Thanks to a billionaire, Detroit is new and improved – but for whom?

[Canadian Visitor]

People from the outside love to take a local Detroit story and spin it in all sorts of ways to fit their political narrative. Don't fall for that, especially if you have a 3-digit IQ [[100 is average btw ).

I don't know if this was aimed at me, but I would certainly take issue if it was, as I did no spinning here.

I posted an article to encourage conversation/discussion/debate.

I don't think the article was anti-Gilbert polemic, I think it raised important questions of public policy.

I certainly did not vilify Mr. Gilbert, his investments or Detroit.

What I have done is take issue with responses that are virulent, bashing, off-topic, reactionary and stupid.

Yours was not one; but there have been a few.

The whole article is based on the assumption that Detroit had a secret pot of $700M in cash.

I'm not at all convinced that was the premise of the article.

I would read it as follows; if one had chosen to expend said funds on infrastructure and those things that ameliorate quality of life and make an area desirable to live in; you might have attracted the same level of investment without using the tax credit.

The argument goes, that in such a case you get the investment, the on-going tax revenue; AND the infrastructure.

No there was not a giant pot of cash, but in trading away future revenues, you starve the government of many of the resulting benefits of the investment, for a period of time.

Thus delaying infrastructure investments and the like.

The argument that there was no alternative source of funds is not entirely accurate as a variety of options would exist to lever that money, through taxes, tolls, fees, asset sales, and deficit-financing; particularly from higher levels of government.

All of that is not to argue that the investments here were evil or that Gilbert was.

I see no reason for either/or of such extreme proportions.

It is entirely possible to accept that Gilbert made good investments, which have helped Detroit; while also accepting that he might have made some or all of those anyway, in the fullness of time, were a different strategy employed vis a vis public funds.

Its less a discussion of what happened, in as much as that's done; vs how to formulate public policy going forward.

Income inequality, health care, affordable housing are all huge issues that merit further and separate discussions.

Sure they do; but they are also impacted, for better and/or for worse, by how governments expend money on other things; and tax-expenditures which forego future revenues are one such thing.

I'm not judging the choice adversely here, but arguing for thoughtful analysis and good public policy going forward.

If, for instance, one is a strong believer in this tool, why not use it to help Detroit's poorest citizens directly?

Why not let them deduct from their property tax any money spent on curb appeal, state-of-good-repair of derelict/at-risk properties, or investments that reduce crime/provide security [[window locks, cameras, lights on motion-detectors)?

Why not let small business make similar write-offs?

One consideration of good public policy is whether a large number of citizens can benefit from a program vs only a tiny minority.

Another is to consider when a benefit does go only to a few or the one, whether there is a compelling reason for doing so.

Perhaps that was the case here. But the question merits asking.

[Canadian Visitor]

I have big doubts about public subsidies for development. But that doesn't bother me anywhere near as much as the ignorance of how the world really works.

Fair

Gilbert seems to have taken the public money we have offered for development. Well, gee. If you create a public program to give money subject to certain conditions, don't be shocked when it gets taken.

That too is fair, and I hold nothing against Mr. Gilbert for accessing the programs on offer.

Its a separate question as to whether they should have been; and if they should have, were the details correct.

I'll be Gilbert would have done much of the same things he has done if we didn't have programs to toss money onto the fire of our ideas of how we want our government to try to manipulate results. Of course we'll never know, because we can't stop ourselves from creating more and more 'programs' [[or like E. Warren - 'plans') to 'fix' something.

Agreed here too. I would be supportive of some interventions you would not; but I'm not supportive of all interventions; and think every one should be subject to thoughtful scrutiny.

And I can't understand how destroying successfully businesses helps reduce poverty. Looks to me like the success Detroit is having is mostly because of business success -- not so much because we give away tax dollars like drunken sailors on port leave.

Who was advocating destroying a business?

The reasons for Detroit's renewal, downtown, and many and varied, but Mr. Gilbert is among those who deserve some credit.

But I would not suggest that business alone is responsible; using that argument would lead to business having been primarily responsible for Detroit's challenges.

Certainly, business [[different ones) did contribute to the challenges Detroit has suffered. But it would be utterly silly to suggest they were the primary or exclusive causes.

Likewise, credit can be shared for Detroit's renewal among many actors.

One final rant.... massive income or wealth inequality isn't a great thing -- but its not really that important. What's important is getting food, shelter, and safety to our most vulnerable citizens. It doesn't matter if Gilbert is rich. It matters if Joe Citizen can't get healthcare, or find a decent home in a safe neighborhood. Tearing down the rich won't help Joe -- it'll only hurt him. The singular focus on inequality is a real big mistake.

In economics, one is taught to understand that money is a representation of what society collectively is capable of producing/providing; and then access to that is divied up based on who gets the most money.

It is true society can and indeed should become more productive overtime, and has; and thusly the pie should grow.

But that doesn't necessarily mean everyone gets a larger piece.

How the pie is divided, so to speak, does matter.

Your Joe Citizen who works 40 hours per week without health insurance will only get it if:

A) he gets more money from his employer so he can buy it himself.
B) gets coverage from his employer [[money equivalent and paid by the employer just the same)
C) gets coverage through the government, which is paid for through taxes; evidently non his, as if Joe had enough spare cash to buy insurance he would have.

Any which way, money will go from someone[[s) who has it, to Joe who does not.

You can't divorce absolute wealth from the issue of relative inequality, as one is fundamentally the result of the other.

[CR75]

I would read it as follows; if one had chosen to expend said funds on infrastructure and those things that ameliorate quality of life and make an area desirable to live in; you might have attracted the same level of investment without using the tax credit.

Again, the 'said funds' you are referring to did not, and still do not exist. You cannot offer tax abatement incentives to public projects [[such as schools, parks, public trans., etc.) that do not generate taxes in the first place. I hope we can agree on this very basic, but important fact.

Later on in your post you do acknowledge that there was no pot of money to give away, and you suggest that the city should/could have raised capital to pursue such projects to 'ameliorate the quality of life', by increasing taxes and/or issuing debt. In fact, the city DOES raise a lot of capital in the manner you suggest, for the purposes you suggest. We have high property taxes compared to the rest of Michigan and a fairly steep city income tax. We have issued a lot of debt in the past, probably too much, and still do. Just recently City Council denied Duggan the issuance of 250M worth of bonds to remediate blight, so yeah, these are ongoing debates, each with pros and cons.

Your other statements regarding 'small businesses' and 'Detroit's poorest citizens', the 'few' vs. 'the one', are a bit too vague to discuss, I am sorry. Please be specific. For example, the City of Detroit, and the State, offer lots of tax incentives to small businesses and private citizens [[e.g. NEZ, as stated in my previous post, just to name one of many programs), all adding up over the years to probably more than it has ever been given to DG, though it would be interesting to crunch the numbers.

Overall, it would be more helpful to the conversation to stick to the facts and provide concrete examples, rather than offering platitudes. If you don't know our city very well [[because, well, you are a visitor...) that's fine, but all the more reason to be humble and respectful when making statements regarding local politics.