"It lays the blame at the feet of successive administrations that taxed,
borrowed and spent when they should have been cutting back in the face of
declining revenue..."A fluke, no way this could happen anywhere
else. Or, maybe it could.Wonder if anyone inside the DC
Beltway has seen this and heeded the warning?
But I thought spending money was the way to fix financial problems?Barack?
Okay maybe there is merit in blaming how governments responded to revenue
shortfalls but lets look at what caused the Detroit economy to dry up. Detroit
was one of the biggest economies in the world in its hey day and now look at it.
What made it dry up? It wasn't socialism or government overspending but
free market capitalism and free trade. Detroits car makers and manufacturing
base cannot compete with Asian countries that have cheap labour. Why pay someone
an honest wage of $15-$20 an hour when you can get $2-$7 in Asia? When
shareholder wealth is the main objection instead of stake holders the economy
jr85,A business owner can do whatever he wants with his business -
its his business. He owns it. I dont get to demand how you spend your money or
manage your assets. A business owner(shareholders) have every right to make
wealth the main objection, its the only way to stay in business.
Just for the record, GM labor rates average $29.78 per hour. Toyota pays
$30.00.The big difference is in bennies.GM has an
additional $39 an hour to cover with existing employees. Toyota, $18.
I seem to recall someone saying that staying in business requires serving your
customers fairly, or even providing a better value than competitors. Heaping
wealth, then sheltering it from the evil tax man doesn't really fit the
model of a company that wants to prosper, does it?
The problem is demanding government 'save' anyone. If the government
can save Detroit, a farmer, an individual, the poor, or the rich, it must
'save' everyone else! So, if it can't save everyone, how can it
'save' anyone? It can't! I'm not a libertarian, but in this
day and age, how could anyone not be persuaded by their principles? When you
listen to the socialist planners out their, it makes you wonder where common
sense was lost. To what end did our education fail these people?
Given that there seems to be such obvious blame to lay at the feet of
"several administrations", it would probably be helpful to know the
party affiliation of those "administrations". Presumably, there are
some characteristics of the platforms of those parties that might shed some
light on the reasons for the shamefully inept policies enacted by the
"administrations".Does anyone else want to bet that there is
a predominantly Democratic representation?
I'd say most administrations in Detroit have been Democratic. Will you
agree the same about New York City?
For years, Detroit's automakers resisted demands for fuel efficiency from
the government, claiming that consumers didn't want fuel-efficient cars.
When gas shot up over $4 a gallon under the Bush years, it seemed to be a final
downward spiral for American cars as Americans quickly shifted to foreign
hybrids and fuel-efficient models.Interestingly, the Bush
Administration, as part of its financial stimulus plan after 9/11, created a
significant tax incentive for businesses to purchase big SUVs. The tax
incentive was originally for farmers to write off equipment, but the incentive
was extended to SUVs so that real estate agents, insurance agents, and other
businesses could enjoy the same tax benefits for their vehicle needs. The stimulus worked! Businesses gobbled up SUVs and Detroit thrived on the
selling of SUVs.Sadly, this sent another wrong signal to Detroit
that producing gas-guzzling SUVs would be their long-run salvation.Detroit's industry has largely dug its own grave by resisting fuel
efficiency and relying on gas-guzzling SUVs for short-term gains.The
hottest car today is the Tesla -- out of Silicon Valley. And its electric,
making it the cheapest car on the market to fuel.
It's not just coincidental that all of the sizable cities to declare
bankruptcy over the past few years have all had predominantly democrat
administrations for decades... including Detroit. That tax-and-spend policy will
always eventually catch up to whomever espouses and practices it. An extra good
economy will hide the folly of that practice for awhile, but those times never
last forever. In addition, unions need to shoulder their share of
the blame for requiring cities to pay excessive wages and especially pensions.
Those cities were stupid to continue going along with those demands. For
verification, google and read the economic history of the bankruptcy of Stockton
California. Other bankrupt cities have similar stories.
It is easy to lay the blame at the feet of the city administration. But let us
be honest with ourselves; we the people hold the reigns of power in the country.
We are the ones who put the administration in place, and we are the one who
kept them there. The people of Detroit cannot point the finger of
blame at anyone but themselves, because ultimately they are the ones who chose
the city leaders who placed them on the road to ruin. And if We the People
choose the same for ourselves in our own cities, states, or even for the
country, we will only have ourselves to blame.
@Baron Scarpia, jr85, Spoc - You DO realize this article is talking about the
City of Detroit, not the Big 3, right? The City of Detroit is bankrupt because
of the administrations that ran it, not because of any business that happened to
be headquartered there. Once upon a time, Detroit's population was around 2
million people, and the city employed 10,000 to serve those citizens. Today, the
population is around 700,000 yet, before it declared bankruptcy, it still
employed nearly the same number of employees (including a professional
horseshoer despite the city not owning ANY horses...) Detroit is the epitome of
government mismanagement. (And for those who are curious, Detroit's been
headed by Democratic mayors since 1962.) But this could've happened under
any party affiliation. As commentor Z said, Detroit's citizens can only
blame themselves. Granted, the government probably hid their financial woes, and
as long as the trash got picked up, most citizens never thought twice about it.
But that's the lesson we ALL need to learn: Never be complacent in your
government leadership, because when the symptoms of crisis become evident,
it's usually to late to stop it.
Public sector unions are largely to blame. When city managers negotiate with
these unions there is no incentive to bargain. They thoughtlessly gave the store
away, thinking the taxpayers would always pay the increase.Someone here
suggested the problem is the voters, but they were as bad as city managers. They
voted for the guy offering free government cheese. THOUGHTFUL voters would have
seen it coming. Revenue is down and city workers were making way too much money.
But they were out-voted by the entitlement class.The unfunded benefits
problem is even bigger in Illinois. The problem there is $100 BILLION. It too
will fail.Obama is likely to run the printing press and bail them out.
Hopefully he'll make that mistake ahead of the 2014 midterms.
How many cities are currently in debt?I don't understand why
leaders of our country can't manage tax payer money.