Newt on Detroit

 

The final collapse of Detroit should lead to thorough congressional investigations into the pathology that killed a great American city. You might think "killed" is too strong a term, but consider these facts about what was once our fourth largest city with the highest per capita income of any city in America.

The recent bankruptcy in Detroit is a harbinger of the steady decay of government competence in America. To have the city with the highest per capita income in America in 1950 collapse economically, culturally and in the basic aspects of civilization is horrifying. To have a city of 1,400,000 people decline to fewer than 700,000 is astonishing. With the collapse in population there are 78,000 empty houses. Some can be bought for $1 (yes, it's true) and no one will buy them.

The number of Detroit manufacturing jobs dropped from 296,000 to 27,000.

No one will create new jobs in the city because it has become a public safety and public services wasteland. In some ways it resembles the post-devastation world of the movie Mad Max.

Imagine a world in which 40% of the traffic lights don't work. Almost one third of the ambulances don't work. Of the ambulances that have been repaired some have over 250,000 miles on them. In some dangerous neighborhoods ambulances will not go without police. On average it takes the police nearly an hour to show up when called. Faced with this public safety crisis, the politicians cut the police force by 40% and closed most police stations to the public 16 hours a day.

As the politicians have eliminated public safety personnel and budgets, crime has soared. You are 11 times more likely to be killed in Detroit than in New York. You are 5 times more likely to be the victim of a violent crime than the national average. The police solve fewer than 10% of the crimes committed in Detroit. (You thought the reference to Mad Max was exaggerated?)

Mark Steyn has a devastating analysis of the collapse of Detroit and its wider implications. He writes:

"The tunnel from Windsor, Ontario, to Detroit, Michigan, is now a border between the First World and the Third World — or, if you prefer, the developed world and the post-developed world. To any American time-transported from the mid 20th century, the city’s implosion would be literally incredible: Were he to compare photographs of today’s Hiroshima with today’s Detroit, he would assume Japan won the Second World War after nuking Michigan."

The greatest problem in Detroit isn't structural. It is the collapse of human capital. Consider Steyn's further observation: "Forty-seven percent of adults are functionally illiterate, which is about the same rate as the Central African Republic, which at least has the excuse that it was ruled throughout the Seventies by a cannibal emperor...The illiterates include a recent president of the school board, Otis Mathis, which doesn’t bode well for the potential work force a decade hence."

Detroit is a human tragedy for the unnecessary pain its residents are living through. It is an historic tragedy for the loss of a great American city and a symbol of American industrial power. It is a sobering warning of what can happen in the rest of the country if we continue to tolerate massive, systemic breakdown in government.

Detroit is not unique. It is in fact a warning signal of what can happen to us at every level of government if we continue to tolerate the breakdown in government capabilities and performance.

For two generations we have had a political system dominated by protecting the government class and growing a dependency class. More and more people got unsustainable deals through government employee union power to coerce politicians (for whom they were often the largest and most powerful reelection threat). More and more people were told they didn't have to learn or work or be productive because someone else would take care of it all for them.

These pathologies need to be exposed and studied. Their lessons should be applied at every level of government across the country.

Detroit's problems are not new. I outlined the pathology and some possible solutions at the Mackinac Policy Conference in June 2010. I also spoke there in September 2007.

Six months later on March 27, 2008 at the American Enterprise Institute I responded to then Senator Obama's speech in Philadelphia on race. A significant part of my talk focused on Detroit:

Senator Obama asserted, the history of legalized discrimination 'helps explain the wealth and income gap between black and white and the concentrated pockets of poverty that persist today in so many urban and rural communities.'

So let’s take Senator Obama seriously about discussing this. His analysis is simply factually false. The collapse of Detroit, from 1950 to 2008, which I think should be the centerpiece of the fall campaign, because it is the case study in bad culture and bad government. Detroit in 1950 had 1,800,000 people. Last year, it dropped below 900,000. Less than half the housing stock is needed. It is the first American city in history to drop below a million.

The numbers are actually worse than that in the last three years: Detroit had three times the out-migration rate of any other city in the United States. Twenty-seven thousand additional people fled Detroit. It dropped from being the number one per capita income city in the United States to ranking number sixty-second.

Now, you could say, well, it’s all the auto industry’s fault. That’s simply not true. First of all, there are large parts of America that have very successful auto industries. They tend to be in right-to-work states with low tax rates and without the United Auto Workers. But they’re quite successful. We’ve had a very large increase in factories that produce cars.

Second, even in Michigan, despite a very destructive governor and a very destructive state legislature, Grand Rapids is in the middle of a building boom. Now why is Grand Rapids, on the western side of Michigan, growing dramatically while Detroit, on the eastern side of Michigan, is continuing to collapse?

The results are even worse. The best estimate of the Gates Foundation was that a freshman entering the Detroit school system had one chance in four of graduating on time. Three out of four children in Detroit are being cheated by one of the most expensive school bureaucracies in America.

But that’s because we measure the wrong metric. The primary metric of the Detroit school bureaucracy has nothing to do with the children. It has to do with whether or not the paychecks are issued every month. And it has been a stunningly effective bureaucracy at issuing paychecks. It just doesn’t do anything for the paychecks. And yet no one wants to talk about this.

So start with the idea that if we’re going to have an honest conversation, we ought to start with Detroit because if we can’t have an honest conversation about how big a disaster Detroit is, we sure can’t have an honest conversation about poverty in America, and we sure can’t have a conversation about what needs to change.

It’s that simple and that direct. And I think virtually no one on the Left is prepared today to talk candidly about Detroit because it is their institutions and their culture which has caused the collapse of one of America’s great cities.

And you may think I’m exaggerating. Consider the following. An entrepreneur offered $200 million to develop charter schools in Detroit and was rejected on the grounds that he was obviously a white racist attempting to overturn the black power structure. “I am disappointed and saddened by the anger and hostility that has greeted our proposal,” explained [Bob] Thompson to the Associated Press.

"Because of these contentious conditions, we are not going to move forward with our planned charter high schools. Our proposal to build a number of new, very small charter high schools in Detroit was intended to increase options for Detroit parents and children. The proposal was meant to be for kids, and not against anyone in any institution."

Now what does that tell you about pathology, when you can have a system failing, and remember, if you’re an African-American male, and you drop out of high school, you face a 73 percent unemployment rate in your 20s and a 60 percent chance of going to jail.

And you have to ask yourself, by what moral authority did the Detroit school bureaucracy block $200 million from saving young men from going to jail, from giving them an opportunity to go to college, from offering them hope? And why did no one speak out against it?

The disaster in Detroit involves ruined lives, lost futures, tragic deaths, avoidable poverty, and a host of societal, governmental, economic and political pathologies.

The Congress should thoroughly explore the disaster and outline what steps we need to do to avoid repeating this terrible human tragedy in other cities.

Your Friend,

Newt

What Entitlement Program Will Go Broke First?

What Entitlement Program Will Go Broke First? by Sean Hackbarth on FreeEnterprise.com

What federal entitlement program is closest to fiscal collapse?

Medicare? No.

Social Security? Negative.

Medicaid? Uh-uh.

While the three above are in peril, the “award” goes to the Social Security Disability Insurance Fund (SSDI), which is expected to run out of money in 2016.

In the Wall Street Journal, economist Michael Boskin notes the explosion in the people using it and SSDI’s costs:

The number of people collecting disability benefits has soared, especially in recent years, to almost 11 million in June, up from 2.7 million in 1970. The 2012 price tag was $140 billion, up eightfold, adjusted for inflation, from 1970.

In a 2011 paper, MIT economist David Autor put these costs in the context of the rest of the federal budget [h/t Reihan Salam]:

In 2010, SSDI cash transfer payments totaled $124 billion, while the cost of Medicare for SSDI bene?ciaries was $59 billion. These outlays, exceeding $1,500 for every U.S. household, comprised 7.3 percent of federal non-defense spending last year—a sum that is larger than interest payments on the federal debt. In the last two decades, outlays grew at 5.6 percent in real terms, compared to just 2.2 percent for all other Social Security spending. As a consequence SSDI’s share of total Social Security outlays has risen from one in ten dollars in 1988 to almost one in ?ve dollars at present. Perhaps most ominously, SSDI expenditures now exceed by 30 percent the payroll tax revenue dedicated to funding the program.

By expanding the medical conditions that qualify and increasing payments, SSDI has turned into something it wasn’t originally designed to be writes Boskin: “Disability insurance has clearly become, in part, a form of extended unemployment insurance and early retirement, with Medicare benefits.”

This was covered by FreeEnterprise.com in April:

[A]n extensive April 10 report from the Wall Street Journal dug into the explosion in Americans covered by the Social Security Disability Insurance Program since 2007. The number of Americans on federal disability grew by a half million over the course of the 2007-2009 recession, from 7.1 million to 7.6 million.

But since the recession’s end in June 2009, that number has swelled to a historically high 8.9 million. That’s more than double the number of disability beneficiaries in the 1990s, according to Jordan Weissman in The Atlantic, who notes that the eligibility requirements for disability have been relaxed at the same time jobs have grown more scarce.

A significant proportion of the former workers on disability are below the age of 50, the Journal notes. Based on the statistics, it’s unlikely that these workers will rejoin the labor force. In 2011, the Journal report finds, only .5 percent of disability recipients left the program to return to work.

In March, a National Public Radio (NPR) reporter explored the growth of the disability rolls and found that the disability program was essentially serving to “hide” workers who may not be disabled, but are otherwise unemployable due to changes in the economy—suggesting the real unemployment rate is significantly higher than the official 7.6 percent rate.

"That's a kind of ugly secret of the American labor market," David Autor, an economist at Massachusetts Institute of Technology, tells NPR. "Part of the reason our unemployment rates have been low, until recently, is that a lot of people who would have trouble finding jobs are on a different program."

[As a side note, the fact that millions move from being unemployed to being disabled indicates how weak our economy is and how critical pro-growth, job-creating policies are.]

To prevent the SSDI’s collapse Boskin recommends that the program better target the truly disabled:

Eligibility should emphasize objective medical—as opposed to more subjective and vocational—criteria, with a more rigorous appeals process for potential false rejections of meritorious but difficult-to-verify claims. About 40% of disability awards now follow appeals, of which a large majority are successful.

Next, offer better incentives to return to work for those who can. This means early intervention and providing information about job options—before people lose any attachment to the labor market and their skills deteriorate. Today, the disability-insurance program hardly focuses on the return to work. It is a Hotel California—you check in with a disability and don't leave unless you die or convert to Social Security retirement at age 66. In 2009 only a tiny percentage of those on disability, 0.8%, returned to work or gave up the benefits for other reasons.

He hopes fixing SSDI can be a springboard to broader entitlement reform:

With luck, the looming implosion of the Disability Insurance Fund will focus attention on other entitlements (and may dampen some of the happy talk now heard in Washington about the health of Social Security and Medicare). Coming to grips with the disability program also may provide a guide to reform of the larger programs.

The clock's ticking on SSDI, and we can't afford to ignore it.

xxxxxxxxxxxxxxxxxxxx CATP - Black conservative Deneen Borelli blacklisted from NAACP Convention The NAACP (National Association for the Advancement of Colored People) was founded “to ensure the political, educational, social and economic equality of minority group citizens of the United States and eliminate race prejudice.” The organization claims it “seeks to remove all barriers of racial discrimination through the democratic processes.”

Well apparently the NAACP has erected a barrier of its own and blacklisted black conservative, Deneen Borelli.

Borelli, author of book Blacklash: How Obama and the Left Are Driving Americans to the Government Plantation, and Fox News commentator, and her husband, Dr. Tom Borelli, were told there was no room at the 104th conference when they tried to pay for booth space. Photos of the venue, however, clearly showed plenty of available space.

But there was no room at the inn for Doreen and husband, who might have upset the new NAACP meme of discrimination for all BUT black liberals who tow the race-baiters’ line.

The organization once formed to ensure black people could strive, on an equal playing field without fear of bodily harm, to achieve their dreams in America, now only protects the struggles and aspirations of liberal blacks.

Congresswoman Frederica Wilson Inflames Racial Tensions with Hate Speech

Thanks to The Blaze for bringing this story of Congresswoman Frederica Wilson inflaming racial tensions with this hate speech. She is nothing but a racial profiteer like Al Sharpton and Jesse Jackson. And for all her talk about "being guilty for being black", Wilson is certainly guilty of being stupid. Congresswoman Frederica Wilson (D-Fla.) had harsh words Saturday for those who racially profile black men. An article from The Blaze.

Wilson said that black males “will continue to be singled out and arrested for driving while black, shopping while black, walking while black, eating while black, and just being plain old black.”

Her fiery comments drew loud cheers and applause from more than 300 hundred people who gathered at a “Justice for Trayvon” vigil held in front of the Federal Building in Miami, according to the Miami Herald.

In related news, the brother of Trayvon Martin is interning for Wilson, her office confirmed to NBC News. Jahvaris Fulton attends Florida International University in Miami, according to his Twitter page, NBC News reports.

Fulton is also part of the 5000 Role Models of Excellence Project founded by Wilson 20 years ago, which aims to prevent drop-outs and mentor at-risk boys in Miami-Dade schools, Wilson’s office told NBC News.

Here’s a clip of Wilson’s racial divisive speech this past Saturday: