Look to Detroit, and you'll see where Obama's policies could take us
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If you'd like to get a glimpse of what America would look like if President Barack Obama got his way on everything, take a good look at Detroit.
In 1950, Detroit was America's fifth-largest city, with a population of 1.84 million. Median household income was higher than in any other city. So was the percentage of people who owned their own homes. Detroit was then arguably the best big city in which to live.
Today, Detroit leads Forbes magazine's list of "most miserable cities." It's the fourth-worst run, according to Money magazine. It's second in violent crime, third in murders. Nearly half of Detroiters of working age are unemployed.
The population of Detroit has fallen by more than half, to 706,585. It's now the smallest it has been since 1910. Median household income is barely half the U.S. average ($27,862 vs. $51,413). The average price of a house in Detroit is just $16,800, by far the lowest in the country.
There are a couple of smaller cities which, arguably, are in even worse shape. But no city has fallen so far, so fast.
Some decline was inevitable because the world of 1950 was uniquely beneficial to Detroit. The most important industry at that time was the automobile industry, and because Europe and Japan were still rebuilding from the devastation of World War II, Detroit had a virtual monopoly. Detroit had been the heart of the "arsenal of democracy" and had a more skilled labor force than any other city on the planet.
The U.S. auto industry tumbled from its lofty perch in the 1970s, in part because by then Europe and Japan could offer serious competition. The Arab oil embargo after the 1973 Yom Kippur War sparked for the first time the interest of Americans in smaller cars, which the Germans and Japanese were building, but Detroit, with few exceptions, was not.
But most wounds were self-inflicted. Cars built by GM, Ford, Chrysler and American Motors cost more and were less reliable than cars built in Germany and Japan. Partly responsible were the contracts won by the United Auto Workers, then America's most powerful union. It wasn't so much the lavish pay and benefits as the featherbedding work rules which guaranteed cars built in Michigan would cost more and break down more often than cars built elsewhere.
The auto industry has bounced back some. Several Ford and GM sedans are now rated as more reliable than the imports with which they compete. But Detroit's decline has accelerated. That's because for half a century, Detroit has been governed by the policies President Obama advocates. (Detroit's last Republican mayor was Louis Miriani, who left office in 1962.)
The problem is that liberals judge policies on the basis of what is promised, not on what is delivered. That's because liberalism in practice means:
• A large and expensive public work force but deteriorating public services. Detroit in 2011 had 12,900 city employees, one for every 55 residents. Of the cities closest to Detroit in population, Columbus, Ohio, had one city employee for every 95 residents; Charlotte, N.C., had one for every 109; Fort Worth had one for every 118 residents.
Schools stink, buses are late and infrastructure deteriorates because Democratic politicians depend on public employee unions for votes and campaign contributions. So they hire as many public employees as they can, overpay them and don't require them to do much.
• High taxes. Despite an average home price barely more than a tenth that of the next lowest city, Detroit has the highest property taxes in the country, according to a 2011 study. When all city levies are included, Detroit had the ninth-highest taxes. Because median income is so low, the tax burden on Detroiters is heavier than these data indicate.
High property taxes have spurred tax evasion on a mammoth scale -- half of Detroiters don't pay their property tax bills -- and flight to the suburbs.
• Massive debt. Detroit's long- term debt is $14 billion, the servicing of which requires nearly a third of what the city collects in taxes. Detroit's finances are in such bad shape that last week Michigan Gov. Rick Snyder appointed an emergency manager to restructure them.
Democrats emphasize redistribution of wealth. Before wealth can be redistributed, it must be created. Liberal policies destroy wealth. Those who suffer most are precisely those Democrats say they're helping. In the Detroit of 1950 -- when no city in the world was creating more wealth -- the poor and the middle class were far better off.
This column has been revised to reflect the following correction: Detroit has $14 billion in long-term debt, the servicing of which requires nearly a third of what the city collects in taxes. The population of Detroit is the smallest it has been since 1910.
First Published March 10, 2013 12:00 am