We all know that Detroit, Michigan, is a basket case. But it always helps to see things for yourself, as I did last week when attending the graduation of a son of a friend.
The bottom line news right now is that basket-case Detroit is starting back up, because a bunch of millennials are moving in and taking advantage of rock-bottom prices for everything from the storied 30-storey Fisher Building to bombed-out apartment buildings. The fabulous art-deco Fisher Building, in Midtown on Grand Avenue opposite the old General Motors HQ, sold for $12 million in 2015. It was built for $9 million in 1928.
The rule-of-thumb on apartment buildings is that the rehab costs about 3 times the purchase price. That's because every abandoned building has been stripped of all its wiring and plumbing by looters.
Back in 1928 Detroit was the hottest thing in the world, and when the Fisher brothers -- of Fisher Body fame -- sold their remaining 40 percent of Fisher Body to General Motors for $200+ million, they gave Albert Kahn a check for $30 million to build them a building that couldn't be beat. In the event they only needed $9 million because they scaled back the building from three towers to one. So they go a refund.
But then came the Great Depression, and Detroit plunged off a cliff. Pretty soon we got the Battle of the Overpass in 1937 with the workers battling for their labor union.
Funny how that works. You'd think the workers would be battling the government that screwed up the response to the crash of 1929, but no. They loved the FDR that kept the economy down and dirty for his first term and then gave them a recession in 1937-38. But they hated the corporations that paid their wages. How does that work anyway.
Of course it wasn't the union that got Detroit back on top again. It was World War II and the arsenal of democracy. They tell us that Detroit build 153 cars during World War II, but 44 percent of the munitions, the planes, Jeeps, and tanks.
Still, the post-war period was another glorious era for Detroit, what with the UAW inventing the weekend and pushing wages, benefits, and pensions way beyond what the market would bear.
So when blacks rioted in the Sixties and the Japanese brought in the Toyota Corona, and the union said No Givebacks, the stars all lined up to flush Detroit into the toilet.
The result is everywhere to see, withvacant lots everywhere growing grass, and houses with half-collapsed front porches, dilapidated houses, burned bouses, and vacant apartment buildings everywhere.
It's a pity that the whole city didn't work take Motown Records as a model. That family firm started with an $800 family loan to Berry Gordy Jr, with a studio in the basement of the family home on West Grand Blvd. But in 1972 Motown bailed out of the Motor City and headed for LA.
I guess it is lucky that Detroit is run by a black Democratic city government. Otherwise the whole disaster of the last 50 years would be the fault of Republicans and white racist patriarchs.
But I'd say that Detroit ought to be made into a National Park of Stupid Politics. Because for me the travails of Detroit are as obvious as can be. Political power stinks if you are serious about wiving and thriving is a growing economy.
No, it is not a good idea to mew up corporations with labor unions, because it milks the corporation of flexibility and capital, both of which will likely be needed when the market turns, as it always does.
No it is not a good idea to burn your city down. Capitalists are funny that way. They really shy away from cities that have lots of angry young men with a taste for burn, baby, burn.
And it is not a good idea to turn your city into a loot and plunder operation. Back in the day loot and plunder was cool: you attack your neighboring tribe, kill the men, rape the women, and take all the food. But not any more. Now you need to tend your city like a garden, and make it into a place where corporations want to go and investors want to invest.
But there is good news about Detroit. It is simply this: the bargain hunters and bottom feeders are moving in. Partly these are folks willing to make a bet, figuring that they are buying low, getting the marquee Fisher Building for cents on the dollar, and might well get to sell high. Partly these are young people that can't afford to move to rich-bitch places like Silicon Valley. So they move to Detroit and hope that their sweat equity will convert into a chance to wive and thrive. See, if you can buy a bombed-out apartment building cheap, stripped of everything salable, maybe you can camp out in it while you rehab it, putting in new plumbing and wiring, apartment by apartment, and renting out each apartment to students as soon as you make it habitable.
Here's another interesting factoid. If you visit The Henry Ford museum in Dearborn you will get to see all the marquee cars of the last century. Each car has its price and also the number of months that the average worker would have to work to pay that price at that time. Back when the Model T came out it was over a year for the average worker to afford one. But by the 1950s the price of the average car was priced down to 5-7 months of the average worker's wage, and that is still true today. I guess those automakers know where to find the sweet spot is in the auto market. Who knew?
Well, we are flying back to Seattle today, and I doubt if I will ever be back to Detroit. But I wish the young folk and the bottom feeders well. They are the true patriots that make the world work. Because they don't just sit there; they do something.
The bottom line news right now is that basket-case Detroit is starting back up, because a bunch of millennials are moving in and taking advantage of rock-bottom prices for everything from the storied 30-storey Fisher Building to bombed-out apartment buildings. The fabulous art-deco Fisher Building, in Midtown on Grand Avenue opposite the old General Motors HQ, sold for $12 million in 2015. It was built for $9 million in 1928.
The rule-of-thumb on apartment buildings is that the rehab costs about 3 times the purchase price. That's because every abandoned building has been stripped of all its wiring and plumbing by looters.
Back in 1928 Detroit was the hottest thing in the world, and when the Fisher brothers -- of Fisher Body fame -- sold their remaining 40 percent of Fisher Body to General Motors for $200+ million, they gave Albert Kahn a check for $30 million to build them a building that couldn't be beat. In the event they only needed $9 million because they scaled back the building from three towers to one. So they go a refund.
But then came the Great Depression, and Detroit plunged off a cliff. Pretty soon we got the Battle of the Overpass in 1937 with the workers battling for their labor union.
Funny how that works. You'd think the workers would be battling the government that screwed up the response to the crash of 1929, but no. They loved the FDR that kept the economy down and dirty for his first term and then gave them a recession in 1937-38. But they hated the corporations that paid their wages. How does that work anyway.
Of course it wasn't the union that got Detroit back on top again. It was World War II and the arsenal of democracy. They tell us that Detroit build 153 cars during World War II, but 44 percent of the munitions, the planes, Jeeps, and tanks.
Still, the post-war period was another glorious era for Detroit, what with the UAW inventing the weekend and pushing wages, benefits, and pensions way beyond what the market would bear.
So when blacks rioted in the Sixties and the Japanese brought in the Toyota Corona, and the union said No Givebacks, the stars all lined up to flush Detroit into the toilet.
The result is everywhere to see, withvacant lots everywhere growing grass, and houses with half-collapsed front porches, dilapidated houses, burned bouses, and vacant apartment buildings everywhere.
It's a pity that the whole city didn't work take Motown Records as a model. That family firm started with an $800 family loan to Berry Gordy Jr, with a studio in the basement of the family home on West Grand Blvd. But in 1972 Motown bailed out of the Motor City and headed for LA.
I guess it is lucky that Detroit is run by a black Democratic city government. Otherwise the whole disaster of the last 50 years would be the fault of Republicans and white racist patriarchs.
But I'd say that Detroit ought to be made into a National Park of Stupid Politics. Because for me the travails of Detroit are as obvious as can be. Political power stinks if you are serious about wiving and thriving is a growing economy.
No, it is not a good idea to mew up corporations with labor unions, because it milks the corporation of flexibility and capital, both of which will likely be needed when the market turns, as it always does.
No it is not a good idea to burn your city down. Capitalists are funny that way. They really shy away from cities that have lots of angry young men with a taste for burn, baby, burn.
And it is not a good idea to turn your city into a loot and plunder operation. Back in the day loot and plunder was cool: you attack your neighboring tribe, kill the men, rape the women, and take all the food. But not any more. Now you need to tend your city like a garden, and make it into a place where corporations want to go and investors want to invest.
But there is good news about Detroit. It is simply this: the bargain hunters and bottom feeders are moving in. Partly these are folks willing to make a bet, figuring that they are buying low, getting the marquee Fisher Building for cents on the dollar, and might well get to sell high. Partly these are young people that can't afford to move to rich-bitch places like Silicon Valley. So they move to Detroit and hope that their sweat equity will convert into a chance to wive and thrive. See, if you can buy a bombed-out apartment building cheap, stripped of everything salable, maybe you can camp out in it while you rehab it, putting in new plumbing and wiring, apartment by apartment, and renting out each apartment to students as soon as you make it habitable.
Here's another interesting factoid. If you visit The Henry Ford museum in Dearborn you will get to see all the marquee cars of the last century. Each car has its price and also the number of months that the average worker would have to work to pay that price at that time. Back when the Model T came out it was over a year for the average worker to afford one. But by the 1950s the price of the average car was priced down to 5-7 months of the average worker's wage, and that is still true today. I guess those automakers know where to find the sweet spot is in the auto market. Who knew?
Well, we are flying back to Seattle today, and I doubt if I will ever be back to Detroit. But I wish the young folk and the bottom feeders well. They are the true patriots that make the world work. Because they don't just sit there; they do something.