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Posted 11/2/08 (By Travis)
Detroit Michigan seen from Nevada
I just returned from a month in Detroit Michigan. Apologies that I was unable to keep this site operational from there. I was there exploring various residency programs, very excellent programs actually.
However, while there, I was struck by a number of observations, observations made possible by being an acute political observer :), and coming from the state (Nevada) which has been the fastest growing states in the United States for the past 10 years, over taken just this year by Arizona. Nevada grew by 3.5% last year. Michigan, on the other hand, has been hemorrhaging people, Detroit in particular has lost half of it's population in the past 30 years. It is said that 80% of people in Michigan were born in Michigan, and although my sampling might be skewed, I thought I saw fewer young people than normal in my traveling around the city and state.
In Detroit, I was stuck by a sight I will never forget, huge 20 story building stretching for blocks, with every window broken. Gazing around a stoplight surrounded by abandon buildings, with broken windows, covered in graffiti.
What is the difference between Michigan and Nevada? Why do people flock to one state and abandon another? The answers, from my perspective, are entirely political and apparent from my time spent in the state.
The first thing I noticed was that there are no Wal-Marts in Detroit. The second thing I noticed, and I am not the first one to notice such things, was that there were not many chains of any kind in Detroit. Here in Nevada you can find any national chain on every other street corner, Wal-Mart, Target, Office Max, Office Depot, Staples, and every sort of restaurant chain, all locked in intense competition. Detroit, at least the parts not abandon, do have a bunch of local stores, for example, Meijers, is a food retailer based in Michigan, and numerous other 'mom and pop' stories sprinkled the city.
Do the people of Michigan prefer these local stores to the national chains? Is there simply not a market for these chains in Detroit? Or, has the government of Detroit and the state of Michigan prevented the market from working, employing protectionist policies, to protect local industry? Surely the latter is the case, resulting in higher prices, sub par services, in effect, another 'tax' on the already over taxed people of Michigan.
Speaking of taxes, let us compare NV and MI taxes:
Nevada has no state income tax, Michigan's is a flat 4.35%
Nevada no corporate tax. Michigan 4.95 corporate tax
Nevada sales tax 6.5%. Michigan 6%
We can also be assured that Michigan has higher taxes in other areas, franchise, exercise, inheritance, gift, and less favorable property taxes as well as numerous fees and more onerous regulations.
What does the government of Michigan do with all their extra loot? Well, I can tell you I have never heard so many 'public announcements' on both TV and radio as I have heard in Michigan. A plethora of public agencies were constantly advertising themselves and offering 'job training', 'obesity awareness' and other 'public safety messages'.
They also surely spend it on welfare, as evidenced by the extensive public housing projects and 'ghettos' of Detroit. In other words, they create poverty, preventing people from escaping poverty. Thus, Detroit has one of the largest inequality gaps, with large divides between the haves and havenots. This phenomena holds true in other large liberal cities, such as Chicago, New York, Philadelphia, cities which are also hemorrhaging people.
This extra tax money is also spent on healthcare, through public entities such as University of Michigan, Michigan State, and the Michigan Department of Community Health, and others. Although private hospitals exist in Michigan, from what I saw, state healthcare centers and publicly owned hospitals dominated. For example, in the city of Wyandotte, the largest employer is Henry Ford Wyandotte Hospital, a public hospital. In contrast in Nevada all the hospitals are private with the exception of UMC, which is operated by the county.
The teachers Unions were also on strike while I was in Detroit, reflective of the strong unions presence and sorry state of Detroit education. In fact, readers may recall this previously posted story:
the Unions Killed a Dream
10/26/03 Time magazine
Speaking of unions, I found it common to hear Michigan's economic woes dismissed as 'trouble in the auto industry', as if there had not been trouble in the auto industry, Detroit would not be hemorrhaging citizens and suffering some of the highest unemployment in the nation. Firstly, I think that if liberating economic policies had been in place the state would be growing in other areas, offsetting the trouble US automakers have had. Secondly, liberating economic policies would surely help the US automakers, for example, limiting their corporate taxes and those of their supplies. Finally, as previously documented on this site, the powerful unions in Michigan are primarily to blame for the automakers declines; in effect they killed the goose that laid the golden egg.
The last question is the toughest. Are the people of Michigan getting their just desserts? After all, they have elected people who pursue the same policies so harmful to the state. For example, the people of Detroit have repeatedly elected disgraced Mayor Kwame Kilpatrick. Obama stickers and yard signs were prominent throughout the city. Indeed, surely the people of Michigan do deserve some blame, and sadly, many of those who think differently have left for greener pastures.
But what was done can be undone, and Michigan can still save itself and return to its former glory. So too, other states can learn lessons from Detroit's mistakes and even more importantly, we can avoid these same pitfalls as a nation at the national level.
Health Care and Detroit: Killed By Government
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