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  • Why isn’t Detroit a Paradise?

    Posted by Shannon Love on November 1st, 2008 (All posts by )

    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. 

     

    94 Responses to “Why isn’t Detroit a Paradise?”

    1. sol vsaon Says:

      What you write is totally powerful. It is marred by the terma “liberal” and “conservative”.

      The distinction between liberals and comservatives is totally backwards. Conservatives want to preserve a market place and a political system where constant change is desireable.

      Liberals want to take a picture of today and preserve it unchanged forever, perhaps tweaking around the edges to benefit this friend or that. Thus environmentalists want to freeze evolution in its tracks; Al Gore et al want to freeze the weather; labor unions dedicate themselves to preserving current hierarchies and job skills.

      So the Liberals are really conservatives and the Conservatives are the true liberals. This means that it is impossible for a Liberal to develop new technology (such as solar or wind power) because it disturbs the environment, makes some people obsolete, and simply has too many unknown consequences.

      If the rest of the world were still in the 50s, the rust belt would still rule the world.

    2. WOODY Says:

      The American People are almost ready to bite their noses off to spite their faces. Change, the reckless abandon for morals, and a general hate of conservatism in general is what let us to the current economic crisis at hand. Spending beyond your means, wheather you are a government, or an individual, is just not good policy.Getting an abortion because a child might “inconvience” someone, and victimology are running rampant, and now it’s time to pay the piper for our deeds.Being responsible for one’s own self , either success or failure, is one of the great joys of capitolism.

      obama, get your filthy hands out of my pockets, get a real job where you actually produce something worthwile other than bullshit for the masses. Our new company policy will be that those idiots who voted for the obamamessiah, will be the first to be laid off as a result of higher taxes

    3. Shannon Love Says:

      Sol Vsaon,

      I agree with you complaint about the terminology of “liberal” and “conservative”. That terminology is really about how particular political segments view the status quo. That is why I make it a point to use the terms “left” and “right” to describe ideologies.

      You’re correct the contemporary left represents the conservative or even reactionary element in American politics. I would argue that they have not had a new idea in 30 years. Obama does want to go back to the policies of the mid-20th century. He wants to preserve and extend the policies and programs laid down before I was born.

    4. Shannon Love Says:

      Woody,

      Our new company policy will be that those idiots who voted for the obamamessiah, will be the first to be laid off as a result of higher taxes

      I strongly recommend you do not do that. While would be karmically just, in the real world it would could establish a dangerous situation wherein people would not feel free to speak their mind or vote their consciences.

      It’s bad enough that politicians muck around in business indirectly. Tying work to politics directly would empower the politicians in the end by giving them direct control over who can get a job.

      I’ve always wondered by business never educated their employees about the way in which different policies would effect the business and employees jobs.

    5. Ellen K Says:

      Great article. I quoted and linked you from http://community.myfoxdfw.com/blogs/TexasTruBlu. I hear that unions, with their new bullying tactic of having a list of names of all people who vote against organizing, are expecting to wield more power in the next few years. I suspect that under such an atmosphere that right to work states and employees will be more or less forced into unions against their better judgment. I wonder how long it will be before we see the nation shut down by transportation workers or teachers or police due to this situation just as frequently happens in the EU.

    6. Paul from Florida Says:

      There is a lot of money to be made in ruin, in stripping assets, in ripping cultural copper out of the wall.

      Lawyers, politicians, welfare industry workers all can earn more, retire better, assisting in the economic euthanasia of once great productive bodies that are now elderly and sick.

      Invasive parasitic organisms thrive on the dying body politic, and when Detroit is but a free range zone for parolees and proles, the little opportunistic human bacteria will move on to welfare/leftist polity they find open, warm and generous.

    7. Ellen K Says:

      So you think they are heading for Washingon or LA?

    8. Ellen K Says:

      Washington…sorry. Bad keyboard.

    9. ElamBend Says:

      In Michigan alone, the auto industry destroyed any kind of innovation or incentive to create other business models. The auto work was such a cash cow that most businesses were formed to feed of the teet of that cash cow, rather than attempt new forms of wealth creation.
      It’s strange, considering the natural beauty of Michigan, not to mention it’s strategic location between Chicago and Toronto, but it truly is a dead zone for business right now. (The legacy bad business law and taxes don’t help either).

    10. david foster Says:

      Thought experiment: what if auto imports had been absolutely prohibited, thereby avoiding any serious competition for the Big 3? What would be the current situation in Detroit?

      My guess is that wages would still be very high, management would be pretty bad, quality would be far inferior to what it is today…and cars would be priced at a minimum of something like $50K in today’s dollars, putting a huge damper on the rest of the economy.

    11. Shannon Love Says:

      ElamBend,

      One can say that the auto industry was a victim of its own success, yet other regions adapted to the loss of advantage in critical industries and the rustbelt in main did not. Texas and other oil states, for example, adapted to the collapse of oil prices and the depletion of oil fields. Oil ruled the Texas economy for over 60 years but the state adapted in less than a decade.

      I think unions and the political complexes associated with them, prevented adaptation by the industries they controlled. Unions have a vested interest in stopping increases in productivity that use fewer workers to produce more goods. Certainly, the major auto companies are far more innovative in plants outside the rustbelt and outside the country, than they are in rustbelt plants.

      The rustbelt states have a political culture that values stasis before all other things. That has a tremendous long term cost.

    12. Dan from Madison Says:

      ElamBend – I hesitate to mention this because I don’t want to ruin things for myself, but here goes. The southwest part of Michigan is abaolutely beautiful. We vacation there every summer for a week, around New Buffalo, St. Joseph, South Haven, up to Saugatuck. We rent a house on a high bluff overlooking Lake Michigan and the sunsets are spectacular. I get to run on the beach every morning for several miles. You can swim, go to wineries, they have (small) festivals, etc. etc.

      There is a cottage tourist business in this area, but nothing like I would expect – I am not sure why. I would think that the whole west coast of Michigan would be built up but maybe they have some restrictions in place, I don’t know.

    13. Paul from Florida Says:

      Ellen K.

      Yes. Washington is a growing undefined tumor of lawyers, paper shufflers, copier salesmen, wonks, collators, desseminators, policy pimps, hacks, bagmen, drivers, courtiers, minions, layabouts, bed feathers, and boil suckers common to the metastasizing administrative state.(Was I harsh? Did I leave anyone out?)

    14. Obloodyhell Says:

      > We may soon be living in a repeat of ’70s

      I’ve been saying for months that Obama was going to bring back the Carter 70s and make Carter look good by comparison.

    15. Mike Drew Says:

      I agree that Union’s is a major factor for the failing of the Big 3, that and the high taxes that our domestic automakers pay both here in the states and when trying to sell overseas. Obama’s illuminati party is not setting us up for success in the private sector, but rather dependency on government. I’m still waiting for the day when all of us get silenced through the fairness doctrine. Thanks for reminding me of the graveyard that I have to spend the next few days at going to a wedding in Michigan. I can’t stand that depressing state.

    16. mishu Says:

      I’m already picturing Obama sitting next to a fire place, wearing a sweater and trying to explain why we’re in such a malaise.

    17. Paul Says:

      Alright, please get off of Michigan’s back! Detroit is a hot mess due to urban sprawl and the disappearance of manufacturing jobs. The unions did play a part in driving these companies out of the Midwest. Something was said about a worker having a good job at 25 and being laid-off at 45 and out of a job by 55, let’s shine some light on these “good union workers”: The guy probably was offered a chance to relocate but loved the state he was living in and couldn’t possibly imagine moving. Some years go by and he is offered an early retirement he takes it because the company that he works for is leaving the state. The good worker never seen this coming and is so distraught of the “sudden” change of events that he is on the verge of losing everything. If he would have saved some of his union paid hourly salary he would have been better prepared for this situation, if he would have relocated down south because that’s were some of the manufacturing jobs went before companies figured out they could go to Mexico and pay their workers even less money to do same work thanks to the North American Free Trade Agreement (which is another can of worms that screwed us) he would have some sympathy from me.This is typical of us Americans when everything is going well it’s all fine and dandy, when something doesn’t go our way we scream and holler that someone has screwed us. Prime example just look at the housing industry and the “market collapse” we will bounce back under Obama or Mccain in my opinion but the next time someone is offering us something that we don’t need or sounds to go to be true will we will take it? It sounds to me a lot of people are whining looking to point the finger at somebody when we should be pointing the finger at ourselves for LIVING BEYOND OUR MEANS. I say take control and responsibility of your life and money instead of always looking for a scapegoat. On the other hand i would like to agree with the guy from Madison. I currently live in Kalamazoo, Michigan and there are a lot of great things happening. There is the Kalamazoo Promise, which will pay for any kid that goes to school from K-12 free tuition at any Michigan school and those that go from 9-12 they will pay about 60 percent. There are several opportunities in the pharmaceutical field dealing with drug research & development. Midlink is planning to add over 3000 new jobs to the area over the next 10yrs., Stryker a fortune 500 company is making additions to their workforce. Toyota is building a new plant in Battle Creek, Kalamazoo’s neighbor 20 min. down the road and Grand Rapids which is 45min north of Kalamazoo has added multiple new hospitals for everything ranging from training doctors to medical research.

    18. BlogDog Says:

      I have to agree with the post but it raises one question in my mind:
      Unions that work at businesses are subject to change because competing businesses can move in (cf non-union auto manufacturing in the sunbelt v. union auto manufacturing in the rustbelt). I recall reading that the only union growth in the last decade or so has been in government unions (i.e. SEIU). Given that no competing government can arise, how is it possible to blunt the inimical nature of such unions to the betterment of a free society?
      Of course I imagine that some will say the government union is to the betterment of a free society but such a fundamentally frivolous position deserves nothing more than derision.

    19. Real Life Bundler Says:

      “I’m already picturing Obama sitting next to a fire place, wearing a sweater and trying to explain why we’re in such a malaise.”

      Mishu – many business leaders and ‘capitalists’ agree with you that Obama is Carter II. The difference between capitalists (on-shore and off-shore) and everyone else is that we look at it not as a tragedy but rather an economic certainty on which safe bets can be made and profits can be reaped.

      To illustrate: If you know Obama is going to “bankrupt” the coal industry by for example massively taxing the burning of coal for energy, you buy oil and watch Americans run the price up (complaining all the way about how much exxon is ‘windfall’ profiteering). If you know Obama is going to force business to buy green energy credits, you start a business which certifies these indulgences. My current favorite – we know Obama is going to raise income taxes. Municipal Bonds, which are not taxable at the federal level, produce an improved after-tax yield the higher taxes get. Buy them now and profit when Obama raises your taxes.

      Democracy is not suited to libertarian principles of economics. It is a majority-takes-all scheme where two sides compete for client-voters with a grab bag of directed give-aways, harvested from a few wealth creators. The wealth creators are permitted to profit and reside in the Democracy with reasonable certainty that their wealth is not going to be simply snatched by the mobs outside the gates of their houses. The wealth creators pay taxes on their incomes and profits as a form of ‘protection money’ to the democrats (small d). If the protection money paid exceeds the actual cost of the protection of the wealth, the wealth creators move to a less costly ‘turf.’ Remember, income taxes tax income and real estate taxes tax wealth. When democracies have massive wealth taxes, nearly all the wealth creators run for the door. Income taxes are only a burden on middle class people who are trying to get wealthy. Wealthy people can choose not to earn income. (Simply buy gold for example and sit on it). My advice, if you don’t want to be a middle class person, stop thinking like one and start thinking like a capitalist.

      Democrats and Republicans are both socialistic redistributors with client-voters. If you think a 35% marginal tax rate in which the government owns you like a slave until April and a 40% tax rate in which the government owns you until May are philosophically so different then you aren’t paying careful attention. The real difference is in who gets the spoils of victory – faith based initiatives (aka evangelical churches) or SCHIP (aka children of urban welfare queens).

      Capitalists do not care if a certain politician is detrimental to your personal cost of living or quality of life. If you choose Obama, which for many means a lower quality of life in higher taxes and higher cost of desirable goods, that is simply your choice. For many others, who are his client-voters and who will get a ‘tax credit’ (aka WELFARE PAYMENT) this may mean a better quality of life, at least in the short term. All capitalists want is to know in advance who will win and what will he/she do. Then capitalists can plan the use of their capital for investment (or restraint of investment) in the most efficient and profitable way.

    20. MarkJ Says:

      Mishu,

      I’m already picturing Obama sitting next to a fire place, wearing a sweater and trying to explain why we’re in such a malaise.

      I’ve got an even better picture. Imagine an embattled Obama acting like Lloyd Bridges in Airplane:

      “Damn, this job is HARD. Looks like I picked the wrong decade to stop smoking! Hey Hillary, how ’bout some coffee? (Hillary:) NO THANKS!!!!”

    21. Shannon Love Says:

      Paul,

      Alright, please get off of Michigan’s back! Detroit is a hot mess…

      I’m not singling out Michigan and Detroit for condemnation but just using them as the primary examples of the collapse of the area. Fifty years ago, Detroit was the premier industrial city in the entire world. If you’d have told someone in 1957 that in 2007 Detroit would be a basket case, they would have thought you mad. The collapse of the region occurred in a period of less than 15 years (1960-1975). It can happen that fast in the rest of the country if we implement the same policies.

    22. Shannon Love Says:

      Real Life Bundler,

      If you think a 35% marginal tax rate in which the government owns you like a slave until April and a 40% tax rate in which the government owns you until May are philosophically so different then you aren’t paying careful attention.

      That 5% compounded over several decades would add up to to quite a chunk of change which would in turn add up to more personal choices.

      Politics is purely a matter of choosing the lesser of two evils.

    23. wonderer Says:

      “Obama clearly plans to try to extend the rustbelt model to the rest of the country.”

      This statement has me wondering when the United States became a place where an individual could do this. Doesn’t Obama have to convince a majority of the country that doing this would be the right track?

      What everyone forgets is that Obama’s first initiative, should he be elected (which I seriously doubt) would have repercussions that will resonate fairly quickly.

      Card check = the end of secret balloting.

      Health Care Reform = Establishing a state religion (Islam, since Muslims will not be required to adhere to health care laws that require compulsory insurance purchase, effectively taxing Jews and Christians more.)

      Creation of his Civilian Army = The Return of Adolph Hitler’s Brownshirts.

      Shortly, people will put two and two together and someone will step up and do the right thing.

    24. BuddyPC Says:

      Shannon Love Says: “I’ve always wondered by business never educated their employees about the way in which different policies would effect the business and employees jobs.”

      See the GM ‘Thought Starter’ series, from back in the day. A notable example: The Illustrated Road To Serfdom
      http://mises.org/books/TRTS/

      Paul Says: “If he would have saved some of his union paid hourly salary he would have been better prepared for this situation, if he would have relocated down south because that’s were some of the manufacturing jobs went before companies figured out they could go to Mexico and pay their workers even less money to do same work thanks to the North American Free Trade Agreement (which is another can of worms that screwed us) he would have some sympathy from me.”

      If all these jobs have supposedly gone to Mexico……. then why are so many Mexicans coming here looking for jobs? We don’t want any jobs created in Mexico, but we don’t want any Mexicans emigrating here. One can’t be both nativist and protectionist.
      Mexican , Canadian, and US GDP and job creation has accelerated in the years following the NAFTA signing.

      The shelter of cradle to grave corporate employment was a one generation in 10000 human years aberration.
      For all the lament about manufacturing jobs, why don’t any Americans seem to want their kids to have any manufacturing jobs?
      It was McCain who was recklessly honest (he did lose that primary) in telling Michigan folks that “some of these lost jobs are never coming back.”
      It seemed he was trying to lay a foundation of new thinking in a region whose traditional approach to product development and markets is in too many cases as obsolete as their civic leaders who wish that for the rest of us.


      Of all tyrannies a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience. – C.S. Lewis

    25. Never Yet Melted » Obama Happened Says:

      [...] Shannon Love asks why isn’t Detroit and the Great Lakes region along with the former Industrial Northeast today the economic powerhouse it was in 1950? [...]

    26. Jack Says:

      It isn’t just Detroit…

      take a look at any democrat city that has been democrat for 20 years or more. They are all basket cases. In fact, the 20 least desirable places to live in the US are Democrat run cities.

    27. Obama Happened Says:

      [...] In Detroit.  From the Chicago Boyz, a companion piece to mine on Chicago politics, coming to a city near you. Posted by Dan Collins @ 1:46 pm | Trackback Share This [...]

    28. Spartee Says:

      “There is a cottage tourist business in this area, but nothing like I would expect – I am not sure why. I would think that the whole west coast of Michigan would be built up but maybe they have some restrictions in place, I don’t know.”

      Nah, no such thing going on here. I lived in West Michigan as a kid, worked in Chicago for a number of years after leaving U of M, and I now live in West Michigan’s lakeshore area again with my family.

      Truth is, we don’t want you Chicago folks here. You are loud, crude, and foul the nest. I like Chicago a ton as a town, I just don’t want you people for neighbors. (Polite Michigan grin and nod) I may not like the hypocritical religion-spouting, miserly Dutch folks that seem to run everything in West Michigan, but they are *way* better than the narrow-eyed, thieving Chicago business community I dealt with all those years.

    29. Jeff Medcalf Says:

      Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

      This is known as “bad luck.”
      — Robert Heinlein

    30. Peter Rice Says:

      I grew up in Michigan in the 1950s and finished college in 1969 to never return to live in Michigan. What harmed Michigan were:

      1. The Detroit riots of 1967 that caused massive white (and non white) flight out of Detroit by people and taxable businesses. Blacks with money moved out of Detroit also, except to Dearborn that as late as 1969 was white only.

      2. Racial discrimination ended in the South and air conditioning became inexpensive so the South with its right to work laws became VERY attractive to workers and owners of businesses.

      3. Large numbers of Republicans moved out of Michigan and the Democrats and RINOs took control of the state government and came to believe that they could TAX MICHIGAN TO PROSPERITY. They still believe this.

      4. Winter is long and summer is short in Michigan. Why stay there if there are few good jobs, high taxes, and a bleak future?

      Michgian was NOT competitive with southern states for workers nor business. With the likely failures of the not very big three car makers, it will likely get much worse.

      I see nothing in the future that can correct this. And why would Democrats correct it, for keeping Michigan poor will cause it to vote Democrat again and again.

    31. The Rustbest Model-Coming to a theater near you? at Hispanic Pundit Says:

      [...] have to say, having lived in Michigan for 2 years, I can still visualize the extent to which strong unions, a heavy reliance on big government and a general hostility to free markets can destroy an economy. Obama’s economic policies remind me of the same characteristics that [...]

    32. Slocum Says:

      It’s strange, considering the natural beauty of Michigan, not to mention it’s strategic location between Chicago and Toronto, but it truly is a dead zone for business right now. (The legacy bad business law and taxes don’t help either).

      I would say the biggest problem that Michigan faces right now is probably not the business climate, it’s the uniformly negative perception being spread by news stories and blog posts like this one. Seriously — the reality and perceptions of Michigan are pretty far out of whack. Michigan does have a great deal of natural beauty and also good infrastructure, excellent universities (including one of the world’s greatest public universities in the University of Michigan in Ann Arbor), a reasonable cost of living, and even the tax levels are really not *that* high. The perception is of a state strangled by high taxes, but Michigan is actually middle-of-the-pack — nowhere near NY or Calif:

      http://money.cnn.com/pf/features/lists/taxesbystate2005/index.html

      Nor has Michigan’s recent history been one of inexorable decline under Obama-style left-liberal leadership. Michigan boomed during most of the 90s under a 3-term Republican governor (John Engler). And the U.S. automakers were still generating billions in profits during that decade (mostly on truck & SUV sales, yes, but profits are profits). It’s hard to believe now, but at the time of the supposed ‘merger of equals’ ten years ago, Chrysler was slightly larger and more profitable than Daimler Benz, and Ford and GM were on buying sprees snapping up European automakers (Saab, Volvo, Jaguar). Also keep in mind that there is more to the auto business than the Big 3 and manufacturing here. Toyota and Hyundai/Kia both are expanding engineering and R&D facilities in SE Michigan — and why not? The engineers are here and the UAW isn’t an issue for technical and white collar workers.

      Although the city of Detroit itself has steadily lost wealth and population since the 1950s, the surrounding metro area has grown and sprawled…to the point where the city of Detroit makes up less than 1/5th of the population. Also, the west side of the state was never either an auto-production or union stronghold, but tends to be conservative and vote Republican.

      Lastly, there was no possible set of policies that would have enabled Michigan and surrounding states to maintain the share of world manufacturing that it had at the end of WWII — since European and Japanese industry had been bombed to rubble.

    33. Slocum Says:

      “Dan from Madison Says: There is a cottage tourist business in this area, but nothing like I would expect – I am not sure why. I would think that the whole west coast of Michigan would be built up but maybe they have some restrictions in place, I don’t know.”

      Oh, it’s not all laid back and undeveloped. And the most concentrated tourism/resort development tends to be farther north — ever seen the traffic in Traverse City in the summer time? Or the serious money in Glen Arbor, Harbor Springs or Suttons Bay?

      Spartee Says: Truth is, we don’t want you Chicago folks here. You are loud, crude, and foul the nest. I like Chicago a ton as a town, I just don’t want you people for neighbors.

      That’s silly–vacationing Chicagoans have been coming to West Michigan since the 19th century when they came by steamboat. If Chicago politics hasn’t rubbed off over that time, it’s not likely to happen. Nobody wants an extension of corrupt Chicago politics in Michigan (probably least of all visiting Chicagoans), but they’re certainly welcome as cottage-owners, golfers, sailors, skiers, etc, etc.

      With respect to Chicago, I think West Michigan has it good — Chicago is easily accessible (in both directions), but Michigan doesn’t have to deal with the politics. Detroit is in bad shape, which is a shame, but at least there’s no danger that the city is going to dominate state politics the way that Chicago does in Illinois.

    34. ExDetroiter Says:

      [ Comment Deleted for making racist comments. A politician's race is not relevant to their policies. -- Shannon ]

    35. Jason Says:

      I live in Ohio, and I find it frustrating to listen to politicians here, still to this day, talk about restoring manufacturing jobs and whatnot. Few, if any, ever really talk about lowering taxes on businesses and implementing other policies that might encourage innovation. Obama even talks that way when he stops by to visit. The economy of Ohio will never, ever improve if we don’t get over this idea that we have to return to some 1950′s style economy where we all work for 30 years at the same factories our fathers did. Aside from the fact that it’s simply not going to happen, the idea of working 30 years in the same factory sounds kind of awful to me anyway.

      But the message works (obviously) for people in their 50′s who just got laid off from a factory job, and possess very few marketable job skills. They don’t care much about the overall economy of Ohio, they just want their jobs back. Which is understandable, but to a large extent, this is just shifting deck chairs on the Titanic.

      But, the previous commenters were correct. The left in this country is far more conservative and reactionary in many respects than the right.

    36. CapedConservative Says:

      Detroit is dead because of the failure of the automobile industry. This industry is a dead man walking for one BIG reason. Unions. CAFE standards and other automobile regulations have done their share, but at least foreign competition must meet those same standards. The only item they don’t have to meet are the ridiculous buren the unions have been over the years. My sister’s neighbor is a “retired” GM line employee. Some 15 years into his working life, he was laid off…. could only draw 90% of his salary and benefits for the next year. However, thanks to a great union, he could simply work at ANY plant in the US for two weeks and then extend that for another year…. which he did until retirement. I’m sure that doesn’t add much to the cost of a car….

    37. rustbelt Says:

      You guys with your union fetishism crack me up. You think a bunch of working-class and barely middle-class joes managed to piss away the greatest concentration of industrial prosperity ever assembled. No, that kind of feat requires the potent combination of Government + Wall Street. The Great Lakes region was systematically treated by the US government as a cash cow to fund the development of the backward areas of the US that rejected industry in favor of slavery or were devoid of natural resources. This PDF shows the net federal spending per state back to 1980, and it was much worse before that. You’ll see that the states in the region make up the bottom 20%, those that have sent far more to Washington than they have received, for 60 years. That funds a lot of infrastructure, which btw was built by private industry originally, not by the feds like down south and out west. Let’s face it, manufacturing is dirty and hard. Wall Street likes a quick buck as much as the next guy, and figuring out the next improvement takes time and money and effort. It’s a lot easier to borrow some money, leverage a company to the gills, strip its assets and then leave it to fail than it is to engage in constant, sustained effort to eke out a little margin with no room for error in a world economy. No, that’s not the problem, the problem is that intransigent union guy that would really like a 3% raise this year instead of the 50% reduction we’re offering.

    38. celebrim Says:

      A few comments about my experiences with Unions:

      1) I was born in a small town where the single largest employer was a bauxite mining firm. In the late ’70′s, early 80′s, the price of Aluminum tanked, and it no longer was profitable to run the plant. The company went to the union and gave them a choice, “Either take a pay cut or else we will close the plant.” The Union choose to have them close the plant. The question is, “Why?” The answer is that the a very large percentage of the Union was older tenured workers with pension plans. Younger workers who wanted to work lost their jobs because older workers had less incentive to keep working.
      2) I worked for a while at an oil refinery. The manufacturer was in the process of scaling back the unions by outsourcing more an more of their work to contractors. The unions were very angry about this, however, every week during the status meeting a comparison of the numbers revealed that the contractor employees had in comparison to the union employees: lower injury rates, higher productivity , lower rates of sick leave, and less down time do to incidents of every sort. There was a time when union employees managed to leverage management by promising to self-police their work and gaurantee labor of the highest quality. At such a time, the threat of a strike was meaningful because replacement workers would bring with them higher costs. But if replacement workers bring with the lower costs, the union loses any leverage over management except what it can extort through legal action. The company was willing to replace union jobs with contractor jobs even if it meant paying higher wages.
      3) I worked for a while as a truck driver, primarily delivering industrial supplies to heavy construction and industrial sites. One day I did a delivery to a carpentry shop serving a refinery. The shop had replaced a unionized employee carpentry shop with contracted labor, but the shop itself had unionized employees. I went into the office and endedup talking to the shop foremen about the economy, because there was a recession that was slowing down new construction projects (we were feeling it too). The foremen invited me to look out the window onto to the shop floor, and pointed out several groups of workers. In one group was a young man, hard at work cutting studs to length. He said, “I hired that guy two years ago. He’s my best worker. He’s got young three kids at home he’s trying to feed, and he works his ass off every day all day long.” Then he pointed to a couple of heavy set older gentlemen drinking coffee and telling jokes, “Those guys have been in the union for like 25 years. They come into work and do nothing unless I ride their asses, and even then they pretty much ignore me and just do desultory work. They are so tenured that I can’t get rid of them. I’m going to have to lay off the young kid with three small kids even though he does more work than the whole bunch of them combined.”
      4) I worked for a few days as a printer’s devil doing temp manual labor to help a university printing house get books out at the beginning of a semester. I’d been working like only an hour and a half when everyone stopped working and went over and started drinking coffee. Previously, I’d been working a warehouse wearing 3 or 4 different hats and pulling 10.5 hour days with lunch as I could grab it, so I say no reason to stop so early in the day. As I continued running the punch machine, a group of men came and surrounded me and said, “It’s mandatory break time. You got to get off the floor.” They made it pretty clear to me that if I didn’t stop working, bad things would happen to me. So like clockwork, 2 times everymorning and 2 times every afternoon I’d stop and twiddle my fingers for 10 minutes, plus an hour for lunch. All told, an ‘eight hour day’ involved less than six hours of labor. As with many of the jobs I took to pay for my wife’s education, most of the time the reason ‘temp labor was needed’ was that the existing labor simply refused to work. I did data entry jobs at firms where the four existing employees gossipped 5-6 hours a day and watched me work through the backlog of a years worth of work – the whole of which I did in less than six weeks. I literally could have replaced all four employees with just my own labor, and certainly no more than my labor and the one young single mother who was the only one of the four that consistantly worked more than an hour a day. I can remember working in a pipe yard while older guys watched me work while saying, “I’d rather take a beating than pull any more of this pipe.”, to which I thought of responding, “That could be arranged.” Unions used to be about garaunteeing the right to work, but they’ve become the means of gauranteeing the right to not work.

    39. alwayscowgirl Says:

      Just look at New York and California – all run by Democrats/Liberals – Arnie is a RINO and listens to Ted “who killed Mary Jo” Kennedy. These two states are in the eonomic toliet. California has a $16 billion budget deficit because the RICH are leaving in droves, which drives down the amount of taxes that the state collects – Yes THE MESSIAH, taxes are paid by the rich. California will be losing a Congressman in the House of Represenatitves in the next year due to the loss of population. Rich people and business are leaving in droves. Half of California’s budget is Education, yes education. Half of that education budget is K-12. One in three high schoolers drop out. WOW – great return on taxpayer money. California spends $7 billion a year in entitlements, $15 Billion a year in Medicad and oh yeah $16 Billion in entitlements to illegal aliens – you know the ones who do the jobs most Americans won’t do. So illegal aliens get paid cash (they pay no taxes) to do menial jobs and then they get $16 billion in benefits from taxpayers. What a return on investment. No wonder the rich are leaving California.

    40. Jimbo Says:

      Detroit is a pretty good analogy but I think the pre-Thatcherite Britain is a better example of where we are heading. Consider the similarities:

      1. Auto Industry. Britain: Government ownership of British Leyland; US under Obama: Government the largest creditor of GM, Ford, Chrysler.

      2. Other Industries: Britain: Government ownership of railroads and steel industries. US under Obama: Government ownership of large shares in banking and insurance companies.

      3. Coal and Utilities: Government owned British Coal and electric power generation (the Central Electricity Generating Board); US under Obama: Coal and electric power producers driven into bankruptcy (and then nationalized) by onerous environmental regulation.

      4. Housing: Britain: Government ownership of millions of council houses; US under Obama: government ownership of million of homes via the subprime mortgage bailout.

      5. Militant Unions: Britain: Yep; US Under Obama: Yep.

      6. Healthcare: Britain: Single payer national health care; US Under Obama: ditto

      7. Biggest celebrity in the world: Britain: The Fab Four; US under Obama: The One

      So rather than Detroit, pre-Thatcher Britain may be a closer fit.

    41. Mike Says:

      Great article, great comments – and a couple of priceless quotes courtesy of BuddyPC and Jeff. Whatever happens tomorrow I take comfort from knowing there are so many of us that still have our heads screwed on,

    42. Snorri Godhi Says:

      This is a very interesting analysis for someone who, like me, is morbidly fascinated by cultural and economic decline. I remain more concerned about Obama’s foreign policy, though.

      About the point that the “left”, or at least the American “left”, is really conservative rather than liberal: the best evidence for that is Obama’s comment that the US has gone downhill (at least in the World’s opinion) since his father moved to the US in the late 1950s. Given that there was still segregation at the time, Obama could not have meant literally that the US was a better place at the time; but the remark exposes the reactionary instincts of the American “left”.

    43. Shannon Love Says:

      Rustbelt,

      You guys with your union fetishism crack me up. You think a bunch of working-class and barely middle-class joes managed to piss away the greatest concentration of industrial prosperity ever assembled. No, that kind of feat requires the potent combination of Government + Wall Street.

      That would be true except that Unions=(working class joes + middle-class joes) + Government. Unions are cartels and only work through violence and intimidation. In the early days, unionist did it themselves murdering thousands of “scabs” i.e. competing workers. (As unions were profoundly racist, about 2/3 of the murdered competing workers were African-American.) Union violence became so extreme that eventually the government stepped in and promised to threaten employers with violence under the guise of labor law if they did make the unions their exclusive providers of labor.

      (This is why unions cannot exist in Right to Work states, if the government will not use violence on the union’s behalf, the union members cannot prevent competition.)

      Given that event he largest company cannot stand against the smallest government (because the government has all the guns) unions can a do push large corporations around. Unions, back by the force of the state, can destroy any company they please and the companies know this. In the period of 1945-1965, the unions did not even have the discipline of economic cooperation for the companies they worked for so they went berserk using the power of government to extort unsustainable salaries and benefits. When competition returned, the unions refused to adapt the companies collapsed.

      The Great Lakes region was systematically treated by the US government as a cash cow to fund the development of the backward areas of the US that rejected industry in favor of slavery or were devoid of natural resources.

      I’ve seen this argument before and it does not hold water for the following reasons: (1) To get the wealth transfer, you have include social security payments. Since the warm southern states and rural states have a higher proportion of elderly, they receive more social security payments. Subtract those and the tax pictures shifts significantly. (2) Income taxes depend on income but do not reflect the cost of living. As I noted in the parent, union drive up wages for everybody in an area thus driving up the cost of living. This means that people pay higher taxes to the federal government than does someone who does the same job in a right to work state. Given the lower cost of living in those states, however, the person in the right to work state can have the same standard of living of an equivalent person living in a union state.

      The fundamental problem with unions is that they try to make their members better off by using violence instead of by improving the members productivity. The end result is that the total wealth of the are will decline to the point whereat even violence cannot maintain the standard of living.

    44. Bozoer Rebbe Says:

      While Detroit is a real-life experiment in what 50 years of Democratic ideology will do to a city, you can’t ignore the significance of the 1967 riot. A lot of “white flight” had taken place before the riot, in terms of homeowners, but most of the businesses remained. In the riot many small and medium sized businesses were burned or looted. After the riot, their owners decided to rebuild in the suburbs. Other business owners followed suit to get away from crime. Those residents who remained in Detroit were stymied at getting jobs at all those moved businesses by, ironically, Detroit’s emphasis on the automobile. The Detroit area has long had an inadequate public transportation system so if you don’t own a car getting to work on time is a problem.

    45. mhr Says:

      As union pay and benefits- health care and pensions- went up, the quality of the product went down. And then competition arrived for the first time and Americans began to buy foreign cars. It is a crying shame that Ford General Motors may soon disappear. US public schools are now run by unions most of whose members are becoming increasingly radical. And as the unions got more powerful, quality of teaching went down. Some university should fund a study of the effect of unionization on quality of product. But then universities are run by liberals and such a study will never be undertaken there.

    46. Shannon Love Says:

      Bozoer Rebbe,

      I think the 1967 riot merely accelerated an already existing trend. Cities function somewhat as living organisms, as economy routes resources through them i.e. the wider economy needs the city to exist, then cities bounce back even after being literally burned to the ground. Cities are fundamentally collections of people, not buildings or other infrastructure. Had Detroit still been a good place to do business i.e. to create wealth, the city would have bounced back following the riots.

      More to my original point, Detroit is merely an exemplar of fate of the entire region. No single event such as the riot afflicted the entire area so riot is better viewed as a symptom rather than a cause.

    47. chicopanther Says:

      What really finished off Detroit was the election of Detroit’s first black mayor, Coleman Young. He said he was going to “stick it to Whitey” and he did. He also got forced school bussing going and that really accelerated all of the property owners with money fleeing to the suburbs. Under Young’s administrations, he was surrounded with corrupt cronies like Daralynn Bowers and Charlie Beckham who further ran down the city.

      chicopanther

    48. rustbelt Says:

      In the early days, unionist did it themselves murdering thousands of “scabs” — Cite, please, and differentiate between the preceding period of company-sponsored Pinkerton private armies. I’ll ignore the racist charge/tangent.

      To get the wealth transfer, you have include social security payments. Since the warm southern states and rural states have a higher proportion of elderly, they receive more social security payments. Subtract those and the tax pictures shifts significantly Are there any other inconvenient facts we should subtract, such as that all large military bases are now in the South, or that the vast majority of federal disaster payments are made in the South? SS is a transfer payment, so working people in MI/OH/NY/PA were/are transferring money to retirees in the South, where it is spent in the local economies, not in its place of origin, so I’m not sure what your point is.

      I agree that Detroit is an example of something, political and financial mercantilism, not just of what happens when unions run amok.

    49. Fallingdown Says:

      “A politician’s race is not relevant to their policies.” — Shannon

      Maybe for you honkies…….

    50. Murdoc Online Says:

      Why isn’t Detroit a Paradise?…

      As a Michigan resident since 1993, Murdoc wonders the same thing. In Cicago Boyz:
      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, Wisc…

    51. Tyouth Says:

      “A politician’s race is not relevant to their policies.” — Shannon

      Maybe for you honkies………..said Fallingdown.

      Rather ironic that, if Obama wins, the first black, or semi-black president, will have been elected partially due to racism (although it would not be PC to say so).

    52. Dan D Says:

      My brother took a “buy out” from GM last year and is very concerned that GM will go bankrupt and dump his pension on the Federal government. That pension from the Feds. would be somewhere around $267 a month. During the 70′s and early 80′s the unions extorted GM, Ford, and Chrysler who couldn’t aford a strike because the Japaneese auto makers had entered the US market. Now the UAW workers are paying the price for that “extortion”. The foreign auto companies only hire in counties by zip code with low union membership. Toyto was looking at putting a factory in southern Indiana where union membership is low.

    53. SukieTawdry Says:

      There are many factors contributing to the decline of the Rust Belt, but chief among them, I think, are the unions. Unions are opposed to increased workplace productivity. The more workers required to produce a unit of product, the better. Labor-saving devices and equipment are anathema to union goals. Unions–and the UAW is a striking example of this–mandate skilled craftmen’s wage and benefit packages for workers performing assembly line tasks that don’t require developed skills or abilities. Unions protect workers who would be virtually unemployable in an open shop. Unions neither recognize nor reward merit; seniority and patronage are the only considerations for employment and advancement. And just think, under an Obama administration aided by a Democratic Congress, unions will be able to impose themselves on workers required to vote publicly under the watchful eyes of the unions’ “enforcement” wings.

      But as bad as labor unions can be, even worse are the public sector unions. At one time, government jobs paid less than comparable positions in the private sector. Government workers were compensated for that “inequity” with generous benefits, pensions and civil service guarantees. Enter the public sector unions. Now government workers are generally better compensated than their comparably situated private sector fellows and yet still receive even more generous benefit/pension packages and, of course, those all-important civil service guarantees. It’s gotten so out of hand that municipalities, counties and states face bankruptcy due to their obligations to retired workers. In California, both STRS and PERS have billions in unfunded liabilities. One out of every three dollars in LA County’s education budget goes to retired teachers. It’s not unusual for a municipal employee to receive 80% (or more) of his final wage as retirement compensation. Once the Boomers start retiring in droves, there will be no way for the system to sustain itself. Just wait until the federal government has to assume California’s public pension obligations. And although the pending fiscal disaster is probably worse here than in other states, California is by no means the only state that will buckle–and perhaps break–trying to meet these outlandish obligations. If you think the federal government is already over-burdened by entitlement payments, you ain’t seen nothin’ yet!

      My little union anecdote: I spent many years in general contracting. Although we were not a union shop, we specialized in public works contracting which means we paid our labor a prevailing wage. One of our long-time employees married a state worker who found the periodic lay-offs inherent in our industry unacceptable and persuaded him to seek state employment. Once he made it to the waiting list, a laborer friend of hers already employed by the State took him in hand and explained the facts of life. You can not bring a private sector work ethic to the public workplace, he was told. State construction workers do not “hustle.” You have been “conditioned” to believe that time is money. Forget all that. If you persist in your private sector habits, you will be shunned and eventually dispensed with. Yikes! This guy was a good worker, but I’ll bet by now he’s left all that behind and is fully enjoying the fruits of his much reduced labor. It’s not hard to adapt–Norway, after all, has discovered to its chagrin that the work ethic can be bred out in just two generations. Is this our future as well?

    54. Shannon Love Says:

      Rustbelt,

      SS is a transfer payment, so working people in MI/OH/NY/PA were/are transferring money to retirees in the South, where it is spent in the local economies, not in its place of origin, so I’m not sure what your point is.

      Point is that SS was set in place in the 1930′s decades when the Great Lakes States ruled the roost. SS attach to individuals, no one in say Texas can prevent someone from Michigan from retiring in the Texas and bringing their retirement spending there. This negates your hypothesis that the Great Lakes states are being milked by the scheming states outside the area. Rather the migration of people of the states, caused by deteriorating conditions there, caused the transfer of tax dollars.

      Even we do accept that SS represents drain on the states, it only goes to reinforce my point that socialism destroyed those states and that Obama’s polices will make it worse. Most medical spending goes to the elderly and with socialized medicine most medical spending will go where the elderly go. Which is to say south and west.

      …such as that all large military bases are now in the South,

      Large military bases have always been in the south and west primarily do to (1) hostility to the military in the northeast and (2) just like all other employers the military finds a cheaper and better (civilian) workforce and overall lower cost in non-union areas. Given that the lions share of military hardware was manufactured in the Great Lake States well up until the 70′s military spending cannot have had much to do with the area’s decline.

      …or that the vast majority of federal disaster payments are made in the South?

      Remind me again how many hurricanes, every year, strike the Great lake states? The south gets more disaster spending because the south has more disasters. I don’t recall Idaho or Alaska raking in the disaster dough. Disaster spending is yet another example of the perils of socialism. Once you get people to expect the state to take care of them in little things, they expect the state to take care of them in big things. This two will grow worse under Obama.

      Back in the 70′s price controls and the windfall profits tax crippled the Texas oil industry and nobody in the northeast cared. When those government restraints were lifted we had a five good years until the oil crash plunged us into a depression. Again, nobody in the northeast cared and in neither case did we get any help. We rebuilt and diversified our economy on our own by letting people work themselves out for themselves. The Great Lake states could do the same instead of trying to inflict their dysfunction on everyone else in the country.

      I think your arguments are petulant whining and a refusal to accept responsibility for you own decisions. You could be a great region again if you would just let go of your obsession with using violence to create wealth.

    55. David Says:

      Of course, the unions didn’t kill the automakers on their own – they had enthusiastic support from management. After all, each of these ridiculous provisions was agreed to by management. They apparently thought it was much cheaper and easier to promise a salary for life regardless of the amount of work that needed done than to, say, give a 10% pay raise. Then, they also failed to set aside enough money to pay for their promises, planning to take that from future earnings.

      Also, somehow, despite the Japanese having a similar culture of a guaranteed job for life, they still managed to produce high quality vehicles that people want to buy, while Detroit was satisfied with always playing catch up.

    56. Shannon Love Says:

      David,

      Of course, the unions didn’t kill the automakers on their own – they had enthusiastic support from management.

      Management does have a lot to answer for but it is also clear that the unions tied their hands. Ford for example runs a much admired and study plant in Brazil that uses very innovated methods. Ford cannot use those methods here due to union opposition.

      After all, each of these ridiculous provisions was agreed to by management.

      Unions are back by the violent power of the government. Management has no choice to comply with union demands unless they want to shutdown the company. Should management in 50′s and 60′s fought harder? Possibly, but the Steel industry tried that in the early 50′s and Truman threatened to nationalize the industry. The steelworker’s union got 90% of what they wanted out that strike.

      Ultimately, unions are to blame because they use violence to get what they want. If unions where voluntary associations of workers who got jobs by making themselves more valuable to others, that would be another story. Instead, they exploit there government granted monopoly ruthlessly.

    57. Jim,MtnViewCA,USA Says:

      I’m another MI refugee. I moved to CA during one of the downturns in the early 70s. I still have family there.
      It is amazing to me that such clueless politicoes get reelected over and over again. Today’s velocity of change _may_ mean that politicians will be less able to escape blame. Let’s hope so.
      Currently I’m torn by an issue in personal finance: should I remain out of the stock market because the people who ruined the economy are about to get a mandate to “fix” it? Or is it time to jump in because the media will make continuous claims about what a paradise we have under the Dem gov’t unlike “evil BushCo”?

    58. Jim,MtnViewCA,USA Says:

      It has always puzzled me, here in CA.
      We have about 45% Dem voters (idealistic, say) and about 45% Repub voters (practical, say). And we have 10% unionized gov’t workers. They bankroll Dem politicians with union dues, they vote Dem, the grateful politicians raise their benefits, expand the bureaucracy, etc.
      Of course an individual gov’t employee should be free to do what they want, but why is taxpayer money allowed to go from the state to union dues to Dem politicians’ reelection funds? Shouldn’t gov’t unions be banned from advocacy?

    59. Count Me In That Group « Tai-Chi Policy Says:

      [...] troubles, a president (and matching Congress) who’s stated policies are the same ones that destroyed the rust belt, will immediately begin killing jobs, policies that have never worked, ever, and that are [...]

    60. rustbelt Says:

      I think your arguments are petulant whining and a refusal to accept responsibility for you own decisions

      Yours are in-numerate, historically ignorant scapegoating of economically insignificant entities by exaggerating their power and perfidity to deflect blame from deliberate decisions made by individuals on Wall Street and in Washington.

    61. Favoring Lower Taxes is Selfish | Sparty Says:

      [...] the blog Chicago Boyz, they posed an interesting question which I wish someone one had asked Senator Obama weeks ago:  [...]

    62. realist gun nut Says:

      David said:

      Also, somehow, despite the Japanese having a similar culture of a guaranteed job for life, they still managed to produce high quality vehicles that people want to buy, while Detroit was satisfied with always playing catch up.

      Of course, the Japanese had one thing that the American auto companies did not have.

      A captive home market. How many American auto companies are allowed to compete in Japan or Korea?

    63. rafael Says:

      republicans have only themselves to blame. their power brokers allowed the take over by the theocrats, who could not care less about small govt/free market. way to go.

    64. Slocum Says:

      Also, somehow, despite the Japanese having a similar culture of a guaranteed job for life, they still managed to produce high quality vehicles that people want to buy, while Detroit was satisfied with always playing catch up.

      But the ‘Japanese’ cars that are killing the Detroit automakers aren’t built in Japan, they’re built in non-union factories in right-to-work states in the American south.

    65. Madison Heights Syndrome Says:

      Poor, victimized Michigan. And yet, they keep reelecting Carl Levin, over and over again. And after Obama is elected, Levin will be able to share his special magic with the rest of the national economy…

    66. Anonymous Says:

      “Unions are back by the violent power of the government.”

      YES. Not to mention the patent violence practiced by the Unions themselves, when they picket to prevent others from entering the place of work to earn a wage or engage in physical sabotage of the plant. All government comes down to is violence: What, how, and how much we pay to prevent it from happening to us and what is the return or cost to the practitioner of the violence.

    67. Great New Blog Says:

      [...] Blog November 3, 2008 17:39 by johnolimbo Called Chicago boys: check out their article on Obama http://chicagoboyz.net/archives/6380.html  Basically it shows his policies in action via examples of past failures.  I'm sure [...]

    68. ExPat Detroiter Says:

      What happened to Detroit? Many things but primarily relied too much on one industry which was very badly managed. Very badly managed.

    69. Shannon Love Says:

      Rustbelt,

      Yours are in-numerate, historically ignorant scapegoating of economically insignificant entities by exaggerating their power and perfidity to deflect blame from deliberate decisions made by individuals on Wall Street and in Washington.[emp added]

      No organization that can back it demands with overwhelming violence is powerless.

      Even without that insight, its simply displays a gross ignorance of history. Unions have repeatedly shutdown entire industries for months at time, How is that powerlessness? The Hitler and the Soviet Union never made a dent in U.S. production but unions brought it to it’s knees repeatedly. In 1952 Truman was forced to attempt to nationalize the Steel Industry on national security grounds after the unions shut down ALL steel production in the US for 52 days. How is that powerlessness? They repeated the same stunt in 1959 in a six month long strike whose effects would spell the end for the U.S. steel industry.

      The sixties and seventies saw several months long strikes in major industries. Eventually, they spread to the public sector as well. Garbage sat around laughing as the trash piled an people had to give in to their extortion.

      I think you’re the ignorant one if you think that the ability to shutdown the American steel, automotive, train, trucking, shipyards, docks, government and private sanitation, hospitals etc represents the acts of an economically insignificant organizations. I hate to think what a economically significant organization could do.

    70. Shannon Love Says:

      ExPat Detroiter,

      What happened to Detroit? Many things but primarily relied too much on one industry which was very badly managed.

      By setting detailed work rules and employment floors, the union injected themselves into the management process and became responsible for the management process failures. People talk as if the unions had no say in anything the companies did except for setting wages. That is very, very wrong. The unions effectively told companies how many employees they would hire and what those employees would do. When companies tried to implement methods to improve productivity, the unions shot them down because they often required fewer workers.

      . Of course, a lot of companies fail even without unions but It’s reasonable to believe that some of the car companies might have adapted if they’d been able experiment with new work rules.

    71. Roger Godby Says:

      Realist Gun Nut,

      I don’t know about South Korea, but here in Japan, people drive on the left; Detroit didn’t produce such cars. Management either chose not to invest in such production lines or unions opposed such investment, or both. Of course, import taxes are an important factor as well. Regarding motorcycles, nothing over 400 or 500cc is built and sold domestically to the public (Japanese police have big cc bikes, though), but an exemption is made for foreign imports, which is how Harleys are allowed in. In the same way, GoldWings are reimported from the US or somewhere else. Over ten years ago I stopped in a JETRO office that had a Harley on display. The import tax on the Harley was 36% (plus consumption tax of 5%).

      The guys on the US military bases seem to find plenty of Japanese buyers for the used cars they bring over. Where else would the ’60s and ’70s chromed low-riders and stretch vehicles come from?

      Pricey foreign right-hand cars sell well and wealthy Japanese like them very much. There are enough of them that toll roads have considered installing special right-hand toll collection booths. Some years ago there was a fad among young men about having your right arm tanned, suggesting you had enough money to own and drive a foreign car. Of course, I read that in a newspaper, so it was probablly bogus.

      From what I understand, the Rustbelt still remains homes to heavy industry, which is more influenced by business cycles: when it’s good, the Rustbelt is GOOD; when bad, BAD. Add government taxes, one-factory towns, and bad weather and you get emigration.

      I know the Region too well and concur on Chicago: great to visit but one wishes it could keeps its contaminants to itself, because wherever they go they bring the disease with them. Just like Californians who flee their workers’ paradise only to rebuild it in AZ and CO (Lost control on a snowy Denver road? Yet another Californicator.).

    72. Roger Godby Says:

      Sorry, I’ve confused left and right, flipflopping between inside the car and facing the car.

    73. realist gun nut Says:

      I don’t know about South Korea, but here in Japan, people drive on the left; Detroit didn’t produce such cars. Management either chose not to invest in such production lines or unions opposed such investment, or both.

      Come on Roger, you can do better than that.

      Australians also drive on the left, but there are no longer any Australian car companies. They are owned by GM, Ford, Toyota and Mitsubishi. They used to be owned by GM and Ford and Chrysler, and that was the case from before WWII.

      That is to say, American Car companies could manage to invest in a market that required right hand drive cars.

      As to the anecdote about service men managing to sell lots of cars, that is really a very different situation than a non-Japanese company trying to sell cars in Japan.

    74. realist gun nut Says:

      Shannon, it is tempting to attribute all of the RustBelt’s problems to one problem, unionism and a cosy political arrangement between Democrats and unions etc, but surely you don’t support such simplistic arguments.

      Others have pointed to additional factors, like the US being in the fortunate position after the end of WWII that much of the industrial capacity of the rest of the world had been destroyed. Perhaps those in the RustBelt and Americans in general simply became complacent and drank too much of their own coolaid (believed that no country could ever challenge them). Under those circumstances, why should management resist union demands for a large slice of the pie if they believed they would forever be the premier industrial country in the world and could always charge a premium for their products.

    75. Cynthia Says:

      I’m also a Michigan native, born and raised on Detroit’s east side and in about your age group. Apart from venting on forums such as DetroitYes.com, there seems to be little interest in resurrecting manufacturing in America. Small businesses and manufacturing are a key to our future success as we become hamstrung by the trade deficit and declining markets. McCain is correct that punitive taxes on business only raises prices to the consumer. Obama’s policies seem intent on destroying incentive and ambition, rather than fueling it.

    76. joe Says:

      regarding conservative vs. liberal:

      If I recall correctly, the original “conservatives” were trying to conserve the radical changes that took place during the then-immediate past. Possible the revolution, or the civil war. They weren’t trying to prevent change – they were trying to prevent backsliding.

      Wish I had a source for this.

    77. Something... and Half of Something Says:

      Why isn’t Detroit a Paradise?…

      A really good read from Shannon Love over at Chicago Boyz: 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……

    78. Shannon Love Says:

      Realist Gun Nut,

      Shannon, it is tempting to attribute all of the RustBelt’s problems to one problem, unionism and a cosy political arrangement between Democrats and unions etc, but surely you don’t support such simplistic arguments.

      I didn’t. Read the parent.

      Others have pointed to additional factors, like the US being in the fortunate position after the end of WWII that much of the industrial capacity of the rest of the world had been destroyed.

      That was me, in the parent. I pointed out that unions were only the most egregious of a slew of anti-production, semi-socialist policies that crippled business in the region.

      Under those circumstances, why should management resist union demands for a large slice of the pie if they believed they would forever be the premier industrial country in the world and could always charge a premium for their products.

      I don’t think management deserves any blame for bowing to union demands. Union get what they want through violence. In the beginning, unions simply killed people themselves but eventually the government stepped in and took over the threatening function. The government would fine and imprison business people that did not deal with the union.

      Managements types back in the 50′s and 60′s did warn against the expansive pensions and health benefits. What exactly do you think their detailed arguments were about during the negotiations? The recognized that the union’s compensation demands and work rules where bad for the long term health of the company but in the end they had no choice but to capitulate. They couldn’t fight the government.

    79. Vote! « The View from Alexandria Says:

      [...] prosperity and depression [...]

    80. Anonymous Says:

      Obama ate my lunch.

    81. Jim Realist Says:

      The top article seems to assume the United States could somehow have stayed in a dominant position of producing 50% of the world GNP if only there were no unions or taxes. No one can argue they didn’t have an impact on those corporations afflicted, but it seems incredibly narrow sited to suggest that the greatest free market in the world could not have reacted. Other businesses could and do spring up to take the place of old ones. Do you think Toyota and Hundae were plugging along in the 50s and then just by chance got the edge because the US had unions?
      Narrow minded thinking about how to go to market is more the culprit. Sure those US companies were unsuccessful in managing their business, but that doesn’t mean all US business is doomed to fail.

      That’s ridiculous. If that were the case then companies like BMW, Mercedes and VW would have failed years ago due to epically stronger unions and higher taxes.

      One could argue that because the US didn’t protect it’s workers with outrageous policies like in China or Japan where they basically subsidize their industry with government, the US firms couldn’t compete because of the diluted labor and auto costs coming out of those countries. The world doesn’t always play fair even though the US wants them to.

    82. Shannon Love Says:

      Jim Realist,

      The top article seems to assume the United States could somehow have stayed in a dominant position of producing 50% of the world GNP if only there were no unions or taxes.

      I asserted no such thing. The point about the dominance of the area in the 1950 merely showed how great an advantage was squandered. From such significant head start, the regionsshould have been able to adapt easily to the reconstruction and development of the rest of the world.

      Your focus on the automotive industry misses the broader picture. All the manufacturing in the area collapsed, in every industry. Steel, plastics, electronics, consumer durables, you name-it, all experienced a major downturn in the area in the late 60′s early 70′s. Do you mean to argue that every single major American manufacture of that era was incompetently managed? Don’t you think that just by sheer randomness some of them would have figured out how to adapt?

      Most damningly to your argument, companies that relocated outside the region to other parts of the U.S. usually prospered. If bad management and foreign competition were the main culprits, why can manufactures Right-to-Work states prosper? Bad managers in Michigan are bad managers in Texas. Unfair practices overseas hurt Texas companies as much as they hurt companies in Michigan.

      Remember also, that unions represent only the most visible manifestation of a political culture hostile to change and economic adaptation. A vast array of laws in many different areas seek to force corporations to remain highly static and to prevent adaptations that might produce dislocations in the workforce or the taxbase. It’s much harder to get permission to build a factory in Michigan than it is in Texas. The factory will pay higher taxes and poorer state services.

      We can’t force the rest of the world to go by our standards and laws. We can’t lock them out of our markets without locking ourselves out of theirs. We need to focus on what we can control internally instead of trying to lash out at foreigners. We need to set wages based on the free-market value of people’s labor, not by how much they can violently extort.

    83. DannyInSoCal Says:

      A special thank you to everyone who voted for Obama.

      The uninformed and naive voting for inexperience and potential.

      Thank you for turning our presidential election into American Idol.

      Now grab your ankles and brace yourself for “Change”…

      Thanx, D

    84. The Thunder Run Says:

      Web Reconnaissance for 11/05/2008…

      A short recon of what’s out there that might draw your attention, updated throughout the day…so check back often….

    85. Steynian 280 — Post-Election-O-Rama « Free Canuckistan! Says:

      [...] ONE REALLY has to ask the obvious question: If Obama’s economic policies work so well, why isn’t Detroit a [...]

    86. THE MEDIA WON : Stop The ACLU Says:

      [...] Source [...]

    87. PS Says:

      Hmmm….Republicans have held the presidency 28 out of the last 40 years. They have been in charge the last eight. And it is somehow Obama’s fault?

      The Republicans have been in charge most of the last 40 years. Take some responsibility instead of making excuses.

    88. Why isn't Detroit a Paradise? How Liberalism Killed Detroit and the Auto Industry - Sherdog Mixed Martial Arts Forums Says:

      [...] We may soon be living in a repeat of 70s and looking back at the years 1984-2007 as a golden era. Chicago Boyz Blog Archive Why isn’t Detroit a Paradise? Patrick J. Buchanan : We Did It to Ourselves – Townhall.com __________________ Favorite [...]

    89. Shannon Love Says:

      PS,

      Hmmm….Republicans have held the presidency 28 out of the last 40 years. They have been in charge the last eight. And it is somehow Obama’s fault?

      Most of the policies I criticizes are the policies of states not the federal government. The Great Lakes states have been mostly solidly Democrat since the 1930. Even when Republicans were elected in the area they choose to avoid to the suicidal course of taking on the unions.

      Of course Obama is not to blame. Indeed, his resume so thin he is not to blame for much of anything. My entire point in the parent was that Obama seeks to extend the failed policies of the Great Lake states to the rest of the country. In few short years, the rest of the country could experience the same economic devastation.

    90. How Accurate is Our Perception of Union Power? Says:

      [...] linked to this article the other day entitled Why isn’t Detroit a Paradise? but with the auto manufacturers sitting on the doorstep of Congress begging for money, I wanted to [...]

    91. » Paradise Detroit Says:

      [...] Read all about it here. [...]

    92. How Accurate Is Our Perception of Union Power? Says:

      [...] The article is a short anti-union piece. The article and comments are filled with typical yet informative examples of why people think unions are bad or that unions killed Michigan. (c.f., Michigan ain’t that bad.) [...]

    93. Why California is No Longer a Paradise « The Brew Says:

      [...] As I wrote before, those states where once the industrial dynamo for the entire Earth, yet they destroyed that enormous economic dominance by political policies hostile to economic creativity. Likewise, California had a golden era as an economic and cultural dynamo. Well up until the late 1980s California was the place to go to make it big. People moved from other states to California. Now, internal migration has reversed. California looks less like a dreamland and more like basket case waiting to happen. [...]

    94. Chicago Boyz » Blog Archive » Killing Cities: Indiana versus Texas Says:

      [...] are there in the Great Lake region? Most people point the finger at the auto industry to explain the fall of Detroit but what explains the fall of [...]