Bad Liberal Democrat Policies chased the Industrial Base out of Detroit

Posted by PITHOCRATES - June 2nd, 2013

Week in Review

A growing population is to government coffers what growing revenue is to business.  More money.  Governments at all levels collect their money by taxing the population.  The greater the population is the greater the amount of taxes they collect.  So a growing population increases the money coming into a government’s coffers.  While a shrinking population gives you a Detroit (see How to save a city by knocking down thousands of its buildings by Tim Fernholz posted 5/31/2013 on Yahoo! Finance).

The problem with Detroit, which could soon host the largest municipal bankruptcy in the country’s history, is its shrinking population. With its industrial base decimated by automation and outsourcing, a city of 1 million people in 1990 dropped to 700,000 this year, with 200,000 people leaving the city since 2008. That reduced the taxe base to fund public services. Fewer public services coupled with lower population density weighed on crime, public health and the economy.

Yes, its industrial base was decimated by the loss of all those manufacturing jobs.  But the real question is why businesses left Detroit.  And there is only one reason why a business leaves one location for another one.  Because of a more business-friendly environment elsewhere.

Detroit became a liberal Democrat bastion.  Supported by high taxes.  Including a city income tax.  And costly regulations.  These are what chased businesses out of Detroit.  After decades of this nonsense the regulations for doing work in the city grew so great that business just went elsewhere.  Or cheated the regulations.

Money flowed into city coffers.  And the public sector grew.  Including generous pay and benefit packages for their public sector workers.  Paid for with wealth they transferred from the private sector to the public sector.  Until the private sector said enough is enough.  And left the city.  For a more business-friendly environment somewhere else.  Taking all of those jobs with them.  And with no jobs people left the city.  Looking for jobs.  But as the tax base shrunk the public sector remained bloated.  Which was a problem.  A big problem.  As more and more money went for those pay and benefit packages.  Including generous pensions and health care benefits.  And less to city services.  Causing urban decay.  In time this accelerated.  With fewer and fewer people paying the taxes to support the public sector.  And when they could no longer support the public sector the city started running deficits.  Pushing it towards the “largest municipal bankruptcy in the country’s history.”  All because of an unfriendly business environment.

So this is what decimated the city’s industrial base.  Anti-business liberal Democrat policies.  For if the city wasn’t so anti-business the industrial base would still be there going strong.  Attracting new businesses from other anti-business locations.  Instead of what they have in Detroit.  A city half the size it once was.  Where they talk about tearing down houses and turning these old neighborhoods into farmland.  In what once was the automobile capital of the world.  Amazing what bad liberal Democrat policies can do.

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