This week Senator Rand Paul, who is likely running for president, suggested that Congress act to pass legislation which would declare Detroit an economic “freedom zone.” That is to lower taxes in Detroit to near 0% levels spurring business activity and development.
We at Against Crony Capitalism wholeheartedly agree with this idea. We even called for something similar last year. Unleash the market in Detroit and the city will bloom.
Few cities have been as ravaged by inept governing and crony capitalism as Detroit has. Because of decades of mismanagement and neglect what was once one of the great cities of the world is now a rusting heap. But it need not remain so.
We couldn’t be more for this. In fact, last year we suggested a very similar idea. We said:
This is a winning strategy for Paul. The cause of truly small government and free markets and free prices isn’t an idea which only works for white folks. It works for ALL folks.
These are annual pensions. The workers are retired. They contribute little if anything to the state of Illinois at this point. And most of these folks probably retired in their 50s, some probably before that.
This isn’t a bailout, a bailout would be much larger, but it is a gift (paid for by you) from the Feds. Mostly a political move to placate some of the restless Dem party loyalists who would like far more for Detroit, I am surprised it isn’t a greater sum. In the end it probably will be.
My bet is that within 15 years the American car manufacturers will mess things up again, but for right now they are bailout plump. The city which grew up around the big 3 is in a nearly post-apocalyptic state however. Miles and miles and miles of rust spread out from the city center where GM and Chrysler executives look down from their offices.
That is when they aren’t touring the new manufacturing facilities in China.
We wrote about this a couple of weeks ago. Cities do very stupid things for their sports franchises. Politicians are so afraid a team might leave that they throw cash at owners. Residents likewise often abandon their senses when owners threaten bolting with a team.
This is how Detroit rises from the ashes.
A year ago, before Detroit had officially declared bankruptcy we suggested that the city declare itself a free market zone. Get the dysfunctional government out of the way, lower taxes, and let the market solve the problems of the city. Why not? It literally had nothing to lose.
We suggested that Detroit would blossom if that happened. The city is blessed with a wonderful location at an important crossroads of trade in North America. It could live again, if it just got government out of the way.
Enter The Detroit Bus Company.
Cities do stupid things for their sports franchises. They often leverage themselves out and pour money into the pockets of team owners. City leaders don’t want to be the ones who chased off a beloved team. The Red Wings are such a beloved team. (In Michigan hockey is a top tier sport.) That is why even as Detroit is negotiating with creditors in bankruptcy the city is promising to build a new stadium for the team (owner) with tax money, some of which was originally designated for schools.
And it’s not just New York, Illinois, and California with the spendthrift ways. Across the nation taxpayers owe a lot more local debt than they think they do because of end runs by local governments around debt restrictions.