The Problem With Demanding Respect

Moral hazard asserts its ugly head -

Councilwoman JoAnn Watson is reiterating her call for a government bailout of Detroit, saying the city that built the middle class deserves as much help as Wall Street or General Motors.

Addressing the City Council today during Mayor Dave Bing's budget presentation, Watson gave a spirited pitch for federal funds to help the city whose population declined 25 percent since 2000 to 713,777.

"We are worth it. We are worth at least as much as General Motors or Chrysler or the Wall Street bankers," Watson said. "It was this city that built military vehicles for World War II. It was this city that (invented) the middle class and the five-day work week.

"We should not be in a position to be victims. We are victors. And we should demand respect."

The Real Effect

This is exactly why I have been harping as loud as I have for years now about consistency in property rights. This councilwoman demonstrates her absolute fiscal ignorance in dealing with her city's problems.

Actions have consequences. On the one hand, she is trying to claim the good consequences of the city's actions - "It was this city that (invented) the middle class and the five-day work week." while simultaneously rejecting the negative ones - ""We should not be in a position to be victims. We are victors."

Yes, you have a history as a city. But World War II was 2 generations ago and a lot has happened since then. Namely the consequences of government demanding that private entities behave as they see fit. This happened to the farmers in the USSR during the Bolshevik Revolution. Property owners were systemically removed and the property was given to "more deserving", less productive individuals. If the individuals failed to produce, they too were, removed. Ultimately, this resulted in a collapsed system some 70 plus years later as demand far outstripped supply.

Detroit is on the verge of this same lesson. The answer is not in bulldozing houses, raising taxes, or getting the rich. This is all variation on the common theme of seizing capital. Rather, prosperity lies in the other, less appealing vein. Give the houses away. Whoever wants one, free house. But make the property management the owners responsibility.  Sure, prices will start out low. Crime will be somewhat prevalent. But commerce will commence and as long as people are free to keep their gains, they will protect them and the city will eventually grow.

The councilwoman can demand all the respect she wants. But nobody owes her or that failed experiment called Detroit anything.