Don’t Tell Detroit ‘I Told You So’: News Analysis

Fiscal conservatives need to understand their subordinate position in today’s zeitgeist

Man walks past grafitti in Detroit. (Photo: AP) Man walks past grafitti in Detroit. (Photo: AP)

If Samuel Johnson could sarcastically call second marriages the triumph of hope over experience, Americans should view news of Detroit’s bankruptcy as the triumph of experience over hope.

The city has been in a tailspin for decades. Bond issuance, state aid, emergency managers, occasional pushes from the political class for union concessions, halfhearted suggestions of selling art assets, a last-minute plea to the White House — every little flight of hope was grounded in Thursday’s bankruptcy filing.

Ultimately, Detroit’s crushing long-term debt and vast unfunded pension obligations stretched beyond the city’s revenue and borrowing ability.

This is not merely a stall for the Motor City — it is more like a breakdown of its transmission, whose repair will be extensive and costly. The city’s 700,000 residents will likely see a further erosion in its already decrepit city services — its broken street lights and shuttered fire stations. And its creditors, including city pensioners, will see just pennies on the dollar.

The often dour critics of Blue State spending excess will probably say, “I told you so.”

It is true that government at all levels including the federal government have spent recklessly.

And the list of cities with debt and pension problems like Detroit’s is a long one. (Buried under all the Detroit news on the same day as its Chapter 9 filing, Moody’s cut Chicago’s credit standing three steps to A3, citing pension fund liabilities and crime-fighting costs.)

One can rail against the injustice of cops and firemen retiring in their early 50s with pension deals that private-sector stiffs can’t obtain, about teachers who can’t be fired despite their students’ poor academic achievements.

But gnashing teeth about America’s Greek future has had little impact on public policy; Detroit’s bankruptcy — the canary in the progressive coalmine — is likely to have some impact.

Whatever frustrated fiscal conservatives think they might obtain from their morality lessons, austerity proposals or privatization pushes is dwarfed by the fear inspired by the actual severance of union contracts that bankruptcy will bring about.

The corrupt political alliances that traded union votes for sweet pay and pension deals is now undermined by the inability to deliver on the promises.

For too long, policy critics have acted as if all their opponents needed was an economics course. Not knowing how budgets work was never the problem; not caring was. And now, because of Detroit’s bankruptcy, officials in similarly situated cities will care more than they used to.

While the fiscally reckless are learning a painful lesson, it is important that those who cling to hoary principles such as living within one’s means learn some lessons too.

First, there is such a thing as a zeitgeist, an esprit du temps — we really need a pithy English-language equivalent to this. The spirit of our times is not one that would cheer Calvin Coolidge, and fiscal conservatives who yearn for a new Reagan Revolution must accept that that does not fit contemporary American priorities.

Ronald Reagan got far in politics by deriding his opponents for their tax-and-spend policies, but it is precisely taxing and spending that has fueled the political success of progressive politicians at all levels in the United States today (with some notable state exceptions).

What fiscal conservatives must therefore come to grips with is that they can, at best, propose but it is progressives who dispose in today’s climate.

Like it or not, every person has his time and everything its place. A resurrected Reagan could not be elected today.

Knowing that your role is a subordinate one does not mean you should yield to despair. Remember that capitalism — which to paraphrase Churchill’s statement about democracy may indeed be the worst economic system except for all the others — is a dynamic process of creation and destruction.

While Detroit’s policies have immiserated its population, they have done wonders for Farmington Hills and West Bloomfield Township, suburbs that have prospered from contrasting public policies and city services.

And the likelihood that creative and enterprising Motor City refugees can be found in thriving economies like Dallas or Williston, N.D., evinces the very American tendency to vote for more sober public policies with feet rather than ballots. Detroit's population is, after all, less than half its 1950 peak.

Who knows what municipal bankruptcies, federal fiscal cliffs and Social Security distress lies ahead? It is to be hoped that the experience of disaster will further our education.

But until the pendulum shifts again, the spend-within-your-means crowd can console one another and humbly offer their thoughts to those who will listen among the dominant school of thought.

As Henry Wadsworth Longfellow’s charming poem “The Arrow and the Song” advises:

“I breathed a song into the air, it fell to earth, I knew not where…

And the song from beginning to end, I found again in the heart of a friend.”

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More news analysis from Gil Weinreich on ThinkAdvisor:

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