The Craig Fahle Show

Intangible Political Benefits of Bankruptcy

Friday, May 9, 2014

Photo courtesy of detroitnews.com

Columnist and Associate Business Editor at The Detroit News, Daniel Howes joins Craig to discuss how Chapter 9 is reshaping the political dynamics in and around the city of Detroit. While the ongoing bankruptcy has been a complex and difficult experience for Detroit pensioners and many institutions and organizations in the city, Howes points out that there may be some long term benefits for the larger political landscape in Michigan.

Volatile confrontation and an "out of conflict...accord" mentality has played a large role in the post- war culture of southeast Michigan, but how we move past that is more important than ever.

Howes points out that "there was a lot of political posturing at the Mackinac Policy Conference" as recently as last year and now, a lot of entrenched interests have had to change their tune or put their money where their mouth is in Detroit. As Howes explains in his recent Detroit News article, the bankruptcy has the potential to break down a lot of the barriers that exist between Detroit and some state officials. "The city is a legal creation of the state, I think a lot of people look at this as a very reasonable approach by the state now," Howes says, in reference to the proposed package dropped yesterday in Lansing.

The broader issue in the bankruptcy is that the gold sets the rules, and Howes points out that the new money is coming in from the state. While things are progressing and changing everyday, it is becoming increasingly apparent that As a result of the bankruptcy, Howes says "more people are going to have a stake in what happens in Detroit than in previous generations and it will also enable the political leaders in the city to focus their efforts more narrowly."

But if the state does have oversight, and Detroit doesn't come back, what does that mean for the people in Detroit and systemic issues in this city?

--Annamarie Sysling