Posted on 11/01/2008 6:32:21 PM PDT by Leisler
One really has to ask the obvious question: If Obama’s economic policies work so well, why isn’t Detroit a paradise?
In 1950, America produced 51% of the GNP for the entire world. Of that production, roughly 70% took place in the eight states surrounding the Great Lakes: Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, Pennsylvania, and New York.
The productive capability of this small area of earth staggers the imagination. Virtually everything that rebuilt the industrial bases of Europe and Japan came from those eight states. Cars, planes, electronics, machine tools, consumer goods, generators, concrete - any conceivable item manufactured by industrial humanity poured out this tiny region and enriched the world. The region shone with widespread prosperity. People migrated from the South and West to work in these Herculean engines of industry.
The wealth, power and economic dominance of the region at the time cannot be overstated. Nothing like it has existed in human history.
Yet, a mere 30 years later, by 1980, we called that area the “rustbelt” and it became synonymous with joblessness, collapsing cities, high crime, failing schools and general hopelessness.
What the hell happened?
Obama happened.
Of course, not Obama personally but rather the same ideas that Obama espouses. What those ideas did to the Great Lakes states, they can do to the entire country.
What did they do wrong?
First, unions: Without any serious economic competition, unions could force virtually any salary, benefits and pensions they wished from manufactures. Worse, however, they could set work rules and conditions, effectively dictating the organization of a business and what technology, processes and methods it used. Since increasing productivity, by definition, means doing more work with fewer people, unions froze companies into the methods used in the mid-1950s and refused to let them adapt. Companies rode high for over 15 years, but by the late ’60s they faced increasing competition and needed to change and adapt. The unions blocked this.
In the end, however, strong widespread unions turned out for workers to be merely a case of robbing Peter to pay Paul. Unions got workers in factories better wages, but the people who built the workers’ houses, cars, consumer goods and stocked their groceries also had strong unions and the price of everything went up. Strong public-sector unions kept taxes high and public productivity low, so workers’ taxes went up. By the time they paid all the increased cost of union labor in everything they consumed, the unions gave them little if any real increases in income.
Second, invasive government: People who grew up during the New Deal and WWII believed that government could solve almost any problem, and they supported high taxes so that government could fix society. Unfortunately, the supposed benefits of an expansive state, good schools, solid public infrastructure, low crime, etc. failed to materialize while zoning and land-use restrictions drove up housing cost and taxes and crime destroyed small businesses. Strong public-sector unions blocked tax cuts and reforms that could have saved them.
By the early ’70s the states that once served as the industrial engine for the entire planet began to fall apart. Then came double-digit inflation and the energy crisis (both caused by leftist policies). By 1980, the industrial heartland of America lay in virtual ruins. People called it the “rustbelt” in analogy to the “dustbowl” of the Great Depressions. Even today, nearly 30 years later, the region lags behind the rest of the country in job creation and is steadily losing population to internal migration.
It can happen just that fast. A worker who entered the factories in 1950 at the age of 25 saw 20 good years before things looked bad. At 45 he saw repeated layoffs, and by 55 he was out of a job and his children had little hope of finding one.
Obama clearly plans to try to extend the rustbelt model to the rest of the country. “Card check” will let unions use intimidation to control workers. High taxes on capital gains will slow investment. Environmental regulation will starve workplaces of electricity and mandate inefficient modes of production. Great new bureaucracies will arise to restrain the freedom and creativity of the people.
Obama has no concept of business as a creative and experimental endeavor. On some deep unconscious level, he assumes that material wealth is something akin to a natural phenomenon for which no group of humans can take credit. Therefore, he sees distribution as the only serious economic issue and ignores how politics interferes with the actual process of wealth creation.
We may soon be living in a repeat of ’70s and looking back at the years 1984-2007 as a golden era.
UNIONS!
Bush’s fault.
Here’s a little tour of Detroit, today “The Paris of the Midwest”, as it was known before the riots of ‘68.
http://www.youtube.com/watch?v=A8dz40AOOmA
Excellent post!
I live along the I-94 corridor here in Michigan. This strip alone was one of the world’s most productive industrial areas. Jackson had some big name shops and dozens of smaller ones in town 30 years ago. These day’s we’re retail resturants and welfare.
Detroit is a ghetto.. all of it..
Excellent question. But I wonder if you can even blame the unions for all of Detroit’s problems.
Fixed your oversight.
It is a paradise for the thousands on the dole. Sleep late, eat … sit on the stoop of your government rent controlled abode, eat, drink and do dope. Watch TV on your riot obtained TV, over your stolen cable connection. Eat, drink and snort some more …go to bed. Tomorrow is yet another day.
No palm trees.
No sandy beaches.
No surf.
No mountains.
'rats in control.
Why aren’t urban school districts paradise?
Why aren’t the inner cities paradise?
Why isn’t Washington, DC paradise?
Why hasn’t the Great Society succeeded in 40+ years?
One of the major problems resulting from this fantastic improvement in industrial productivity is DEFLATION. That happens because those new products are produced at lower and lower costs, not just in manpower but also in materials and energy input.
Automobiles are a small part of the equation and getting smaller. That's what happened to Detroit.
Detroit was run by an ultra-liberal Great Society mayor when the riots hit in 1967. It scarcely has been any less liberal since then.
If liberalism worked, then the liberals who’ve run Detroit, along with those representing Detroit to the State of Michigan and the US Congress would’ve been able to fix things.
“Robotics, computerization and de-unionization happened.”
Yeah, but in the meanwhile something else should’ve taken its place. I mean, the last time the bottom fell out this bad was in 1978 (I was living in a GM town in Indiana at the time), and everyone agreed at that point that it was only a matter of time before all factory jobs were gone.
Well, today GM employs fewer employees in the USA than they used to employ in Flint alone. While the rest of the country has found ways to have an economy based on other sectors, and survive changes to their economy, Michigan et al has lagged.
It is my contention that until the last UAW job is gone, the region where the UAW people work won’t recover. Michigan won’t recover until the last UAW job is gone.
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