Glen L.

The Detroit Syndrome of Economic Failure

Good article, and excellent point added by atlasman.

Economics is really simple, when you stick to the basics and don't try to refute, say, the law of supply and demand. For example, if the supply of labor was not artificially limited by union contracts that drove wages and benefits through the roof, there would be more jobs and lower prices for the cars, thereby propping up Detroit whilst not a single dollar of taxpayer money was wasted. What a concept.

Yes, management knuckled under to UAW demands, and for a while it didn't hurt because it took a few years for Japan and Germany to catch up, due to bombed out factories etc. Of course, the problem goes back to Depression-era government policies and court decisions that effectively legalized union intimidation tactics.

Funny how anti-market policies in one era come back to haunt us in the future. We eventually repealed many of the New Deal horrors, but the ones we didn't address (see also Fanny Mae) are hurting us still and exacerbating the crisis. How will the US economy survive the current round of interventions and boondoggles? Sadly, collapse appears inevitable.

It proceeds apace: a neighborhood here, a city there.