I am still obsessing about Detroit's abandonment and regression to prairie. It is a large American city completely equipped with all the infrastructure, built up in three centuries, that has been given up by its owners and inhabitants. How many billions are being lost by destroying Detroit and returning it to "Nature"?
I know that in Israel, each new dwelling is charged about 50,000 dollars for municipal development. It includes pavement, and water and sewage connections. But this is not the real cost - the Municipalities calculate their "agrat pituach" (development tax) according to what the market will bear. Moreover, most of the infrastructure is built by the central government, such as the water supply system, water purification plants, the wastewater treatment plants, the connecting roads. Telephone, electricity, gas, etc. are built by private companies. The planning of the infrastructure costs about 8% of the total costs. All in all, I think you could not have the infrastructure of city like Detroit for less than 200,000 dollars per dwelling.
This sum does not include the cost of urban infrastructure such as schools, libraries, parks, cult buildings, theaters, markets, and other public buildings, which in Israel is about 15% of the surface and the total cost. Then it is the cost of the dwellings themselves, which in urban areas (at least in Israel) is equally divided between the cost of the land, and the cost of the building. I presume that the land's worth - of undeveloped prairieland - is less than 1000 dollars per hectare, although it is obvious that a block of real estate in Detroit Downtown in its peak must have been worth many millions.
Presuming that Detroit has/had 400,000 dwellings, and the sunken cost of each one is 500,000 dollars, the prairiezation of Detroit destroys 200 Billion dollars. It is not a terrible loss for a rich country like the USA, which reminds me Edward Teller's dictum that nuclear wars are thinkable and fightible, since the worth of the infrastructure is equivalent of only ten years GNP, so in less than a generation, the country could rebuild itself. Germany post WWII is a good example, by 1955 it was prospering. Of course Germany was not totally destroyed, far from it.
My calculation takes into account the sunk cost of Detroit, and not the commercial value of a working, inhabited, prosperous city. A large office building in Manhattan can easily fetch 100 million dollars, and Detroit in the fifties may have been no less valuable, but I am considering only the physical infrastructure. So please have in mind that I am talking about the cost of the building, irrespective if it is in Manhattan or central Ougadougou.
My conclusion is that the abandonment of Detroit means the loss of an investment of about 200 billion dollars. This loss is the consequence of the collapse of the original owners and inhabitants's faith in their right to own and inhabit the city. Like wars, Detroit was lost because of moral collapse - that of the natives's inner convincement that they were living in their city by right and they had the moral right to defend it.
17 comments:
Wikipedia has a list of the mayors of Detroit up to the present time. Here are the last four White mayors:
Albert Cobo 1950-1957
Louis Miriani 1957-1961
Jerome Cavanaugh Jan 1962 - Dec 1970
Roman Gribbs 1970-1974
Coleman Young - First Black mayor of Detroit 1974-1993
If you look over the list Young, Gribbs, Cavanaugh and Miriani were all either Catholics or attended the Jesuit-run University of Detroit. Above all read the wiki article on Cavanaugh, he was one of main people who caused the fall of Detroit.
The wiki article on Young has been purged of an excerpt from his inauguration speech in which he thanked the White voters who did not vote in the election.
I think it's wrong to blame the mayors, just as its wrong to give them credit. They could not hold back the macroeconomic and social tides that were sweeping the country.
Also, times have changed. Today I saw an obituary of someone that had bombed a campus building in the '60s as an anti-Vietnam war protest and killed someone. This was no little pipe bomb but a serious truck bomb made with fuel oil, ammonium nitrate and dynamite. He was sentenced to 7 years and served 3. 3 years for killing a man. This would never happen today.
K
I think you are seriously overestimating the costs. Much of Detroits infrastructure was built decades ago and is fully depreciated and beyond it's useful life. If you have to put new pipes in the street anyway (because the old ones are 80 years old) might as well put them in a better (run) place.
If you are familiar with American housing construction, it is remarkably flimsy for such a rich country. Due to the ample supply of wood, it is the main building material. Likewise all the mechanical and electrical systems are fully depreciated after 50+ years. Even where I live (especially where I live) where land values are high, it is not uncommon for a 40 year old house to be totally demolished and you start fresh with something more to the modern taste (and usually bigger).
Most of the houses in Detroit (the buildings alone, not counting infrastructure, did not cost $15 or $20,000 (1950) dollars to build - even allowing for inflation you are talking about less than $100,000 per unit and again these are all fully depreciated now and essentially worthless.
K
K,
The book value after full depreciation of Detroit may be zero, but I am not using accounting methods.
Rockefeller Center in Manhattan is 80 years old and fully amortized and depreciated, yet it can be sold for a hundred million dollars, and it would cost much more to build it anew.
Private houses in Detroit suburbs may be made of wood but the buildings in downtown are solid cement. The infrastructure is not new but it is serviceable. It is worth more than its scrap value.
I wonder how much would it cost to build a city like Detroit somewhere in its neighborhood. I think more than 200 billion.
Also many new cities and settlements fail. The population needs generations to develope certain unique cohesivenesss and civic esprit.
Maybe Americans are a practical, mobile, rootless people. In Europe they cling to their old cities and conserve them carefully. Can you imagine the people of Vienna letting it dacay or abandoning it to move elsewhere?
Americans have never been that attached to their cities or particular buildings at least until very recently. Now we are interested in historic preservation but up until the 60s it was quite common to tear down anything more than a few decades old, even things that would be considered of monumental quality today (the former NY Penn Station which was a full Roman classical building in limestone, of quality unimaginable today, was torn down for a cheap looking glass office building). Detroit's train station stands abandoned and it is of such massive strength that it will not fall down of its own accord for centuries.
Depreciation is not just an accounting concept - the reason Rockefeller Center remains viable today is that there has been continuous investment in maintaining and upgrading the mechanical systems which probably far exceeds the original '30s construction cost. Steam cleaning of the exterior, new windows, rewiring, the addition of computer cabling, new interior finishes, new elevator machinery, etc., etc. - only the basic structure is untouched.
K
Sorry for going OT, but since you seem interested in Jewish population genetics, I thought I would repost my comment in response to the last paragraph of your "Salt" post. My apologies if you saw the comment earlier, but I wanted to make sutre you had an opportunity to read about these new studies.
J,
Are you referring to the paper by Zelinger et al. discussed by Dienekes at his blog (see link below)? If so, the autosomal haplotype is shared between Arab Muslims and "oriental Jews", not Ashkenazim. Perhaps your post reflects shoddy PC "we're all alike" reporting in the popular press?
http://dienekes.blogspot.com/2010/06/autosomal-haplotype-shared-by-arab.html
If you want to read about the most up-to-date autosomal studies of Jewish population genetics, there are discussion of the recently published papers by Atzmon et al. and Behar et al. at GNXP Discover and at Dienekes' blog (see links below). I can't believe you missed them. The gist is that Ashkenazim do show links to the Middle East but also some admixture from Europe, more than would have been suspected from the older Y-chromosome studies. Much of the admixtrue possibly originated in the Hellenistic and Roman periods before Jewish proselytism ended, which would in part explain why Sephardim (not Mizrahim, but true Sephardim) are genetically close to Ashkenazim. Of course, continued genetic contact between Sephardim and Ashkenazim would also explain genetic proximity. Jewish populations also lack the significant sub-Saharan introgression found in most Arab populations.
Discussion of the Atzmon et al. paper:
http://blogs.discovermagazine.com/gnxp/2010/06/genetics-the-jewish-question/
http://dienekes.blogspot.com/2010/06/two-major-groups-of-living-jews-atzmon.html
Discussions of the Behar et al. paper:
http://blogs.discovermagazine.com/gnxp/2010/06/genetics-the-jews-its-still-complicated/
http://dienekes.blogspot.com/2010/06/genome-wide-structure-of-jews-behar-et.html
I think it's wrong to blame the mayors, just as its wrong to give them credit. They could not hold back the macroeconomic and social tides that were sweeping the country.
The mayors the people of Detroit elected were a symptom not a cause of the city's decline. Nonetheless, the type of mayor elected by the people of Detroit says something about the character of the people living there. Cavanaugh refused to respond forcefully to the riot that was breaking out in his city, thinking that a forceful response would make things worse. Looking at Detroit today we know Cavanaugh was wrong. Also, Cavanaugh pushed through the city's income tax, helping to make business in the city unprofitable compared to moving to the suburbs. Cavanaugh wanted to spend more on his pet programs and he had to close a budget gap, so he made doing business in the city less profitable.
Worst of all, Detroit had had a previous race riot in the 1940s, so Detroit was 20 years ahead of the rest of the Rust Belt in decay.
The people of Detroit elected a liberal, and first they got Cavanaugh and then they lived to see their city burned to the ground.
All this is as irrelevant as counting the cost in denarii of the abandonment of any given city by the Roman Empire. Scobi in Macedonia is a good example-it went from being a giant city with a mint to an uninhabited ruin in a couple of centuries. The abandonment of Detroit is a symptom, not a thing in itself, and worrying about its cost is like worrying about the cost of custom-made shoes for an elephantiasis sufferer. Worry instead that Detroit will come to you.
The disease it's a symptom off is the temporary decoupling of our elites from the cost of their ideology. In this scenario, the ethnic cleansing of a major American city of its productive white inhabitants and the descent of its black inhabitants into a feral state costs nothing to the professors, journalists, pundits and politicians driving the process. On the other hand, the process carries many incentives: the weakening of the hated white middle bourgeoisie, ever a roadblock to Progress, is a powerful class-wide incentive for the Brahmins. Individually, a collapsing city with block voting and federal money pouring in offers many delectable opportunities to everybody from the mayor to the public school teachers in the short run, and in the long run, as Keynes said, we're all dead. A similar process occurred in Rome, where the elites bribed the mob for their own temporary gain to the loss of the Empire; by the time that the external enemies they'd been bribing with the empire's wealth as pawns in internal political struggles went ahead and decided to cut out the middleman, it was too late.
Not just obscure place like Scobi. Athens and Rome were reduced to villages in the Dark Ages, with populations in the thousands, not millions as before. What was formerly the Roman Forum came to be known as the Campo Vaccino - the Cow Field, for the cattle that grazed there. I would say that this is shooting kind of high for the future of Detroit - although their ancestors kept cattle I don't think the current inhabitants would, left to their own devices, be able to manage herds of cattle - keeping large animals in that climate requires more knowledge and discipline than they possess. Goats might be more doable.
Look - the world is full of change and in ways that were once unimaginable. Who would have thought in 1930 that less than 20 years later Budapest and Warsaw would be more or less Judenrein - Jews were as integral to those cities as they are to Jerusalem. In 1980, who would have thought that in a decade the entire Warsaw Pact would crumble and Lenin's statues would be pulled from their pedestals from Prague to Vladivostok? The handwriting has been on the wall for Detroit for almost 50 years now - the only surprise is that it has taken this long.
K
K,
The blacks of Detroit are a canary in a coalmine. As Mencius Moldbug never gets tired of explaining, you don't have to go to Mogadisho-it will come to you.
The decoupling between action and consequence in modern societies is, in a way, inevitable. The journalist can write anything destructive or irresponsible - he personally will never feel the consequences of his action, on the contrary, he may earn a promotion for being noticed. Irresponsability is inevitable in a democracy. Only the existence of a solid block of serious minded citizens stands in the way of inevitable decadence. But slowly the number of people who benefit from the State and from higher taxes (which are not paid by them) becomes more numerous than the number of serious tax payers. When this tipping point is reached, as it may have in California, the oppression and exploitation of the productive people is going to cause the collapse of the whole structure. Taxpayers have only two choices: to abandon everything and run, or adapt and learn to dance the rumba. Or rapping in your case.
Addenda: Yeah, California has definitely reached that tipping-point. I am basing this diagnosis on the fact that a large pumping station project (that would have supplied drinking water to millions instead of being allowed to flow into the ocean) was stopped and discarded because the pump may have caused discomfort to the "smelt" - a common sardine like useless fishy that can be found in coastal swamps.
A few years ago, when a columnist pointed out some ridiculous government action like the smelt thing, a reader wrote back to him that it was OK because "we are rich enough to be stupid". The corollary of this is that we will continue being stupid as long as the money holds out, which is not much longer I'm afraid. And after we can't afford it, we won't be stupid anymore. No poor country can afford to build an expensive project and then just discard it.
This is especially true in the case of state governments. Not only do they not have the power of the money printing press (though their buddy Obama has been minting some for them - most of the so-called "stimulus" money went to keeping public employees in their overpaid positions) but taxpayers are free to vote with their feet and move to more hospitable states. Americans are quite mobile and we have a national culture, so it's not that hard to move. California is an especially sad case - it went from being the most promising, ambitious, future looking state (the home of all sorts of hi tech breakthrus) to being an over-regulated, crime ridden nightmare in a few short decades.
But the weather is still amazing (on days when there are no earthquakes).
K
I am not so sure that we can stop being stupid. Also, moving to another state when the root of the cancer is in DC is like getting a morphine drip for cancer.
J,
I do not have anywhere to run. Israel is a democracy and suffers from the same phenomena as the country pulling its strings. The Mavi Marmara incident was a perfect example of democratic government by committee choosing the worst of all possible courses of action, accruing all possible costs and no benefits. The apparent inability of the Israelis, whom I've grown to like immensely as individuals, to maintain humanoid posture while using a public resource in anonymity is a huge turnoff. Russia, which my parents ran from, is not a place that I would choose to live. On the bright side, being an assimilated redneck, I do not need to learn to rap. Dipping Copenhagen, driving a pickup and having guns come with the territory, but I see those as benefits, not costs.
B, I don't think it's necessary to give up on America as a whole just yet. Socialist excess in America tends to self-correct (somewhat). Even the bluest of "blue" states (how convenient that Democrat does not equal "red" - a brilliant propaganda stroke by the Democrat/media establishment) of NJ now has a fiscally conservative governor (BTW I want that fat guy to be President). While some states (Michigan, California) may have reached some sort of tipping point, there are other states (Texas) that remain fairly well run and the odor emanating from Washington at present is I think just temporary - as early as November the picture will begin to change.
K
K,
Conservatives might slow down the rot on one front, but it will advance on all others. That's the nature of the system.
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