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This blog is cross-posted at StewartAcuff.com

The Radical Right-wing is licking their chops over the economic and financial failure of Detroit, which was at one time perhaps the greatest industrial city in the world.

Lavish pensions and much too powerful unions destroyed Detroit they crow on Fox News.

Really, the average pension in Detroit is $19,000 a year. Hardly lavish. And the unions made it the greatest industrial city in the world, as did the tens of thousands of once poor people who came to the city in the 40′s and 50′s, to build first the war material without which Nazism, fascism, and Japanese Imperialism could not have been beaten. Then those same once poor people stayed in Detroit to create the core of the building of the American middle class – hardly a bad thing.

No, Detroit hollowed out because we live in a country with no Industrial Policy. We live in a country that almost allowed the entire automobile industry to go under – the industry that was once part of the definition of America with its boundless open spaces and endless highways.

For 45 years, our domestic automobile industry faltered and slowly failed, and foreign imports slowly filled our streets and roads. The product created by our automobile industry also faltered.

And we steadfastly refused to adopt a national industrial policy that would bring together management, unions, and our government to develop a strategy to save our great industries and wealth creating manufacturing.

That kind of industrial policy is exactly why Germany has exports that greatly outweigh imports and a robust manufacturing sector.

And in the 90′s, we actually accelerated the destruction of our manufacturing sector with trade deals like NAFTA and Permanent Normal Trade Relations with China. Increasingly as a result, global corporations moved operations everywhere except here at home. Our labor movement declined and so did our middle class.

And Detroit lost its economic base and then its population. Eventually, Detroit lost two-thirds of its population.

Show me any enterprise that can lose two-thirds of its financial base and survive.

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Image: Western part of the abandoned Packard Automotive Plant in Detroit, Michigan.

Image source: Albert duce via Wikimedia Commons
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Comment Preferences

  •  Detroit was destroyed thirty years ago by (1+ / 0-)
    Recommended by:
    TracieLynn

    the ex-men, people who

    exploit
    extract
    exhaust
    execute
    exterminate
    extort
    etc.

    People who make things were made to work and then, when they wore out, they and their environment was discarded. It's not just the troops that are considered fungible by modern day predatory humans. Willard was right about the "makers" and "takers." He's just not aware that the use of force is not all it takes to create.

    Germany is actually a good example. When industrious people let the ex-men have their way, it was all down hill. The only difference is that the destruction was quicker and, because the U.S. advanced the currency, the rebuilding occurred in record time. In the U.S. it's the currency that has turned the destruction into a slow march. And Congress is to blame for that. Instead of insuring that the money circulates to lubricate enterprise, Congress has permitted it to be captured by the speculators and rationed the distribution of the rest. Also, Congress has overseen the generation of a horde of middlemen to take a cut of every dollar spent, like a legal Mafia, for allowing it to pass from hand to hand. Every tax cut is nothing more than a promise to the middlemen to let them increase their store.

    To let middlemen hoard the currency is, btw, a matter of policy. It is a mistake to accept the claim that our agents of government have no involvement in enterprise. Having made thievery legal is purely a legislative act.

    We organize governments to deliver services and prevent abuse.

    by hannah on Wed Jul 31, 2013 at 03:19:37 AM PDT

  •  I live near a former German Steel town (3+ / 0-)

    which employed the equivalent of 20% of the town's population in the mills at its heyday in the 60's

    The steel mill shut down in 1986,and the town's population is still around the same level, and unemployment is under the German average around 8%.

    The main reasons are that the town still has a growing industrial base, in large part due to the town and region's support to generate new jobs.

    The kind of industries we have are largely metal based - custom agricultural machinery, wind turbine gear boxes, escalators, custom machined parts, and new industries include window frame manufacturing and other construction related manufacturing.

    When the steel plant closed down, the region/city offered incentives for companies to relocate based on gross investment and jobs created (or relocated, which is a way of sharing the pain). One company offered to relocate its head office from Dusseldorf, and to build a world scale gas plant, and the town contributed the cost of the new office block, bringing 300 jobs to the city for 20 years.

    The company has now moved out, but the impact on the town is negligible, the employees still employed in the neighboring town still live here, and don't contribute to the unemployment numbers.

    •  And I bet that Germany has laws and codes that (0+ / 0-)

      don't permit companies to promise to relocate and build plants, only to reap the tax abatements and financial incentives and then up and leave a couple of years later.

      That's one more thing to add to my long list of small problems. --my son, age 10

      by concernedamerican on Wed Jul 31, 2013 at 06:19:13 AM PDT

      [ Parent ]

  •  Well, the U.S. *does* have an industrial policy. (5+ / 0-)

    The U.S. industrial policy for decades has been implicit or silent, but ruthlessly consistent and effective.

    This policy is, simply put, to strip-mine a century of accumulated resources and value out of America's industrial base and funnel it into the pockets well-connected billionaire investors, leaving behind a dead husk and millions of impoverished retirees and unemployed workers.

  •  Corporate profits have risen 20 times faster... (2+ / 0-)

    than workers' incomes since 2008.

    ...Corporate profits hit record highs in the second half of 2012, but that prosperity hasn’t led to the creation of jobs, since America’s biggest firms are sitting on stocks of cash instead of investing them back into the economy.

    At the same time, wages hit record lows, and corporate earnings are rising nearly 20 times faster than disposable incomes, the New York Times reports...

    The Industrial Policy engineered by the corporations, and enabled by the Congress is to do whatever it takes to increase profitability for the company, including, but not limited to:  Slashing workers' pay and benefits; sending jobs overseas; downsizing (=making each worker do the work that two or more workers did previously, with resulting decrease in quality and customer service); replacing full time workers with part-time staff.  

    The result is:  "An Economy Built for Profits, Not Prosperity.

    ...Newly released data on corporate profitability for 2012 show the continuation of historic levels of profitability despite excessive unemployment and stagnant wages for most workers. Specifically, the share of capital income (such as profits and interest, which are hereafter referred to as ‘profits’) in the corporate sector increased to 25.6 percent in 2012, the highest in any year since 1950-1951 and far higher than the 19.9 percent share prevailing over 1969-2007, the five business cycles preceding the financial crisis....
    Despite this increasing corporate prosperity, corporations--and their CEO's and boards of directors are adamantly opposed to reinvesting any significant portion of their windfall back into the economy.  
    We now have an economy built to assure high corporate profitability even when it’s operating far below capacity and when most families and workers are faring poorly. This is further evidence that there is a remarkable disconnect between the fortunes of business and those best-off (high-income households) and the vast majority...
    The corporations have been deliberately pushing a false narrative about how damaging taxation is to their bottom line, while in fact, By the 2000s, corporate tax revenue raised just one of every 10 tax dollars...
    In the 1950s, the corporate income tax brought in, on average, one of every four dollars in federal tax revenues.
    The Decline of Corporate Tax Revenues
    ...A weak economy, new tax breaks, and aggressive tax sheltering have pushed corporate income tax receipts down to historically low levels, both relative to the size of the economy and as a share of total federal revenues...
     

    Some signs of the destructiveness of Vampire capitalism--which views the United States as a cash cow, focusing entirely on getting the highest possible profits, while returning as little as possible back into the economy--ends up resulting in things like this.

    But, it wouldn't be possible without the active support of our elected "representatives" who are selling out their own country as they personally profit.

  •  We do have an industrial policy (1+ / 0-)
    Recommended by:
    tom 47

    But we do and have had an industrial policy - more or less since January 1981, our industrial policy has been to move as much of our industry off-shore or beyond our borders as possible.

    •  I thought the government industrial policy (0+ / 0-)

      was that industry tells the government what to do.

      We could both be right, unfortunately.

      I'm part of the "bedwetting bunch of website Democrat base people (DKos)." - Rush Limbaugh, 10/16/2012 Torture is Wrong! We live near W so you don't have to. Send love.

      by tom 47 on Wed Jul 31, 2013 at 05:52:37 AM PDT

      [ Parent ]

  •  This diary deserves to be rec'd up!! Say it loud (3+ / 0-)
    Recommended by:
    peregrine kate, profundo, kayla9170

    and clear:

    "No, Detroit hollowed out because we live in a country with no Industrial Policy. We live in a country that almost allowed the entire automobile industry to go under – the industry that was once part of the definition of America with its boundless open spaces and endless highways.

    ... we steadfastly refused to adopt a national industrial policy that would bring together management, unions, and our government to develop a strategy to save our great industries and wealth creating manufacturing.

    That kind of industrial policy is exactly why Germany has exports that greatly outweigh imports and a robust manufacturing sector."

    We need much stronger voices in concert that clamor for exactly this, a coherent national industrial policy, and the re-valuing of American labor and manufacturing.

    That's one more thing to add to my long list of small problems. --my son, age 10

    by concernedamerican on Wed Jul 31, 2013 at 06:17:29 AM PDT

  •  An industrial policy is not going to be enough. (0+ / 0-)

    We have to be demanding a guaranteed income. Robotics and article intelligence are going to make all jobs expendable by mid-century-- if not sooner. When, for example, our navy is launching drones off carriers it is only a matter of time before all pilots military or commercial won't be needed.

    Detroit’s Bankruptcy and America’s Future: Robots, Race, Globalization and the 1%

    Posted on 07/19/2013 by Juan Cole

    The big question is whether Detroit’s bankruptcy and likely further decline is a fluke or whether it tells us something about the dystopia that the United States is becoming. It seems to me that the city’s problems are the difficulties of the country as a whole, especially the issues of deindustrialization, robotification, structural unemployment, the rise of the 1% in gated communities, and the racial divide...........
    http://www.juancole.com/...

  •  Thanks for this article! (0+ / 0-)

    Truth and more truth on Detroit's current plight!

    Michigan based Citizen Journalist Owner/Podcast host at Independent Underground News at http://www.rojsnews.com and our weekly radio show Independent Underground LIVE at http://www.blogtalkradio.com/rojsradio.

    by kayla9170 on Wed Jul 31, 2013 at 11:16:54 AM PDT

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