The argument of statism versus federalism in Detroit


Photo by Mark Wilson/Getty Images

Photo by Mark Wilson/Getty Images

The definitions of federalism and statism are probably in direct contrast to what most people would assume.  The political concept of federalism, for example, provides for greater sovereignty in individual states, so that they have more control over their individual affairs based on the natural resources of their state, and their citizens more individualistic needs.  This was the political concept that Thomas Jefferson favored during the country’s founding years. Alexander Hamilton, on the other hand, favored a more central government, or the statist political concept, that calls for a more national strategy when it comes to the codification of laws, and social policies, and finances.  The two men butted heads when the foundation of this country was being set, and we’re still arguing over which concept is more beneficial, to America, to this day.The question on the floor of the nation today is, are the problems the city of Detroit is experiencing a result of the problems inherent in federalism, as it invites so much more fraud, waste, abuse, and incompetence on local levels, without the necessary amount of oversight purportedly found in more statist governments.  Also, if Detroit is evidence of federalism gone wild, can their problems be resolved with a heavy dose of statism?

The current statist is arguing that the federal government needs to bail the city of Detroit out.  Those that argue for even more federalism, even in the face of what’s happened in Detroit, argue that the city should be allowed to go through bankruptcy procedures, and that by doing so they may undergo the necessary, fundamental changes that it needs.  Those that argue for more federalism also use the Calvin Coolidge modus operandi when they mention that if you bail Detroit out, you set a dangerous precedent for the other cities that are in similar positions.

Former Democrat Governor of Michigan, Jennifer Granholm, spoke of these problems over the weekend, with Detroit as her reference point, on NBC’s Meet the Press:

“We need a strategy, nationally, like other countries have, to create and keep good middle-class jobs here, and we need a Congress that would support that strategy.”

“…This is not just Detroit. There are 50,000 communities across the country that have lost factories since the year 2000.  This is not just a Democratic problem.  This is a problem across the country.”{1}

One of the points Granholm made on the show, that wasn’t entirely incorrect, is that Detroit may need to “deindustrialize”.  That’s fantastic, say those casual observers that know little about Detroit, but how do you transform a manufacturing mecca like Detroit into a deindustrialized city? Granholm calls on the federal government to do it with a national strategy that would make Detroit a poster child for de-industrialization, and then the government could “adopt (statist) policies to ensure that other cities do not continue down the same path.”

That having been said, most manufacturing is currently being outsourced, and it probably wouldn’t be a bad idea for Detroit to try to move their industry away from manufacturing.  To have the federal government just pass an edict that Detroit will no longer be industrial just seems irrational to some of us. Regardless, that should be their decision, and it should be the decisions made by those enterprising companies that decide to put their business in Detroit to take advantage of the human resources available there, but that, of course, is the rub.

Even though there were some points made by Granholm, and all Democrats commenting on this issue over the weekend, the ever-present theme of their commentary was that Detroit’s failure is not necessarily emblematic of liberal (and Democrat) policies.  They didn’t mention corrupt officials, irrationally greedy unions, or the excessive taxes and regulations imposed on Detroit’s companies by Democrats.  They just said that it just sort of happened, that we can all learn from it, and that Detroit should be a “poster child for de-industrialization.”

Some MSNBC commentators joined Granholm in floating a trial balloon that Detroit’s problems could even be a result of Republican policies.  Even though Granholm’s fellow Democrats have held majorities in Detroit’s city council since 1982, against Independents, or non-affiliated members, and they have held super majorities since 1994, with only one Republican being elected to the city council since 1970.{2}  Another important note is that the last Republican to win the office of mayor in Detroit occurred in 1961.{3}  Somehow, according to MSNBC, Detroit’s problems arose as a result of the policies of current Governor Rick Snyder, Romney, and former president Ronald Reagan.{4}

Different ideas have been tried over the last fifty years, in other words, and Detroit doesn’t need different ideas(see Republican), and it doesn’t need a complete philosophical overhaul, it just needs jobs.  Reagan’s ideas didn’t work in Detroit(?), Romney’s (presumably George W. Romney governor of Michigan from 1963 to 1969) ideas didn’t work, and Rick Snyder’s ideas (elected in 2011) haven’t worked, so it’s not about Republican or Democrat.  It’s about jobs.  Detroit doesn’t need more sovereignty, it needs more jobs.  It needs the federal government to step in, bail Detroit out, deindustrialize it, and give the city’s citizens more jobs, and it’s the fault of (the federal) Congress that this national strategy has not implemented already.

‘What exactly is this national strategy?’ the casual observer (as opposed to the major network moderator) would ask.  The answer: “One that other countries have.”  What strategy do these other countries have?  ‘One that creates jobs,’ a politician that doesn’t want to get politically detonated by the answer ‘statist strategies’ would answer.  The moderator of Meet the Press didn’t press her on this, of course, and we were left with the empty platitude that the strategy, necessary to resolve the dilemma in Detroit, should involve a national one, that other countries have, that is not supported by Republicans in Congress.  The casual observer that knows little about Detroit, and nothing about Granholm, can only believe that these answers reveal Granholm as more emblematic of the problems in Detroit than one interested in productive, non-ideological solutions.

Granholm’s ideas of a national strategy mirror the general strategy for governance espoused by Economist Paul Krugman that states that it’s all about jobs.  It’s not necessarily about attracting private industry, and it’s not necessarily about freedom or capitalism.  It’s about jobs, and it doesn’t necessarily matter what those jobs are.  Detroit just needs temporary, “shovel-ready” jobs to help them get over the hump.  The federal government just needs to step in and develop a strategy, along the lines of Krugman’s strategy to save the national economy, by giving one group of people jobs digging holes and another group of people jobs to fill those holes.  This strategy will, presumably, get the people of Detroit past this temporary (50 year!) divot in the road, until prosperity cycles back.  We don’t need a complete overhaul of Detroit to return it to prosperity, we just need to tread water through these down cycles, until the prosperity cycle comes back, and until that happens they need jobs.  It doesn’t matter that “Jobs and human capital have been bleeding out of Detroit for decades due to a toxic brew of high taxes, terrible governance, excessive regulation, and unsustainable union demands.”{4}  Detroit just need jobs.

As an individual with executive experience in government, we have to believe that there is some non-ideological granule in Granholm’s philosophical makeup that recognizes that the current climate of Detroit (created solely by Democrats) is not conducive for prospective, private businesses.  We have to believe that some part of her recognizes that a business with a list of prospective places to put a plant, or an office, is going to take Detroit off that list halfway through first paragraph of the city’s current prospectus.  We have to believe that at some time between 2003 and 2011, then governor Granholm attempted to attract businesses to Detroit, and she saw how difficult that was, based on “its toxic brew of high taxes, terrible governance, excessive regulation, and unsustainable union demands”.

If she didn’t see how difficult that could be, it’s entirely possible she never tried to attract new business.  This would be a questionable statement, likely made by a partisan Republican, until one sees that it could be backed up when one sees that Michigan’s unemployment rate went from 6.8% to what some believe reached as high as 15.2% during her tenure as governor.  Some even believe that 15.2% figure was kept low by the fact that “Michigan was the only state in the union to suffer a net out-migration during the past decade”.{5}  In other words, those Michigan residents that couldn’t find employment, during Granholm’s tenure as Governor, simply left the state to find it.

This, of course, led Granholm to write the book “A Governor’s Story: The Fight for Jobs and America’s Future” to detail her expertise in finding work for residents of Michigan, and it, of course, led NBC to look to her as the expert for finding a resolution to the problems Detroit is currently experiencing.

If anyone held any hope that being governor, or writing a book on the subject, meant that Granholm gained some knowledge of making Detroit more amenable to private industry, those hopes were quickly dashed it with her Paul Krugman-style answers on Meet the Press.

The question a casual observers would ask, is if a city failed to the degree Detroit has failed, how could anyone, especially one with eight years of experience trying to attract companies to Detroit’s confines, look at that situation and not say that it’s in need of a complete overhaul?  This question begs the question how can you complete an overhaul of a city that keeps voting in candidates, like Granholm, that don’t necessarily believe that the key to the city’s success is attracting business?  You can’t, of course, but if you listen to Granholm, and MSNBC the local politicians are not to blame for what happened in Detroit.  It’s (the only federal branch of office dominated by Republicans) Congress’s fault, it’s Reagan’s fault, and it’s the fault of those companies that outsource their manufacturing needs due to high taxes, excessive regulation, and unsustainable union demands, but it’s not (repeat it with me) not the fault of liberalism, or Democrat politicians, so keep voting them in.

{1}http://www.mlive.com/politics/index.ssf/2013/07/all_eyes_on_detroit_rick_snyde.html

{2}http://townhall.com/tipsheet/guybenson/2013/07/22/msnbc-identifies-true-culprit-in-detroit-bankruptcy-republicans-of-course-n1645893

{3}http://en.wikipedia.org/wiki/Detroit_City_Council

{4} http://frontpagemag.com/2013/arnold-ahlert/how-the-democrats-destroyed-detroit/

{5} http://reason.com/blog/2012/09/07/a-failed-governor-talks-up-a-failed-pres

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