Thursday, July 25, 2013

Detroit Broke City

Now that we know the name of the Royal Baby, perhaps we can return our attention to things that are actually important here in the 21st century--like the bankruptcy of one of the largest cities in the country.  Detroit is so far beyond broke that both city and state officials admit there is no way to get out of the hole without writing off nearly all of that debt.  And how did that happen?  Well if you believe those on the left, it is the usual culprits for all social ills in America: corporations and affluent white people.

Article after article after article villify those most likely to have a conservative bent in their political beliefs--all the while failing to mention any of the Democrats who were running the city since 1956.  Instead, it's the automakers' fault for outsourcing work and improving efficiency in production.  Nevermind their crushing commitments to pension and health insurance plans for retirees and the increased cost of production due to more restrictions on carbon emissions and more expensive electrical consumption at their plants in Detroit.  And other corporations are to blame because they sought incentive packages from Detroit to bring or keep jobs in the city--even though similar enticements were being offered by suburbs with more land available and brand new infrastructure and lower tax rates. 

While these pundits blast what they like to call "corporate welfare", they heartily applaud President Obama for his trillion dollar bailout of the GM and Chrysler--which is nothing more than "union welfare".  The Big Three would have continued to manufacture vehicles in Detroit--even in bankruptcy.  And the process would have allowed them to get out from under the contracts that represent the second largest expense on an American-made vehicle today.  But the President chose the short-sighted bailout route--which just kicks the can farther down the road.  However, those pension and health benefit bailouts were good news for places like The Villages, Bradenton, Sarasota and Winter Haven, Florida--where those UAW retirees have flocked to spend their golden years--and to avoid having to pay any state income tax, which of course could have been used to help Detroit.

And that brings us to the other "villains": the middle and upper class whites who left the city for the suburbs starting in the 1960's.  Robert Reich--the former Clinton Administration "economic guru" is harshest on these folks--accusing them of leaving the city behind to rot.  In Reich's world, everyone should remain stuck in small urban houses with no backyards, no garages, nowhere to park and no big box stores or mega-malls conveniently located right next to the six-lane expressway.  That is why I am sure that he lives in a small brownstone in San Francisco while he teaches at Cal-Berkley.  Perhaps he forgot that those surrounding communities are the result of the "strong unions" getting the higher wages for those auto workers--who in turn parlayed that income into the best lifestyle they could afford?  And what does that say about minorities when you argue that they are totally incapable of maintaining an economy--or a society--without "the support" of whites?  Maybe he should talk to Magic Johnson--who has made more money out of basketball by putting his movie theaters in some of the "worst" neighborhoods in America.

There is one point that the Socialistas are correct about--a broke city should NOT be paying hundreds of millions of dollars to build a new hockey arena.  If Mike Illitch needs a new home for the Red Wings that badly, he can add 25-cents to the price of every Little Caesar's pizza he sells across the country for the next few years.  I think that we can all agree, Detroit has more important things to worry about than that.

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