Detroit

The City of Detroit made it official today, when it filed for bankruptcy. For those who watch this sort of thing it was no surprise. Each city has its own particular problems but one thing they all have in common is payments to retirees in the form of health care and pensions. While these were the result of collective bargaining, there was a built in distortion because of public unions. It happens at all levels starting with city unions, county unions and state unions. It is also a part of teachers unions. It is the reason why a liberal no less than FDR warned against public unions, in that he knew when people gained the power to determine their own benefits, they would overdo it. One example of how this works would be to look at county workers. The situation would be the same if you looked at state or city workers. The county workers organize and form a union. They then select a candidate to run for county commissioner and then they proceed to get him elected. They help him with their votes, the votes of their relatives and friends. They help him by campaigning door to door calling on their neighbors. They help him by holding coffee parties in their homes along with financial aid to help pay for his campaign. Once elected, they select another candidate and repeat the process and promise those in office, their help in reelection campaigns. Next they sit down across the table from these elected officials and negotiate their benefits. The public unions across the country started this process just after WW 11 and they have worked long and hard to achieve the success they now enjoy. There was nothing illegal or unethical about what they did. It was the American way. Set your goals, work hard to achieve them and then enjoy your success. They have now become the victims of their own success and thus the reason why FDR warned against them. In regards to Detroit why doesn’t the federal government step in like they did with the auto industry? The city is 19 billion in debt and the Fed is printing up 85 billion per month so they could just pay off the city’s debt. This would set the precedent to bail out all of the other cities that will fail over the next few years. If the government can give billions to the big banks, why not the cities? Could it be those city employees who are going to lose their promised benefits don’t have a lobbyist or perhaps they don’t have enough votes. So much for looking out for the little guy.