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I know some refugees who were SETTLED in Detroit by the government.
They all got jobs. Jobs were never an issue for them.
But they never had anything nice to say about Detroit.
In fact, when they start bickering and boasting among themselves, it's about HOW FAR from 8 Mile....they've moved.
The further out they are..... The more successful they FEEL.
They came to the US as war refugees, and the last place they wanna hang around in, is the city of Detroit proper.
These people LIKE big cities. They come from an urban culture, that traditionally lives in urban environments, (as well as rural and suburban).
But they were moving as far away from Detroit as financially possible.
In fact, it was the state of the city itself, as THE major urban center in Michigan that shocked them. The indifference of a lot of its population and politicians was another shocker.
And when their out-of-state friends used to come to visit them, they'd also go into a state of shock upon seeing the city.
They'd never seen anything like it.
The BAD PR generated by the city is so corrosive for the entire state.....
Michigan may as well have a permanent Hiroshima wound that never heals....
If you've ever been to Germany.....
Imagine the SHOCK on an average German executive's face when he SEES the city for the first time.
I know EXACTLY how shocked and disgusted these people become.
Their FIRST reaction is
"HOW can the world's wealthiest country ALLOW THIS?"
HOW can they be indifferent? Bad PR is bad PR. You can only spin a bad situation so much,
but Detroit IS what it is,
and that German exec is flying back to his clean and orderly Dusseldorf, with a
bitter-sweet taste in his mouth, that taste of the city of Detroit.
These people don't really CARE about the suburbs, and how deluxe they are. They come from cultures which have invested in their in their cities for thousands of years.
They take PRIDE in their cities.
As far as they're concerned, the wealth and beauty of their urban-built environments IS THE measure of success of A society.
They simply cannot COMPREHEND Detroit.
Young people are no different. That's also why they leave.
Well, no doubt that these people come from socialist constructs that would never allow such a scenario to manifest. Here in the US collective social engineering and safety nets are frowned upon in this establishment. However, some would argue that is why the EU is in the mess that it is in.
The US has ALWAYS had shameful conditions for a first world nation.....and they usually involved conditions or or treatment that black people lived under or endured. That pattern has not been broken....unfortunately.
Last edited by Indentured Servant; 01-09-2012 at 08:34 AM..
Its my opinion that the Detrot area represents a microcosm of what America would look like if it did not have the ability to run deficits and print money and use other schemes to kick the can down the road. The US is in REALLY bad shape and is a shell of its former economic glory, not unlike the Detroit area. The Detroit area simply do not have the tools to mask it decline like the US does.
I agree with you on this. We are definitely masking our decline at the federal level, and have a lot more "tools" for doing so.
However, I think our politicians are doing us a disservice in the long run by attempting to mask our decline through deficit spending, debt, stimulus programs, etc. I think the eventual collapse, either of our currency or from the massive debt, will be worse than if we had just let the bubble burst naturally. My gut tells me that avoiding the pain and pushing it further down the road is never the solution, whether it is in our personal lives or as a nation. If something is the politically easy choice (delaying the collapse through stimulus and money printing), then it is most likely the WRONG course. If something is politically difficult, it is often the correct thing to do (and we are not doing it). The sooner we deal with reality, the sooner we can begin to rebuild and recover.
We are basically doing everything we can to allow ourselves to continue our bad habits, both personally and as a nation. I don't see how that can work out positively in the end.
To oversimplify, the problem arises because politicians aren't willing to make tough choices.
For instance, if you want to cut military spending by 20%, as some might argue debt is at unstainable levels, that results in X thousands of people losing their jobs (via govt contracts).
So which choice is it? Do you want to cut spending? Or be known as the politican who caused 3,700 employees (in an anemic geographical region) to get pink slipped.
Most politicians will talk cutting - until the time comes to cut - and then they kick the can for the next politician to deal. Until the collectors demand payment...
To oversimplify, the problem arises because politicians aren't willing to make tough choices.
For instance, if you want to cut military spending by 20%, as some might argue debt is at unstainable levels, that results in X thousands of people losing their jobs (via govt contracts).
So which choice is it? Do you want to cut spending? Or be known as the politican who caused 3,700 employees (in an anemic geographical region) to get pink slipped.
Most politicians will talk cutting - until the time comes to cut - and then they kick the can for the next politician to deal. Until the collectors demand payment...
I think it's also a case of "seen" vs. "unseen."
The effects of cuts or austerity measures are very visible. You see people lose jobs and take pay cuts, you see programs disappear. These things are perfect material for political attack ads and debates.
It is much harder to quantify the positive effects of cuts, which are mostly long-term in nature. It could very well be better for society as a whole, and in the long run, to make cuts. But it is very difficult to demonstrate this and most people don't have the patience or willpower to make it to the light at the end of the tunnel.
I agree with you on this. We are definitely masking our decline at the federal level, and have a lot more "tools" for doing so.
However, I think our politicians are doing us a disservice in the long run by attempting to mask our decline through deficit spending, debt, stimulus programs, etc. I think the eventual collapse, either of our currency or from the massive debt, will be worse than if we had just let the bubble burst naturally. My gut tells me that avoiding the pain and pushing it further down the road is never the solution, whether it is in our personal lives or as a nation. If something is the politically easy choice (delaying the collapse through stimulus and money printing), then it is most likely the WRONG course. If something is politically difficult, it is often the correct thing to do (and we are not doing it). The sooner we deal with reality, the sooner we can begin to rebuild and recover.
We are basically doing everything we can to allow ourselves to continue our bad habits, both personally and as a nation. I don't see how that can work out positively in the end.
I agree with you that kicking the can down the road only makes the calamity worse when it actually happens, theoretically. The problem is that there is no way to manage decline to lower more manageable GDP, one in which there is equilibrium between what we produce as a nation and what we consume as a nation. Right now we consume more than we produce and hence need to borrow to make up the difference. That is the “hole” in our economy that keeps stimulus from stimulating, due to the fact so much of what we buy is produced by workers in other nations.
Economics is mostly a behavioral science, with embedded mathematics and accounting. There is likely a mathematical point in which our nation becomes solvent and balanced, but that point cannot be reached without doing major damage to the psyche of Americans. It will erode, if not destroy consumer confidence and the decline will then become self-reinforcing because the panic of the population will change their consumer behavior and people will become frugal to the degree it creates the economic “Paradox of thrift”. Panic will ensue to such a degree that the mathematical correction needed will most definitely be overshoot. In other words, panic will make the correction become much worse than it mathematically needs to be.
I agree with you that kicking the can down the road only makes the calamity worse when it actually happens, theoretically. The problem is that there is no way to manage decline to lower more manageable GDP, one in which there is equilibrium between what we produce as a nation and what we consume as a nation. Right now we consume more than we produce and hence need to borrow to make up the difference. That is the “hole” in our economy that keeps stimulus from stimulating, due to the fact so much of what we buy is produced by workers in other nations.
Economics is mostly a behavioral science, with embedded mathematics and accounting. There is likely a mathematical point in which our nation becomes solvent and balanced, but that point cannot be reached without doing major damage to the psyche of Americans. It will erode, if not destroy consumer confidence and the decline will then become self-reinforcing because the panic of the population will change their consumer behavior and people will become frugal to the degree it creates the economic “Paradox of thrift”. Panic will ensue to such a degree that the mathematical correction needed will most definitely be overshoot. In other words, panic will make the correction become much worse than it mathematically needs to be.
This makes sense. I probably tend to put too much emphasis on the mathematical side of economics, and not enough on the behavioral side.
The reality is that, due to the nature of politics, we will never attempt my "tough medicine" approach, so it's pretty much a moot point. Gradual, drawn-out, masked decline is what we are going to get.
This makes sense. I probably tend to put too much emphasis on the mathematical side of economics, and not enough on the behavioral side.
The reality is that, due to the nature of politics, we will never attempt my "tough medicine" approach, so it's pretty much a moot point. Gradual, drawn-out, masked decline is what we are going to get.
Yes, I agree again. Its political suicide for a politician or party to let any air out of GDP while they are in control. Hence, we are building up to an explosion, I am afraid. Well....maybe not. I think they are using the dollar as the relief valve. If they allow the dollar to be devalued that theoretically should boost exports and reduce imports and help shrink the trade gap that leads to so much borrowing to offset. However, I don't see any evidence that our trade gap is declining. Devaluing the dollar is also a means by which one can reduce their debt. If you had a debt of 1000 dollars made 5 years ago, and the value of the dollar has declined 10% since then, you reduce your debt, effectively, to only 900 dollars (the interest rate on the debt ignored for simplicity.....because the devaluing of the dollar is greater than the low interest loans rates). Inflation is much higher than government reports and I think most consumers do not have a clue concerning what the governments inflation rate is... in order to juxtapose their personal experience with it. If a nation wants to avoid its real debt burden and pull the rug out from under the standard of living of its people, it does that through printing money....or what we like to call "quantitative easing". All that does is debase the currency and lead to higher inflation......but again.......by understating inflation you overstate GDP growth and can hide real decline. Most people do not know that the way inflation is calculated was changed during the Clinton years (I am not making a poitical statement). If the previous methodology was employed today, inflation would be more the twice the official inflation rate.
This is why I say that Detroit is a true baramoter of the nations health. If you take away all the gimmicks, borrowing and money printing you will find a nation that is in the same shape as metro Detroit economically......if not a lot worse because metro Detroit does benefit from some of the economic trickery of the national government.
We can either have a job collapse, where millions or more jobs are lost, or we can have a standard of living collapse, where people keep their jobs but inflation erodes the purchasing power of the people.
Since I usually spend my time disagreeing with you, Indentured Servant, I just wanted to say that you have made some outstanding points in the last several posts.
Yes, I agree again. Its political suicide for a politician or party to let any air out of GDP while they are in control. Hence, we are building up to an explosion, I am afraid. Well....maybe not. I think they are using the dollar as the relief valve. If they allow the dollar to be devalued that theoretically should boost exports and reduce imports and help shrink the trade gap that leads to so much borrowing to offset. However, I don't see any evidence that our trade gap is declining. Devaluing the dollar is also a means by which one can reduce their debt. If you had a debt of 1000 dollars made 5 years ago, and the value of the dollar has declined 10% since then, you reduce your debt, effectively, to only 900 dollars (the interest rate on the debt ignored for simplicity.....because the devaluing of the dollar is greater than the low interest loans rates). Inflation is much higher than government reports and I think most consumers do not have a clue concerning what the governments inflation rate is... in order to juxtapose their personal experience with it. If a nation wants to avoid its real debt burden and pull the rug out from under the standard of living of its people, it does that through printing money....or what we like to call "quantitative easing". All that does is debase the currency and lead to higher inflation......but again.......by understating inflation you overstate GDP growth and can hide real decline. Most people do not know that the way inflation is calculated was changed during the Clinton years (I am not making a poitical statement). If the previous methodology was employed today, inflation would be more the twice the official inflation rate.
This is why I say that Detroit is a true baramoter of the nations health. If you take away all the gimmicks, borrowing and money printing you will find a nation that is in the same shape as metro Detroit economically......if not a lot worse because metro Detroit does benefit from some of the economic trickery of the national government.
We can either have a job collapse, where millions or more jobs are lost, or we can have a standard of living collapse, where people keep their jobs but inflation erodes the purchasing power of the people.
I think you are spot-on with this post. In a strange way, though, I think this gives me some hope for Michigan, even if the national economy tanks. This is one of the few states that still has a manufacturing base. If the future that you are laying out here comes to fruition, we will be very thankful that we still have the ability to produce goods and export them. It might be our saving grace.
I think you are spot-on with this post. In a strange way, though, I think this gives me some hope for Michigan, even if the national economy tanks. This is one of the few states that still has a manufacturing base. If the future that you are laying out here comes to fruition, we will be very thankful that we still have the ability to produce goods and export them. It might be our saving grace.
I kind of have the inverse feeling. I think that it is now obvious, or should be, that there is no viable "new economy", one in which is based upon services and money manipulation, while we allow other countries with "comparitive advantage" to perform the manufacturing. That only leads to huge trade defits and a transfer of wealth and jobs to other nations.
We need manufacturing to come back for America to come back. That is the only way we can balance what we consume with what we produce....by producing more at home. That is not to say that there is not a cost associated with this, however. Thus, I am more confident that Michigan will do very well, if America domesticates its production. I am less confident that Michigan will do well in an all out economic collapse, because one of the first thing people will cut off is new car purchases and Much of Michigans economy is still related to auto production.
However, I hope that you are right and not me.
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on an average German executive's face when he SEES the city for the first time.
