From everyplace in the world, people develop attachments to where they are living, it is normal thing to do. Every place in the world is subject to cycles of the economic cycle for cities it involves more people. For a city such as Detroit, Michigan it also involves a city which when it was at the top of the economic cycle was one of the greatest cities in the world in providing good jobs for its citizens, its ability to generate wealth and its ability to attract people to the industrial age. The city in decline is how long a city takes for a city to try to come back. A journalist who was born and raised in the city but spent many years away came back to the place which has a hold on him. The book Detroit – An American Autopsy by Charlie LeDuff  published by Penguin Press, NY, 2013 is Mr. LeDuff’s take on what happened to Detroit. In the end it is complicated and simple. It is complicated in many factors are in play, it is simple because all the things which made Detroit great are hard to be found. Detroit’s story is about race because even though the city attracted people it was an essentially segregated city and what your race mattered to where you lived and essentially what jobs were available for you. In the up climb of the economic cycle – jobs paid well, not mattered what you did. As the jobs paid less, all the problems with Detroit quickly came to the forefront.

Mr. LeDuff outlines the city proper, where anyone who makes a reasonable amount of money to have the simple pleasures of having children play in the front yard safely moves to the suburbs. In Detroit proper there are very few supermarkets but lots of liquor stores, churches and many abandoned houses and factories. The houses are abandoned for a few reasons – the value of Detroit real estate is very low, so it does not make sense to pay a mortgage; the services to keep the water on, the police in the neighborhood and the fire department doing their jobs are lacking or response times grow every year. When the “whites” started moving to the suburbs in great numbers, there was no one left to maintain the city properties and sometimes it was more lucrative to have a small fire (arson) than to fix up the house in order to collect on insurance. The lack of public services help feed the move to the suburbs and as houses turn to crack homes, those remaining were happy some burnt down. If city hall and higher governments were innovative rather than being corrupt in ensuring those who supported the mayor got jobs (many which paid well but were not performed well) things might be a little different; although when jobs losses are in the hundreds of thousands a better solution is still hard to find.

Linking to dividend stocks, if you look at the city as an investment from the perspective of bondholders – for a while Detroit was a great place to place your investments. The city was growing, the automobile companies were generating great wealth and many talented people were trying their best to continue the cycle. Economic cycles happen, but it seemed the automobile companies were not prepared nor anyone in government seemed to know what to do. The great thing about Detroit is the infrastructure of the city still exists, there are wealth generating aspects to the city, but what to do with all the people?  There are no great answers but there continues to be people that try. Maybe something good will happen; as a dividend investor you would have long ago looked towards cities which are growing and have made transitions to the new service cycle.

There are more questions than answers, till the next time – to raising questions.