Stuff That Needs to be Said

Did you ever see or hear something and just can’t seem to get it out of your head….like Gene Autry singing Jingle Bells from Thanksgiving to after Christmas? Well a friend of mine sent me some photos about two cities. Some things just make you stop and say “Wow”. It was 65 years ago that the United States dropped the atomic bomb on Nagasaki and Hiroshima.

As a country we really don’t hear or know much about either place now.  So I’ve posted some pictures of before and after

I was stunned.  This is Hiroshima – a beautiful, vibrant city.  Clean and thriving.  An almost crime free city.

Now, let’s look at Detroit…..

Crime riddled filthy Detroit….our beloved Motown in ruins.  This city was once called the Paris of the Midwest because it was so beautiful and vibrant.  This looks more like New Orleans after Katrina….but sadly it’s not.

If you think this is a bit harsh, check out this website: http://www.detroityes.com/home.htm. It is dedicated to the modern ruins of Detroit – once one of America’s greatest cities.   Yes, modern ruins!

Now for the last few years, most of the articles showing these photos (and many more) said that the difference between the two cities was that in Japan there are no handouts…you either worked for it or did without.  They also stated that in Detroit, U.S. Government welfare programs were created to buy the votes of those who want someone to take care of them.  The question was asked “Which one worked better”?  Clearly a shot at the left from the right.

Brief research shows original comparisons were published sometime in the fall of 2009.  The message was that the welfare state did more to destroy Detroit than the atomic bomb did to Hiroshima.  Some of the photo groups were circulated with the caption “Who won the war”?  Very compelling!  The articles also said that Japan has no welfare system.  While many of us (including a few of my readers) wish this was so, it is not quite accurate.

Detroit was once nearly 2,000,000 people in the 1950’s and the fourth largest city in the US.  It is now barely over 700,000.  It’s smaller than Charlotte.  And if people never return, it’s unclear what will happen to Detroit’s nearly 140 square miles — enough to fit Boston, San Francisco and Manhattan with room to spare — that now lie largely vacant.   Can this all be attributed solely to the “welfare” programs in America?

I have to give that a no.  It is true that the welfare programs in the US are much more liberal than those in Japan.  You must remember that the US invested heavily to rebuild both Nagasaki and Hiroshima…..you have to call that a hand out.  On the other hand it is also true that Detroit became addicted to federal hand out programs.  Sorry, it is the truth.  But that’s not the whole story.  Let’s back up a bit.

The biggie to me is that businesses moved out of Detroit.  Why?  Oh gosh, do we really have to hear that the workers that built our beloved Motor City were not competitive?  The answer is yes we do.  They simply could not compete with Japan, much of Europe, Mexico and now Korea.  We weren’t dumber, slower or incompetent.  So why did the companies move elsewhere…even to the Southern states?  They could no longer afford UAW wages, local taxes, the pensions and policies of Detroit and people that lived there.

Businesses moved away from unions and the bureaucracy of an entitlement based city economy….and the corruption.  Many politicians and civic leaders found out they could become wealthy skimming off the top of federal programs aimed at helping the poor.  The expense of doing business in Detroit became prohibitive.  Taxes for businesses had to continually be raised because as businesses moved out, somebody else had to take up the slack.  Big businesses left and with that so did the wealthy.

More people were out of work and the unemployed had to be taken care of.  Taxes had to be raised from those that still worked and owned homes.  That eventually chased out much of the employable middle class out too.  Too few jobs and high taxes.

Many that remained were the elderly and those that were simply not employable elsewhere.  The remaining jobs were lower paying so there was really little to tax.  No businesses, no upper or middle class – only the poor.

The vicious cycle of two and three – even four generations on welfare began.  Politicians wanted to keep the poor where they were because they could always depend on them to vote as a block.  All they had to do is promise them more “social programs” and they would show up on voting day.  Nobody wants to lose benefits.  Social programs became a lifeline.

So if there is anything to learn here it’s that these articles got the cart before the horse.  Detroit did not become Hiroshima because of overly liberal welfare policies….it became a warzone because businesses could not survive.  Businesses could not take care of the pensions and benefits that their workers demanded and they could not stay in business when they were getting taxed to death.  Even the middle class could not survive.

GM and Chrysler still failed after moving much of their operations out of Detroit.  So it just wasn’t the ever increasing taxes (and Detroit) that made them fail.  It was bad management, lack of vision and product development on top of everything else….the perfect storm.  That’s why our government threw billions (and lost plenty of it) to keep those companies afloat.  It took major concessions by the unions to keep GM and Chrysler alive…..major concessions and both companies still lost significant market share and have been downsized.  And the upper and middle classes paid for that too!

So in summary, Detroit became a wasteland because of several things:

• Anti business environment – businesses simply moved away
• High taxes for individuals or companies that were successful
• Extravagant employee wages and benefits in the auto and related industries
• Unsustainable pension obligations for government and private sector workers
• Mismanagement of resources by businesses and politicians alike
• Rampant cronyism and personal enrichment by those in political power
• Lack of innovation on the part of civic and business leaders
• Non functioning, corrupt, top heavy city bureaucracy
• Unemployment rates that could not be brought down
• Exploitation of the wealthy, middle class and the poor
• Environment that made welfare multi generational

I almost feel compelled to add greed to this list but I really think it needs an explanation.  Sure, we could say there was greed on the part of the wealthy.  We could say paying an auto worker $35+ per hour with lifetime benefits to do a job a ten year old could do is greedy too.  We could say that the civic leaders that lined their pockets with taxpayer dollars were greedy.  We could even say that the poor who became dependent on handouts are just as guilty as anybody because a hand out is a hand out.  But….and this is a big but (no pun intended) there is a difference between working hard and being successful and being a leech.  Greed is not only for the wealthy.

You know, I do try to see things from a middle of the road and I clearly know that many sweeping statements were made.  Probably hacked a few of you off.  However, there really is not much to disagree with or debate relative to downward spiral of Detroit.  This list is pretty solid.

But, to extrapolate what happened in Detroit over the last 50-60 years to what has transpired (and is currently transpiring) in our country as a whole for the last decade may be a stretch.….but not a very big one…..in my opinion.