Wednesday, November 26, 2008

American Free Enterprise: RIP

It matters little what's taught in college anymore, free enterprise and capitalism haven't existed in the United States for years. Not in the sense that businesses are allowed to compete and survive in the market strictly on their own merits, creativity, and ability to compete for consumer dollars.

You don't need to be a professor or fellow at an ivy league university or institute to appreciate the demise of free enterprise. You can see the effects of government interference right in Ferndale.
City Council, at the behest of the DDA, spent valuable time June 23 considering then passing ordinances regulating the size, shape, and fees permitting a potential health risk to civilians: sandwich boards. You know, those little signs shops put on the sidewalk hoping to catch your eye with their lunch menu, specials, promotions and sales.

I'm unsure how Ferndale has survived this long without rigorous standards for sandwich boards. This must be the blight and rejuvenation the state legislature was thinking about when it wrote the laws authorizing DDAs to micro-manage.
Between this and other ordinances, millages, expanding the district to tax more business, eventually the DDA will transform Ferndale's character to be as unique and appealing as the inside of Oakland Mall.

Would the car sticking out of the second story at Wetmore's be allowed if the DDA had anything to do with it? I think not. I credit Steffie Loveless, publisher of Ferndale Friends, with the observation that the DDA is slowly removing everything that was once "authentic" Ferndale.

But back to the Big Three,
the bailouts requested from GM, Ford, Chrysler, and the UAW is a small part of the expense to government for interfering with the markets in the first place. In addition to CAFE standards, where the government tried to force manufacturers to build cars the public doesn't want to buy, there are numerous safety standards that perhaps the public ought to have voted for with their purchases rather than legislated.

Every large corporation is also a welfare agency of its own--employing people that if they weren't for fear of discrimination lawsuits would have been let-go a long time go. The same goes for minority suppliers--for fear of more government intervention and bad press from Jesse Jackson's Rainbow Coalition, the big three could have spent less time propping-up weak suppliers with preferential price and payment terms than with established suppliers.
As part of the bailout, the big three should hold a Survivor-like tribunal to vote some of its staff off the island--including management.

When I worked at Comerica there were people we all knew were unproductive by virtue of laziness or incompetence that wouldn't make it to the second episode.
The reality is such a thing isn't possible because public opinon wouldn't allow it. The only time such a move might be tolerated would be during bankruptcy--which might be one of the opportunities the big three may exploit--along with the elimination of suppliers that require too much hand-holding. The result would be a stronger staff and a stronger supply-chain.

Wonder if government interference influences the price of things or free enterprise? Ethanol is cheaper to produce from sugar cane than corn, but those quantities of sugar cane are more likely to come from Brazil than midwest corn farmers. So to make corn-based ethanol more attractive (and not just to congressmen and senators) the government subsidizes it.
And because the government doesn't think consumers are willing to pay for electronic cars at prices that reflect the cost to make them, they're offering a $7800 tax incentive to new owners.

I've already gone on record as believing embryonic stem cell (ESC) research shouldn't be illegal, but I strongly oppose any public funding for it. If ESC therapies are really as promising as its supporters claim it to be, then some entreprenurial capitalist should be funding their own development of the technology so they may profit from their patents, treatments, and medicines. Adult stem cell therapies have already proven successful without hype. Where ESC is all promise, hope, lobbying, grants, government funding and sympathetic advertisements, adult stem cells are helping people today.

One last example while I'm thinking about it. If Ferndale residents had to pay the whole cost of the totem pole at Woodward and Cambourne, would we have paid the $100,000 cost? No, but since government grants picked-up much of the cost not only did we get fragile monument for only $30,000 but we contributed to earmarks, pork, and wasteful government spending.

So, as citizens, if we think government intervention and social engineering is a good thing in commercial markets, that minimum wage should be set by law and not the market, that the government should manipulate credit-worthiness through Fredie and Fannie whether borrowers have a job or income, then we should applaud the bailouts and be anxious for more of them--because bailouts are the price we're willing to pay for feel-good public policy in commerce than free-enterprise.

Battered Detroiter Syndrome

Amber Arellano wrote an interesting piece in July 7's Detroit news likening Detroiters to wronged-women, who doesn't appreciate themselves enough to know they're with the wrong men and they deserve better.

Detroit is like a wronged woman who deserves a good man and gets nothing but deadbeat suitors, manipulating her, robbing her, taking advantage of her desperation.

Her betrayers are many: the despicable schemers at the Detroit Public Schools who have looted the district of millions of dollars for years, according to a new lawsuit.

Or take school district's leaders who, for years, failed to implement basic procedures to protect their students of the Tammany Hall-like corruption that infects the district. Their incompetence was revealed by a new report conducted by the Council of Big City Schools.

Or take Mayor Kwame Kilpatrick, who persuaded City Council members last week to approve the beginning of a deal that, if passed in its entirety, will cost the city more than $300 million, according to figures provided to the Detroit News.

These are just some of the headlines of the last two weeks. Almost daily, the litany of offenses grows.

I was immediately reminded of Battered Wife Syndrome.'s, What is battered woman's syndrome?, explains is like this:
It is also important to understand why battered women stay in abusive relationships. The Court in People v. Aris, 215 Cal App 3d 1194, 264 Cal Rptr 167, 178 (1989) stated that "battered women tend to stay in abusive relationships for a number of reasons." Among those reasons: women are still positively reinforced during the honeymoon phase; women tend to be the peacekeepers in relationships - the ones responsible for making the marriage work; adverse economic consequences; it is more dangerous to leave than to stay; prior threats by batterer to kill self, or children; or to abscond with children; lost self-esteem; and no psychological energy to leave - resulting in a learned helplessness or psychological paralysis.
I've taken the liberty of rewriting it to apply to Detroiters.

It is important to understand why battered Detroiters re-elect abusive politicians and tolerate public administrators. Battered Detroiters put up with it because they are told by their abusers that they're the heart of the metro area; the suburbs are the enemy; whites made them do it; what you may get next could be worse than what you have now, or if you vote for someone else I'll make life worse for you. All this results in political paralysis.

This past November's election swept many republicans from office, but Detroit's representation is mostly unchanged. America will celebrate the election of its first black president, but hasn't Detroit already proved the color of your leaders doesn't change the color of your prospects?