Financializing Detroit

Transatlantic city, part 1: Conjunctural urbanism

“…This process of financial deepening, in its extended, stressed and credit-dependent form, need not be read as some clearly demarcated 'next stage', but instead can be seen as an intensification of longstanding tendencies in the marketisation of interurban relations, in the evolution of financial techniques and technologies, in devolution as a disciplinary and incentivising project and in post-Keynesian state restructuring (see Leitner, 1990;Peck and Whiteside, 2016). Nevertheless, the more recent manifestations of financialisation are growing out of the degraded soil of late-entrepreneurialism.…”

“…Second-and third-generation, or late-entrepreneurial, urban strategies are now being pursued in the context of slow(er), more unequal and uneven growth, elusive and diminishing returns to conventional policy measures and growing evidence of strategic exhaustion. This is a context, moreover, increasingly conditioned by a deeply financialised operating environment, enveloping conditions variously market by competitive logics and rationalities 'ingested' by states, by the institutionalisation of bond-market interests, by a host of reengineered fiscal pressures and incentives, by new technologies of credit (and risk) assessment, creative accounting and debt management and so forth (see Kirkpatrick and Smith, 2011;Lake, 2015;Peck and Whiteside, 2016;Weber, 2010). While analytical (and political) attention was properly focused, during the late 20th century moment of entrepreneurial urbanism, on the realm of (local) elite governance and regime dynamics, urban growth machines themselves do not appear to be anything like the locus of decisive, strategic action that they once were.…”

“…An exploration of 'late-entrepreneurialism', in its increasingly financialised and crisis-prone forms, it sets out both to characterise and to contextualise Atlantic City's experiment in casino capitalism. The article does so as a contribution to an ongoing effort to map the shifting landscapes of devolved austerity governance and financialised urban rule in the United States (see Davidson and Ward, 2014, forthcoming;Kirkpatrick and Smith, 2011;Lake, 2015;Peck, 2012Peck, , 2014bPeck and Whiteside, 2016;Tabb, 2014;Weber, 2010), in this case taking as a point of departure a connection traced from one hotspot to another -between post-bankruptcy Detroit and Atlantic City at the brink of default. While it is trivially true that Atlantic City is not and will never be Detroit, there are both political and theoretical reasons to probe the constitutive connections and family resemblances across such contemporary manifestations of localised fiscal crisis.…”

“…These efforts have been undeniably generative, but in their wake they raise some vexing issues when it comes to the role and rationale of single-city cases, especially if these are located in the very 'heartland' of received urban-theory production, and right on the receiving end of some of the most severely asymmetrical and coercive applications of financially driven and technocratically managed restructuring. In the wake of the experience of cities like Detroit (see Hackworth, 2016;Peck, 2015b), can it be said that we already know how these stories end? To the extent that this neoliberalised terrain has become familiar territory, is it the case that largely predictable empirical answers now effectively precede and preempt the (theoretical) questions?…”

“…The bond-rating agency Moody's greeted the news by slashing the city's credit rating into deep-junk territory, noting the 'possibility of material impairment to bondholders from a debt restructuring' (Russ, 2015: 1), Mr. Orr having acquired a reputation on Wall Street as a man prepared to impose tough settlements on creditors (Eide, 2015;cf. Darragh, 2015;Peck and Whiteside, 2016). S&P promptly followed suit, concerned about the risk of a bondholder haircut should the city follow Detroit into bankruptcy protection: 'The implementation of an Emergency Manager signals to Standard & Poor's that the state [of New Jersey] does not view the city as capable of resolving its challenges without outside intervention' (quoted in Beckerman, 2015: 1).…”