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Today Detroit, Tomorrow Chicago?

 

 

 

 

I view Detroit and its bankruptcy as a harbinger of things to come.  The blue state social model of ever higher taxes, ever expanding benefits for members of public employee unions and one party rule by the Democrat party is coming to an end.  The ending will be painful for people luckless enough to live in blue states, as I do, but this parasitical form of government ultimately destroys the private economy host it feeds on.  Walter Mead at Via Meadia has been prescient in seeing this:

 

It looks like Detroit may yet have competition for the distinction of America’s most poorly run city. The unprecedented triple-drop in Chicago’s bond rating and the city’s shiny new long-term debt figure—$29 billion—should have pols quaking in their boots. The Chicago Sun-Times has published some distressing numbers from Chicago’s recent audits:

In addition to the pension, law enforcement, and emergency response concerns that remind us of a certain bankrupt city across the lake, the report notes that three of Chicago’s four largest private employers (JP Morgan, Accenture LLP, and Northern Trust) are in finance. It seems like blue cities have a codependent relationship with the one percenters progressives claim to hate.

It hasn’t all hit the fan quite yet, but Chicago seems perilously close to real trouble. The city is all out of money, and with an imploding public education system and harrowing levels of violence, it is losing residents fast. Illinois, which itself lost more than 800,000 people to out-migration in the past two decades, is essentially Chicago on a larger scale, with hundreds of billions in unfunded pension liabilities and complete political sclerosis. The state cannot bail out Chicago, and judging by the feds’ reluctance to even lift a finger for Detroit, Chicago shouldn’t expect much more.

Go here to read the rest.  Great changes occur in societies for many reasons.  The most painful type of change is usually that brought on by a crisis.  We live in such a time of crisis.  Since the Great Society implemented by Johnson in the Sixties we have been living in a fantasy world of ever expanding government paid for by magic money created ex nihilo.  Obama and his merry band of gangsters are not the start of a grand new era in expansive government, but a parody of the policies that are now crashing down to Earth as reality, as always, wins.

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Donald R. McClarey

Cradle Catholic. Active in the pro-life movement since 1973. Father of three and happily married for 35 years. Small town lawyer and amateur historian. Former president of the board of directors of the local crisis pregnancy center for a decade.

7 Comments

  1. To be more precise, you have several problems in Detroit (in particular) and other cities.

    1. A deficit of institutions encompassing the whole of the metropolitan settlement.

    2. Suboptimal placement of service provision in the architecture of local government (e.g. police departments placed with municipal governments as opposed to county governments).

    3. Intra-metropolitan migration patterns which leave the slum neighborhoods (with their special problems and denuded tax base) concentrated in the core municipality. Detroit presents a special case of a municipality which is all slum.

    4. Public policy at all levels corrupted by the notion that the purpose of public agency is to sluice income to clients of the Democratic Party and (in general) to be convenient to the employees of said agency. (The Republican Party is amply supplied with otiose characters and sleazy careerists who are happy to be accommodating).

    5. The vested interests of suburban voters and the black political establishment which inhibit any attempts at salutary institutional adjustment.

  2. Social Justice!!

    What about the children!!!

    From “Never Yet Melted” blog. Here’s how it works.

    “Three contractors are bidding to fix a broken fence at the White House. One is from Chicago, another is from Tennessee, and the third is from Minnesota. All three go with a White House official to examine the fence.

    “The Minnesota contractor takes out a tape measure and does some measuring, then works some figures with a pencil. ‘Well,’ he says, ‘I figure the job will run about $900. $400 for mater…ials, $400 for my crew, and $100 profit for me.’

    “The Tennessee contractor also does some measuring and figuring, then says, ‘I can do this job for $700. $300 for materials, $300 for my crew, and $100 profit for me.’

    “The Chicago contractor doesn’t measure or figure, but leans over to the White House official and whispers, ‘$2,700.’

    “The official, incredulous, says, ‘You didn’t even measure like the other guys! How did you come up with such a high figure?’

    “The Chicago contractor whispers back, ‘$1000 for me, $1000 for you, and we hire the guy from Tennessee to fix the fence.’

    “’Done!’ replies the government official.

    “And that, my friends, is how Government works today.”

  3. Cities seem to find their way into the state coffers. My hunch is the weight of Detroit became too much for Michigan’s declining population and industry. I’d guess that Illinois is stronger.

  4. There is not much wrong with state revenue sharing per se. The problem you get is when you are financing all sorts of specialized projects and granting special favors. A formulaic distribution which took into account population and per capita income and expected the subsidiary government to manage within the limits of the sum of its revenue sources would be appropriate. A problem you have is that central cities are stuck with the task of policing the slums on their own account; a secondary problem is that you have fixed costs in the face of demographic decline. A driver of demographic decline is a deficit of public security and another might be property taxes. Addressing the one can exacerbate the other.

  5. What is mildly amusing in a schadenfreude sort of way about these municipal/state fiscal crises is how little recourse the left has to its usual toolkit of solutions-cum-excuses that they apply at the federal level:
    – No national defense spending to cut to generate magical surpluses (although at the state level, correctional institution budgets sometimes serve as an analogous target of progressive ire)
    – “Tax the rich” is not a winning strategy when the rich and industry are fleeing in droves
    – No sovereign currency to inflate your way out

    And worst of all for the left, there’s usually no dastardly Republican political block to blame. It’s all on you, progressives – own it!

  6. Ironically, there is a story going around right now claiming that certain wealthy Chicago businessmen of fiscally conservative leanings engaged in a conscious strategy of trying to get Illinois’ bond rating lowered, in order to gin up public pressure for state employee pension reform:

    http://capitolfax.com/2013/07/23/fahner-civic-committee-helped-jaw-down-states-bond-rating/

    Upon closer examination it appears (if we take what Fahner says at face value) that what actually happened is that certain members of the group in question (Civic Committee of the Commercial Club of Chicago) encouraged bond rating agencies such as Moody’s and S&P to “go or get off the pot” with regard to their continual threats to lower Illinois’ bond rating. However, they later backed off in order to avoid any appearance of trying to manipulate the bond ratings, or pursue a “destroy the village in order to save it” strategy (which the questioner in the video phrases as “sometimes you have to be irresponsible to be responsible”).

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