Will The Detroitization Of America Change Anything?
July 30, 2013 by Robert Ringer
As the Detroitization of America continues with the official bankruptcy of Detroit itself, many conservative economists, like my friend Steve Moore, believe that it might be the best thing that could ever happen to the Motor City. The thinking is that Detroit’s corrupt politicians and public employee piggies may finally be forced to realize that reality yields to no one.
Lots of luck. The sad fact is that the greed and avarice of the public sector is insatiable, which is why it never learns anything. Just as the Federal government committed a crime by stealing from shareholders and handing over a big chunk of General Motors stock to the very workers who bankrupted the company in the first place, then took your money to make sure that those same workers could continue living the good life, so, too, will the Federal government not hesitate to take your money to bail out the entire city of Detroit.
Oh, it might result in some minor, temporary adjustments for public employees; but, long term, nothing will change. In fact, supposedly free-market economist Larry Kudlow says that Detroit should eliminate or drastically cut back on its highest-in-the-country property taxes on homes, highest-in-the-country commercial property taxes and second-highest-in-the country industrial property taxes. And, for good measure, Michigan should drastically lower its corporate tax rate.
All of that sounds good, except for one problem: Kudlow is only advocating that these cuts be temporary — perhaps three to five years! Then, once the reduced theft allows both Detroit and Michigan to get back on their feet, bring on the high taxes again and let the taxpayer-funded public-employee party swing back into full gear.
In other words, do what produces solvency only temporarily — until you get back to the point where you can afford to once again do what doesn’t work. It reminds me of the RINOs who keep insisting that you don’t raise taxes during a recession, implying that it’s fine to do so when times are good. The reason you don’t raise taxes in a recession is because higher taxes are bad for the economy. So if they’re bad for the economy, why would you want to raise them during a healthy economy? To make it unhealthy?
We already know that handing people free stuff doesn’t break the poverty cycle; and Detroit and San Bernardino and Stockton, Calif., are just the tip of the bankruptcy iceberg. Wake up, Americans: The entire country is broke! The best-kept economic secret in the world — and those who have figured out the power game work hard to keep it a secret — is that the best hope by far for the masses escaping grinding poverty is through capitalism.
All this should remind do-gooders once again that the world runs on individuals pursuing their self-interest. It has nothing to do with ideology and everything to do with human nature. Thus, self-interest drives things in both communist and capitalist countries.
Self-interest is simply a basic human trait — perhaps the most basic of all human traits — and is neither good nor bad. It is, in fact, neutral. The only question is whether it is used to create or destroy. Those who use it to create are a benefit to society. Those who use it to destroy cause both pain and poverty.
Henry Ford helped make Detroit what it once was — a thriving metropolis of 1.8 million people by 1950 (down now to a beleaguered city of about 700,000) — by revolutionizing the automobile industry. But he didn’t do it for altruistic purposes. He did it to build a successful company for himself and his family. He succeeded and, thanks to that omnipresent invisible marketplace hand, everyone in Detroit, the State of Michigan and throughout the country was better off for his success. His was a positive example of using one’s self-interest to create.
Of course, the far left will never accept the verdicts of history or any kind of empirical evidence that threatens their grip on power. So they employ their self-interest for social-engineering purposes.
Bankrupt cities come into being through the implementation of an arrogant, destructive self-interest idea — that some people are more qualified than others to organize society in a way that assures “social justice” will prevail. Social justice is, of course, an abstract — and a subjective one at that. One person’s idea of social justice might be equal material well-being for all, while another person’s idea is a society where everyone keeps 100 percent of what he earns through voluntary transactions in the marketplace.
Government grows primarily by redistributing wealth. Armies of workers are needed to administer redistribution programs, and government makes sure they are highly paid and highly pensioned (not to mention highly perked). These armies of workers — recipients of stolen loot from taxpayers — ultimately bankrupt their cities. Then, of course, they cry foul when the money runs out.
While it is true that the United States could slip into a dictatorship as a result of runaway inflation or a massive Great Depression (whether a result of an impeccably carried-out Cloward-Piven plan or through sheer stupidity), the likelihood is that the public-employee redistribution game will continue indefinitely.
That means Detroit will not change its ways after making its way through bankruptcy court — nor will San Bernardino, Stockton, nor bankrupt States like California, New York and Illinois. Because so long as their socialist allies in Washington are in control, they can simply extract the money from the good folks in places like Wyoming, North Dakota, South Dakota and Texas and bail out the same States, cities and municipalities over and over again.
Not to worry, though. Remember what Lord Keynes told us about the long run. At least he gave us a certainty we could all look forward to.