Detroit Broke City…” Private enterprise built it, government destroyed it.”
By: Peter Schiff, CEO of Euro Pacific Capital
Thursday, 1 August 2013
It should come as no surprise that the lessons that should be learned from the bankruptcy of Detroit, a city that once stood as the shining example of America’s industrial might, are being ignored by the American political establishment and its allies in the docile press corps. While the death spiral of the Motor City may be extreme in relation to conditions throughout the country, it is a difference of degree rather than design. In truth, Detroit is our canary in the coal mine. It is succumbing to the same combination of productive decay, government mismanagement, and unmanageable debt that is crushing the rest of us. But as the most sub-prime of all major American cities, the symptoms that are infecting all of us have first become fatal in Detroit.
Proving that politicians want nothing more than to tell soothing lies to voters, Detroit mayoral candidate Tom Barrow has forcefully asserted that the city’s fiscal crisis is a fiction. In a recent TV interview he described a long term conspiracy by republican and private sector forces to steal assets from Detroit residents, bust the unions, and disenfranchise voters. Not to be outdone in absurdity, MSNBC host Ari Melber concluded that Detroit’s problems result from the libertarian movement to deny residents needed government services. He ignores the fact that Detroit’s government did not whither by choice, but by necessity. Thanks to years of excessive government the city lacks the resources to fund the basic services that even most libertarians support. Others claim that Detroit is just as deserving of federal bailouts as the Big Three or the communities wiped out by natural disasters such as Hurricane Sandy. But there is nothing “natural” about the fiscal disaster in Detroit, and the mistake of bailing out the auto companies should not be compounded on a municipal level.
The real story of Detroit is that its problems are entirely man-made, and can be summed up in seven words. Private enterprise built it, government destroyed it. That is the screaming headline that is unfortunately absent from the media coverage.