DETROIT, A CASUALTY OF REAGANOMICS

The disturbing economic crisis that taking place in Detroit is difficult to figure it out because of its slow evolution. The United States Government did what it is suppose to do when it bailed out the auto industry in 2001-2010. They modernized their manufacturing facilities. With new and exiting electronic innovations and with pollution control devices, they are using more secondary suppliers than ever before. So why is Detroit dying when their main industry is booming? The only thing we seem to know is that vulture capitalists are now hovering over the carcass of this city; especially the huge public workers pension funds. We also know that the anti union people are pounding their chests in anticipation of a massive victory over working people by union busting bankruptcy procedures. Why is the State of Michigan not helping the city? Clearly, the federal government and state government are going to have to help if the city is to recover but both seem to be standing nonchalantly by watching the buzzards pick the bones clean of what was once a thriving city of 1.8 million people.

I think the answer is politics. We took the first step during the Second World War. Our manufacturing facilities expanded tremendously especially in Detroit. Because of the war, we and our allies destroyed Japanese industry. Gallant in victory, a government lead by Democratic President Harry Truman, rebuilt their industries; in the process of modernizing theirs, we allowed ours to remain at prewar level. As a result, the Japanese could, and did produce, cars at a faster rate, for less money, and of a higher quality than we could.

This was the prologue to the tumultuously cold war years of Eisenhower, Kennedy, Johnson, Nixon, Ford and Carter, then came Reagan, 1981 to 1989. They included the Korean war followed by the Vietnam war followed by civil rights strife. Reagan set the stage for a class war; the rich against the poor with his Reaganomics. Bush, Clinton, and then another Bush preceded Obama. The second bush turned the government over to business, which drove the United States and the world economy into the ground. They deregulated and corrupted the funding of wars to shovel money into the corporations through un-budgeted government military contracts (Iraqi War). This was coupled with severe and irresponsible tax cuts echoing those of Reagan, allowing the corruption of not only Fannie Mae and Freddie Mac but the entire mortgage industry became corrupted to the point that the greed of a few led our nation into a serious recession. Workers could no longer afford to buy cars and those they did buy came from Japan. The result was the 201802010 crash of the auto industry.

The Republicans lawmakers wanted to let the auto industry collapse. They had rewritten the bankruptcy laws to favor the creditor at the expense of the workers. They could roll the pension funds on to the company books so that the creditors would receive all those funds and not the workers to whom they really belonged. If you want cheap labor the best way to get it is to create it. There would be no jobs so there would be not unions. What they were saying is in the name of greed and Ronald Reagan was to hell with the American workers, to hell with the auto industry, and to hell with the United States. Obama said no. He led the charge to save the auto industries. They rebuilt the industry with automation of many jobs so it cut the work force. There were huge wage cuts and cuts to pensions and workers health care benefits but it saved many jobs. What is important is to understand where the jobs were,  that is the jobs were that were save: they were in the suburbs. The intercity shrank from 1.8 million to 700,000. The 38% percent of the people that remained were poor and low wage workers but also those who were about to retire or retired from the auto industry and government workers; the people who could not afford to sell their homes on a falling market and relocate.

The people who remain in Detroit are Democrats. The majority white voters including the blue-collar workers who elected Ronald Reagan, the ones who were doing so well because of the unions and the wartime economies, were the first ones to move out. The people who elected Gov. Rick Snyder and the Michigan state legislature are not about to help Detroit. Remember the Mitt Romney vulture capital business model; buy into a company, borrow private and government money to increase the value of the asset, then sell the assets for a huge profit, and bankrupt the company taking all the workers pension funds, etc. Republicans are starting to do it to our cities.

Would it surprise to learn after it is all over that Republican business people rushed in to the city buying assets for pennies on the dollar?  Does it ring familiar when you hear Gov. Snyder say the State will not help to bail out the city and that the State owes Detroit money but is not going to pay what they owe. Does it not make you cringe a little when you know what is happening in the City of Detroit and then hear that the Republican State Legislature of Michigan are disenfranchising poor and black voters across the state? If you think that is bad look at the Congress of the United States you voted into office but especially look at the Supreme Court of the United States. Republicans are heading our nation in the direction of Detroit. We are moving back to an economy patterned on the plantation south: Reaganomics. Read Reagan. Someone Elses Hero on this blog site. 

URL: firetreepub.blogspot.com Comments Invited and not moderated