Socialist Europe in America

Krauthammer on Detroit:

If there’s an iron rule in economics, it is Stein’s Law (named after Herb, former chairman of the Council of Economic Advisers): “If something cannot go on forever, it will stop.”

When our great industrial competitors were digging out from the rubble of World War II, Detroit’s automakers ruled the world. Their imagined sense of inherent superiority bred complacency. Management grew increasingly bureaucratic and inflexible. Unions felt entitled to the extraordinary wages, benefits, and work rules they’d bargained for in the fat years. In time, they all found themselves being overtaken by more efficient, more adaptable, more hungry foreign producers.

The market ultimately forced the car companies into reform, restructuring, the occasional bankruptcy, and eventual recovery. The city of Detroit, however, lacking market constraints, just kept overspending — $100 million annually since 2008. The city now has about $19 billion in obligations it has no chance of meeting. So much city revenue had to be diverted to creditors and pensioners that there was practically nothing left to run the city. Forty percent of the streetlights don’t work, two-thirds of the parks are closed, and emergency police response time averages nearly an hour — if it ever comes at all.

Bankruptcy, which will radically cut payments to bondholders and retirees, is the only chance to start over. Yet, if a Detroit bankruptcy succeeds, other cities will be tempted to follow suit. Dozens of other large urban areas have similarly massive pension and debt obligations, with commensurately denuded services and exorbitant taxes — leading to a vicious cycle of depopulation that makes everything worse. Detroit has lost more than 60 percent of its population since 1950.

Reactionary liberalism simply cannot countenance serious reform of the iconic social-welfare programs of the 20th century. Nancy Pelosi and Harry Reid are pledged to their inviolability.

Ironically, that last may well be our only realistic hope for the reformation of the Republic, if indeed it can even be saved at this point. The liberal Democrats have lashed themselves to the backs of Churchill's referenced tigers and now find themselves going along for the ride at an increasingly breakneck pace. The more they "double-down" on their bankrupt (literally) ideas, the more it will drag them down. At the bottom of the spiral is a choice which is constrained by history to only two options: sweeping economic and social reform or total collapse resulting in civil war. At this point in time, the outcome is too close to call.

The liberal Democrats in America are nothing new. Their kind have been around throughout human history. They use demagoguery and empty promises to gullible people in order to increase their personal power and prestige. Only their packaging changes, and the end results are always the same.

"Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded--here and there, now and then--are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as 'bad luck.'" - Robert Heinlein