The good news about Detroit's bankruptcy filing is that it is causing lots of news coverage of that city and how it got where it is. While most people may have been vaguely aware that Detroit was not doing too well, not many outside Michigan have known the full magnitude of the disaster: loss of almost 70% of the population since 1950; going from America's wealthiest large city in 1960 to the poorest today; nearly 70,000 abandoned houses; houses for sale for $1000 or even $1 with no takers; most parks closed and almost half of streetlights out; highest murder rate in the country but police response time almost an hour; etc., etc.
This is the end game of Progressive government. Here's the recipe: be the highest tax jurisdiction in the vicinity; agree to generous pensions and benefits for unionized city workers in return for their working to get you re-elected; get as many people as possible into dependency and handouts; have a business environment hostile to start-ups and entrepreneurship while doing big-time crony-capitalism and show projects to get politicians' names in the papers and generate political contributions (e.g., Renaissance Center, casinos, new stadiums, the GM Poletown plant, the People Mover, etc., etc.). Of course, the demise of the UAW-ized auto industry didn't help, but that's only a reason why Detroit declined faster than other Progressivized cities, not a reason it was in decline to begin with.
The lessons appear incredibly obvious, screaming out to anyone who will look. Is it possible not to see? Well, yes. The last few days since Detroit's bankruptcy filing have brought out of the woodwork advocates for a Federal bailout, giving every possible reason why Detroit's situation has nothing to do with failed Progressive policies and instead comes from something else. Here, for example, is John Nichols today in The Nation, giving his explanation of the sources of Detroit's problems:
But only the most deliberately
disengaged commentator would imagine Washington to be blame-free in all this.
America’s urban communities—and many not-so-urban communities—have for decades
been battered by free-trade policies that
foster deindustrialization, by tax policies that encourage offshoring, by
all the missteps and misdeeds of Congress and successive
presidents.
Funny, John, how those policies of Congress didn't seem to affect Atlanta, or Houston, or Charlotte, or Dallas, or Phoenix, or lots of other growing cities that didn't follow the Progressive prescriptions. And, of course, the conclusion of Nichols' piece is, since Congress caused the problems, it is up to Congress to solve them, with, of course, a bailout. Also joining the call for a bailout is Steven Rattner (former "Czar" of the GM bankruptcy) in Saturday's New York Times.
I'm actually somewhat amazed that President Obama and his team haven't been offering up a bailout -- do they actually realize that the Federal government might have some limits? Well, probably the calculation is far more cynical than that. They have to realize that all public focus on Detroit can only make people realize that the policies that have brought Detroit to ruin are very much the same policies that Obama is bringing to the whole country. Let alone that an offer of a bailout to Detroit would have Cleveland and Philadelphia and Baltimore immediately in line, with Chicago next, and the entire state of California following and looking for maybe a trillion. They still may do it, but I'm betting against it.
And back here in New York, are we capable of learning any lessons from this? The funny thing is, 40 years ago in the 70s, New York looked very much to be going the way of Detroit, at least in the early stages. Our taxes got way, way above the neighboring states (19% combined top state/city income tax rate in the 70s vs. 0% for NJ and CT at that time), and we lost about 12% of the population in that decade. But New York's tax rates were cut dramatically in the late 70s and early 80s. And now since 1994 we have had almost 20 years of Republican or semi-Republican mayors in the City, during which we have had huge declines in the crime rate (murders dropping from about 2200 to about 500 per year), welfare dependency cut to about one-quarter the previous level, professional management of city services, and, for the most part, a lid on tax rate increases. And the City has come way, way back.
Yet the Democratic candidates for mayor are competing in offering new Progressive prescriptions, from increased "affordable housing," to easing up on access to cash welfare, to universal pre-K, to, of course, paying for it all by increasing taxes on the high earners. Can someone please shout the word "DETROIT" at them every time they appear in public?