Monday, March 7, 2016

Why Detroit Died

As the Michigan primary approaches, candidates from both political parties have been promising to solve the problem of Detroit.

But, Kevin Williamson explains, the problems are far worse than the politicians imagine. We should to curb our enthusiasm for a Detroit renaissance. It’s not going to be happening any time soon.

Regardless of the incentives, Williamson notes, businesses are not going to move to Detroit. The reason: there are not enough skilled workers to do the jobs.

In his words:

Even if you were inclined to open a factory there and create some jobs in the process, you’d have to bring in workers to fill them. The people in Vance, Ala., like the people in Stuttgart, know that putting Mercedes-Benz automobiles together requires a great deal of high-skill work. The people building Toyotas in Texas know the same thing. Nobody is moving to Detroit, because there are no jobs to be had; good jobs aren’t coming to Detroit, because there aren’t enough good workers to be had. The best you’re going to see in Detroit is Shinola workers shoving Swiss-watch movements into Chinese cases and stamping them “Made in Detroit.” Sentimentality is a form of capital, too, when it can be used for marketing purposes.

Either the education system is failing students or the culture at large has made it nearly impossible for children to learn. Perhaps both are to blame:

Detroit is a city in which only one in five black men graduates from high school on time — in a city that is 83 percent African American. You think Google is going to move its headquarters there, or invest in a major facility? Tesla? Apple? Does that sound like a place you would invest in?

It was not always thus. In the past jobs gravitated to Detroit because it had a great deal of human capital, people who were willing and able to do the job:

Contrary to the received version, the automakers did not build Detroit. The city already was a center of manufacturing excellence, with skilled craftsmen and mechanics who had learned their trade in the marine-transit business easily making the transition to the new automotive business. In the early days of the 20th century, dozens and dozens of automobile companies were founded, mostly in the old industrial centers of New England and Ohio. Detroit thrived because of its human capital, and because of the entrepreneurs who made the most of it.

Williamson does not mention it, but we note that in 1967 Detroit saw one of the worst race riots in American history. Whatever the cause or the intention, the city has never really recovered. Rioting rarely induces people or businesses to relocate in a city. At the time and since, America has tended to excuse race riots as expressions of rage against racism. In many cases, however, the communities that rioters burned to the ground have never recovered.  So much for social justice warriors.

Besides, Detroit seems to have joined some other American inner cities in adopting countercultural values. Sex, drugs and rock ‘n roll. That will do it. While many upper class Americans thought that the counterculture was a harmless weekend diversion, Charles Murray pointed out that lower class Americans took the new values to heart. The result was a spike in out-of-wedlock births, in broken homes, in drug and gang violence… all taking place in a culture that was increasingly matriarchal.

If the states are the laboratories for democracy, America’s inner cities, led by Detroit, were the laboratories for cultural revolution.

Detroit politicians thought that the problem was discrimination and the lack of social justice. They did not understand the importance of reinvesting capital. Like socialists they believed that wealth needed to be taxed and distributed. Then it could be doled out by the government. If property is theft, as Proudhon famously said, then enterprising socialists could right the scales of justice by taking the wealth and redistributing it. And yet, wealth that is redistributed is wealth that is not working. Ergo… Detroit died.

Williamson explains:

Just as short-sightedness leaves Arab oil emirates poorly prepared to weather declines in oil prices, civic and corporate myopia left Detroit dependent upon a handful of firms whose production undergirded the entire economic ecosystem of Detroit. A combination of factors deformed the economic foundations of Detroit, from governmental protectionism (which made managements thick and lazy) to union rapacity (which diverted potential investment capital into inflated pay and benefits, creating a lot of multimillionaire union bosses) to our national unwillingness to deal with the fact that Germany and Japan — smoking ruins at the end of World War II — would eventually rejoin the modern industrial economy.

Detroit politicians and union leaders were living in the present. They wanted to get what they could out of it. Rather than think how they could revitalize their city they cannibalized its carcass.

We recall the bitter struggles between the auto makers and the UAW. In the end auto workers were very generously compensated, but not for making better cars. It was more about what could be wrung from the capitalist bosses than how to improve production. More benefits for workers meant less investment for research. The labor/management struggles opened the door to foreign auto workers. Worse yet, American auto manufacturers shut down operations in Detroit and moved operations abroad.

Why is Ford building a mammoth factory in Mexico? The Wall Street Journal explains the decision:

One impetus behind Detroit’s Mexico expansion is the United Auto Workers new collective-bargaining agreement, which raises hourly labor and benefit costs to $60 in 2019—about $10 more than foreign auto makers with plants in the U.S.—from the current $57 for Ford and $55 for GM. The increasing wages make it less economical to produce low-margin cars.

Thus, the problem was the same that bedevils all socialist regimes. Misallocated capital. When politicians and bureaucrats tell businesses and investors where to invest and where not to invest, you find yourself with problems like these:

We see dead capital around us all the time: the suburban black holes of derelict shopping malls, failed big-box stores, block after block of abandoned housing in cities such as Philadelphia and Baltimore. Sometimes those facilities are kept dead by conservatives’ favorite villain: regulation, especially overzealous planning-and-zoning regimes that prevent the rehabilitation of commercial and residential properties.

Cities that are falling apart tend to be run by liberal Democrats. Such politicians do not trust the free markets. They do not trust the judgments of investors. They believe that property is theft and that capitalism rests on the most venal of human impulses. They insist that capital investment be controlled and policed by the government.

In the end, you get cultural anarchy. In many inner cities, families have disintegrated, gangs rule the street, crime rates are at nightmare levels. The leaders of the Democratic Party blame it all on white policemen. No one thinks to hold the local politicians and union leaders responsible. And no one suggests that the people who live there might choose to live their lives differently. Since they are never held responsible, they sit back and await the arrival of the next government program.


priss rules said...

How about gangsta rap industry?

Ares Olympus said...

Stuart: Thus, the problem was the same that bedevils all socialist regimes. Misallocated capital.

Do we also see the fate of China in Detroit as well? That is China, which just used more concrete in the last decade than the U.S. used in the last century. But they can't blame the white police officers at least for their troubles.

According to market capitalism, you have to let things bottom out, and eventually some billionaire will come in and tear everything done, and start a new town on the ashes of the old. Henry Ford created his company towns, with wholesome square dancing to keep the masses entertained. There's still time to try to go back in time, but since the rich keep getting richer, eventually someone with a spare billion or ten will see a good deal.

Meanwhile littler motown Flint Michigan, they have a little less social chaos, but $300 billion dollar bill to replace all the corroded waterpipes after changing water sources to acidic river water.

Its easy to feel overwhelmed and want someone to rescue you, whether walmart or the federal government.

I can see why people of means, leave for some place better.

Ignatius Acton Chesterton OCD said...

Most all of Detroit's troubles trace back to two things: (1) school busing; and (2) black nationalism.

Busing led the middle class to leave the schools and neighborhoods, and black nationalism led to false pride in a rapidly declining economy.

Either way,the source of both problems is the destructive force behind all such political disasters: Leftism.

Liberal judges who think they know how to solve social problems make pronouncements about transporting people's children around a 142 square mile city to achieve nirvana demographics.

And then there's black nationalism, which is tied to dependency theory. After the "White Flight," communist demagogues like Mayor Coleman A. Young tells blacks they don't need whitey... everything will be solved with a racial political patronage system in a rapidly declining economy with declining population,,crumbling infrastructure, and an uneducated, indigent population that remains. I guess you don't need a hint as to how well it turned out.

Remember: crime is always a symptom, not the root cause...

A once wealthy and proud city dies. In no other urban area before nor hence did the average working class person enjoy a better lifestyle. That's what stupid ideas do when applied to things that matter most to people. Hillary and Bernie carry that standard, crying for "More, more, MORE!" of the ideas they learned at college that didn't work. Lovely.

And make no mistake, tDetroit's experience provides THE key reason Leftists hate the automobile, as the environmental concerns are a ruse. The automobile provides people with choices. Lefties hate choices.

Dennis said...

Detroit is the epitome of what keeps a lot of people in dependency and tied to the Masters of the "Liberal Plantation."
I have wondered for years how many minorities cannot seem to recognize that years of voting for Democrats and Leftists has gained them little but a destroyed family, poor education and schools, poverty and little success. How can one keep making the same mistake and not recognize that one keeps losing?
One has to also recognize that the republican party has done little to bring minorities into the party and actually reach out to them. Given that large numbers of minorities are far closer to republicans than democrats this appears to be not well thought out. I suspect that somewhere a number of years ago both parties made a deal to keep each other in power and to divide us into warring groups and not individuals. This became so ingrained in the power structure that the parties gravitated to what they do best. We now have the "Corrupt Party" and the "Stupid Party." Not that both are not capable of their share of corruption and stupidity. And one wonders why Independents are growing by leaps and bounds because most of us are neither corrupt nor stupid. An example of this, and one must include the "media" for they are both corrupt and stupid, is how easily Trump plays both for fools.
Sadly, the real "Uncle Toms" are the race hustlers who aid democrats in keeping minorities in place. The democrats are never going to ensure that minorities succeed because they cannot afford to lose the issue and voting bloc.

Ignatius Acton Chesterton OCD said...

Dennis, I'm not clear about what you mean by "outreach." Don't get me wrong, it sounds nice, but it won't work.

Anytime Republicans reach out (to blacks, in particular), the Jacksons and Sharptons of the nation go to Defcon 1 and freak out, making it an overall net loser for the party. And the charlatan's accomplices in the media validate the victimhood. This happens again and again and again.

If the Republicans won't play the demagoguery graft game, I'm not sure what outreach will do. Political campaigning is driven by resource allocation and return-on-effort. Republicans can gain a greater return by focusing efforts on swayable constituencies: those committed to entrepreneurship and education to increase upward mobility.

Blacks vote 90% Democrat, and have for many decades. I'm not sure the outreach will yield anything. That may seem like a narrow viewpoint, but I don't see how you can beat the Dems at the graft/patronage game. Blacks vote uniformly Democrat in every notable urban center, yet the squalor and lack of economic opportunity deepens. You cannot make someone not vote on repeated lies.

Maybe Rieff thinks we should just "forget" this, and pretend it doesn't happen. Then we can vote on rosy pictures of Xanadu dancing in our heads, and forget that the politicos never deliver. That's called ignorance.

Sam L. said...

IAC, Leftists do hate choices, but they hate even moreso the people who make those choices that they hate.

As for Republican outreach, they should go and ask the blacks: How's that working out for you, voting for Democrats? Who are the teachers teaching your children? Don't seem to be white Republicans, do they? Will you keep voting for the devil you know, or take a chance that the devil you know has lied to you about the devil you don't know?

Ignatius Acton Chesterton OCD said...

Sam, I'm with you 100%. I firmly believe this question must be asked directly, big and bold, with no consideration of the inevitable howling from the Lefties and race extortionists, because they will freak out. Ask the question, in just that way, with that level of directness, and in that manner, and score the result. It costs nothing. It is profoundly powerful, just and efficient. It is powerful because it leaves a clear choice behind. "What level of social gain have you received from the social justice peddlers?" Shut up and wait for the first person to talk... the first person to talk owns it. If Trump is he last man standing on the GOP side, he can do this, so long as he doesn't play it safe like Romney did. I'm doubtful Cruz would do it. Rubio and Kasich? Never in a million years.

Dennis said...


What if representatives from the republican party went into these communities on a regular basis and talked to people about the problems they are having some what like THE PAULS have done. It would take time and consistency to build up trust in those minority communities.
Have people from your political offices go out and find young blacks and minorities to mentor and provide assistance where possible in creating a new kind of leadership in these communities. Yes it will take time to develop trust, but once one has created a dialogue and relationship it will grow to include others. They can act as one's eyes and ears so that you, as a politician that desires to meet the needs of underserved communities, will have an idea of how to make them into self sustaining members of this country vice being dependent. You cannot solve problems unless you know what the problems are for people.
I spent a lot of time in the military and developed working relationships, friendships, some mentors, and those that I mentored among people and I have found that most minorities have the same desires to work hard and succeed as others. One has to start demonstrating that everyone has the capacity and capability to gain respect and give respect. You cannot grow people if you do not expect the best from them until they begin to build the best themselves.

priss rules said...

Black America sure has its priorities in order.

Black Feet Matter

priss rules said...

White cities with same political policies as Detroit don't go to hell.

It can't be ideology alone.