Friday, July 19, 2013

Detroit: Another One Of Many Corpses Left In The Wake of Progressive Policies

"We refused to let Detroit go bankrupt." Pres. Obama in 2012


  • Initially I was reluctant to write about Detroit's bankruptcy. Let's face facts. It's been an soft target. In addition, my last post was about the failure and pain of progressive policies not only in Detroit but in many other American cities.
  • Nevertheless, I felt compelled to write a few words for several reasons.
  • I lived outside of Detroit for three years about 30 some odd years ago. I was still a young guy not paying to much attention to economics and politics. But even then, it was obvious something bad was going to come down in Detroit in the not too distant future. One had to be blind not to see it. The recession hit the city like a Mack truck and the foreign auto industry was making headway with the American consumer. In short, it was perceived by many that some American automobiles sucked. After all, it was during this period GM produced the Chevy Vega, a piece of crap. The Detroit auto industry started it's long contraction similar to what was happening with the steel industry in Youngstown, OH (another town I know well since I also lived in a surrounding community).
  • The other ominous signs were the politics surrounding the city. It came as no surprise to me (and I'm sure many others) when years later former Detroit Mayor Kwame Kilpatrick was busted for extortion and bribery. I was just surprised it didn't happen earlier.
  • And yet, while the city was collapsing, the municipal executives, along with the union executives, kept kicking the can down the road. One problem: they ran out of road. So the result was a steep decline in population from almost 2 million people in the 1950's to less than 700,000 living there now.
  • When people left in droves, they left behind homes and businesses that eventually turned into almost 80,000 vacant structures. With that, the infrastructure started collapsing. Today, the fire department is at 75% operational capacity.  The average fire station is 80 years old. Kevin Orr, an emergency fiscal manager, proclaim the police department is "in disarray." While the national average time for police to respond is 11 minutes, in Detroit---it's 58 minutes. An estimated 40% of the city's street lights don't work. (USA Today).
  • And unfortunately Detroit is not alone. Just yesterday, Moody's downgraded Chicago's bond rating. In progressive controlled California, several major cities filed for bankruptcy including San Bernardino and Stockton. Harrisburg, Pennsylvania's former Democrat mayor left the city near bankruptcy.
  • It's certainly not the first time major cities have defaulted on their debt or faced bankruptcy. Cleveland and NYC in the 1970's also faced those challenges.
  • The fact is the model Detroit and other cities were successful in using decades ago just does not work today. Moreover, corruption rots most cities like Detroit to its core.
  • We can only hope Detroit will emerge from this challenge a better city. It can if it gets the right leadership and does not retreat to the failed policies of progressive government. If it continues on the same path, a city like Detroit will end up like many countries in Europe today.
  • I recall viewing Detroit's skyline at night from across the Detroit river in Canada with my girlfriend at the time. But that view was deceiving. I already knew what damage was being done on those city streets that were unable to be seen 2 miles away.
  • So the question remains: Did Detroit learn its lesson?