“Detroit is the rotten fruit of uncontested progressive socialism.”
— Editorial, Investor’s Business Daily, July 19
It didn’t take long after the announcement that Detroit was declaring bankruptcy for a captioned photo of Barack Obama to hit conservative websites and blogs showing a downcast president saying, “If I had a city, it would look like Detroit.”
Unfair? Well, yes and no. It’s true the (former) Motor City’s problems began long before Obama entered the Oval Office, and the decisions that left it $18.5 billion in debt were made by other politicians and civic and business leaders.
But those decisions — which can be boiled down to one, spending more money than could be raised in taxes — paralleled the policies Obama as president has chosen for the country as a whole.
As Mark Sappenfield, a staff writer for the Christian Science Monitor, wrote on July 22, “How Detroit and Michigan navigate their seismic changes could hold lessons for the country. All the problems that the city and state are facing are looming for states from Illinois to California” — and, obviously, the nation as well.
So it’s not all inappropriate or remotely unjust to link the failures of Detroit, which was the nation’s most prosperous city in 1960 and last had a Republican mayor in 1962, with the past, present and inevitable future failures of the Obama regime.
Detroit, which has been spending $100 million more than it took in for each of the past five years and currently has $11 billion in unfunded pension and health-care promises to its retirees (the rest of its shortfall is in obligations to bondholders and other debtors), is today the poorest large city in the United States.
(What’s the richest? The answer is a lesson in itself: Washington, D.C.)
If Detroit’s decrepit present provides a window into our nation’s future (at least if we don’t stop following the same path its leaders trod), that path is worth a serious look.
It isn’t an unfamiliar journey, but with the example of where it leads directly in front of us, we might learn something — or at least be reminded of certain things — that are worth keeping in mind.
Especially since, even though President Obama denies it, the chance of the federal government stepping in to pay Detroit’s bills cannot be entirely ruled out.
If something like that isn’t done, then union members are going to learn that the promises their leaders and Democratic politicians made to them about their ability to demand ever-increasing medical and pension benefits are essentially hollow — a truth states such as Wisconsin and Indiana have already faced, and California continues to deny. Can Democrats afford to have that happen again and again?
While we’re waiting to find out, let’s look at some of the analyses of what happened in Motown to turn it into Lowtown.
— WHAT’S IT LIKE? James Pethokoukis, an American Enterprise Institute scholar, wrote on National Review Online on July 22 that, “If Detroit were its own city-state — a bizarre version of prosperous Singapore — it would be a place the U.S. State Department would regularly issue travel warnings about…. Detroit’s murder rate, for instance, would be higher than that of all but a handful of other countries.”
He adds, “The Democratic Republic of Detroit would also be relatively poor, with an annual per capita income of around $15,000, making it a middle-income country like Mexico … Except Detroit would be a nation in decline, rather than on the rise … Literally dying off, its shrinking population abandoning territory the central government could no longer provide with basic services.”
— HOW BAD IS IT? According to Kevin D. Williamson, also writing on NRO on July 19, “Detroit has lost nearly two-thirds of its population,” dropping from 1.8 million in 1950 to about 715,000 today. And forget “white flight,” as the city’s upper- and middle-class black populations have also fled for the suburbs, or other regions altogether.
Investor’s Business Daily, in a July 19 editorial, says, “An estimated 78,000 of the city’s homes are unoccupied, and in 2011, half the occupiers of its 305,000 properties did not pay any tax. Some 40 percent of the street lights do not work.”
It adds that the city “has 264,209 households, and 91,204 — or 34.5 percent — get food stamps. Only 54.3 percent of Detroit residents participate in the labor force. This is how America is beginning to look.”
— WHO’S TO BLAME? Williamson says it isn’t all the fault of the auto industry: “Ford by itself still employs enough people that it could employ one member of every family in Detroit. GM and Ford together could employ the entire working-age (18-65) population of Detroit, along with every man, woman and child in Flint and Pontiac … and would still need to fill a few vacancies.” But these firms “do not want to be in or near Detroit.”
That’s not because they don’t want to pay a living wage. Successful non-union auto factories have enriched workers and communities all over the “right-to-work belt,” where union membership cannot be coerced. (Michigan joined the RTW ranks this year, but too late to help Detroit.)
Rich Lowry, writing in NRO on July 23, says that Detroit’s condition is entirely self-inflicted: “Detroit died of its own hand.”
He continues, “The city undertook a controlled experiment in what happens if you are governed by a toxic combination of Great Society big spenders, race hustlers, crooks, public-sector unions and ineffectual reformers. It spent and misgoverned itself into the ground.”
To those who blame “capitalism” for the city’s woes, Lowry retorts: “GM had nothing to do with the city council promising benefits to retirees that it couldn’t possibly pay. Chrysler didn’t disgracefully mismanage city agencies. Ford didn’t disastrously degrade the city’s human capital.”
Indeed, “None of this is the product of the ‘creative destruction’ of capitalism (Economist Joseph Schumpeter’s doctrine, first promulgated in 1942, that new businesses displacing old ones is the heart of long-lasting growth and enduring prosperity). It is the destructive destruction of corrupt statism.”
— WHAT’S THE PROOF? “Despite globalization,” Lowry says, “urban America is alive and well outside of Detroit.” He cites cities such as Pittsburgh, Houston and Raleigh, N.C., as examples of communities where old industries were replaced with new ones and prosperity increased — because their governments either permitted or encouraged it.
Political analyst Michael Barone, writing on the Claremont Institute’s website, says in a review of a new book , “Detroit: An American Autopsy,” by Charlie LeDuff, that he grew up in Detroit and was converted from a liberal to a conservative worldview by what he saw there.
Barone says, “I blame the ambitious liberalism of the (Mayor Jerome) Cavanaugh years, which I believed in at the time, and the 20-year rule of Coleman Young, mayor from 1973 to 1993 (when the annual Oct. 30 rampage of arson and vandalism called “Devil’s Night” took root) … Those who have visited both Detroit and Hiroshima will have trouble guessing which country won that war.”
— WHAT ABOUT THE FUTURE? Mark Steyn, the Canadian commentator on the decline of the West, wrote on NRO, “Like Detroit, America has unfunded liabilities, to the tune of $220 trillion … Like Detroit, it’s cosseting the government class and expanding the dependency class, to the point where its bipartisan ‘immigration reform’ actively recruits 50-60 million low-skilled chain migrants. Like Detroit, America’s governing institutions are increasingly the corrupt enforcers of a one-party state…”
Or, as Investor’s Business Daily put it, after diagnosing the problem with the sentence quoted at the top of this column, “The scary part is that Detroit is what Obama wants to fundamentally transform America into: a place where wealth is redistributed, not created, and where government picks winners and losers in an economy in which we all ultimately lose.”
— IS THERE HOPE? The AEI’s Pethokoukis sees one potential solution: His column, headlined “Remake Detroit, or Empty It,” after reviewing the successes of Asian free-market successes such as Hong Kong and Singapore, suggests that Detroit covert itself to “New Detroit.”
That city could become a “business-friendly charter city where taxes are low and regulation light,” where “Governance could be guaranteed by some outside entity,” perhaps “prosperous, well-run Canada” or “a viable American city” (Houston?) reimbursed by a share in future revenues.
And if it doesn’t want to make those obvious but ideologically incompatible changes, then perhaps Washington could help by making a “relocation voucher” part of each welfare check, helping the poor find opportunity in a new place where success isvalued and rewarded, not penalized with high taxes and poor services.
Two axioms come to mind: “You can’t spend your way to prosperity,” and if you try to, “Sooner or later you run out of other people’s money.”
If all that fails, well, I suppose there’s always exorcism. However, the problem there is that the one who is possessed has to want to be free.
And though Devil’s Night rampages have declined in recent years, socialism itself is a very difficult demon to drive away — as the nation at large is learning.
M.D. Harmon, a retired journalist and military officer, is a free-lance writer and speaker. He can be contacted at: email@example.com