The Dayton Way

National Review ran yet another dissection of the complete collapse of Detroit last week.

One of the key lessons – giving unions carte blanche neither bolsters middle-class wages nor general prosperity:

One lesson to learn from Detroit is that investing unions with coercive powers does not ensure future private-sector employment or the preservation of private-sector wages, despite liberal fairy tales to the contrary, nor do protectionist measures strengthen the long-term prospects of domestic firms competing in highly integrated global markets. We cannot legislate away comparative advantage or other facts of life. But the problem of unions’ coercing distortions in the private sector is at this point a relatively small one, given the decline of unionization outside of government. Organized labor being a fundamentally predatory enterprise, its attention has turned to the public sector, where there are fatter and more stable rents to be collected.

Also – taxing ones’ way to prosperity is merely the road to madness:

The second important lesson to be learned from Detroit is that there are hard limits on real tax increases, a fact that will be of more immediate significance in the national debate as our deficit and debt problems reach crisis stage. Even those of us who are relatively open to tax increases as a component of a long-term debt-reduction strategy must keep in mind that our current spending trend is putting us on an unsustainable course in which our outlays will far outpace our ability to collect taxes to pay for them, no matter where we set our theoretical tax rates.

Detroit was a cold Greece long, long ago.

 But tax rates are not the only incentive: Google is not going to set up shop in Somalia. Healthy governments create conditions that make it worth paying the taxes — which is to say, governments are a lot like participants in any other competitive market (with some obvious and important exceptions).

And one of the keys to that is that creating a “healthy government” isn’t much different than creating a “healthy teenager”, in health doesn’t’ mean “giving them everything they think they need”.

The benefits of being in Detroit used to be worth the costs, but in recent decades millions of people and thousands of enterprises large and small have decided that is no longer the case. It is not as though one cannot profitably manufacture automobiles in the United States — Toyota does — you just can’t do it very well in Detroit. No one with eyes in his head could honestly think that the services provided by the city of Detroit and the state of Michigan are worth the costs.

The lesson there:  while government is necessary to create the legal stability needed to do business of any kind, when government’s main mission becomes sustaining itself, it defeats that purpose.

The third lesson is moral. Detroit’s institutions have long been marked by corruption, venality, and self-serving. Healthy societies have high levels of trust. Who trusts Detroit?

Without some other overarching reason to stay there?  And in Detroit – without the location and markets of a New York (I’m thinking in the Dinkins era, of course) or the resources of a New Orleans or the weather of a Miami?  There’d be no reason.

What is true of Detroit is true of the country. Our national public sector not only is bloated and parasitic, it is less effective, less responsible, and less honest than that of many other developed countries, including New Zealand, Canada, Australia, and Germany. I am not an unreserved admirer of Transparency International’s global corruption-perceptions index, but I believe that it is in broad outline accurate. Liberals are inclined to learn the wrong lessons from the relative success of countries such as Canada or New Zealand, concluding that what we need is a bigger welfare state, government-run health care, etc.

And as it’s true for the nation, it’s true for Minnesota.

Who has spent the last year trying to expand the coercive power of Minnesota unions, by trying to unionize home daycare providers and expending boundless political capital on stopping the Right to Work amendment?

Whose entire substantive platform (other than “create chanting points for the Alliance for a Better Minnesota”) is “raise taxes?”

Whose administration is focused on obstructing efforts to curb corruption and safeguard the state voting system?

I’m not saying Mark Dayton is trying to be a Detroit-style governor.

I’m just saying that if he were, I can’t think of anything he’d be doing differently.

Maybe “get indicted for something”.  Other than that, I got nothing.

2 thoughts on “The Dayton Way

  1. I pointed out last week that a large contingent of rank and file UAW members in Michigan are supporting RTW legislation there. Of course, in a union bastion like that, the union leadership will most likely stop at nothing to derail it.

    If we want to see a European country that is succeeding, we should look at Sweden. I read an article a few weeks ago (can’t remember the author, but it was on Townhall) about their fiscal responsibility resulting in the lowest unemployment rate and highest number of new jobs created, in Europe.

  2. Want to know what happened to ancient Babylon? Look to Detroit. Babylon wasn’t conquered, it simply ceased to exist. The people went elsewhere because the only thing left in Babylon were politicians and thieves (ptr). When there was nothing left to steal, the dust took ownership.

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