Why Detroit died 2

Since we don’t expect to find much that is useful to us in Time magazine we seldom visit it. But when we went searching for good articles on the decline of Detroit, it was there that we found a quotable one.

Our search was prompted by tc, one of our readers (see comments on our post of November 21, 2009: Death city). Our thanks to tc.

The primary reason for the decline of Detroit was the decline of the US auto industry. This article by Daniel Okrent says so, and also talks about related contributory causes. We think it’s a good overview, and although we don’t like everything in it, particularly the ‘green’ opinions on its last page, we recommend it.

Here are the extracts:

Detroit fell victim not to one malign actor but to a whole cast of them. For more than two decades, the insensate auto companies and their union partners and the elected officials who served at their pleasure continued to gun their engines while foreign competitors siphoned away their market share. …

Detroit became a majority-black city, and in 1973 it elected its first black mayor. Coleman Young was a talented politician who spent much of his 20 years in office devoting his talents to the politics of revenge. He called himself the “MFIC” — the IC stood for “in charge,” the MF for exactly what you think. Young was at first fairly effective, when he wasn’t insulting suburban political leaders and alienating most of the city’s remaining white residents with a posture that could have been summed up in the phrase Now it’s our turn. But by his third term, Young was governing more by rhetoric than by action. These were the years of a local phenomenon known as Devil’s Night, a nihilistic orgy of arson that in one especially explosive year saw 800 houses burn to the ground in 72 hours. Violent crime soared under Young. The school system began to cave in on itself. When jobs disappeared with the small businesses boarding up their doors and abandoning the city, the mayor seemed to find it more useful to bid the business owners good riddance than to address the job losses. Detroit was dying, and its mayor chose to preside over the funeral rather than find a way to work with the suburban and state officials who now detested him every bit as much as he had demonized them.

When Young finally left office in 1993, he bragged that Detroit had achieved a “level of autonomy … that no other city can match.” He apparently didn’t care that it was the autonomy of a man in a rowboat, in the middle of the ocean, without oars.

But Young isn’t the only politician to blame. In 1956, when I was 8 years old, my Congressman was John D. Dingell. There are people in southeastern Michigan who are still represented by Dingell, the longest-serving member in the history of the House of Representatives. “The working men and women of Michigan and their families have always been Congressman Dingell’s top priority,” his website declares, and I suppose he thinks he has served them well — by resisting, in succession, tougher safety regulations, more-stringent mileage standards, relaxed trade restrictions and virtually any other measure that might have forced the American automobile industry to make cars that could stand up to foreign competition.

By so ably satisfying the wishes of the auto industry — by encouraging southeastern Michigan’s reliance on this single, lumbering mastodon — Dingell has in fact played a signal role in destroying Detroit. He was hardly alone; if you wanted to get elected in southeastern Michigan, you had to support the party line dictated by the Big Four — GM, Ford, Chrysler and their co-conspirator the United Auto Workers. Anything that might limit the industry’s income was bad for the auto industry, and anything bad for the auto industry was deemed dangerous to Detroit.

The UAW had once been the most visionary of American unions. As early as the 1940s, UAW president Walter Reuther was urging the auto companies to produce small, inexpensive cars for the average American. In 1947 and ’48 the union even offered to cut wages if the Big Three would reduce the price of their cars. But by the early 1980s, the UAW had entered into a nakedly self-interested pact with the auto companies. After the union’s president joined GM’s chief congressional lobbyist to defeat a tougher mileage standard in 1990, the lobbyist declared that “we would not have won without the UAW.” It was, he said, “one of the proudest days of my life.”

The union really can’t be blamed for pushing for fabulous wages and lush benefits for its members — that game required two players, and the automakers knew only how to say yes. But the union leadership’s fatal mistake was insisting that workers with comparable skills and comparable seniority be paid comparable wages, irrespective of who employed them. If a machinist at a prosperous GM deserved $25 an hour, so did a machinist who worked for a barely profitable Chrysler or for a just-holding-its-own supplier plant that made axles or wheels or windshield wipers.

This defiant inattention to market reality not only placed the less healthy firms in peril, but by pricing labor so uniformly high, it also closed off Detroit to any possible diversification of its industrial base. When the automakers’ inattention to engineering, style and quality caused them to crash into a wall of consumer indifference, there was no other industry that could step forward and employ workers who would have been thrilled to make even a fraction of what they once earned. Now nearly 1 in 3 Detroit residents is out of work — and not many of the unemployed have a prayer of finding a job anytime soon. …

Most particularly we urge our readers to follow the 2 links on the Time pages to the eloquent pictures of buildings abandoned and decayed. Once seen, they can haunt the imagination, not only as images of an historic industrial and human disaster, but as portents of what can befall a whole triumphant civilization when a few people who arrogantly believe they know best impose their vision on millions of other lives. The car industry managers were guilty, unwilling as they were to change and adapt, to make what consumers would buy. Union bosses were guilty, blindly demanding more than the industry could bear. Politicians were guilty, as our extracts demonstrate. And now another bunch are coming up to try and order our world to fit their hearts’ desire: the greens.

Posted under Commentary, Environmentalism, Industry, United States by Jillian Becker on Sunday, December 6, 2009

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Death city 8

Detroit is a dying city. How many more American cities will fall into decay and despair as Obama and the Democrats bankrupt the nation?

From the Times Online:

The abandoned corpses, in white body bags with number tags tied to each toe, lie one above the other on steel racks inside a giant freezer in Detroit’s central mortuary, like discarded shoes in the back of a wardrobe.

Some have lain here for years, but in recent months the number of unclaimed bodies has reached a record high. For in this city that once symbolised the American Dream many cannot even afford to bury their dead.

“I have not seen this many unclaimed bodies in 13 years on the job,” said Albert Samuels, chief investigator at the mortuary. “It started happening when the economy went south last year. I have never seen this many people struggling to give people their last resting place.”

Unburied bodies piling up in the city mortuary — it reached 70 earlier this year — is the latest and perhaps most appalling indignity to be heaped on the people of Detroit. The motor city that once boasted the highest median income and home ownership rate in the US is today in the midst of a long and agonising death spiral.

After years of gross mismanagement by the city’s leaders and the big three car manufacturers of General Motors, Ford and Chrysler, who continued to make vehicles that Americans no longer wanted to buy, Detroit today has an unemployment rate of 28 per cent, higher even than the worst years of the Great Depression.

The murder rate is soaring. The school system is in receivership. The city treasury is $300 million (£182m) short of the funds needed to provide the most basic services such as rubbish collection. In its postwar heyday, when Detroit helped the US to dominate the world’s car market, it had 1.85 million people. Today, just over 900,000 remain. It was once America’s fourth-largest city. Today, it ranks eleventh, and will continue to fall.

Thousands of houses are abandoned, roofs ripped off, windows smashed. Block after block of shopping districts lie boarded up. Former manufacturing plants, such as the giant Fisher body plant that made Buicks and Cadillacs, but which was abandoned in 1991, are rotting. …

Read more of this depressing stuff, if you want to, here.

Posted under Economics, United States by Jillian Becker on Saturday, November 21, 2009

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Where the young will find themselves 0

 Our top favorite columnist (for being not only right but also funny) Mark Steyn writes:

This is the biggest generational transfer of wealth in the history of the world. If you’re an 18-year-old middle-class hopeychanger, look at the way your parents and grandparents live: It’s not going to be like that for you. You’re going to have a smaller house, and a smaller car – if not a basement flat and a bus ticket. You didn’t get us into this catastrophe. But you’re going to be stuck with the tab…

The Teleprompter Kid says not to worry: His budget numbers are based on projections that the economy will decline 1.2 percent this year and then grow 4 percent every year thereafter. Do you believe that? In fact, does he believe that? This is the guy who keeps telling us this is the worst economic crisis in 70 years, and it turns out it’s just a 1-percent decline for a couple more months, and then party time resumes? And, come to that, wasn’t there a (notably unprojected) 6.2 percent drop in GDP just in the last quarter of 2008?

Whatever. Growth may be lower than projected, but who’s to say all those new programs, agencies, entitlements and other boondoggles won’t also turn out to cost less than anticipated? Might as well be optimistic, right?…

We love the youthful sense of living in the moment, without a care, without the burdens of responsibility… But we also love the idealism of youth: We want to help the sick and heal the planet by voting for massive unsustainable government programs. Like the young, we’re still finding ourselves, but when we find ourselves stuck with a medical bill or a foreclosure notice it’s great to be able to call home and say, "Whoops, I got into a bit of a hole this month. Do you think you could advance me a couple of trillion just to tide me over?" And if there’s no one at home but a couple of second-graders, who cares? In supporting the political class in its present behavior, America has gone to the bank and given its kids a massive breach-of-trust fund.

I mentioned a few weeks ago the calamitous reality of the U.S. auto industry. General Motors has 96,000 employees but provides health benefits to over a million people. They can never sell enough cars to make that math add up. In fact, selling cars doesn’t help, as they lose money on each model. GM is a welfare project masquerading as economic activity. And, after the Obama transformation, America will be, too… 

Posted under Commentary by Jillian Becker on Sunday, March 15, 2009

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A constructive suggestion 5

DETROIT (AP) – Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to the struggling Detroit Three, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.

"Everybody has to give a little bit," said Rich Bennett, an official for Local 122 in Twinsburg, Ohio, representing Chrysler workers. "We’ve made concessions. We really feel we’re doing our part."

Union leaders also agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010.

In addition, they decided to let the Detroit leadership begin renegotiating elements of landmark contracts signed with the automakers last year, a move that could lead to wage concessions.

 

Question: Why not let the UAW take over the management of the Detroit Three and struggle to make the sort of profits that can keep them in gravy forever? 

 

Posted under Commentary by Jillian Becker on Thursday, December 4, 2008

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