Baltimore Redux: Still Thanking the Government for the Ghetto

Want to save money? Sell your house. Move to Detroit. The median house in the Motor City sold for $7,500 in December. How about that, dear reader? You can buy a house for the same price as the Dow stocks. A little low on cash? Put it on your credit card.

Of course, then you’ve got to live in Detroit. The papers report that life in the city is so grim 1,000 people move out every month.

We’ve never been to Detroit. Out of curiosity, we offered to take Elizabeth for a romantic getaway to Detroit for her birthday. Our offer drew this reply:

“Are you out of your mind?”

Poor Detroit. No one goes to the city for a holiday. Not even students. As near as we can tell people only go there if they have to. And then, they get out as soon as they can.

We can imagine what it is like. We lived in the Baltimore ghetto for nearly 10 years. If you want to know what it is like, there’s a TV show that chronicles life there – The Wire.

Was it disagreeable living in the inner city? No, it would have to undergo major improvements to be disagreeable. It was Hell. Drug dealers on the street corners. Trash in the alleys. Everybody with a pistol in his pants and a chip on his shoulder.

Elizabeth was once on the phone with her brother.

“What’s that noise in the background?” he asked. “It sounds like popcorn popping.”

“Oh, that’s just someone shooting in the alley,” Elizabeth replied. “I think they’re trying to settle an argument.”

We’d been there too long. Elizabeth hadn’t even noticed the gunfire.

But it shows what government can do when it tries to fix a problem. In the case of Detroit and Baltimore, the government provided massive bailouts. Education standards collapsed…so the government provided money to the local education bureaucracy. Jobs disappeared (largely because people couldn’t read or write)…so the government provided massive bailouts in many different bureaucracies – training centers, welfare, food stamps. Pretty soon, the only industry left was the welfare bureaucracy.

We don’t know how it works now, but when we lived in the ghetto a girl’s best career path was promiscuity. She got more money with each child she had…provided, of course, that the father didn’t take responsibility for it. Then, the child grew up…took drugs and stole cars…until he got sent to prison. One problem led to another – but it could all be traced to the government’s giveaways. They had the same effect in Baltimore as they had in Burkina Faso. The political elite took the money and lined their pockets…the masses become more miserable than before. And the worse conditions got, the more money the cities received from federal bailout programs.

Baltimore is still in business. But from what we read, Detroit sounds like it has become a kind of Port-au-Prince with snowdrifts. The whole city sounds like a hellhole without the warm fires.

And now Obama is proposing to make things worse. More bailouts…more giveaways…more programs…more bureaucrats… Already, the ‘rich’ support whole sections of the population. Obama says he will raise taxes on ‘the rich,’ creating even more parasites. Of course, who cares if the rich have less money? They will still live in their leafy suburbs and send their children to private schools. But pity the poor parasites.

Neither Mr. Obama nor none of the candidates for Mayor of Detroit (the last mayor is doing time in a federal penitentiary) has asked for our advice. We will give it anyway. Want to save Detroit? Here’s how:

Abolish all welfare of all sorts…no unemployment insurance…no child tax credits…no welfare…no foods tamps…no nothing, except privately-sponsored charities. Close the public schools. Kick out all the bureaucrats and all federal and state employees. Abolish all rules concerning employment – no minimum wages, no overtime, discriminate all you want. Require all residents to say please and thank you…dress properly…and sneer at people who don’t seem to be gainfully employed or polite. Declare the city an Open City and Free Trade Zone. In exchange for cutting all federal aid programs, eliminate federal and state taxes for people living in the city. Allow unlimited immigration into the city…giving all immigrants a U.S. passport after 5 years of residency. Levy a flat 10% tax to pay for basic services. Eliminate elections…have the city controlled by a town council composed of 10 citizens chosen at random.

Within five years, Detroit would be the most dynamic city in the nation.

Bill Bonner

March 6, 2009

The Daily Reckoning