Written by Frank Li
Detroit is in bankruptcy – what a disaster!
There are numerous articles about this disaster already, from diagnosis (Detroit, and the Bankruptcy of America’s Social Contract), to its implication for the rest of the country (Detroit’s Warning for Chicago – and Others), to a possible solution (Detroit Ran Into The Inviolable Rule Of Economics). What’s missing in the mainstream media are the wisdom and honesty to identify the root cause of the Detroit disaster in order to work toward a real solution and prevent more disasters like this from happening across the country.
In this article, I will try to do just that: identify the root cause of the Detroit disaster and provide a real solution!
1. The Detroit disaster
Detroit was not built in one day, nor did it go bankrupt in one day. Here are two facts highlighting the Detroit disaster:
Population: It declined from its peak of 1,849,000 in 1950 to 713,000 in 2010 (Demographic history of Detroit).
Abandoned houses today: 78,000 (Broken City: Detroit).
There are two essential ways to analyze the Detroit disaster: is it due to a contingency or is it a systemic failure? If it’s the former, which means non-repeating, we should identify the major problems and fix them one by one. Otherwise, it’s a systemic failure, which means there are big structural problems. Obviously, for Detroit (and other liberal strongholds), it is a systemic failure. We should therefore focus on the biggest problem first. The reason behind the intense focus is that unless the biggest problem is identified and solved, little else matters. Besides, once the biggest problem is solved, some other big problems may be minimized.
Apparently, for the mainstream-media, the Detroit disaster is due to a contingency. So everybody has been looking for problems everywhere (e.g. mismanagement and corruption). But for me, it’s obviously systemic. So let’s focus on the biggest problem first …
What is the biggest problem in Detroit (as well as in many other U.S. cities and states)? Crushing pension obligations for public-sector workers, both active and retired (Detroit not alone under crushing pension obligations)!
How bad is the public-sector situation in America?
The public sector is too big! Read this report (Government Employees and Manufacturing Jobs: Takers and Makers). Here is an excerpt: “More Americans work for the government than work in construction, farming, fishing, manufacturing, mining, and utilities combined.“
Public-sector workers are overpaid! Here is an excerpt from the same report: “state and local government employees earned total compensation of $39.60 an hour, compared to $27.42 an hour for private industry workers, a difference of over 44%!“
The pensions of [most] public-sector retirees are too good to be true!
Why such a big mess with the public sector? In 1961, President Kennedy allowed public-sector workers to unionize against the United States of America (Executive Order 10988)!
Did not JFK know what he was doing? Yes, he did, boldly against FDR’s explicit warning against it (Letter from FDR Regarding Public-Sector Unions)!
Why did JFK do it anyway? He did it to specifically insure his re-election, which became moot after his assassination, but the damage was done! In other words, JFK sacrificed America’s future to achieve his personal aggrandizement! More broadly, it’s called “getting re-elected ad nauseam, even if it means destroying America by emptying her public treasury” (Saving America, Chinese Style)!
The day of reckoning is here, finally!
Here is an excerpt from my book (Saving America, Chinese Style):
“President Kennedy might well be recognized as the worst American President twenty years from now, as America finally realizes the magnitude of the damage he caused by allowing public-sector unions in 1961!”
Have you yet realized the magnitude of the damage caused by JFK?
Yes, JFK is the ultimate culprit behind the Detroit disaster, with the worst for the rest of America yet to come!
In summary, not only was the problem of public-sector unions created by JFK systemic, the reason behind JFK’s action (i.e. getting re-elected ad nauseam) was also systemic! It’s time to fix both systemic problems, at once! It is existential, for both Detroit and the U.S.!
4. A real solution
Political reforms! Specifically,
Abolishing all public-sector unions immediately and banning them forever, with an executive order to undo President Kennedy’s Executive Order 10988!
Setting term-limits for all the top political offices, with the American Presidency being one term (e.g. six years)!
For more, read my book: Saving America, Chinese Style!
Throughout human history, great nations have risen and fallen. They rose for one and only one reason: they were exceptional for a period of time. They fell primarily for one reason as well: self-destruction!
The U.S. has long been exceptional! It has been falling steeply over the past decade, at least, for the same common reason: self-destruction!
How has the U.S. been self-destructing? Via democratic socialism, epitomized by public-sector unions (as well as democratic imperialism, epitomized by the Iraq War)!
In short, public-sector unions are totally communistic, and must therefore go!
Detroit is not an exception – Detroit’s problems are common throughout the U.S.! Unless we successfully address the biggest problem in Detroit (i.e. public-sector unions), little else matters: we will not get Detroit back for real and worse yet, more U.S. cities and states will follow Detroit to bankruptcy!
More broadly, it’s time for us to critically examine our country as an entitlement society! Here are five principles someone has applied to Detroit recently (widely circulated on the Internet):
You cannot push the poor into prosperity by pulling the rich out of prosperity!
For what one person receives without working, another person must work without receiving.
The government cannot give somebody anything that the government does not first take from somebody else.
You cannot multiply wealth by dividing it!
When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.
Now, compare America with Europe: Detroit is just yet another example of our Greece (Greece’s Unemployed Young), with many more cities and states to follow, such as my home state Illinois like Spain and even California like Italy …
One by one, both cities and states, democracy, as we practice it today, will drive them into bankruptcy, until all is there (America’s European Past and Future)!
6. Detroit = 9/11?
I believe Detroit is a new 9/11 moment for America. The grand approach for us should be the same: either we face the truth and seize the opportunity to change for the better, or we ignore the truth and continue on a path of self-destruction!
What was the truth behind 9/11? Read: Ron Paul on 9/11: Ask the right questions and face the truth! Have we already faced the truth as a nation? No, not yet! Because of that, we have been on a path of self-destruction (e.g. the Iraq War and Patriot Act) since then!
What is the truth behind Detroit? Democracy, as we practice it today, does not work! More specifically, by allowing public-sector unions, President Kennedy committed the worst act against the United States of America, ever! Therefore, not only should we explicitly name JFK the worst American President (so far), we must also undo his act by revoking Executive Order 10988 and then fundamentally reform our political system!
More broadly, was 9/11 a terror act against America? Yes, it was! But even that was nothing when compared with what American politicians have done to America, with JFK epitomizing it! For more, read my book: Saving America, Chinese Style!
America is deeply in trouble. Detroit is just yet another example!
Overall, I believe I have the most accurate diagnosis for America, as well as the best solution (Saving America, Chinese Style). But, can you handle it?
Truth matters! Truth hurts!