[Viewpoint] What the Emperor of Wall Street Did in Detroit

The new mayor of New York City, Zohran Mamdani, is making headlines. The fact that a 'democratic socialist' now leads the heart of global capitalism is remarkable. In the American political group Democratic Socialists of America (DSA), the emphasis is placed more on 'socialist' than on 'democratic,' despite the seemingly contradictory combination of the two words. This is why Wall Street even organized a fundraising group to campaign against Mamdani's election.

To Mamdani, Jamie Dimon, Chairman of JPMorgan Chase and the so-called emperor of Wall Street, offered some warm(?) advice: "I hope Mamdani seeks advice from Mike Duggan, the mayor who revived Detroit."

So who is Duggan? Let's turn back the clock nearly 12 years. In early 2014, just as he had begun his term as a rookie mayor, Duggan received a call from an unknown number. "This is Jamie Dimon from JPMorgan. I want to help revive Detroit." "Excuse me?" "We will invest 200 million dollars to save Detroit. Let's make Detroit a city for people to live in again."

The area around the Great Lakes in the northeastern United States was originally known as the 'Factory Belt.' It was the center of manufacturing, including automobiles, steel, and machinery, with Detroit at its core. However, since the 1970s, high-cost structures resulting from the Democratic state government's excessive spending policies and the decline of manufacturing led to a shrinking population and soaring crime rates. Companies left, and facilities rusted. Thus, it became the 'Rust Belt.' Eventually, in 2013, Detroit declared bankruptcy. Duggan had just begun his journey as the leader of a bankrupt city. There was no reason to turn down the helping hand of a Wall Street titan with both capital and expertise.

Dimon's JPMorgan went all-in on Detroit's recovery. The bank made large-scale project financing investments in urban regeneration and focused lending on small and medium-sized businesses, as well as cultural facilities like cafes, restaurants, and bookstores. They also actively invested in emerging venture companies. This was the so-called 'Invested In Detroit' project.

The judgment of the Wall Street emperor proved correct. Over 3,000 small and medium-sized businesses and entrepreneurs supported by JPMorgan survived, and companies from other cities were attracted as well. White middle-class residents who had left began to return. Last year, Detroit's credit rating was upgraded to investment grade for the first time since bankruptcy. The city budget has been in surplus for eleven consecutive years. Throughout this process, Duggan maintained a careful balance. He managed city affairs so that the benefits of the project reached women and low-wage jobs. He also worked closely with Michigan's Republican governor, Rick Snyder, maximizing the impact of the investment. JPMorgan also reaped practical benefits, attracting deposits more than 100 times the amount invested in the Detroit area. This is why cities across the United States, including Chicago, Washington D.C., and New Orleans, are considering adopting the Detroit model.

To implement the 'productive finance' encouraged by the government, the four major financial groups in Korea have pledged astronomical budgets ranging from 80 trillion to 110 trillion won each. It is said that they struggled to find ways to allocate such massive funds. This is not something that can be accomplished by simply being pushed forward. The Detroit project is a comprehensive package of productive finance, encompassing regional revitalization, support for small and medium-sized businesses and entrepreneurs, and job creation. There are many 'Detroits' in Korea as well. Dimon confidently stated, "We can rebuild three or four regions a year just like Detroit, and another ten regions in a similar way."

This content was produced with the assistance of AI translation services.