Wednesday, August 29, 2012

Detroit, Obama and African American Failure

Detroit is an enlightening microcosm to examine both culture and politics in a city dominated for 60+ years by African Americans and their unfailing loyalty to the Democratic Party.   You could also say that Detroit is a city without a Republican.   See my blog about the finances of the State of California:  A State Without Republicans.

Detroit is in ruins.

Yet there are other cities in the US "rust belt" that have undergone a similar decline in population and loss of jobs to Asia who are not devastated.  Instead, with more balanced leadership, other areas have "adjusted" and have either prospered or at least did not slide into a horrifying decay like Detroit.   Pittsburgh is a good example.   They completely lost the Steel industry but is today is voted one of the best places to live.

Detroit's population has shrunk from 1.8 million in 1950 to an estimated 800,000 today (55% reduction).  Pittsburgh population also shrank by 55% from 670,000 in 1950 to 300,000 in 2010.

The big difference is that Pittsburgh is 90% white and Detroit is 82% black.  Race is obviously the key difference.  It's the people.   It's black people who have ruined Detroit---black people and those that prey on them including the Democratic party (although Pittsburgh leans Democratic too).  Unfortunately, they just don't have the traditions and capability of building up themselves and their community like those with Northern European or North Asian ancestry. They have a solid Third World mentality that begets Third World reality even in America.

Obama's Third World Background

Barack Obama has a solid Third World mentality too.   Indonesia, where he was raised,  has a solid Third World mentality too as does Africa---where he also lived. (I've lived in both Indonesia and two countries in Africa, so I'm qualified to comment)   Now, Obama is (naturally) bringing the Third World to America!   And he's leading in the polls!!  By the way, this is the precise point that the new film "Obama 2016"

He's seen only government as the primary enterprises in his early life as there are minimal traditions of free enterprise or capitalism in Africa (Kenya) and Indonesia.  Both places are basket-cases of poverty, corruption and failure where it's extremely difficult for private business to prosper.   In America, Obama has only been on the receiving end of the benefits of a prosperous society and he seems to be determined to NOT understand how and where the country's wealth comes from.  Because of that extreme ignorance, he'll easily bite the hands that feed him.

His "statist" views also explain why Barack Obama has no plan to help lift up Black Americans--the group struggling the most.  He vaguely calls for more "redistribution" and is all for more food stamps and easier SSDI eligibility and enrollment (Social Security Disabiliy).  His "faith" is completely in "The Government" and not in 'people' nor 'god'.   It doesn't seem to matter that government programs have been tried in Detroit and are still being tried with no good result.  It's wasted money.  (See the writing below by Jarrett Skorup)   He isn't able to identify correctly the root cause of problems.  For example public school teacher unions cost too much but, worse, are hurting the kids more than helping plus raising costs to unsustainable levels.

You think Obama really cares about black people?  If he does, what is his proposal for real change for this group?   I guarantee he'll never give a speech rallying African Americans emphasizing the need to "pick yourself up by the bootstraps", or promoting self-reliance, personal responsibility, personal initiative, or a call for more discipline and a stronger work ethic.  He's in a position to positively influence this group but his emphasis is a drab emphasis on bureaucracy.  Does he really think that redistribution for black people ad infinitum is good for this group?   If he does, he's a fool.  Sadly, I think he's a fool because Obama has proven that he is incapable of learning from "facts on the ground" whether it's the 2010 mid-term "shellacking" or even from a cop in Cambridge, MA.

We have created a monster in Obama, our first "affirmative action" president.  His ego is vastly inflated and he is so over-confident having been slathered with praise for essentially nothing.    He hasn't done anything of note except get elected (that was done with the backing of a political machine).   He didn't really work his way through school (despite his claims).   He never wrote an article for the Harvard Law Review. He never had a "real" private sector job.  He never sponsored any key legislation in his brief time as Senator.  He did nothing to earn a Nobel prize.  He has admitted that he was a mediocre student, and since his first deed of his administration to tightly suppress release of any and all college transcripts, one can be confident that he didn't even earn admission to Harvard on merit.   Everything has been handed to him because he's "black."   He's a slacker and he knows it.

Because of our "politically correctness" and our inability to call a "spade a spade",  a collective inability to see (the lack of) substance over "appearance" and "performance art",  the future of the "real" American ideal is in peril especially if Obama is re-elected.

Detroit's Descent

Now for a view on the failures of Detroit from Jarrett Skorup at the Makinac Public Policy Center:
Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:
  • A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors.
  • A school system that spends significantly more per pupil than the national average.
  • A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members.
  • Other government employee unions that do the same for their members.
  • A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.

Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city right here in our state: Detroit.
Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies is alive and well there. How have they worked out?
In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.
Could it be pure coincidence that the decline occurred over the same period in which union power, the city government bureaucracy, taxes and business regulations all multiplied? While correlation is not causation, it is striking that the decline in per capita income is exactly what classical economists predict would occur when wage controls are imposed and taxes are increased.
Specifically, "price theory" predicts that artificially high business costs caused by excessive regulation and above-market labor compensation rates imposed by so-called "living wages" will lead to an increase in unemployment. Detroit's minimum wage is more than $2 above the federal minimum wage; and pressure groups are pushing for more. Additionally, any company contracting with the city must pay its employees $11.03 an hour if they offer benefits or $13.78 an hour if they do not.
Such high wage mandates are especially hard on individuals with a poor education and low skills. If struggling and heavily taxed businesses cannot pay such high wages, then they are more selective about the few workers they do hire or simply go out of business altogether. Those who have promulgated these polices may be well-intentioned, but mainstream economists have warned for decades that such policies were very likely to bring about the abject poverty and unemployment that characterize Detroit today. The city has the highest unemployment rate among all large U.S. cities.
A similar pattern has played out in public education. It is now conventional wisdom among the political class that higher pay for teachers and increased spending per student lead to improvements in teacher quality and student performance -— Detroit Public Schools strongly suggests that this theory must be rejected. It has chronically underperformed state averages, yet reforms are vehemently opposed by the system's powerful school employee union.
At the same time that union, the Detroit Federation of Teachers, has won rich salary and benefits packages for its members. Detroit spends one of the highests amounts of money per student nationwide and the district's spending per pupil is eighth highest out of Michigan's 551 school districts. For all that, by almost any measure Detroit schools have for decades failed their students: test scores, safety, drop out rates, etc. Detroit's public school students perform among the lowest in the state. On a 2009 test for urban districts from the U.S. Department of Education, DPS students performed "barely above what one would expect simply by chance, as if the kids simply guessed at the answers."
In the private sector such failure would result in mass firings for unsatisfactory performance. No doubt such a response would be condemned by the progressives who support the school employee unions that have made similar actions impossible in their institutions, and have opposed major transformation at every turn.
For example, in 2003 philanthropist Bob Thompson offered $200 million to build 15 charter public schools in the city in which he would guarantee a 90 percent graduation rate. In response, the DFT balked because charter schools are not unionized. The outcome was that the union jobs trumped better outcomes for children.
People vote with their feet, and all the above suggests why, over the past decade, DPS has lost about 10,000 students each year to charter, independent and suburban schools.
Of course it would be unfair to place all the blame for the city's decline on public employee unions. Detroit is home to the Big Three, whose contracts with their own powerful unions provided the model for those public employee arrangements. The UAW successfully extracted wages and benefitsestimated at $73 per hour before the recent shake-ups began.
This is about $25 more per hour than the amount foreign-owned U.S. auto manufacturing plants pay their non-unionized American workers. Due to this disparity, Japanese car companies earn some $1,000 to $2,000 more on each car sold than their American counterparts. The outcome has been a relentless loss of market share that, among other things, has devastated the economic engine that once powered Motor City prosperity.
In addition to being a model of progressive economic, labor and education policy, Detroit is also a case study in welfare statism. Tom Bray, former editorial page editor for The Detroit News, has made the following observation:   "Detroit, remember, was going to be the 'Model City' of Lyndon Johnson's Great Society, the shining example of what the 'fairness' of the welfare state can produce.
Billions of dollars later, Detroit instead has become the model of everything that can go wrong when you hook people on the idea of something for nothing - a once-middle class city of nearly 2 million that is now a poverty-stricken city of less than 900,000."
Today, Detroit is down 25 percent over the past 10 years and dropping fast.
Progressives will complain that this portrait oversimplifies the factors involved in a great city's decline. Perhaps it does, but with this question in mind: At what point does the weight of evidence and logic make it impossible to avoid concluding that in the case of Detroit, correlation is causation?

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