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Last week, an op-ed by Stephan G. Richter, editor of The Globalist, was published by The New York Times. Richter writes that while Detroit's economic collapse is notable because of the breadth of its impact, the problems associated with the manufacturing sector are far more widespread than a single city. Not exactly news to anyone. But, he goes on to say, the blame put on globalization, out-sourcing and the Great Recession for the collapse is misplaced.

Instead, it's the fault of those who should have seen the omens: post-World War II dominance was certain to be fleeting as the war-torn economies of Europe and Japan recovered.

In that moment, American companies, communities and employees should have started taking the competition seriously. That did not happen. Companies like General Motors continued to shower blue-collar workers with handsome pay and benefits.

Who was to blame for this? Not the unions. They did what they were supposed to do: ask for higher pay and more benefits. No, the fault lay with the top corporate managers: it was their job, as capitalists, to deny such increases if they were not justified by productivity trends.

Ah. The unions did their job. But the owners and managers failed to properly slap them down. No surprise that globalization would get a pass from the editor of The Globalist, I suppose.

Please read below the fold for how Richter missed the mark.

At the Economic Policy Institute, Josh Bivens heaves Richter's point of view over the side:

Start with claims that excessive blue-collar pay destroyed manufacturing.  For a paper examining those claims, check this out (pdf). Spoiler alert: it’s not. Inflation-adjusted hourly wages for production workers in U.S. manufacturing peaked in 1978 and were about 8 percent lower in 2007, while manufacturing productivity rose by well over 100 percent in that period.

More generally, one really shouldn’t be allowed to just hand-wave about “global competition” as an inevitable destroyer of American living standards without mobilizing some evidence that you understand either what determines these living standards or the economic mechanisms through which globalization affects them. [...]

It is true that increased global trade can (and does) increase inequality in the U.S. economy, so even as average living standards growth continues apace that a large share of American workers are left behind. This has happened, and it’s a bigger deal than many think [...] But this is not a story of American workers getting stupider, as Richter sets it up. Instead, it’s a story about how globalization’s rules of the game increasingly place blue-collar workers in direct competition with workers around the world, while corporate interests are protected.

Bivens goes on to point out the other holes in Richter's argument. For instance, most of the automobiles and auto parts imported into the United States come from nations with comparably high or higher wages for manufacturing workers. And then there's been the damage caused with exchange rate.

Neither Richter nor Bivens mentioned the impact that a decade of making crappy cars had on giving away America's dominance in the auto industry, so I'll save that for another time.

Over the next couple of years or so, we're going to hear a great deal about how to "fix" Detroit and, by extrapolation, other American cities and towns that have suffered decline. Many of those prescriptions, you can be sure, will focus on managerial tough-love for American workers and greater rewards and regulatory freedom for their bosses. With GM already paying entry-level workers around half what they got just half a decade ago, you can see where that's going.

Cities are complex entities that have their ups and downs. Reviving one that's been on the downslide for decades has no single, one-factor-above-all-others solution. And economics aren't the only matter at issue. Detroit's cultural history, including white flight, is a matter that needs attention, too. But a progressive vision—a 21st century left vision—of a "fix" for Detroit and its beleaguered sister cities would encourage innovation, mandate environmental sustainability, reverse the economic damage caused by inequality. It would remind everyone that what once made life vibrant in Detroit were good schools and parks and transportation and jobs. It would promote policies—national, state and local—that restored those factors instead of the worker-hating approaches that just make things worse for the many while adding more polish on the perks of the few.

Detroit could be a model for that vision. It won't be if it remains in the clutches of those who now run it.

Originally posted to Daily Kos Economics on Mon Aug 19, 2013 at 03:00 PM PDT.

Also republished by Daily Kos Labor, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, Progressive Policy Zone, and Daily Kos.

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Comment Preferences

  •  I've wondered how our post WWII dominance (3+ / 0-)

    in manufacturing played out over time. While I didn't think unions or coddling management would be the cause of decline our decline,globalization certainly did have an impact. The developing world's govts wanted jobs, good jobs, for their citizens.

    Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. -Martin Luther

    by the fan man on Mon Aug 19, 2013 at 03:25:03 PM PDT

    •  A quick look at the rise of corporate profits (6+ / 0-)

      tells the story. All of the increase in productivity that used to be shared between capital and labor is now channeled to corporate profits. That's where the money and the jobs are going. And the capitalist/globalist system is setting the stage for major decline because of their greed and unwillingness to literally share the wealth.

      "Government by organized money is just as dangerous as Government by organized mob." -- Franklin D. Roosevelt

      by Kombema on Mon Aug 19, 2013 at 04:48:07 PM PDT

      [ Parent ]

      •  Not even a matter of sharing (6+ / 0-)

        It's a matter of theft. The American worker over the past 30 years has increased their productivity 100+% yet their wages have barely kept pace with inflation and in many sectors have declined.

        And that's theft, pure and simple. Theft by the ownership class of the fruits of the working classes' labor. There is no sugar coating it, at least we who support working people shouldn't and we should vehemently correct any apologist that claims otherwise such as all these wingnut pundits licking their chops to assign blame to so-called high wages and post WWII competition, neither of which is true in any way when assigning the blame for decline.

        OUR MONEY, not the investor classes', not the ownership classes' and CERTAINLY not the Management classes' has been STOLEN and therein lay the seeds of decline. That money that would have been put to better use circulating through the economy has instead been hoarded and hidden by a mentally ill, sociopathic and inbred ruling class. That money sits, useless, as this class figures new ways to steal even more.

        And that's the truth.

        "We have become a Nazi monster in the eyes of the whole world - bullies and bastards who would rather kill than live peacefully. We are whores for power and oil with hate and fear in our hearts" - Hunter S. Thompson

        by Dave925 on Tue Aug 20, 2013 at 07:33:47 PM PDT

        [ Parent ]

        •  100%? Try more like 3 times that (3+ / 0-)
          Recommended by:
          lady blair, drobnox, Kombema

          The productivity of the people in the lab where my parents, up until recently, were working went up 300+% in the past 20 years.

          Yet they still were unhappy. You know why?

          1. They keep on buying machines that had known problems with downtime, something you cannot blame on the people using the machines.
          2. They keep on trying to switch over to a new computer program for the machines, when the old program they used is the 'gold standard' for the industry. Some people even call it the platinum standard.
          3. The doctors had a habit of doing stupid things, like sending them vials with no label on it. Seriously, my mother had documented numerous instances of them doing that (with personally identifiable information of the patient left out ala HIPPA of course) and submitted it to the oversight people.
          Yet nothing was done about that.

          Business all love to blame their lower echelon workers and never blame higher echelon people and management.

    •  This is complicated (4+ / 0-)

      I have spent the better part now of 5 years researching this, and have been posting here about globalization for 11.

      Honestly much of the literature starts with a conclusion and then gathers data to support the conclusion.  The reality is more complicated.  Automation by itself is the cause of a large part of the employment decline.  But automation is driven in part by competitive concerns about relative wage rates.  Hence the two are actually complementary explanations and not mutually exclusive.  One works to accelerate the other.

      You can make a decent argument that the decline in manufacturing is actually overstated.  US Car production for example is higher than it was 20 or 25 years ago.  The problem is those cars are made with fewer workers.  

      In truth the story of Detroit is very reminiscent of the collapse of the textile industry in the North.  If you go to Manchester, New Hampshire, you will see a huge complex of textile buildings, many of which are empty over 100 years AFTER the textile mills left. The mills closed when the work headed South - a process that actually began after the Civil War.  Much of US Car production also has headed South - one of the untold stories is the shift from big 3 union shops to foreign run plants  in right to work states.  It is an irony that most German companies, for example, locate in non-union states though in Germany the unions are tough as nails.

      List the reasons for Detroit's decline - they all have truth.  The Big 3 got fat and dumb and were not competitive for a while - both labor and management share that blame (though not in equal shares).  White fear of crime (which exploded in the 60's and 70's) caused white flight.  Detroit was too dependent on one industry - though "they should have diversified" is easier to say than it is to execute.  

      Big cities are often created by one big idea. Detroit certainly was - but there are other examples I can think of (Rochester New York, Pittsburgh). We often underestimate just how rare those big ideas are, and how hard they are to repeat.  You can see the same thing in companies (What is Facebook's next big idea?).  Usually the advantage that a city or a company gets from the idea is fleeting.  

      You can actually argue that Detroit hung on to its big idea better than most other cities.  

      •  I would sure like to see a diary series... (1+ / 0-)
        Recommended by:
        the fan man

        ...from you on this. We need nuance. You obviously have some.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Tue Aug 20, 2013 at 08:03:21 PM PDT

        [ Parent ]

        •  Honestly (1+ / 0-)
          Recommended by:
          the fan man

          there are other places I go to research this - and people tend not to like diaries here that start with "this is complicated".  I can think of some in particular who will hate that idea.

          I have learned this, though.  Rich people do not create great cities and companies.  SMART PEOPLE DO.

          In that distinction there is a world of truth to be understood.  

          •  You have been long enough to know... (1+ / 0-)
            Recommended by:
            fladem

            ...that there are all kinds of people at Daily Kos. And some of us do like diaries that say "this is complicated."

            But if you aren't going to write such diaries here, is there somewhere else I can read what you've written on the subject?

            Don't tell me what you believe, show me what you do and I will tell you what you believe.

            by Meteor Blades on Tue Aug 20, 2013 at 08:43:05 PM PDT

            [ Parent ]

            •  MB (1+ / 0-)
              Recommended by:
              Meteor Blades

              here is the thing - I am still learning. I comment at delong's site sometimes, and econbrowser. Most of what I write is in e-mails with various people, some of whom used to post here, and others that I have known from  politics or academia.

              I did write one diary about the symptom of the disease.

              But here is the real problem - MB - I don't have much of an answer.  I am not convinced there even IS much of an answer.  And that makes me too scared I think to even write about it.  

              •  I've always been of the belief that answers... (0+ / 0-)

                ...are to be found in tossing ideas out for conversation with others. We face daunting challenges, economically and environmentally. Tentative answers abound. But which ones will actually work, along or in tandem, is the ultimate question.

                Don't tell me what you believe, show me what you do and I will tell you what you believe.

                by Meteor Blades on Tue Aug 20, 2013 at 09:37:39 PM PDT

                [ Parent ]

      •  you can say all of these things, but your (2+ / 0-)
        Recommended by:
        fladem, the fan man

        conclusions are difficult to prove, regardless of such facts as you present.

        you observe, for example, that

        US Car production for example is higher than it was 20 or 25 years ago.  The problem is those cars are made with fewer workers.
        Q: Then why aren't the fewer workers who are producing more automobiles per worker earning more money than the workers who produced fewer automobiles per worker?

        Q: What fraction of the added value of the automobiles is still coming from the US? This number is almost impossible to report, because despite economists' love for doing so, it is practically impossible to compare values across borders. If 100% of the parts for a car were milled in Mexico at a cost of $1000, the car was assembled in Detroit at an actual cost to the company (excluding executive compensation) of $3000, and the car was then sold to a dealer for $15000 (with the bulk of the remaining $11000 going to pay for bloated marketing budgets -- including celebrity endorsements, sports sponsorships, etc. -- and bloated executive compensation), the economist would tell you that only 1/15th of the value-add was in Mexico. That is, of course, poppycock: More likely 75 to 85% of the value-add was the production of those parts.

        You observe that

        Much of US Car production also has headed South - one of the untold stories is the shift from big 3 union shops to foreign run plants  in right to work states.
        Q: Does this somehow refute the globalism-done-it hypothesis? How? The South was devastated by the offshoring of the textile industry. It was Phase One of the enterprise, I believe. The people were told to blame the unions, which they did, with dismal stupidity. They were encouraged to practice beggar-my-neighbor cut-throat competition with other states, setting American worker against American worker, when the real enemies were the fascists who used US power to blast their way into emerging economies, thwart any consideration of workers' rights on environmental protection, and hold the gun of poverty to the heads of southern workers.

        Sure, the situation is more complicated than some folk make it out to be -- but those complications are merely facets of the cold diamond stare of "free" trade, as created and nurtured by the corporate plutocracy.

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Tue Aug 20, 2013 at 08:28:42 PM PDT

        [ Parent ]

        •  I am profundly skeptical of free trade (1+ / 0-)
          Recommended by:
          the fan man

          in fact, I think the economics profession has tended to ignore this topic intentionally, because there was such a consensus WITHIN the profession.  Nevertheless, they are only part of the story.  

          Warning - I said this is complicated.  This post is going to explain in part why.

          To answer your questions:
          "Then why aren't the fewer workers who are producing more automobiles per worker earning more money than the workers who produced fewer automobiles per worker?"
          There are three answers:
          1.  Since fewer workers are required, there is less demand.  Neo-classical economics predicts that less demand but the same amount of supply reduces the price.
          2.  Not a big fan of 1, but a better, though again a more complicated explanation is from someone named Baumol. Baumol wanted to know why the cost of theater tickets and tuition kept going up faster than other things in the economy.  The answer - for which he would have received the Nobel Prize - is in the relative productivity of industries.  So the total share in relative terms for industries that become increasingly productive shrinks in relation to industries that don't become more productive.  So it takes three cars to pay for a theater performance instead of 1 - because theater workers aren't more productive.  

          Baumol predicted that both education and health care costs would continually rise because the productivity in those industries would not increase.  He made that prediction in 1967.  You can read studies that use his theories to explain why health care costs are exploding everywhere, even in single payer countries (though from a lower base).

          So in relative terms Detroit became less important because it became too productive. American farmers can tell you a similar story.

          3.  There has been a shift in the technological relations of production. OK - so this is my own theory - but students of Marx will remember the social relations of production.  The distinction to understand is between labor replacing and labor augmenting technology.  

          Neo-classical economics says increasing capital makes labor more productive and as a result everyone wins.  This was true in the first half of this century - machines made labor more valuable.  It was labor augmenting.  This trend has clearly reversed - not machines are making labor LESS valuable - they are labor replacing.  

          The relationship between technology and labor is not static - in some periods technology may make labor more valuable - in other periods it may make it less valuable.  It is pretty clear that technology relations of production are to the workers disadvantage today.

          So in relative terms Detroit became less important because it became too productive. American farmers can tell you a similar story.

          "What fraction of the added value of the automobiles is still coming from the US?" This is true, but less material than you think from the analysis I have seen.  In terms of overall manufacturing, the US total activity it not declining.  The "hollowed out" statement I read frequently here is a myth in some ways.

          "Does this somehow refute the globalism-done-it hypothesis? How? The South was devastated by the offshoring of the textile industry. It was Phase One of the enterprise, I believe. The people were told to blame the unions, which they did, with dismal stupidity. They were encouraged to practice beggar-my-neighbor cut-throat competition with other states, setting American worker against American worker, when the real enemies were the fascists who used US power to blast their way into emerging economies, thwart any consideration of workers' rights on environmental protection, and hold the gun of poverty to the heads of southern workers. "

          It doesn't refute it - it just says the explanation is simplistic.  Even IF offshoring hadn't taken place, there would still have been significant dislocation.  Offshoring made the effects worse and brought them about faster. (Note - I think offshoring of services will prove to be a larger problem than offshoring manufacturing.)

          The textile change I discuss happened 100 years earlier than the one to which you refer.  The textile industry has been hammered by free trade - worker was indeed set against work.

          But that always happens.  Developing countries desperately want those jobs - with good reason.  

          There is no happy story I have to tell.  Free trade agreements - against them for the most part - but even absent them trade would still happen. And how do you avoid companies like the big 3 to going back to being fat dumb and happy?  Unions - for them, but I don't see how they grow when you can offshore labor so easily, and even if they did capital would invest even more in labor replacing technology.

          Industrial Policy - for it - but in practice hard to implement and really just amounts to trying to run the same race faster.

          I honestly don't know what the answer is.  I am not convinced that beyond nibbling at the margins there is one.

          •  trade is optional. (1+ / 0-)
            Recommended by:
            the fan man

            it is not inevitable.

            "we" choose to have it.

            in general, however, most trade is not in the best interests of the general populace.

            it is relatively trivial to prevent such "bad" trade on large scales -- if you have the political authority.

            if you're bored sometime, sit down and calculate the value of the ash timber that is going to be destroyed by the emerald ash borer. i predict that if you first try to make a reasonable guess you will undershoot by a factor of at least 10 -- and that is after being warned by me that you will be undershooting by a factor of 10. overall, we would have been better off had we ourselves manufactured just about everything that ever came here on a pallet from southeast asia -- just from the cost of the dead ash trees (+ the enormous expense individuals are going to pay to try to keep their trees alive). at least, everything that we would have considered to be worth manufacturing, if we couldn't have it produced by slaves in southeast asia.

            other than that, yes, indeed, the relative cost of certain goods will increase, if those goods cannot take advantage of technology to increase productivity. even uncle milty understood this (he actually said something intelligent once, about differing rates of inflation between wholesale and retail prices). this can be seen, however, as a direct defect of our market-based approach to distributing necessary goods and services. in 1956, a person earning minimum wage needed to work approximately 6 weeks to pay tuition and fees for a year at the university of illinois. in 2013, a person earning minimum wage needed to work approximately 40 weeks to pay tuition and fees for a year at the university of illinois. well ... the theory of rising relative cost doesn't explain how it is that what used to cost recipients an absolute 6 weeks of labor now costs an absolute 40 weeks of labor. what explains that is: plutocratic control of our government, demanding that geometrically increasing absolute quantities of economic output be given to, you know, plutocrats.

            and sure -- lower demand for labor, putatively caused by increased productivity, equals lower wages. except, that is not what the plutocrats and their stooges promise us. they promise us that increased productivity means those other workers will all get hired by the job creators to make other great stuff, cuz there's always job creators standin' around lookin' for ways to build their fortune by creatin' jobs. so real wages'll go upupup, cuz there'll be more of everythin' so everythin'll cost less. it wouldn't work even if they didn't do an end around by shipping those other new jobs off to indonesia -- but having indonesia available gives them the power to throttle domestic labor movements, which means that even though it doesn't work, we can't stop them. that's why globalism is ultimately public enemy number one.

            To put the torture behind us is, inevitably, to put it in front of us.

            by UntimelyRippd on Tue Aug 20, 2013 at 09:58:02 PM PDT

            [ Parent ]

  •  So old factories aren't only things rusted shut (7+ / 0-)

    in Detroit?

    It won't be if it remains in the clutches of those who now run it.

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Mon Aug 19, 2013 at 03:34:02 PM PDT

  •  Look to Congress and how it has mismanaged (6+ / 0-)

    the currency. When Nixon liberated the dollar from its ties to gold, he did so to avoid the possibility of foreign speculators controlling the currency. I suppose it didn't occur to him that Wall Street speculators would hoard dollars, in the vain hope of making them worth more, and then Congress would ration the money supply to reward their supporters at election time.
    The result?
    Even though there are more and more dollars in the economy and the number of transactions monetized has soared, the turnover of dollars has slowed to less than it was sixty years ago, when they started keeping track of such things.
    Imagine if nobody spent their dollars. We could barter and exchange gifts, but trade and exchange would be almost totally stopped.

    What would get the money moving? Well, if you think of federal taxes as recycling, I think that would do it. But then Congress would no longer be able to reward the hoarders.

  •  I really hate the term "white flight", (2+ / 0-)
    Recommended by:
    Kombema, worldlotus

    was racism a part why people moved to the burgs, in some cause yes. The bigger reason that often gets over looked was rise in worker wages that enabled them to buy a new home, most often as not in the burgs because the city was out of space for new construction. When the highway system was installed that increased the trend.

    Detroit is more a case study in class divide, wealth vs poor, then it is about race. When the wealthy never have to rub elbow with those less well of then themselves this is what happens.

    In old Detroit a Doctor would live on a big corner lot, 2 houses down would be a Ford worker. Now they each live 20 miles apart.  

    •  It was both, clearly. But those who couldn't (4+ / 0-)

      afford to move were increasingly minority group, including immigrants and those migrating from the Jim Crow South from the 1930s on.

      "Government by organized money is just as dangerous as Government by organized mob." -- Franklin D. Roosevelt

      by Kombema on Mon Aug 19, 2013 at 04:51:36 PM PDT

      [ Parent ]

    •  Racism in housing and employment within Detroit, (5+ / 0-)

      and its suburbs, is a long-standing phenomenon.
      It's true that some of the post-WWII circumstances encouraged departure from the city--such as the freeway construction and the FHA-supported housing that veterans could qualify for more easily.
      But these programs were also racially tilted in a way to benefit whites over blacks. They were never racially neutral in their impact.

      Support Small Business: Shop Kos Katalogue If you'd like to join the Motor City Kossacks, send me a Kosmail.

      by peregrine kate on Tue Aug 20, 2013 at 07:00:40 PM PDT

      [ Parent ]

    •  Look at the US murder rate (0+ / 0-)

      One cause of white flight was absolutely the explosion in crime in the 60's and 70's.  Ironically, crime has declined back to where it was, and in some cities people are returning to the city.  

    •  White flight was a factor... (0+ / 0-)

      ..aided and abetted by real estate agents.

      The way it worked was that a real estate agent sold a house in a formerly all-white neighborhood to a black family, then went to the other families in the neighborhood to encourage them to all sell and move "before the blacks take over the neighborhood".

      This was a major cause in seeing neighborhoods go from all-white to all-black in a very short period of time in the fifties and sixties...and it was done by real estate agents in many cities.  I would be shocked if it didn't happen in Detroit just as it did in so many other places.

      It was great business for the real estate agents, as it generated two commissions for each panicked white family (for the house they sold, and the new house they bought in a "white" neighborhood).  The ethics, needless to say, don't hold up to much scrutiny.

      Political Compass: -6.75, -3.08

      by TexasTom on Tue Aug 20, 2013 at 08:18:05 PM PDT

      [ Parent ]

    •  Whatever the reason... (1+ / 0-)
      Recommended by:
      vzfk3s

      for the movement of people and tax base to the suburbs, some current statistics can shed some light on Detroit's problems.

      The 2010 Census shows the area of the Detroit Urbanized Area (defined basically as the contiguous areas of urban development radiating from the central city) is 1,337 square miles and the population is 3,734,000.

      The city of Detroit (within the city limits) has an area of 139 square miles and a population of  714,000.

      Those 3 million + people are there because at least historically the city of Detroit exists and has grown beyond the boundaries of the original city, but the city limits of Detroit have not grown.  If the current city limits of Detroit included an area of 1,337 square miles and a population of 3,734,000 there would probably be no problem with bankruptcy.

      A camel can carry a lot of gold, but it still eats alfalfa.

      by oldliberal on Tue Aug 20, 2013 at 08:39:13 PM PDT

      [ Parent ]

  •  Meh. I know people who work in Detroit who have (3+ / 0-)
    Recommended by:
    Paul Ferguson, worldlotus, devis1

    1 hour commutes.  They live on the fringe of the developed area.  I know people who have 1 hour commutes TO THE BURBS of Detroit, they live that f&^$(*g far away.  Heck, I even know a few who have commuted from Toledo and Ontario.  I696 was built to allow the burbs to commute to the burbs, and now it in the middle of an ocean of development...

    All of Southeast Michigan will be concrete in 15 years and it will be 1/5 abandoned if rampant development isn't checked. The tab will continue to hit the entire area. Detroit is just the beginning, and seeing how much money there is to be made by the well-connected by picking over the abandoned assets, the trend won't end soon.....

    The rules to monopoly are fair and apply equally to all. So what is your problem with joining a game-in-progress where all the properties are bought and the bank is empty...???

    by ban48 on Mon Aug 19, 2013 at 04:36:18 PM PDT

  •  Those who "now" run it? (1+ / 0-)
    Recommended by:
    MGross

    How about those who ran it for decades and just ignored reality?

  •  City/suburb split is unsustainable (7+ / 0-)

    The issue of tax base fleeing to suburbs is widely discussed.

    In light of more-recent recognition of climate change and resource issues, it should be recognized that, in comparison to a densely populated city,

    its low-density suburbs do not bear the full cost of economic externalities they create such as

    reduction of land available for food production,
    reduction of foliage that retains carbon and water, and reduces flooding and erosion,
    increase of per capita use of fossil fuels, water and infrastructure costs.

  •  "restored those factors instead of the worker-.. (7+ / 0-)

    ..-hating approaches that just make things worse for the many while adding more polish on the perks of the few."

    Yes

    Pull corporate charters until certain conditions are met and this era of extraction without rules and use of Amercan worker built infrastructure is paid back by the corporations.

    Stop this

     Crappy innovation, just like the American TV setswere still huge pieces of furniture long after people decided it was a good picture and sleek size that mattered.
     

    Neither Richter nor Bivens mentioned the impact that a decade of making crappy cars had on giving away America's dominance in the auto industry, so I'll save that for another time.
    And the short term SUV phase despite all warnings that fuel prices would rise. American auto manfacturers were behind on that reality. I blame the cooperation/connection to Big Oil for this short term plunder for profit lag in re-tooling

    Typical to blame, (as the GOP is now relishing ), the leadership of Detroit and workers, when in reality it's the refusal to invest in the worker by sharing in the productivity gains neccessary with pay that kept pace with the economy

    I will push back on this though..

    auto parts imported into the United States come from nations with comparably high or higher wages for manufacturing workers
    ..only because cheap non-oem parts did take out a huge chunk out of US manufacturing too.

    But to me it's the ownership refusal to Pay for:

     • workers
     • innovation
     • taxes via FTZ agreements (Free trade zones)
     • all of the infrastructure (as Elizabeth Warren made so clear) that made/makes globalization and for these corporations very existence (getting un OSHA protected labor on the cheap etc.) even possible.

    The last point, infrastucture the whole infrastructure; power, transportation, shipping, legal protection, (our judiciary); everything that all American workers have built and paid for is over looked in this 'blame unions' meme.

     It's what republicans Ayn Rand style of justifying greed amounts to - Greed.
    Greed dishonestly defended with carefully  crafted lies about anyone but the 1%ers - responsibilty - not a part of the GOP/Randian world view - and the fact that the GOP spends billions on propaganda year after many years justifying greed vs spending on investment in workers and this country's infrastuctre says something too..

    That is the root of, basis of the republican party. Extract unregulated for free from the earth and from people.

    They are the party of parasites literally. All take no give

    A "free market" globalization reasoning that leaves out what the ownership/extractors are stealing from the real producers - us, the workers

    imo

    P.S. And another thing: how convenient that the "war meme" pops up. Another neo-con meme that strongly imples that war making is a good thing for us as a nation to invest in

    Thx MB

    I'm way late - rant over.

    •  That and idiots like Bob Lutz (5+ / 0-)

      GM's fucking idiot VP that thought that sports cars were going to be the savior of GM - he even specified that the Dodge Viper would herald the return of Detroit.

      Right now that shitbag has a book out blaming the decline of American auto manufacturing on the accountants, and yes, the unions.

      Instead it was idiots like him with their slow to market, poorly designed cars, pinning their hopes on sports cars and SUVs in the face of increasing gas prices and incredibly bad leadership with no forward thinking that led GM into decline.

      Liberalism is trust of the people tempered by prudence. Conservatism is distrust of the people tempered by fear. ~William E. Gladstone, 1866

      by absdoggy on Tue Aug 20, 2013 at 07:23:45 PM PDT

      [ Parent ]

      •  Lutz also argued that hybrids were a fad that... (4+ / 0-)
        Recommended by:
        mightymouse, absdoggy, Eric Nelson, LinSea

        ...would never gain market share:

        "You always have your early adopters," said Alan Taub, GM's executive director for R&D, about today's hybrid buyers. "Toyota sells as many Priuses as we sell Pontiac Aztecs. Is that a success?" Earlier this year, at the Detroit International Auto Show, Bob Lutz, GM's vice chairman of product development, had said that the company's decision not to make a hybrid car "was a mistake from one aspect, and that's public relations and catering to the environmental movement."

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Tue Aug 20, 2013 at 07:57:37 PM PDT

        [ Parent ]

    •  Amen. Preach it, Eric (4+ / 0-)

      In a word, greed.  My son loves to refer to an article in an old Psychology Today that reported the thought processes of the ultra rich and psychopaths as identical.  Greed justifies abuse, degradation and hatred.  The vast majority of the population is happy with what it needs.  A little pleasure here and there, throw in some spirituality and that's about it.

      On the other hand, those whose insatiable appetites drive them to bulldoze over anyone who gets in their way and then justifies that attitude as something desirable requires restraint.  Unbridled capitalism hasn't been restrained.  Our modern society actually encourages wretched excess.  Yet somehow most of us only get as far as hoarder status; even during hearty economic times our greed is self-checked.

      That is why the rich get richer at the expense of everyone else and will not abate on its own.  And that is also why the reasons this occurred confound and confuse those of us without that mindset.  It makes no sense to us that "investments" weren't made in "society" to the good of "humanity".  It matters to us.  It does not now and will never matter to them.

      Please save a child's life. www.signon.org/sign/sarasota-sheriffs-office

      by kmfmstar on Tue Aug 20, 2013 at 07:35:07 PM PDT

      [ Parent ]

    •  Accountants make crappy cars (0+ / 0-)

      Detroit's economy was too heavily concentrated in the big 3 car companies.  And they were taken over by accountants who could figure out how to reduce the cost of making a car, but never realized that the lower cost could result in an inferior product that wouldn't sell as well.  Chrysler in particular had cost-reduction teams (until Fiat took over) that went around the factories telling people how to do their jobs cheaper, but not better.  GM was run down by Roger Smith, who found offshore manufacturing cheaper, but forgot that the cars, no matter where made, had to be desirable.

      The Detroit 3 went 30 years without making a single car that I would take as a game-show prize (i.e., worth just the taxes on the value).  They made big fat SUVs and craptastic sedans, while the small sizes were reserved for hair-shirt garbage for people they deemed unworthy of a big car's luxuries.  The Chevy Cavalier and Dodge Neons were rental-fleet specials.  Toyota and Honda didn't eat their lunch by having cheaper labor (they don't); they just made better cars.

      The post-bankruptcy 3 are doing better now, product-wise, and if they keep it up soon they'll have cars almost as good as Hyundai's.  Sad that they were down so low that Korean cars built out of melted old-American-car scrap iron still look good by contrast.

  •  New Orleans could have been a model too, (4+ / 0-)

    but we can't get caught aiding and strengthening the black community.

    Early to rise and early to bed Makes a man healthy, wealthy, and dead. --Not Benjamin Franklin

    by Boundegar on Tue Aug 20, 2013 at 06:54:48 PM PDT

  •  more like Andy Richter (2+ / 0-)
    Recommended by:
    Lefty Coaster, Eric Nelson
    No, the fault lay with the top corporate managers: it was their job, as capitalists, to deny such increases if they were not justified by productivity trends.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Tue Aug 20, 2013 at 06:59:21 PM PDT

  •  Single-industry cities are asking for it. (2+ / 0-)
    Recommended by:
    peregrine kate, Bush Bites

    A big part of the problem is that the word "Detroit" is literally synonymous with "the American automobile industry."

    Diversify the economic base.

    Art is the handmaid of human good.

    by joe from Lowell on Tue Aug 20, 2013 at 07:04:54 PM PDT

  •  Stiglitz - Detroit is a product of class divide (8+ / 0-)

    Joseph Stiglitz @ NYT: The Wrong Lesson From Detroit’s Bankruptcy

    ... it’s extremely important to recognize that Detroit’s demise is not simply an inevitable outcome of the market.

    For one, the description is incomplete: Detroit’s most serious problems are confined to the city limits. Elsewhere in the metropolitan area, there is ample economic activity.

    [...]

    Detroit’s travails arise in part from a distinctive aspect of America’s divided economy and society. As the sociologists Sean F. Reardon and Kendra Bischoff have pointed out, our country is becoming vastly more economically segregated, which can be even more pernicious than being racially segregated. Detroit is the example par excellence of the seclusion of affluent (and mostly white) elites in suburban enclaves. There is a rationale for battening down the hatches: the rich thus ensure that they don’t have to pay any share of the local public goods and services of their less well-off neighbors, and that their children don’t have to mix with those of lower socioeconomic status.

    The trend toward self-reinforcing inequality is especially apparent in education, an ever shrinking ladder for upward mobility. Schools in poorer districts get worse, parents with means move out to richer districts, and the divisions between the haves and the have-nots — not only in this generation, but also in the next — grow ever larger.

    •  Straw from Stiglitz (1+ / 0-)
      Recommended by:
      Magnifico

      Stiglitz battles a straw man, as virtually no one that I've read makes the claim that Detroit's decline was either inevitable or purely a result of market forces. Unsurprisingly, he doesn't cite anyone, either.

      Instead, he argues post hoc that the current "economic segregation" must be result of segregationists, both racial and economic, with the rich declining to share their wealth or sociality. But he passes over, with literally only a parenthetical mention, the riots of 1967, as if they had no influence on Detroit's decline, along with the legacy of lawlessness that followed in the riots' wake. And he passes by the decades of enduring, thoroughgoing corruption and utter ineptitude of city governments, let alone the large increases in city tax which also helped drive people with money out of the city. And he never notes that white flight has been accompanied by black flight. Should there be accusations that the black middle class has deserted Detroit? Maybe, but you won't find them here.

      In all, a very partial and entirely unsatisfactory analysis.

  •  Just seems odd that Detroit.... (0+ / 0-)

    .....doesn't have a great university or world-class medical center.

    They don't have an incubators or talent magnets.

  •  Framing. (1+ / 0-)
    Recommended by:
    kmfmstar

    As a general, universal, 30,000 foot economic worldview goes: the United States would be better viewed as an improbably successful Brazil-type country rather than a nation with a manifest destiny to rule the world. We are the best of the BRICs, ideally, not the heirs to past empires that are fading.

    it fitfully blows, half conceals, half discloses

    by Addison on Tue Aug 20, 2013 at 07:25:59 PM PDT

  •  Extreme Capitalism made Detroit expendable (4+ / 0-)

    along with much of the "Rust Belt".

    "If Wall Street paid a tax on every “game” they run, we would get enough revenue to run the government on." ~ Will Rogers

    by Lefty Coaster on Tue Aug 20, 2013 at 07:30:21 PM PDT

  •  Why didn't the past leaders (0+ / 0-)

    Do this:

    encourage innovation, mandate environmental sustainability, reverse the economic damage caused by inequality. It would remind everyone that what once made life vibrant in Detroit were good schools and parks and transportation and jobs. It would promote policies—national, state and local—that restored those factors instead of the worker-hating approaches that just make things worse for the many while adding more polish on the perks of the few.
    And exactly how would this take place today if the city is broke?

    I realize that is a somewhat hypothetical question, but to argue that there are solutions when you just post vague generalities begs the question.

    •  As noted, we're going to be hearing a lot... (1+ / 0-)
      Recommended by:
      LinSea

      ...of what should be done over the next couple of years. I consider this to be my opening salvo in what I (and others who I will cite and excerpt) think should happen. Starting out with a specific list before setting the stage seems to me a bad idea.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Tue Aug 20, 2013 at 07:52:24 PM PDT

      [ Parent ]

      •  I look forward to your ideas (0+ / 0-)

        Alas, it is too late for Detroit. But maybe you will help some other cities in similar circumstances.

        •  It's not too late for Detroit unless we're... (2+ / 0-)
          Recommended by:
          northerntier, LinSea

          ...will to give up on the 700,000 people who live in Detroit proper (three times larger than the next largest city in Michigan) and the 3.7 million in the three-county urban area. Writing off people is a right-wing thing to do, not a progressive thing. Will it be hard to bring about positive changes? Obviously.

          Don't tell me what you believe, show me what you do and I will tell you what you believe.

          by Meteor Blades on Tue Aug 20, 2013 at 08:09:09 PM PDT

          [ Parent ]

          •  Um it is too late (0+ / 0-)

            The time to act as was decades ago.I don't think it it is "writing people off" when you are broke and have no realistic method of meeting financial obligations and 18 billion in debt.

            The changes would be tough for sure- and I think bankruptcy is about the only thing that can and will make changes occur. Obviously talking about changes for 40 years didn't help. So what do you think could be done?

  •   in the "CLUTCHES" of those who now run it. (0+ / 0-)

    "Politics is the entertainment division of the military industrial complex." - Frank Zappa

    by Kdoug on Tue Aug 20, 2013 at 08:39:03 PM PDT

  •  I have a theory about health insurance (0+ / 0-)

    Some car companies in Detroit ended up buying lots of parts from manufacturers in Canada, which is really really close to Detroit. Why? Because Canada has socialized medicine, so everyone is covered, so people are healthier and medical costs are lower. And the companies there don't have to deal with medical costs.

    Also, some Japanese (and other foreign) manufacturers came to America and built manufacturing plants in right-to-work states because they knew they'd have weaker unions -- or no unions at all -- so they wouldn't have to pay as much for health care.

    So Detroit has had to deal with competition from places that universal health care, while at the same time they were competing with places that had crappy health insurance.

    I know. This sounds like a conspiracy theory. And I don't have any numbers to back up my theory. Maybe one of these days I'll do some research and get some numbers.

    --

    But I think the current version of Obamacare is a good first step and once it's implemented, it will get better and better.

    "Stupid just can't keep its mouth shut." -- SweetAuntFanny's grandmother.

    by Dbug on Tue Aug 20, 2013 at 08:43:17 PM PDT

    •  An 8% tax on American goods and services (1+ / 0-)
      Recommended by:
      Dbug

      The US spends about 18% of its GDP on medical care, including the insurance and payment overhead (probably 30% of that total).  So about 5% is going to medical insurance and 13% to actual care.

      Canada spends what, 11% or so, on the whole thing?  And the rich EU countries and Japan spend 9-12%.  I don't have the numbers in front of me but the US is far, far costlier than the rest of the world.  This ends up functioning as a tax on our production, something that hinders exports and makes imports cheaper.  It's like a bad parasite infection.

  •  Progressive Vision to Fix Detroit (0+ / 0-)

    We have an antagonism between management and labor that is unhealthy and unnecessary. Other countries don't have the kill-the-unions-at-all-costs attitude we see from management in this country. We need to challenge this situation.

    To a large degree the woes of Detroit are a reflection of this scorched-earth policy. First they tried to move the business to non-union states, and then they moved it out of the country where they could. All to cut labor costs.

    In the process they've moved wealth production out of the country. Manufacturing jobs produce wealth because they produce products that are more useful than the resources that went into them. By exporting wealth production we've impoverished the country. Detroit is just a prime example.

    If we want to fix Detroit we need to respect labor and value laborers. To do that, we need to focus on policies that increase wages enough that working 40 hours per week results in a living wage.

    That means changing our trade laws. We should not allow products to be sold here that are not produced to our workplace and environmental standards. The work going into them should pay at least our minimum wage to everyone that works on them. Products not produced to our standards should be subject to an equalizing tariff that removes any competitive advantage from cheap labor or environmental exploitation.

    It will take more than that to revive Detroit. Obviously, car manufacturers need to step up and design competitive cars. It will take local, state and federal funds to rehabilitate brownfield areas, so that the toxic remains of former industry are eliminated and people will want to live there. It will obviously need something resembling a post-racist society (for a large variety of reasons, including simple justice).

    But the problem with Detroit started with treating labor as an enemy to be crushed, rather than a respected business partner. That has to change or the entire country will continue to suffer, not just Detroit.

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