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Three Charts That Show Obama Isn't to Blame for Detroit's Bankruptcy

President Obama has spent a lot of time talking about his rescue of the auto industry. And so perhaps it’s not surprising his detractors have seized on Detroit’s municipal bankruptcy as proof that the bailout was actually a failure—or, at least, not a success.

On one level, it’s a transparently stupid argument. Yes, Obama has boasted of “saving Detroit.” But mostly he has used “Detroit” as shorthand for the auto industry, in the same way we use “Hollywood” to talk about the entertainment business. Still, Obama always claimed the auto rescue wasn’t simply about saving an industry. He said it was also about saving the cities and people who depended upon it. Doesn’t that suggest the auto rescue was a bust?

Major Garrett, the political writer for National Journal, seems to think so. And something tells me he won’t be the last person to make this argument. In a new article, he notes Obama’s promises of a resurgent Detroit in 2011, during a Labor Day speech there, and then rehearses the now-familiar litany of troubles that led to the municipal bankruptcy. “Its buoyancy and optimism, though well-intended, could make even the most ardent Obama devotee wince,” Garrett writes. Later, he concludes “Detroit's failings are many and its debts staggering. Obama did not cause them. But his economic remedies and intervention have achieved little.”

It’s not the same crude, willfully misleading arguments I’ve seen before. But it’s not a whole lot more convincing. Here’s why: Michigan generally, and the Detroit area specifically, have been recovering steadily since Obama’s key economic initiatives—the auto industry rescue and the Recovery Act—took effect. 

Here’s the unemployment rate in Michigan since early 2008...

...and here’s the unemployment rate in the Detroit...

...and here is the Michigan Economic Index, compiled by Comerica Bank...

(Thanks to my friends at Altarum for pointing out the Comerica Index.)

The city of Detroit has all kinds of problems and the government can no longer pay its bills. Nobody denies that. But this crisis was decades in the making—read Jonathan Chait’s wonderful essay on this if you haven’t already—and there’s not much Obama could have done to stop it from happening. The auto industry rescue was about saving a critical industry and region of the country from calamity, and creating a foundation for a long-term economic recovery. The city, and the people, of Detroit will benefit from that. In fact, they have already.

Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn