We The People

A Different Point of View: Why is Detroit Bankrupt?

Submitted by AMAC Member Dale R. Kollman –

I am a former graduate of Pontiac Senior High School. The 1946 UAW strike forced the loss of any funds that I and my parents had saved to fund my college education. (I was working at the Backenstose Book Store for ten dollars a week.) I had no scholarship, thus I applied for a job on my first day in Ann Arbor. I bused tables, washed dishes, became an orderly, and was one of the original five inhalation therapists at the University Hospital. But after ten years I received my physicians degree. I took a general practice residency and then began practicing. I saw hundreds of black patients, thousands of welfare patients, and many others. At least three of my former patients became presidents of the United States, others had held the position of governor of states from Alaska to Florida and Maine to Hawaii. I have been retired about ten years.

To better understand the conditions of today, one must realize that there are only three basic productive industries. These are agriculture, mining or drilling, and manufacturing. All of the other industries such as transportation. selling and buying, health and medicine, and especially government jobs (or “public parasites”) are more or less dependent or saprophytic upon the basic three industries.

The problem arises when you realize that mining and agriculture are fixed in location and cannot migrate. That is not true of manufacturing, as a business, or your manufacturing jobs, can migrate and will do so.

I am a retired physician who had an economist for a patient over fifty years ago. That economist did a study of manufacturing in the United States. He found that if a manufacturer’s expense for a needed item exceeded 2% of the world average, the manufacturer would reduce the number of employees by 6% (or triple the percentage).

The taxes on business averages about 15% world wide. In the United States it exceeds 46%.

When that difference in percentage is tripled, the percentage exceeds 93%!!! This means that the federal government alone is responsible for over 93% of the manufacturing jobs being shipped out of the United States, — to China, India, Japan, Korea, etc.

By the way, that economist was not a conservative Republican, his name was Paul Douglas, a liberal Democratic Senator from Illinois. He was trying to point out to the Democratic leader Lyndon Baines Johnson, and his ’Great Society’, the danger of the program of buying votes by telling the people, “You do not have to pay taxes, as we can tax businesses and industries!” We are now reaping the unpleasant results of this policy.

The problem is that Industry (and the jobs) can migrate!

The United Automobile Workers pushing the average wage to triple the world average in the post-war years only aggravated the problem.

Now all of our large manufacturing cities are going bankrupt. Such as Detroit, where over 150,000 buildings have been abandoned.

By the way, I was born in Detroit, and I had worked on the motor assembly line at the Pontiac Motor Division, I saw the beginnings of this catastrophe in 1950, and got out of the area.


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