I spoke about this a bit the other day, but now that the dust has settled more details are necessary in regard to the Detroit bankruptcy. Darryl Parks during his Saturday program on 700 WLW did a wonderful couple of segments about the Detroit situation which deserves to be highlighted, and can be heard below. Darryl as he usually does comes to these types of topics armed with many facts and in this case many I did not know about the Motor City. I have family who lived in Michigan and worked in the auto industries who were big union supporters. Every year my family visited them at least once, so I learned a lot about Michigan during these childhood adventures, especially during the 70s and 80s when I was growing up. I watched firsthand the decline that Darryl Parks articulated during his program. I watched Detroit go from the richest city in the United States in 1965 to currently the poorest. I knew that Detroit was at one time a source of entertainment as The Lone Ranger radio program was launched from Detroit and the city still owns the rights to the Howdy Doody puppet. Detroit at one point in its very recent history was a center for art, entertainment, and manufacturing—which drove the entire economy. But what destroyed Detroit is a reoccurring theme everywhere in modern America, the notion of collectivism framed within the labor union movement which is failing on a massive scale. Click Darryl’s broadcast below to begin to understand how many labor unions are listed as creditors in the Detroit bankruptcy and it will quickly become clear how destructive unions have been on the American economy, the role they’ve played in wage inflation, and the way they’ve prevented the proper management of Detroit’s resources.
When Michael Moore made his first big film Roger and Me, I enjoyed it as I shared with Moore a love of the Midwest. His film was about the decline of the auto industry in Flint, Michigan and the loss of entire neighborhoods becoming a gigantic ghost town. But Moore lost me all those years ago in 1989 when he assumed that General Motors CEO Roger Smith had a duty to the people of Flint to give back to the community his large wages so that fewer jobs would be lost. Moore’s position in the film was typical of most union households in Central and Lower Michigan from the 70’s to the 90’s that was raised on soft communism disguised as American patriotism. Moore’s beliefs were harder than socialism, and shy of Russian, or Chinese communism but were certainly anti-capitalism in their nature. Moore failed to understand that it was capitalism that brought jobs to his town of Flint which is just north of Detroit. It was communism that had infiltrated the labor unions and made Moore believe that Roger Smith owed Flint, Michigan anything.
The film launched Moore into the national spotlight as a left leaning media was hungry to team up with someone who could capture their instructed beliefs into a film format. But the parasitic nature of the type of contracts the unions negotiated for themselves continued. Jobs left the Detroit area for destinations that were not friendly to labor unions, like China, and Mexico, countries already utilizing a social philosophy of socialism and communism. I liked my family members, but found myself in contention with the adults who had cars in the driveway with bumper stickers stating, “Buy American” which was a typical union slogan at the time even though the Japanese were making better cars cheaper. Their assertion was the same as Michael Moore’s, and that was people had an obligation to buy an American car built with union labor because of some misguided patriotic duty. All those elements never added up to my mind, even at the ages of 8 through 15 when my years in Lower Michigan were most active. No matter how much the adults from that side of the family yelled their philosophy never made sense to me.
When I was 18 years old I worked in a metal stamping plant while I was majoring in economics in college. The economic professors didn’t seem to understand the real world of manufacturing the way I did because I worked in a real metal stamping plant known as the meat grinder at the time. I saw many very serious injuries and I learned quickly that the parts we made at this facility required salesmen to sell them to a distributer somewhere in the world and that purchasing had to find the metal coils somewhere so we’d have materials enough to manufacture the goods. I worked with some tough, rough neck people and fights on the shop floor were common. When I first started at this place a man older than me by about 10 years picked a fight in the break room. I launched a full can of Coke at his head and luckily missed his forehead by only a few inches. The can exploded against the wall and after the man saw how serious I was about winning the fight decided to befriend me, and we remained friends for all the years I worked there. There were many other fights that involved serious cuts, broken bones, knocked out teeth and eyeballs that were actually removed from their sockets. The foremen would look the other way, especially in my case because I without question out produced everyone in the building. My manufacturing rates were very high. I didn’t work so hard because of fear for my job, or to earn praise from the foremen, but because I enjoyed it. I liked working fast—I enjoyed pushing myself with sweat pouring off my body. The fights came from the workers who were trying to unionize this facility and wanted to bring me in line with everyone else.
The college professors had no advice for my young mind as they leaned toward labor’s position in the matter when I asked about it. Their arguments I know now were Keynesian in their nature and rooted in European socialism, but at the time, I assumed they knew what they were talking about. Because of the economic professor at the college I was attending I tried to understand the union mentality so I listened to the advocates instead of fighting them. This led them to ask me to present a list of union demands to the company president. Even though everyone in the company was much older than I was, they wanted an 18-year-old kid to approach management and negotiate on their behalf. So I did.
I sat across from the President and gave him the grievances from the workers but as I sat there I saw the man who ran the company with his hands that were too smooth from lack of work, a belly that was too fat from eating in too many nice restaurants and was having an affair with his secretary who was half his age. But I also saw a guy who was taking all the risks in the company. If sales were down, it was his fault. If supply could not be meant, it was his fault. If he didn’t grease enough wheels at OSHA politically, then it was his fault. In essence I felt the grievances from the workers were stupid, short-sighted and childish. At the end of the day the “workers” were able to go home and forget about the work they did while the president was always tuned in to what was happening, even when he was on the golf course—because he was the risk taker. For the employees to declare that their labor was worth the same as those who took the risks it was preposterous.
I gave the demands back to the union organizers and told them I would not represent them. They attempted to reorganize without my help and fell flat on their face. Whenever they tried to cut back on their labor hours to force reductions in manufacturing rates the foreman would give me extra overtime to cover their slack. When they tried to paint me as a “scab,” we went out in the parking lot and solved the problem, and a lot of people got hurt. But I never yielded my beliefs on the matter and everyone ended up shaking hands in the end, even over broken bones and busted lips. It was these types of people who made America a manufacturing powerhouse—but only as individuals. The collectivism of labor unions destroyed this trait, which makes America less competitive globally, which is why the labor movement was introduced to America by European insurgents wanting to level the playing field for all economically. And this is what happened in Detroit. The unions got what they wanted and nobody fought them on it. When the companies gave a little, the unions asked for more. The companies became frustrated and just packed up and voted with their feet and behind them all the competent workers left to follow the jobs and Detroit went from being the wealthiest city in America to the poorest in just a few decades of bad policy and bad social philosophy.
To this very day I despise labor unions because they fight against individual responsibility and merit. They are simply gangs of thugs who attempt to extort away from the companies they work for values they have not earned. Collective bargaining is the absolute dumbest idea in economic theory. All people are not of equal value, some workers are faster, stronger, smarter, more efficient, more technically savvy—and they are not all deserving of equal pay. To force companies or governments to pay wages on collective bargaining takes away the incentive of the very good to perform well, because slugs, malcontents, and the ungifted receive the same wages for doing much, much less. This is what killed manufacturing in Southern Michigan and more specifically destroyed Detroit.
The disease of economics that destroyed Detroit is the same idiocy that is at work in our public schools, the IRS scandal, and virtually every branch of government as it is only in the public sector that unions have managed to survive as they have embedded themselves on financial supply that cannot pack up and move out of the country to flee the parasites of economics. This put the burden on tax payers to cover the labor costs and in Detroit’s case, smart people moved leaving behind a city of dependents that did not pay taxes. In just the last five years Detroit went from having a balanced budget to being billions of dollars in the hole—because they do not have a tax base to support their unionized legacy costs. They ran tax payers out-of-town with tax rates that were too high and attempting to sell the concept with “shared sacrifice” which is to say, “wealth redistribution” stolen from the earned and given to the unearned.
Detroit is the first major city in modern America to see such an impact of their mismanagement, but many cities are short in toe. Michael Moore in his film Roger and Me stumbled around revealing his utterly failed philosophy about the way life works as his arguments are only based on observations and not the cause. Further, Matt Damon’s new film Elysium set in the year 2154, where the very wealthy live on a man-made space station while the rest of the population resides on a ruined earth, never really covers what ruined earth. Damon like Moore has been given the progressive task to communicate the union message to mainstream America which continually falls short on logical thinkers who know better. In Damon’s film he takes on a mission that could bring equality to the two polarized worlds. The nature of the story might as well be the same as Detroit versus the suburbs where smart people of value flee the type of people who make themselves social parasites and consume much more than they contribute productively. Progressives somehow think the math will just work out in the end, but it never does. Even as a child I saw what was happening to Detroit and I wanted no part of it in my life—and I have lived by those terms. But not everyone is as combative as I am on issues they believe in, and most will think what I do, but they will not fight. They will simply pack up and move to someplace else that offers less imposition on their lifestyles, which is the root cause for why Detroit has failed as a city. Detroit imposed themselves on the productive, forcing them out-of-town leaving behind only the destitute like Michael Moore to look about their neighborhoods and wonder what happened. The only word their failed philosophies have for the tragedy is “greed” but it is much more complicated than that. The real villain is “financial incentive” and in the case of Detroit, the lack thereof.