"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.Jamie Dimon, CEO of J.P. Morgan Chase. |||
"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.
A typical scene in Detroit. |||With the announcement of its gift, the bank released a pamphlettouting 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.