Detroit: A Perfect Case Study

Detroit is a perfect case study because it may be your own town, writ large, or it might be our country, writ small. Detroit is a city where liberals or progressives or what ever name they pick today have had total unrestrained power. The leadership, if it can be called that, supported the public employee unions and the public employee unions supported the political leadership. And the rolls of public employees unions increased because it was a money machine for both the union leaders and the politicians.

In the glory days of Detroit it was truly a shining city on the hill. With General Motors, Ford, and Chrysler selling cars like Dunkin sells donuts the city was flush with money. The auto business made big bucks and paid big bucks. The citizens of Detroit could afford the high property values and high taxes. That is, most of them could. So Detroit thrived.

There was always a soft underbelly to Detroit. There were people that didn't or couldn't make it. They lived at or near the poverty line. They survived by welfare checks and other, sometimes more nefarious, means. There was always a lot of crime. Not unusual in big cities. There were neighborhoods crumbling and ignored. Again, not unusual. These areas were ignored by the politicians because there was little to be had there in terms of either money or power. Let the rotten areas rot was the order of the day.

That was the first leak in the boat. More leaks were to come. They had names. They were called Datsun, Honda, Toyota and after them a flood of cars from the orient. The first ones were small, cheap, and lacking in quality. But they did give good gas mileage. That became very important during the gas shortages of the seventies. Then these companies increased the size and quality of their imported offerings. America fell out of love with Detroit and in love with the new wave of foreign automobiles. The Detroit manufacturers tried to respond but they could not or would not get their hearts and minds into small cars with economical high performance engines. They lost market share and Detroit wasn't so successful any more.

The politicians that ran Detroit, like the executives that ran the American automotive giants, thought that they were entitled. They just loved to spend other peoples money. So as the exodus out of Detroit started, they just raised taxes because they would no understand austerity. They had the power and felt that they had the right. So as Detroit's market share went down, many of the good jobs went away. Plants closed. Buildings stood empty. The run down areas of the city expanded. But the short sighted politicians went on with business as usual. They continued to give sweetheart contracts to the unions and raising taxes on those that remained behind. They had put the city in a death spiral that is just now coming to completion. Detroit is a dead city.

And so it is going with our country. The government is spending more and more money on things that give no benefit or even do harm. While the national debt increases astoundingly, economic growth is so low as to be unsustainable. There are fewer people working in this country than since the seventies. The stock market is floating on an unsustainable bubble. Forty-six percent of Americans get food stamps. The middle class income is going down.

Are we Detroit yet? No. Not yet. But unless we mend our spending habits and rein in our spendthrift politicians, we will be. We are just at the beginning of the death spiral. If we all keep our eyes closed, like the politicians that ran Detroit, we will get there. Study Detroit and learn.