The UAW and Public Sector Unions devastate Three Michigan Cities

Posted by PITHOCRATES - February 24th, 2013

Week in Review

It’s not been a good year for Detroit.  Well, it’s been more than a year.  It’s been a few bad years.  Actually, it’s been a great many bad years.  Since 1970.  When Ford Motor Company Chairman Henry Ford II joined with other business leaders to form Detroit Renaissance.  To revitalize the City of Detroit.  And some 42 years later, the City of Detroit is still struggling (see Detroit’s Misery Can Be Its Turning Point by Micheline Maynard posted 2/23/2013 on Forbes).

Detroit boosters were dealt a one-two blow this week by the kind of outsiders they have come to resent.

First, a state review panel declared that a financial emergency existed in the city, making it likely that Michigan Gov. Rick Snyder will appoint an emergency financial manager with sweeping powers.

Then, Forbes weighed in by declaring Detroit the nation’s most miserable city, based on a series of criteria that include crime, unemployment, foreclosures and home value…

Although General Motors is based in Detroit, and Chrysler recently opened an office there, the automobile industry is not going to provide the vast numbers of jobs the city needs to become solvent.

And there lies the problem for Detroit.  A city that grew big and rich off of the automobile industry saw a steady exodus and a declining tax base when the automobile industry declined.  Live by the automobile.  Die by the automobile.  And it’s just not Detroit.  A couple of other Michigan cities broke into the top 10 of Forbes’ America’s Most Miserable Cities 2013.

#7 Warren, Mich.

Troy and Farmington Hills are part of the government-defined Warren metro division. Like Detroit, the Warren metro has seen home prices collapse–off 53% the past five years.

#2 Flint, Mich.

Flint has been demolishing homes as the city shrinks with residents leaving in search of jobs. Only Detroit has a higher net out-migration rate. Flint ranks third worst for violent crime, behind Detroit and Memphis.

#1 Detroit, Mich.

Violent crime in the Detroit metro was down 5% in 2011, but it remains the highest in the country with 1,052 violent crimes per 100,000 people, according to the FBI. Home prices were off 35% the past 3 years, which is the biggest drop in the U.S.

If you seek a pleasant peninsula* you’d do better looking for one where the UAW isn’t dominant.  Perhaps Florida.  For the UAW is a city killer based on these Michigan cities.  (*The official state motto of Michigan is “If you seek a pleasant peninsula, look about you.”)

The Big Three dominated these cities.  Where fat pay and benefit packages were passed on to consumers in overpriced vehicles.  The Big Three’s monopoly on car sales allowed them to make fat profits.  And pay enormous amounts of taxes to the cities that had the factories that assembled their cars.  City coffers were so flush with cash city governments grew.  And city workers enjoyed fat pay and benefit packages.  This was the high water mark of the UAW.  Just after public sector unions had joined them on the gravy train.  But then something happened that devastated the UAW.  Consumers got choice.  They no longer had to buy overpriced ‘rust buckets’ the Big Three was putting out during the Seventies.  For the Japanese gave them choice.

And so began the great decline of the Big Three.  Quality and value did them in.  It’s what the people wanted.  While the UAW wanted consumers to pay more and get less.  So they could continue to enjoy their fat pay and benefit packages.  As the jobs went away so do did the taxes.  The cities bloated with all those government workers with their fat pay and benefit packages tried to maintain the size of their governments even while the tax base was declining.  Reducing other government services as they had little money left over after paying those fat pay and benefit packages.

With fewer and fewer jobs available people left these cities.  Empty houses dotted the horizon.  And housing prices fell.  With the tax base continuing to decline.  Poverty rates rose.  As did city services for the impoverished.  Leaving even less for other city services.  Causing a further exodus from the city.  Urban blight followed.  As did crime.  Causing a further decline in property values.

Low interest rates helped boost housing prices.  For awhile.  President Clinton’s Policy Statement on Discrimination in Lending kicked off subprime lending in earnest as lenders bowed to the Clinton Justice Department to put more low-income and minorities into homes they couldn’t afford.  Creating a huge housing bubble.  Built on easy credit.  Artificially low interest rates.  And the adjustable rate mortgage (ARM).  When rates went up all those low-income and minorities who bought houses they couldn’t afford defaulted on their higher mortgage payments.  Creating the subprime mortgage crisis.  Giving us the Great Recession.  Creating a flood of foreclosures.  A free fall in housing prices.  And more of the same that helped put those three Michigan cities into the top ten of Forbes’ America’s Most Miserable Cities 2013.

Michigan recently opted to become a Right-to-Work state.  Greatly angering the UAW and those public sector unions.  But it may be just what Michigan needs to reverse the great decline caused by the UAW and the public sector unions that devastated some of Michigan’s greatest cities.  One thing for sure it can’t get any worse.  Not when being a union state for so long secured three places in the top ten of Forbes’ America’s Most Miserable Cities 2013.

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Flint Tools, Levers, Wheels, Animal Power, Water Power, Wind Power, Steam Power, Electrical Power, Nuclear Power and Solar Power

Posted by PITHOCRATES - February 22nd, 2012

Technology 101

Man harnessed the Energy in Moving Water with a Water Wheel

When prehistoric man first chipped a piece of flint to make a sharp edge he learned something.  It made work easier.  And his life better.  This tool concentrated his energy into that sharp edge.  Increasing the amount of energy he could put to work.  Allowing him to skin an animal quickly and efficiently like never before.  Making better hides to protect him from the elements.  Yes, he said, this tool is good.  But in a somewhat less sophisticated manner of speech.

From that moment forward it has been man’s singular desire to improve on this first tool.  To find ways to concentrate energy and put it to work.  Levers allowed him to move heavier things.  Wheels allowed him to move heavier loads.  The block and tackle allowed him to lift or pull heavier weights.  Harnessing animals allowed him to do all of these things even better.  And we would use animal power for millennia.  Even today they still provide the primary source of power for some less developed countries.

But animals have their limitations.  They’re big, they eat, drink, pee and poop.  Which doesn’t make them an ideal source of power to turn a mill wheel.  A big wheel that grinds grain into flour.  It’s heavy.  But it doesn’t have to spin fast.  Just for long periods of time.  Then man had another moment like he did when he chipped a piece of flint.  He noticed in his environment that things moved.  The wind.  And the water in a river.  The wind could blow fast or slow.  Or not at all.  But the water flow was steady.  And reliable.  So man harnessed the energy in the moving water with a water wheel.  And connected it to his mill wheel via some belts and pulleys.  And where there was no water available he harnessed the less reliable wind.

The Steam Engine eliminated the Major Drawbacks of Water Power and Wind Power 

The water flowed day and night.  You didn’t have to feed it or clean up after it.  And a strong current had a lot of concentrated energy.  Which could do a lot of work.  Far more than a sharpened piece of flint.  Which was ideal for our first factories.  The water wheel shaft became a main drive shaft that drove other machines via belts and pulleys.  The main drive shaft ran the length of the factory.  Workers could operate machinery underneath it by engaging it to the main drive shaft through a belt and pulley.  Take a trip to the past and visit a working apple mill powered by a water wheel.  It’s fascinating.  And you’ll be able to enjoy some fresh donuts and hot cider.  During the harvest, of course.

While we built factories along rivers we used that other less reliable source of energy to cross oceans.  Wind power.  It wasn’t very reliable.  And it wasn’t very concentrated.  But it was the only way you could cross an ocean.  Which made it the best way to cross an ocean.  Sailors used everything on a sailing ship from the deck up to catch the wind and put it to work.  Masts, rigging and sails.  Which were costly.  Required a large crew.  And took up a lot of space and added a lot of weight.  Space and weight that displaced revenue-earning cargo.

The steam engine eliminated the major drawbacks of water power and wind power.  By replacing the water wheel with a steam engine we could build factories anywhere.  Not just on rivers.  And the steam engine let ships cross the oceans whenever they wanted to.  Even when the wind didn’t blow.  And more space was available for revenue-earning cargo.  When these ships reached land we transferred their cargoes to trains.  Pulled by steam locomotives.  That could carry this revenue-earning cargo across continents.   This was a huge step forward.  Boiling water by burning coal to make steam.  A highly concentrated energy source.  A little of it went a long way.  And did more work for us than ever.  Far more than a water wheel.  It increased the amount of work we could do so much that it kicked off the Industrial Revolution.

With Nuclear Power our Quest to find more Concentrated Forms of Energy came to an End 

We replaced coal with oil in our ships and locomotives.  Because it was easier to transport.  Store.  And didn’t need people to shovel it into a boiler.  Oil burners were more efficient.  We even used it to generate a new source of power.  Electrical power.  We used it to boil water at electrical generating plants to spin turbines that turned electrical generators.  We could run pipelines to feed these plants.  Making the electricity they generated even more efficient.  And reliable.  Soon diesel engines replaced the oil burners in ships and trains.  Allowed trucks and buses to run where the trains didn’t.  And gasoline allowed people to go anywhere the trains and buses didn’t go.

The modern economy ran on petroleum.  And electricity.  We even returned to the water wheel to generate electricity.  By building dams to build huge reservoirs of water at elevations.  Creating huge headwater forces.  Concentrating more energy in water.  Which we funneled down to the lower elevation.  Making it flow through high-speed water turbines connected to electrical generators.  That spun far faster than their water wheel ancestors.  Producing huge amounts of reliable electrical power.  We even came up with a more reliable means to create electrical power.  With an even more concentrated fuel.  Fissile material gave us nuclear power.  During the oil shocks of the Seventies the Japanese made a policy change to expand their use of nuclear power.  To insulate them from future oil supply shocks.  Which it did.  While in America the movie The China Syndrome came out around the time of the incident at Three Mile Island.  And killed nuclear power in America.  (But as a consolation prize we disproved the idea of Keynesian stimulus.  When the government created massive inflation with Keynesian policy.  Printing money.  Which raised prices without providing any new economic activity.  Causing instead high inflation and high unemployment.  What we call stagflation.  The Japanese got a big Keynesian lesson about a decade later.  When their massive asset bubble began to deflate giving them their Lost Decade.)

And with nuclear power that quest to find more ways to make better and more efficient use of concentrated energy from that first day we used a flint tool came to an end.  Global warming alarmists are killing sensible sources of energy that have given us the modern world.  Even animal rights activists are fighting against one of the cleanest sources of power we’ve ever used.  Water power.  Because damming rivers harms ecosystems in the rivers we dam.  Instead political pressures have turned the hands of time backwards by using less concentrated and less efficient sources of energy.  Wind power.  And solar power.  Requiring far greater infrastructure installations to capture far less amounts of energy from these sources.  Power plants using wind power and solar power will require acres of land for windmills and solar panels.  And it will take many of these power plants to produce what a single power plant using coal, oil, natural gas or fissile material can generate.  Making power more costly than it ever has been.  Despite wind and sunshine being free.  And when the great civilizations become bankrupt chasing bankrupt energy policies we will return to a simpler world.  A world where we don’t make and use power.  Or machinery.  Much like our flint-tool using ancestors.  Albeit with a more sophisticated way of expressing ourselves.

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