“When the head of the world’s largest bank called the local
billionaire bent on Detroit’s revival, good things happened,” reads
the lede to a
story in the Detroit Free Press by Business Writer
John Gallagher. The “billionaire bent on Detroit’s revival” is Dan
Gilbert, the co-founder of Quicken Loans, and the “head of the
world’s largest bank” is Jamie Dimon, the CEO of J.P. Morgan Chase,
who just announced that his bank is making a $100 million
“investment” in the Motor City.
“Obviously, Detroit was having issues,” Dimon told Gallagher in
an “exclusive” interview. “I got together some of our senior people
and said, ‘What can we do that’s really neat, that could be really
creative?'”
If only super rich guys would pick up the damn phone more often
to talk about their neat ideas, maybe Detroit wouldn’t be an urban
disaster area currently embroiled in the largest municipal
bankruptcy in American history.
Gallagher explains to his readers that J.P. Morgan decided to
spend $100 million in Detroit as a public relations move and to
“revitalize one of its major markets.” He doesn’t mention that in
forking over all that money the bank is actually fulfilling its
obligations under its $13
billion settlement with the U.S. Department of Justice related
to its role in securitizing toxic mortgages. As part of the deal,
some of the money goes towards combating urban blight, and other
distressed cities have also been
vying for a piece.
With the announcement of its gift, the bank
released a
pamphlet touting its “commitment” to the area that’s filled
with some of the worst clichés of urban redevelopment. J.P. Morgan
will be “strengthening workforce readiness,” “tackling blight,” and
“rolling up [its] sleeves.” What could go wrong?
The J.P. Morgan money will undoubtedly do some good, though I’m
particularly skeptical of the $12.5 million allocated to job
training programs, based on the
track record of such initiatives. And the $5.5 million that the
bank will contribute to the light rail project on Woodward Avenue
would be better spent on
improving Detroit’s unreliable albeit less glamorous public bus
system, which is what residents actually use to get around.
Speaking of “seeding future economic growth” on Woodward Avenue,
Nick
Gillespie and I looked at the rationale behind that light rail
boondogle back in 2010. In his recent Reason TV
series, “Anarchy
in Detroit” (which he elaborated on with an
article in our print mag), Zach Weissmueller looked at how
bottom up initiatives, like mower gangs and experiments in
alternative living, are actually Detroit’s best hope at a
comeback.
Click below to watch the first video in the series.
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