Failing Blue State Model
People who live in times of the collapse of an old order and the rise of a new, sometimes can see it clearly and sometimes they can’t. I am convinced that we are on the cusp of a period of rapid change in our country, largely driven by the fiscal debacle. If most of the media were not bitter partisans of the old order, I think more people would see it. Ed Driscoll nails it in a conclusion to a brilliant column:
Between Detroit’s bankruptcy, the multiple bankruptcies in California, the acquisitions of Newsweek, the Boston Globe and most famously the Washington Post at fire sale prices, the media inventing racism-driven stories out of whole cloth, leftwing sexual predators and misogynists either running for office or already in office in major cities on both coasts, and a gaffe-prone president trying desperately to implement his agenda piecemeal through executive orders, we may very well be witnessing the wholesale collapse of the large portions of the century-old “Progressive” model. But because old media has so much invested in that model, they’re far too close to see anything approaching the big picture, and would be far too scared to admit what they’re seeing to their readers, even if they could. Too bad, as Matt Welch wrote last year at Reason, that history is written by the losers. Continue reading
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:
- The number of “physical arrests” by Chicago Police officers declined again — from 152,740 in 2011 to 145,390 in 2012. That continues a six-year trend that coincides with the hiring slowdown that caused a dramatic decline in the number of police officers. Police made 227,576 arrests in 2006. The number of arrests has been dropping like a rock ever since….
- Emergency responses continued their steady rise — to 472,752. That’s up from 300,971 in 2006.…
- The 55 percent subsidy to retiree health care that Emanuel wants to phase out and retirees are suing to maintain cost the city $97.5 million in 2012.
- The condition of Chicago’s four city employee pension funds is growing ever more precarious. The firefighters pension fund has assets to cover just 25 percent of liabilities, followed by: Police (31 percent); Municipal Employees (38 percent) and Laborers (56 percent).
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. Continue reading
Detroit has been de facto bankrupt for a very long time and yesterday it became de jure bankrupt with a Chapter 9 bankruptcy for the former Motor City. Hard to believe that during World War II Detroit was the heart of the American industrial machine that produced more military equipment than the rest of the world combined. How did the city that helped this nation win a world war end up looking like one of the bombed out cities of Europe circa 1945? There are many culprits involved but W.R. Mead at his blog Via Meadia knows who the chief villians are:
Detroit has been spending on average $100 million more than it has taken in for each of the past five years. The city’s $11 billion in unsecured debt includes $6 billion in health and other retirement benefits and $3 billion in retiree pensions for its 20,000 city pensioners, who are slated to receive less than 10 percent of what they were promised. Between 2007 and 2011, an astounding 36 percent of residents lived below the poverty line. Last year, the FBI cited Detroit as having the highest violent crime rate for any major American city. In the first 12 years of the new century, Detroit lost more than 26 percent of its population.
Progressive politicians, wonks, and activists can only blame big corporations and other liberal bogeymen for so long. The truth is that corrupt machine politics in a one-party system devoted to the blue social model wrecked an entire city and thousands of lives beyond repair. The sooner blues come to terms with this reality, the greater chance other cities will have of avoiding Detroit’s fate. Continue reading
This can be considered a companion piece to my worst governor post which may be read here. The video above consists of selections from a speech by author Joel Kotkin to the Illinois Policy Institute explaining some of the ways in which the powers that be in Illinois have made the state completely uncompetitive with other states in producing sustained private sector economic growth. If I were starting out I would leave Illinois. Nothing good is going to be happening in this state economically for a very long time. The leadership of the state is completely blind to our problems and promote policies that drive businesses away and sink Illinois deeper in a fiscal morass. Illinois’ woes are completely man-made, and Illinois, thanks to a majority of the Illinois voters, remains wedded to a model of high government expenditure, hostility to private enterprise and unending political corruption that makes effective reform for at least the next three years a pipe dream.