Saturday, March 08, 2008

Poverty and Economics of Detroit by Akindele Akinyemi

Detroit's plight, especially its failure to curb endemic poverty and disease inflicting its long-suffering peoples, is widely seen as one of the state's challenges of the 21st century. In an age when all other regions of the country are making progress in building their capacity to meet the basic material needs of their people, Detroit stands out as the exception where stagnation or even regression is the order of the day.

The city's poverty has become a national concern, the major focus of attention of good-hearted men and women who want heal to Detroit's problems and make the suffering go away. Detroit has a special place in the agenda of anti-poverty non-governmental organizations and even some outside community organizations have dedicated special taskforce to tackle the Detroit problem.

Should Detroit's poor inhabitants be thankful for the global concern? Will their poverty be eradicated by making their plight a special problem for the international community to solve - alongside terrorism and environmental degradation?

It would be an easy solution if the outpouring of sympathy and granting of more aid and debt forgiveness could save Detroit from a bleak future of worsening poverty and political disorder. Unfortunately, it is not be that easy. Demonstrations of kindness and increases of revenue sharing will not in and of themselves create the domestic conditions that will give Detroiters the capacity to build and reproduce the material environment of modern existence.

Many of Detroit's friends, inside and outside the city, are not really helping its people and leaders become aware of what it takes for underdeveloped communities to become prosperous in this modern age. In treating Detroiters as hapless victims in an unfair world economic system, some of the city's liberal champions shift the responsibility for its development to external forces. Few advocates seem prepared to say the obvious truth - that is, whilst poverty in Detroit, as elsewhere in the world, is an historical condition, the lack of progress in reducing poverty since independence is largely due to internal factors, especially the inability of corruption ruling elites to foster an environment conducive to wealth creation.

Mis-government, civil strife, debt, corruption, City Council and the Mayor's office are not things that others have done to Detroit but things that Detroiters have done to themselves. This is not to deny that the world economic system favors others and development is a mountain climb - it clearly is, but humans make history in circumstances that is not of their choosing. Whilst trying to change the rules of the game, disadvantaged nations must strive to do their its best under existing difficult circumstances.

The deaths and misery suffered by hundreds of Detroiters have not been caused by unmanageable city debts but by bad governance and the struggles between city government that are controlled by parasite elites for ownership of limited city resources. Also, it is ridiculous to blame Detroit's debt crisis on the Republican Party under John Engler on the basis that the former Governor cut back on services that we no longer needed.

In terms of economic growth and responsibility, Detroit should assume responsibility for their actions. We should not expect to be exempted from the basic rules governing economic transactions. The terms of lending money or finances to individuals, businesses or governments, are justifiably tough to protect funds lent. If borrowers were not penalized for default they would not repay their debts and the whole banking system would collapse.

It may sound radical blaming Detroit's poverty on the Republican Party or other factors that do not look like us, but we should be careful not to follow policies that amount to shooting ourselves in the foot - or more appropriating, shooting poor Detroiters whose poverty outrages us. We should not support the demand for more government welfare programs that pushes our state's economies to the limit.

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