Micheline Maynard

Author, Business Journalist, Connoisseur

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A Tale of Two Financial Crises: Chicago and Detroit

Posted on | November 16, 2011 | No Comments

I spent a lot of my professional career covering things related to Detroit. For the past two years, I’ve been in Chicago. It’s amazing how much the cities have in common — they were both built on manufacturing, even though Chicago always seems far more glamorous.

Chicago

Now, they’re both dealing with huge problems. Detroit now looks like it could wind up in default by next summer. It might end up under the supervision of an emergency manager. Chicago is facing a $635 million budget deficit, which people here say is the 12th year in a row it’s run in the red.

On Wednesday, the city’s two mayors saw developments related to their crises. In Detroit, Mayor Dave Bing asked for $40 million in union concessions, said he wants to raise the corporate tax, and proposed a series of other steps.

“City government is broken,” he said in an early evening speech.

In Chicago, Mayor Rahm Emanuel got a big political victory. Aldermen voted 50-0 to approve his budget, which has fee increases, service cuts and all sorts of changes from Chicago’s status quo. There was immediately concern that city council might be giving Emanuel the same rubber stamp that it used to give his predecessor, Richard M. Daley, although Daley was losing popularity just before he left office in May.

Detroit is limping and has yet to be healed; Chicago has accepted the doctor’s prognosis and begun treatment. It’s a comparison worth watching as both cities try to solve their financial crises.

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