Ayn Rand Was Right: March 2011 Archives

With Detroit being such a deep blue economic and political basket case, is it any wonder black families are leaving it and a number of other cities in blue states in droves in search of work and a better life?

Not to me.

Just like their white brethren before them, they realize they have everything to lose and nothing to gain by remaining in cities and states that are hostile to business, either from liberal Democrat policies or job-killing union demands. They know they've been sold a bill of goods and want nothing more to do with the glad-handing politicians and those supporting them, so they're voting with their feet.

More power to them.

Let's hope they've learned the most important lesson from this debacle: Government (and the unions) aren't the answer. They're the problem.

Who Killed Detroit?

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The question: Who killed Detroit?

The answer: Not necessarily who you think.

The Motor City once had over 1.8 million people living within its environs. Now the number making their homes in Detroit as a little over a third of that.

What happened to make large parts of Detroit look like a set from a movie about post-apocalyptic America? There are two groups with whom we must lay the blame for the city's misfortunes: the Democrat political machine and the UAW. There's plenty of blame to go around between these two groups.

The Democrats in power did everything they could to make it less attractive for businesses and residents to stay. The UAW did everything it could to make sure jobs with the Big Three automakers went away. Both groups succeeded beyond their wildest dreams, which is why Detroit is an ongoing economic disaster.

...a lot of the blame goes to a generation of bad management. But the main reason for Detroit's decline is the greed of the industry's main union, the UAW, which priced the Big Three out of the market.

As recently as 2008, GM, Ford and Chrysler paid their employees on average more than $73 an hour in total compensation. The 12 foreign transplants, operating in nonunion states mostly in the South and Midwest, averaged about $42 an hour.

Guess which manufacturers are healthiest and expanding their market today? In 2008, the Big Three still made 59% of all cars in the U.S. But, according to recent estimates, their market share is now 46% -- with foreign companies selling the bulk of all U.S. cars. So Detroit's loss has been the South's and Midwest's gain.

Reading the comments from the editorial linked above is telling as well, with more than a few giving prime examples of the differences between Detroit and some of the surrounding communities. The contrast is striking.

Business and neighborhoods are thriving in the outlying towns and cities, with foreign automakers locating technical centers in a number of them. At least they think there's a future near Detroit, even if they're avoiding Detroit itself.

The communities themselves also have the good fortune not to be under the sway of the destructive Democrat political machine that has so damaged Detroit. As one commenter writes:

Come to Metro-Detroit and see the suburbs with Republicans in charge such as Novi - then see the suburbs with leftists in charge - such as Pontiac. You can literally tell the basket cases from the still-vibrant burbs by their leadership.

Of course I have no doubt the Democrats have plans for the still-prosperous communities, making sure they are brought into the leftist fold and turned into dying towns, all in the name of some pie-in-the-sky leftist utopia that will never come to be. They'll play the envy card and the greed card and the racial card in an attempt to bleed those communities dry as well.

Let us hope for the communities sake that they fail.

(H/T Instapundit)
We hear the platitudes from the President, his cabinet, and his 'czars' about how they're going to get America working again, bringing jobs back to the people.

Unfortunately it seems they have been doing everything they can to make sure that doesn't happen by making it a long, lengthy, painful process for new business ventures to being able to fund and build the factories they need here in the US. That's why they end up building them overseas instead.

Why should any company build a factory here when they know they'll be buried under never ending paperwork and conflicting regulations, held hostage by petty and/or incompetent bureaucrats, or taxed to the Nth degree even before they manage to manufacture a single product? The US has never been so hostile towards business as it is today. But then one has to look at our national leadership to see where that hostility originates, notwithstanding all claims to the contrary by said leadership..
I've been having a rather lively discussion with one of my regular readers/commenters about the ongoing battle in Wisconsin between the governor, GOP legislators, a majority of voters, and the public sector unions. She seems to think it's just fine for the taxpayers to fund an unsustainable entitlement (she really likes the great pensions the state and local union employees will be collecting), while ignoring the facts of what she's supporting and what it really costs.

Robert Costrell gives us a breakdown of just one part of the public sector compensation in Wisconsin: teachers. (UPDATE: Link HTML was incorrect so it didn't display. Fixed now.)

The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools. When I showed these figures to a friend, she asked me a simple question: "How can fringe benefits be nearly as much as salary?" The answers can be found by unpacking the numbers in the district's budget for this fiscal year.

You never see that in the private sector. Why? Because businesses couldn't afford it and it would make them uncompetitive both in the domestic and world market, assuming they would even survive.

As I mentioned to her in a comment to this post, quoting from Costrell's piece, Wisconsin teachers pay nothing towards their pensions. Not a penny. The taxpayers pay for it all. How is it they get away with this? I can explain it in two words: collective bargaining. Hold on to your hats (or should I say wallets) because there's more. Lets' take a look at health care benefits:

Under the current collective-bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.

This is partly because of Wisconsin's unique arrangement under which the teachers union is the sponsor of the group health-insurance plans. Not surprisingly, benefits are generous. The district's contributions for health insurance of active employees total 38.8% of wages. For private-sector workers nationwide, the average is 10.7%.

I wish my employer paid 100% of my health care benefits, but I know that won't happen because they can't afford it. They can't tap the taxpayers to pay for it all. And even if they could, the taxpayers couldn't afford it...hey, wait a minute! That sounds almost like...ObamaCare! And it won't work for the same reason.

I could go on and on, but it might be better if you Read The Whole Thing yourself.

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