I was sitting near Mario Loyola of the Texas Public Policy Foundation as the senator spoke, so I caught Loyola’s surprised expression when the senator quoted him. We should reflect, the senator suggested, on an article Loyola wrote for National Review in 2011. It’s a tale of two cities, Houston and Detroit — symbols of two radically different governing philosophies.
Both cities were once dominated by one industry — autos in Detroit, oil in Houston. Both grew robustly during the Second World War, but the cities responded very differently to setbacks in the years that followed. Detroit and Michigan attempted to favor and coddle their big industry and the big unions associated with it. Houston went for competition.
Both cities (and most of the country) had histories of racial strife. Detroit unfortunately elected a leader in 1973, Mayor Coleman Young, who stoked racial animosity rather than attempting to unify the city. This accelerated the white flight (and capital flight) that had begun after the 1967 riots.
When the auto industry faced global competition starting in the 1970s, Michigan and big auto sought protection from Japanese imports. President Reagan extracted “voluntary” quotas from Japanese car makers. The big three were thus shielded from the consequences of their own bad labor and management decisions. This permitted them to stagnate. They failed to adjust to market pressures and have continued to collect government bailouts to the present.
Michigan and Detroit used “targeted” tax credits and other incentives to lure jobs to their region — more than $3.3 billion over 15 years. The government has often intervened to help favored industries — condemning, for example, 1,300 houses, 140 businesses, 6 churches, and a hospital to make way for a General Motors plant in the early 1980s. City and state taxes are high, and strikes have damaged the school system.
Between 1900 and 1930, Detroit was the fastest growing city in the world. Today, many of its buildings are abandoned. The illegitimacy rate is 80 percent. Half the city’s population is functionally illiterate. During the recent recession, the unemployment rate reached 30 percent. Detroit is one of the most dangerous cities in America.
Houston roared to life as the oil capital of America. But because oil was extracted by hundreds of independent operators, the industry never consolidated as the auto industry had. Producers competed with one another and with the world, rather than colluding to get protection and special breaks from the state.
Houston fell on hard times in the mid-1980s, when oil prices suddenly declined. Rather than intervene to protect the ailing industry, the government did nothing. Layoffs were massive and painful. Unemployment shot up to 9.3 percent. But within a couple of years, employment snapped back. Whereas before the shock, oil had represented 80 percent of Houston’s economy, it dropped to 50 percent after. Left to its own devices, the economy diversified, expanding to include computer makers, airlines, retailers, utilities, food and grocery companies, and medical centers. They were lured not by special tax incentives or breaks from the government but by a low-tax environment, cost-conscious environmental regulation, right-to-work laws, and tort reform.
During the first Obama term, fully half of all the jobs created in America were created in Texas.
I’ve always said that the only way to settle a political argument is to see what happens when each side has the chance to implement their agenda. In my book Choosing the Red Pill, I show how the policies of the left lead to unsustainability and bankruptcy while the policies of the right lead to prosperity. Take a look at some of the bastions of the “Blue” model and see the carnage and destruction that leftism has wrought:
I find it deliciously ironic that Barack Obama came from this dysfunctional political system and somehow thinks that if he applies the lessons he learned there that it will have a better result than the sad sack failure that is his home state of Illinois. Lest you think that Illinois is the only example of the failure of the leftist utopia, take a gander over at California:
It is this kind of cognitive dissonance on a massive scale that infects the left these days. No amount of facts, history or real world examples can convince them that the gulf between their dreams and reality is too far to bridge. Think on this for a moment if you will. For the entire 2012 campaign, Barack Obama assured America that if only we raised taxes on the wealthy, we could solve our deficit problem. Thus, first thing out of the gate the President was able to use to fiscal cliff standoff to sock it to the wealthy. Real world impact on the deficit? Less than zero:
Let’s face it, where leftist policy holds sway, unsustainable spending and fiscal irresponsibility threatens prosperity. And what about on the right? Well, in the zero income tax state of Texas, they actually have a surplus. What will the governor do with this new loot? What new spending programs does he propose? None actually:
Would that conservatives could get out this message and we might see the same turnaround on a national level.