Posted on 05/06/2009 3:38:05 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.
I grew up in New York City in the 1960's and 70's. In the 60's it was totally safe for me as a kid to ride my bicycle all through Brooklyn, and my neighborhood was a safe working-to-middle class neighborhood. My mom had no problems with sending me as an 11 year old to ride the subway by myself to get to my aunt's house.
I passed through my old neighborhood 20 years later and remarked that I wouldn't want to be on foot and unarmed there. It had completely changed.
Ditto for my old neighborhood in Dallas. We kids used to walk all over the place. Now, though, the neighborhood is a war zone. I’ll let you guess what the primary difference is between Then and Now.
As the UAW moved to a monolithic position in regard to ALL of the auto companies, this hurt the smaller companies in favor of the larger ones with deeper pockets. Basically what happened was that the UAW used Studebaker as a club to beat the other auto companies until it was Studebaker that was lagging and unable to match the others in wages and benefits.
A sad,sad story of what appears to be good guys getting shafted by a union with purview over an entire industry and uninterested in 'family relation' type agreements.
Unions have a tebdency to strke places shut, and that includes cities like Detroit.
At leas the glory of America and what she once was.
If you would like to be added or dropped from the Michigan ping list, please freepmail me.
Good article thanks for posting. Thanks for the ping, grellis. Convince 1/2 million FReepers and like-minded citizens from around the world to move to Detroit and you could create one of the premier cities on the planet in a relatively short amount of time.
I was born in Detroit in ‘65, since we had a family business tied in to the auto industry I grew up listening to the family talk about this very topic my whole life.
We left the city and moved to the “suburbs” (Brighton) when it became unsafe to walk to the corner store any more. Our business located down on Davison Ave. turned into Fort Apache with Constantino wire and barred windows, my father, uncle and grandfather all drove with a shotgun in the car even though it was a sure jail sentence or at least a hefty fine if they were ever pulled over.
Sometimes I think the best thing that could happen to that city now is a wind storm during a drought in August with 0% humidity and a dropped match, just let it go and start over from scratch.
.
Nawlins too ???
It’s important for you younger folks to know that the Reuther brothers of UAW fame actually went to Russia in the 1930s and worked in auto factories there to study the communist system.
a quote:
At the end of the trip he wrote, “the atmosphere of freedom and security, shop meetings with their proletarian industrial democracy; all these things make an inspiring contrast to what we know as Ford wage slaves in Detroit. What we have experienced here has reeducated us along new and more practical lines.”
There are a few cities that would be a net plus if we did that to, NOL is a good example also.
It wasn't until the Taft-Hartley Act was passed in 1946, that businesses got some relief from FDR's henchmen.
I have seen the union scourge and listened to their justifications my whole life, and I don’t buy any of it.
I always enjoyed watching the union workers wearing their jackets around town, the coats had the huge logos on both front and back, but no where on that coat was the name of the company that signed their paychecks and put food in their families bellies.
Once someone puts the union above the employer in the food chain of importance then you might as well write him off for the rest of his employment, he is a worthless leach then.
Having worked in UAW shops for 40+ years as a salary employee, I can guarantee that most of the workers truly felt that they worked for the union, not for the company.
The union was very effective at propagandizing the workplace with a “them vs us” mentality.
If you study the history of the Reuther brothers, it’s all in the playbook.
Now the Baraqqis are going to use taxpayer money to subsidize their $3200/month retirement payments and platinum benefits.
That 'update' is 100% certified, pure-grade, tongue-in-cheek.
'Tolerant Liberal' is the Mother of all Oxymorons.
;)
bump
George and Wheezie are in the White House!
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