OT: Poly Ticks will bite

Detroit declared bankruptcy a few days ago. I've written, for years, about how Detroit should serve as a stark warning to Americans who believe in liberal social policies, like highly progressive taxes and expensive social safety nets.

These socialist programs don't cure income inequality. They merely destroy wealth by reducing incentives for building businesses and encouraging dependency. That's why societies with lots of government spending typically have few civil institutions and a small middle class.

Here's the message our politicians on both sides of the aisle seem to miss: 50 years ago, Detroit was one of the largest and wealthiest cities in the world. Nearly 2 million people lived there, and it enjoyed the highest per-capita income in the United States.

Then, in 1960, everything changed.

Liberal Democrats came to power (and have held power since). Their ideas about using the government to build a "Great Society" ? using the government to provide a cradle-to-grave social safety net ? have slowly transformed Detroit from the wealthiest city in America to a hellhole.

Detroit's population has declined by almost 70% since 1960. Roughly half of the people who remain are functionally illiterate. More than 60% live below the poverty line. And roughly half of all adults don't work. Only about one-third of the city's ambulances are in working order. Almost half of the streetlights don't work. It takes the police an average of 58 minutes to respond to emergency calls. The violent crime rate (no surprise) is five times higher than the national average.

It is shocking to realize that only 50 years ago, Detroit was the shining example for the world of capitalism and civil society. It doesn't take long to destroy wealth.

Now consider this? Detroit went bankrupt with total debts of around $20 billion. That's roughly $28,000 per remaining citizen. That's nothing. The debts that the U.S. government has amassed over the same period (the last 50 years) are vastly larger.

Today, all Americans owe more than $16.7 trillion on the federal level ? that's nearly $54,000 per citizen and nearly $150,000 per taxpayer. How many Americans do you think realize that our federal government is twice as bankrupt as Detroit?

Here's another big issue? Detroit is a city made up of mostly African American residents. This has been the case since after World War II, when many black families fled the racism of the South and went north seeking jobs in the auto factories. Detroit became a hub for African American politics and culture. Motown Records is one example of the African American cultural influences that flowed from Detroit.

John Conyers, Detroit's U.S. congressman, is one of the high-profile African American politicians to come from Detroit. A founding member of the Congressional Black Caucus, Conyers is the second-longest serving member of the House, having been re-elected continuously since 1965.

Conyers' wife, Monica, was formerly the head of Detroit's City Council. She's been in prison since 2010, thanks to an FBI investigation of corruption in Detroit. John Conyers was re-elected in 2010, despite his obvious connection to corruption in Detroit.

Given the city's complete collapse, what are our country's black political and social leaders doing to address the city's serious problems? John Conyers' website claims he's focused on "promoting economic development." It then lists the various federal handouts he's helped win for his district? as though simply getting more handouts will cure Detroit's problems.

What about the rest of America's black political and social leadership? What have our president and U.S. attorney general said about the collapse of one of America's wealthiest cities and former capital of African American culture?

The attorney general, Eric Holder, is promising to continue fighting for "justice" in the George Zimmerman-Trayvon Martin case.

President OBAMA! in a recent speech said he would redouble his efforts to fight "income inequality" and that such policies would be his administration's "highest priority." So in short, he's promised to handle Detroit by pandering to his political base and doing more of the things that caused Detroit to collapse.

The right thing to do for the people of Detroit is to empower them to regain their dignity. This means eliminating social programs that encourage reliance on the state, rather than individuals and families. It means kicking out the corrupt politicians. Black leaders need to encourage individual responsibility and family values, not encourage people to live at the expense of their neighbors.

But that's what scares me the most. In the face of Detroit's collapse, not only has no one who should be held responsible even acknowledged the problem? but our country's leaders seem totally oblivious to the causes of Detroit's collapse.

Detroit is a living case study of why government efforts to redistribute wealth don't work. But instead of recognizing any of the lessons of the catastrophe, OBAMA! promises more of the same policies.

Meanwhile, his government is in far worse shape than the city. The only real difference is the president and the federal government are still able to print their way out of trouble, using the Federal Reserve's ongoing manipulation of the U.S. Treasury market.

But what happens when that game ends? And it will. No nation in history became wealthier by printing money and buying its own government's debts. In every case, inflation soon destroyed the economies and wiped out private savings. Rates on the U.S. 10-year Treasury bond have recently moved from 1.6% to 2.6% ? in the face of continued Federal Reserve buying of $85 billion a month.

The dream that the government could provide prosperity to the residents of Detroit has come to its inevitable end. The dream that the federal government can provide prosperity to the entire country is even more delusional. It will come to a far worse end.

Printing trillions in new dollar bills to facilitate the madness won't prevent the inevitable bankruptcy of our country. It will merely gut the middle class of its savings and its wages first.

Believe me? this will come to pass. It will not take another 50 years. Maybe 10.

And when it happens, an enormous number of people will feel betrayed by the government: One group because it's been taxed and inflated into oblivion, and the other because it believed the government's handouts were a civil right, like free speech. How will those two groups relate to each other? My guess is not well. Want a preview? Just spend a few nights walking around downtown Detroit. Let me know how that works out for you? Finally, if you still don't think something has gone terribly wrong with our country, consider this: Our attorney general just sent a letter to the Russians promising that we wouldn't torture or kill National Security Agency leaker Edward Snowden, who's applied for political asylum there.

When I grew up, then-Soviet citizens were fleeing to America to escape such government threats. I don't remember the day the world turned upside down? but it has.

Reply to
Robert Baer
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No. They reduce income inequality, and by paying for better education and b etter health care for everybody, they make for a happier and more productiv e community. Check out Germany (Gini index 0.283) Sweden (0.25), Norway (0,

258) and Denmark (0.24).

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A serious problem in Germany, Sweden, Norway and Denmark? Only when looked at by right-wing nitwits.

Examples?

slowly

Actually, American car-manufacturing sat on it's well-padded rump and let t he rest of the world work out better ways of making better cars, which took enough customers away from Detroit to derail the gravy-train.

Germany spends a whole lot more training it's work force than the US does ( or pretty much anybody else) and it's car-manufacturing business is doing f ine.

If you don't keep on working on making a better product more cheaply than y our competition, your business is bound to go down the drain.

It's not the size of the debt that has bankrupted Detroit. It's the fact th at Detroit hasn't got any income or any prospect of any income. This isn't true of the US as a whole.

Since it was the white-run car-industry that failed Detroit, rather than it 's black politicians, who are stuck with trying to salvage something from t he ruins of a once thriving industry, this is pretty moronic stuff even for the dimmest of right-wing nitwits.

"justice" in the George Zimmerman-Trayvon Martin case.

Very sensible of him. The US Gini-index - at 0.45 - is almost as bad as Chi na - at 0.47 - and worse than Russia, at 0.401. The rich in the US are simp ly cheating the rest of the country - to the point where they'd end up with more money if they were content with a smaller portion of a bigger pie.

Allowing rich executives to divert company resources into their own pockets while short-changing research, development and worker training? That's the American way today, and has been since Regan got to be president.

So they can starve with dignity? There's no work to be had in Detroit.

The real political corruption in the US is the system which encourages poli ticians to pay attention to the wishes of the rich lobbyists, who pay for t heir election advertising, rather than the needs of their electorate, which includes an education system good enough to let the voters see through the propaganda that serves the interests of the very well off, and nobody else .

Which you want to blame on something other than the collapse of the car-man ufacturing business.

For the last thirty years, US society has allowed the rich - essentially th e top 1% of the income distribution - to cream off pretty much all the incr ease in production of the US economy. The US government has spent the last thirty years redistributing wealth to the already wealthy, damaging the eco nomy in the process. That process has worked all too well.

Read Joseph E. Stiglitz's "The Price of Inequality" ISBN 978-0-718-19738-4. You won't like it, but it will expose you to some information that you've c learly missed.

Which wouldn't work if Detroit's ruined car business was all that stood beh ind it.

Nobody ever became wealthier, but quite a few governments have used this tr ick to get out of recession. It works, but you have to stop stimulating the economy at the point where economy has been persuaded to start running at close to its full capacity. You aren't there yet.

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Nobody would ever have claimed that the federal government could have resto red Detroit to prosperity - that would have required a new industrial base employing something like half as many people as the auto-industry had in it s glory days. Governments don't have that capacity.

The delusion is to confuse "getting the country out of recession" with "pro viding prosperity". The US government can manage the first. The German gove rnment - working in partnership with industry - has managed the second, but it meant spending a lot more money on educating, supporting and re-trainin g workers than any US government could get away with.

If the US government keeps on shifting wealth away from the 99% into the ha nds of the 1%, the 99% are eventually going to get peeved, and rework their current system of government, which -at the moment - hasn't got a lot to r ecommend it. This ought not to need any kind of revolution, but a ripped-of f-majority can get nasty.

US middle class wages have been steady or declining for the past thirty yea rs. The amount the middle classes have to pay to get their children educate d enough to get middle class jobs has gone up quite a lot in real terms ove r that period.

The US middle class may not have been completely "gutted" yet, but the proc ess is well under way.

It's already going on. The beneficiaries aren't the poor, who have done eve n worse, but the rich.

Actually both groups should feel betrayed already by a succession of govern ments who have short-changed both groups in favour of the top 1% (probably the the top 0.1%, but nobody publishes those statistics).

It seems to have got under way when you had the bad judgement to elect Rona ld Regan as president. A more perceptive observer might have got the messag e when Oliver North was caught illegally selling arms to Iran to finance il legal right-wing interventions in Central America.

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Bill Sloman, Sydney
Reply to
Bill Sloman

Except it isn't a good think to give tax breaks to move a business. Your state benefits while some other state gets f***ed over.

Oh I see, tax people and not corporations. Perhaps we should just chop up people and use their flesh to feed the rich.

Reply to
miso

It's called "competition" and it sounds like you don't like it.

You don't seem to like jobs, either.

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John Larkin                  Highland Technology Inc 
www.highlandtechnology.com   jlarkin at highlandtechnology dot com    
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Reply to
John Larkin

This particular competition has been called "a race to the bottom" and it w orks great for business, less well for the employees of the business and th e state which "wins" the competition, which has to service the business - f ix the roads that it uses and educate the employees that it hires - while c ollecting very little in the way of taxes from the business to pay for thes e services.

They can be bought at too high a price.

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Bill Sloman, Sydney
Reply to
Bill Sloman

I like competition just fine. But giving a tax break to one corporation is like giving one team a few extra points before the game started.

Last time I checked, jobs and corporate taxes are not mutually exclusive. You may recall Bush's famed job creation bill that allowed companies to repatriate money hidden offshore at a 5% rate. The irony was the companies that were repatriating money were the ones doing the most layoffs. The Bush tax cuts produced the worst employment record.

"For starters, given that all of these two-term presidents experienced better job growth without the assistance of the massive tax cuts for the wealthy provided by President George W. Bush, it certainly seems fair to note that a certain amount of job growth would have come during the years George W. was president?whether he had given us the tax cuts or not."

Sorry to confuse you with the facts. However, I am not some stupid tea-bagger than chants bumper sticker slogans. I present the facts, even if it is like a hot burning rod up the ass of shit for brains conservatives.

Reply to
miso

German corporate boards have worker representatives. American boards have useless ass kissers. In fact the only way boards become remotely useful in the US is when some corporate raider, i.e. a person not suckng the CEOs c*ck but rather someone with skin in the game, gets on the board.

Reply to
miso

And most of them are doing what Mitt Romney mostly did - loading the company with debt, using the borrowed money to pay themselves absurd fees, then getting out before the company collapses under the debt load.

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Bill Sloman, Sydney
Reply to
Bill Sloman

ot."

es.

That was an opinion-piece (or a fairy-tale, I'm not sure which). Rick Ungar's Forbes' resident class-warfare specialist.

Check out the Obama comparison over at the Journo-lister's blog:

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Take note of the GDP, lower ratio of employed, and lower(!) number who are even trying for employment.

Neat feature for fooling the masses: they cheer the household wealth graph breaking even vs. 2007--hoooray!--but /not/ adjusted for inflation.

Synopsis: Bush's big-spending was somewhat preferable to Obama's mega-spending. Obama = Bush^3.

Reply to
dagmargoodboat

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Wrong. Bush's big-spending was pure extravagance - on an unnecessary and to tally unproductive war in Irak, amongst other idiocies. He let the banks in flate a house price bubble which wrecked the international economy when it burst. Obama is not in contention for that kind of mega-incompetence.

Obama's big spending is directed at one end only - keeping the US out of a depression. He should have spent more, but he has spent enough that the sit uation is improving, if not as fast as it might have.

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Bill Sloman, Sydney
Reply to
Bill Sloman

Not a bit. More corporate taxes here, more jobs in China.

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John Larkin         Highland Technology, Inc 

jlarkin at highlandtechnology dot com 
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Reply to
John Larkin

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More corporate taxes in the US is more taxes for some corporations. The US has one of the highest corporate tax rates in the world, but also offers mo re corporate tax exemptions than anybody else, to the point where it collec ts a smaller proportion of corporate earnings that most advanced industrial countries. More corporate taxes in the US really means more jobs for lobby ists.

Labour in China is cheaper than it is in the US - and the difference is a l ot bigger than the corporate tax rate - so a usual, John Larkin has posted nonsense, reflecting his imperfect comprehension of his business environmen t.

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Bill Sloman, Sydney (but in Nijmegen at the moment).
Reply to
Bill Sloman

Ask HP and Tek how their ODM is going with Rigol and Instek. Build in China and expect to eventually get f***ed over.

Reply to
miso

Is there a story there?

Not a lot of electronics is being manufactured in the USA any more. Hardly any consumer goods are made here. It's only partly the fact that labor itself is expensive, but a bigger issue is how much overhead is piled onto labor (FICA, unemployment, workman's comp, legal liabilities) and how much businesses are taxed and regulated for other stuff.

If a company builds a factory, it's considered to be an asset, and is taxed as part of profit. It can be depreciated over time, so the investment involves an additional long-term, zero-interest loan to the government.

My company does manufacture electronics in the USA, but it's a niche, boutique thing, not the sort of thing to create a lot of working-class jobs. We pay many times the tax rates that places like Apple and Google and HP pay.

I really pity the high-school-grad worker-guy type whose jobs have been disappearing for decades now.

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John Larkin         Highland Technology, Inc 

jlarkin at highlandtechnology dot com 
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Reply to
John Larkin

Behold, tea bagger racists:

Reply to
miso

Do I need to spell it out? What started as a ODM is now a company selling right in the US. I would never buy Rigol if they weren't ODMing for Aligent.

When I see Chinese stuff at Home Depot, I go to Harbor Freight and cut out the middle man.

Funny, Apple and Google are bringing some assembly back in the US.

Reply to
miso

We have several Rigol scopes, including a 1 GHz 4-channel that's very nice. All the scopes are made in China, so why pay HP or Tek to triple the price?

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John Larkin                  Highland Technology Inc 
www.highlandtechnology.com   jlarkin at highlandtechnology dot com    
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Reply to
John Larkin

And a poodle!

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M0WYM 
Sales @ radiowymsey 
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Reply to
Wymsey

If there was zero corporation tax the companies would still outsource production to the the cheapest labour market. When the workers there wanted a decent wage then the companies would move on - that's what has happened in the past.

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M0WYM 
Sales @ radiowymsey 
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Reply to
Wymsey

Some. But the tax-versus-jobs relation is not a step function.

The other way companies outsource jobs is by going out of business. Few do that voluntarily, but lots do because the government sucks away their resources and makes employees too expensive

When the workers there

Certainly unions kill the industries that they parasitize (except governmant unions, of course.) But a free labor market will find equilibrium. If you want a decent wage, make yourself more productive, not less productive.

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John Larkin                  Highland Technology Inc 
www.highlandtechnology.com   jlarkin at highlandtechnology dot com    
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Reply to
John Larkin

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