The Art of the Turnaround

Cleaning up a financial mess is never fun.  Be it a bankruptcy or restructuring, there’s never enough money to go around, and, as a result, whoever’s in charge is going to end up alienating and angering a lot of people.  This was one of the reasons that the city government of Detroit was never going to be able to make a full pivot from their financial mess.  The elected powers that be simply weren’t willing to make the cuts and sacrifices necessary to right the fiscal ship.

The consent agreement approved by the City Council yesterday in Detroit provides just that, however, an authority immune to the electoral rage of the consequences of making cuts to a city budget that’s long lived well beyond its means.  By any metric, the city does not get the value that it deserves for what it spends.  The city government is a massive behemoth that functions more as a patchwork of personal fiefdoms geared towards providing lifetime employment and benefits to boot for those with the connections to the powers that be.  I would say that this system of spoils probably reached its zenith under Kwame Kilpatrick’s regime, and has somewhat leveled off, but the problem, overall, is not just simply one of balancing the city books.

For about as long as I can remember, whatever success that happens in Detroit does so in spite of the city government, not because of it.  For far, far too long, the city government has essentially functioned as the personal ATM machine of political lackeys instead of acting as a government should: a provider of services, collaborator to business and incubator of innovation.  Yes, this financial stabilization team will bring a modicum of sanity to a city balance sheet that probably has more in common with an insane asylum than a financial statement.

But once the books are corrected, and the city finances are stabilized, Detroit should seize on the opportunity to reform not only the fiscal culture, but the political culture that enabled such a corrupt and dysfunctional system to establish itself and endure for so long.  Having enough money in the bank at the end of the day is a great thing, but if we don’t fundamentally overhaul how the government itself works and inject a massive dose of transparency into it, then we’ll find ourselves having this same discussion again in another decade.


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