Detroit a 'cross between postwar Berlin and ancient ruin'
New York Times columnist Bob Herbert takes a ride through the desolation that is Detroit -- "a cross between postwar Berlin and the ruin of an ancient civilization" -- and decides it was the fault of free marketers and free traders.
"It's a ghost town," Herbert writes, as he takes a drive around with Harley Shaiken, the University of California Berkeley labor expert and native Detroiter. What would bring the East Coast columnist together with the West Coast professor in the heart of the Midwest is a story that goes untold.
"What you'll see are endless acres of urban ruin, block after block and mile after mile of empty and rotting office buildings, storefronts, hotels, apartment buildings and private homes," Herbert writes.
Yes, he argues, it is tempting to blame the city's problems on the 1967 riot, clueless leaders and the implosion of the auto industry. But see the city through Harley Shaiken's eyes:
The recession of the early 1980s was "when the place really cracked, and that was about aggressive globalization and the lack of an industrial policy, not the riots."
It's an odd argument, even though it gets nods in labor circles. After all, the recession took place as President Reagan prodded the Japanese to place voluntary limits on the number of vehicles they shipped to America.
This had the effect of RAISING the price of Japanese vehicles and creating an incentive for them to locate more factories in the United States to meet consumer demand. Eventually, the competitiveness of Toyota, Honda and Nissan were so great and their presence in America so overwhelming that the export restraints lapsed -- without much of a whimper from the Clinton administration.
Also consider that America is pursuing now pursuing the kinds of government involvement associated with "industrial policy." The government is intimately involved in the workings of two automakers, GM and Chrysler. It is increasing regulation of the kinds of vehicles it wants on the road. It is trying to pick winners and losers with loads of alternative energy subsidies. The dollar has become incredibly weak, which may help U.S. exports a little but is causing nervousness among investors, including the Chinese, other Asian countries and the Europeans.
What killed Detroit is competition -- from other automakers, from surrounding suburbs, from other cities and from other nations. What exactly the government should have subsidized 20 years ago is left to the memory banks of those who were intimately involved in the industrial policy battles of the 1980s.
