired decision-making, the problem isn't as simple as color or voting Democratic. People need help - not money, but help: focused training from successful peers in how to be a good human in a complex society. It's not instinctual, especially in communities that are broken from generations of bad history and largely ignored/demonized by outsiders. But yeah, maybe instead we could just dream that one day the poor will spontaneously acquire upper middle class entrepreurial values and open their own businesses. It certainly protects us from having to take any time away from maximizing our personal investing returns in order to take responsibility for helping out our brothers and sisters.

Anonymous said...

As the old saying goes, "help comes to those who help themselves" But first you gotta want to.

Anonymous said...

Being poor is no excuse for not being clean, civil and polite, and law-abiding. From this comes pride and a sence of worth. From this comes progress and integration. Has nothing to do with Dems or Reps. You got to want to change your culture and self-image - no one can do it for you. Self respect and pride of community are not things given but are things that can be earned.

Anonymous said...

Must be a lot of black leaders and Democrats in northern England.

If only Detroit were run by Republicans, it wouldn't have so many problems. It would be more like Mississippi, the finest state in the nation!

Anonymous said...

Is Africa also controlled by the Democrats?

Eben Lazarus said...


I like your blog because you're generally pretty unswayed by the conventional wisdom BS surrounding many issues. But posts like this are slowly degrading your credibility and turning me away from the blog, especially because you're so thoroughly trained in rigorous analysis.

First, for every example of "Democratic-controlled" crumbling inner city, I'm sure I could find an anecdote about a crumbling Southern town headed by Republicans since time immemorial. Do a rigorous analysis (or find one on the internet!) on the subject, and then I'll be much more willing to read your blanket assertions about it.

Second, local-level politics rarely have anything to do with party affiliation. I'm a Democrat, but would have no problem voting for a "Republican" for city council because the issues that distinguish the two parties on the national level make no sense when used to distinguish them on a local level (which is why I put Republican in quotes).

I'm just continually surprised when you make ideological assertions like the one in this post, or like "Markets Learn, Governments Don't" and then use no data or even rigorous theoretical analysis to back them up. In one particularly egregious case, you resorted to using some anecdote about a failing organization started by Madonna -- Madonna!! -- as an example for why government is inherently stupid. I'm still sorting through that connection.


Unknown said...

Cities are headed by Democrats.Wow!
Maybe the reason is the Republicans went to the suburbs!
Deep thinker!

Anonymous said...

Interesting how you folks perfectly prove his point. The truth is painful sometimes. Amazing how some will cling to ideological falsehoods all the way to their bitter demise. Are there other factors which contribute to the decay of these cities? Sure. But the overriding constants are the factors he bravely mentions. Keep it up, Eric. You will take many bullets, but we must save our country for our children, and the truth is the only way to do it.

Anonymous said...

And the first law of nature is? ...... And why are we humans the only species that transgresses by trying to beat or repeal it. will not go away, it is just enforced with variying levels of harshness, depending on the times.

Anonymous said...

Imagine an investment portfolio where you sold all your winners to double down on your losers over and over again. What would the results be?

Imagine betting on the horses that came in last in every race. What would the results be?

Imagine taxing the brightest and most productive people so much they can't afford to have kids and then paying that money to the dumbest and most destructive people to have more kids. What would the results be?

Well, I guess you don't have to imagine the last one.

Anonymous said...

What is needed is a simple system of eugenic incentives for the African-American community.

-Reverse welfare: 15k bonus + small annuity for any ghetto dweller who receives for permanent birth control

-Early release for felons in return for sterilization.

-Tax credits and other incentives for the top 20% of blacks in two parent homes to have more children.

In a few generations the problem would be gone.

Ignoring the real issue (population quality) will not make it go away.