Twenty-five years ago, the J.L. Hudson company announced it was closing its massive department store in downtown Detroit, a building that had once defined retail life in the motor city. That was traumatic.
The days when elegant young ladies put on white gloves to go shopping at Hudson’s were already long gone. But the real meaning of the closing of this landmark lay in what it symbolized about Detroit. Every so often, a big story would appear about a new plan to restore the building. It was going to become condos or lofts or even a casino.
These announcements were made with great fanfare, and then nothing ever happened. In the end, Hudson’s became rubble. The city blew it up in 1998. Even that involved a broken promise; the demolition, promised to be safe, badly damaged the People Mover.
Other new plans are always being announced to get Southeast Michigan out of its doldrums, or to renovate great buildings that sit slowly crumbling, with 1980 calendars on their walls. So, many of us who live in the Southeastern part of this state tend to be a bit skeptical of grandiose new plans. The airport city venture, which could turn the onetime Arsenal of Democracy into a World Transportation Axis, sounds wonderful.
Yet I am not ready to believe yet. Not till they show me both the money -- and an entity with the power and teeth and resources to get it done. You can talk all you want about the hidden hand and the mystique of the free market. That works just fine for a company that springs up to sell PCs or scrunches. But a vast project like Airport City is never going to happen without some kind of central planning, and a regional government authority with power.
Power, that is, to buy up all the land needed -- 20,000 acres -- and to then set common rules for its use -- zoning and building codes and tax rates. The authority has to figure out parking and green space and innumerable other things connected with creating a major industrial park which would be, in many ways, a mini-city.
This could work. Daniel Howes, the astute business columnist of the Detroit news, pointed out recently that a vast transportation hub created along the same lines exists at the airport in Amsterdam, and employs something like sixty thousand people.
Last month, a delegation of Wayne County officials flew to Holland to check it out. Make no mistake: If our Aerotropolis become reality, it will benefit people in Michigan from Grand Rapids to Saginaw. But that will only happen if we put a major sustained regional and statewide effort behind it, including public money.
Yes, I am talking about an official industrial policy. That tends to make people nervous. “State-sponsored industrial policies never work,” one businessman once told me. Well, not in the Soviet Union. But Hong Kong does pretty well. And is what we have now working so great?
Jack: Congratulations on admitting your mistake on impeachment.
Here's a tip to help you avoid making the same kind of mistake again:
There is nothing more insane than to think that the solution to Detroit's woes caused by the end of cheap energy will come from or even have anything to do with an airport, or an even more gargantuan airport, or anything to do wih commercial flying at all.
Airlines are nothing but subsidy sucking, greenhouse gas producing, executive bonusing corporate welfare hogs, but there isn't enough money in all of Michigan to keep the industry aloft when oil sails past $100/bbl and winds its way towards $200/bbl, which is a lot closer than many people seem to think. Even if you're one of the optimists who thinks that peak oil hasn't already occurred, fewer and fewer folks think it won't happen by 2010 or 2015 at the latest.
Once people realize that no amount of "free market magic" will ever bring back cheap gas (or jet fuel) any investments centered around airports are going to look as stupid and lonely as that People Mover.
I'm not saying that Detroit won't look reality in the eye and try to deny it once again--they've been in that business for a long, long time, and it probably feels pretty natural to them. They've got this whole pathetic "Death of a Salesman" doggedness thing down pretty well, able to get out and try and flog the goods day after day ...
But reality doesn't care if you want to pay attention or not, it just is. And the reality is that anyone with an ounce of sense is NOT looking to make big plans that are contingent on cheap energy, period.
I'm coming to think that every public investment needs to have a prospectus, just like new stock issues, and in that prospectus would be a disclosure printed on every page: "The analysese used in this investment presume an average price of oil of $X between now and 2010, $Y between 2011-2020, etc." for the design life of the project.
After all, if Wall St. is required to give the rubes that kind of disclosure before taking their money, why isn't government required to do the same?
Posted by: JMG | May 12, 2007 at 01:56 PM
Jack: Congratulations on admitting your mistake on impeachment.
Here's a tip to help you avoid making the same kind of mistake again:
There is nothing more insane than to think that the solution to Detroit's woes caused by the end of cheap energy will come from or even have anything to do with an airport, or an even more gargantuan airport, or anything to do wih commercial flying at all.
Airlines are nothing but subsidy sucking, greenhouse gas producing, executive bonusing corporate welfare hogs, but there isn't enough money in all of Michigan to keep the industry aloft when oil sails past $100/bbl and winds its way towards $200/bbl, which is a lot closer than many people seem to think. Even if you're one of the optimists who thinks that peak oil hasn't already occurred, fewer and fewer folks think it won't happen by 2010 or 2015 at the latest.
Once people realize that no amount of "free market magic" will ever bring back cheap gas (or jet fuel) any investments centered around airports are going to look as stupid and lonely as that People Mover.
I'm not saying that Detroit won't look reality in the eye and try to deny it once again--they've been in that business for a long, long time, and it probably feels pretty natural to them. They've got this whole pathetic "Death of a Salesman" doggedness thing down pretty well, able to get out and try and flog the goods day after day ...
But reality doesn't care if you want to pay attention or not, it just is. And the reality is that anyone with an ounce of sense is NOT looking to make big plans that are contingent on cheap energy, period.
I'm coming to think that every public investment needs to have a prospectus, just like new stock issues, and in that prospectus would be a disclosure printed on every page: "The analysese used in this investment presume an average price of oil of $X between now and 2010, $Y between 2011-2020, etc." for the design life of the project.
After all, if Wall St. is required to give the rubes that kind of disclosure before taking their money, why isn't government required to do the same?
Posted by: JMG | May 12, 2007 at 01:56 PM