Gary’s Note:
Socialism breeds failure and misery. So went Detroit and so will
go the nation, warns Porter Stansberry.
|
Detroit’s Socialist Nightmare Is
America’s Future |
By Porter Stansberry
November 2, 2009
Baltimore, Maryland, U.S.A.
One
of the most important things to remember about socialism — or
coercion of any kind — is it fails eventually because human
beings have an innate desire for liberty and a strong need for
personal property rights. In fact, the origins of government lie
in the need of agricultural communities to protect themselves
from violence and theft. So it is particularly ironic that in
more recent times, it is government itself that has more
frequently played the role of bandit. When you start taxing
people at extreme rates to pay for socialist “benefits,” when
you start telling them which schools their children must attend,
when you start giving jobs away to people based on race instead
of ability... you quash human freedom, which bogs down
productivity... and if continued for long enough, leads to
social collapse.
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I
find it perplexing that only 20 years after the collapse of the
Berlin Wall, the West continues to implement laws that mimic all
of the failed policies of our former “communist” foes. In fact,
our current president won the election by promising to “spread
the wealth around.” But... truth be told... we don’t have to
look to Eastern Europe or the Soviet Union to find a society
destroyed by coercion, socialism, and the overreaching power of
the State. We could just look at Detroit...
In
1961, the last Republican mayor of Detroit lost his re-election
bid to a young, intelligent Democrat, with the overwhelming
support of newly organized black voters. His name was Jerome
Cavanagh. The incumbent was widely considered to be corrupt (and
later served 10 years in prison for tax evasion). Cavanagh, a
white man, pandered to poor underclass black voters. He marched
with Martin Luther King down the streets of Detroit in 1963. (Of
course, marching with King was the right thing to do... It’s
just Cavanagh’s motives were political not moral.) He instated
aggressive affirmative action policies at City Hall. And most
critically, he greatly expanded the role of the government in
Detroit, taking advantage of President Lyndon Johnson’s “Model
Cities Program” — the first great experiment in centralized
urban planning.
Mayor Cavanagh was the only elected official to serve on
Johnson’s task force. And Detroit received widespread acclaim
for its leadership in the program, which attempted to turn a
nine-square-mile section of the city (with 134,000 inhabitants)
into a “model city.” More than $400 million was spent trying to
turn inner cities into shining new monuments to government
planning. In short, the feds and Democratic city mayors were
soon telling people where to live, what to build, and what
businesses to open or close. In return, the people received
cash, training, education, and health care.
The
Model Cities program was a disaster for Detroit. But it did
accomplish its real goal: The creation of a state-supported,
Democratic political power base. The program also resulted in
much higher taxes — which were easy to pitch to poor voters who
didn’t have to pay them. Cavanagh pushed a new income tax
through the state legislature and a “commuter tax” on city
workers.
Unfortunately, as with all socialist programs, lots of folks
simply don’t like being told what to do. Lots of folks don’t
like being plundered by the government. They don’t like losing
their jobs because of their race.
In
Detroit, they didn’t like paying new, large taxes to fund a
largely black and Democratic political hegemony. And so, in
1966, more than 22,000 middle- and upper-class residents moved
out of the city.
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But
what about the poor? As my friend Doug Casey likes to say, in
the War on Poverty, the poor lost the most. In July 1967, police
attempted to break up a late-night party in the middle of the
new “Model City.” The scene turned into the worst race riot of
the 1960s. The violence killed more than 40 people and left more
than 5,000 people homeless. One of the first stores to be looted
was the black-owned pharmacy. The largest black-owned clothing
store in the city was also burned to the ground. Cavanagh did
nothing to stop the riots, fearing a large police presence would
make matters worse. Five days later, Johnson sent in two
divisions of paratroopers to put down the insurrection. Over the
next 18 months, an additional 140,000 upper- and middle-class
residents — almost all of them white — left the city.
And
so, you might rightfully ask... after five years of centralized
planning, higher taxes, and a fleeing population, what did the
government decide to do with its grand experiment, its “Model
City”? You’ll never guess....
Seeing it had accomplished nothing but failure, the government
endeavored to do still more. The Model City program was expanded
and enlarged by 1974’s Community Development Block Grant
Program. Here again, politicians would decide which groups (and
even individuals) would receive state funds for various
“renewal” schemes. Later, Big Business was brought into the
fold. In exchange for various concessions, the Big Three
automakers “gave” $488 million to the city for use in still more
redevelopment schemes in the mid-1990s.
What
happened? Even with all of their power and all of the money,
centralized planners couldn’t succeed with any of their plans.
Nearly all of the upper and middle class left Detroit. The poor
fled, too. The Model City area lost 63% of its population and
45% of its housing units from the inception of the program
through 1990.
Even
today, the crisis continues. At a recent auction of nearly 9,000
seized homes and lots, less than one-fifth of the available
properties sold, even with bidding starting at $500. You
literally can’t give away most of the “Model City” areas today.
The properties put up for sale last week represented an area the
size of New York’s Central Park. Total vacant land in Detroit
now occupies an area the size of Boston — Detroit properties in
foreclosure have more than tripled since 2007.
Every single mayor of Detroit since 1961 has been a Democrat.
Every single mayor of Detroit since 1974 has been black. Detroit
has been a major recipient of every major social program since
the early 1960s and has received hundreds of billions of dollars
in government grants, loans, and programs. We now have a black,
Democrat president, who is promising to do to America as a whole
what his political mentors have done to Detroit.
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Those of you with a Democratic political affiliation may think
what I’ve written above is biased or false. You may think what
you like. But there is no way to argue that what the government
has done to Detroit is anything but a horrendous crime. You may
think what I’ve written above is merely a political analysis.
Perhaps so, but politicians drive macroeconomic policy. And
macroeconomic policy determines key financial metrics, like the
trade-weighted value of a currency and key interest rates.
The
likelihood America will become a giant Detroit is growing —
rapidly. Politicians now control the banking sector, most of the
manufacturing sector (including autos), a large amount of media,
and are threatening to take over health care and the production
of electricity (via cap and trade rules). These are the biggest
threats to wealth in the history of our country. And these
threats are causing the world’s most accomplished and wealthy
investors to actively short sell the United States — something
that is unprecedented in my experience.
Regards,
Porter Stansberry
 |
A
big thanks to Porter for the article. I was very eager to run
it, Shooters…and I’d ask you to read more from Porter.
Just take a look here.
I
hope your Halloween was safe and enjoyable, good bar patrons.
Your editor used the occasion to warm his house a bit with
something distantly resembling a party.
A
handful of costumed workmates stopped by at the Whiskey
Bunker on Saturday night. There was music, hooch, pizza…and one
slightly soused Whiskey editor playing the piano and
looking fetching in a red cape and blue tights…
The
day started so well, Shooters! And it ended pretty darned good
too. That morning I wrapped up a six-week training cycle with a
20-lb increase on my squat. Then it was off to the home of
Roving Whiskey Reporter Samantha Buker who cooked a
delicious meal for our super secret Whiskey project
meeting (I washed the dishes).
Miss
Buker also gets high praise for going above and beyond her
obligations to the Bar. In preparation for the Halloween
get-together she came over to the Whiskey Bunker early
and cleaned and organized the kitchen! “This mess has been
bothering me for months…since the last time I pet-sat for you,”
she explained as she set things right.
Samantha returned later dressed as an Amazon, bow in hand.
Recent addition to the research writing staff Colm O’Dwyer
arrived next, bedecked in bloody O.R. scrubs. A little later on,
Whiskey intern Matt “Bookins” Christianson showed up
and proved just how easily he could pass for Rod Stewart.
At
some point in the night, our merry band made its way through the
streets to procure a few pizza pies. We were a regular Yellow
Brick Road foursome! If only Samantha had had a small animal
with her…and perhaps if I’d been a tin man instead of the man of
steel…
Colm
paid for the pies…and for a bottle of Maker’s Mark! My esteem
for him grew. Lifetime Income Report editor and
Whiskey contributor Jim Nelson eventually came a-knockin’,
too…though without a costume…
**********
The
preceding Friday night wasn’t quite so much fun, however…Intern
“Bookins” was snatched away from our usual motley crew at the
last minute for an after-hours team-building excursion with
another department.
I
later attended a small concert with Jim Nelson and Whiskey &
Gunpowder founder Greg Grillot and others, but we got
separated in the crowd before the show even started. The night
was seeming too long and lonely at that point, Shooters, so I
simply left.
As
luck would have it there was a bright, shiny McDonald’s directly
across the street! I left the concert venue chock full of white
people and dashed across North Avenue to enter a fast food chain
that was predictably full of black people…and for less than $4 I
had my fill of cow flesh and comfort.
In
the U.S. McDonald’s is a fairly important part of black life…and
some people see that as a little predatory on McDonald’s part…
But
as of this morning, there is an entire nation of very white
people who wished to God that they could have just one more meal
from McDonald’s…
All
three McDonald’s restaurants in Iceland will soon be closing
forever. So Icelanders are lining up outside the door, down the
block and around the corner for one last chance to get that
McDonald’s smell.
The
materiel to assemble the food on the McMenu must all be flown in
from outside the country. Now that the krona has collapsed after
the failure of Iceland’s three biggest banks, exports have
become outrageously expensive...too expensive for the franchises
to survive.
So
take heart, good patrons! When our dollar loses over 80% of its
value we may at least still have McDonald’s.
That’s your Whiskey staff for you; always looking for
the silver lining…
We
do sort of like big, dark clouds too, however. Silver linings
would mean so much less without them! So in case you missed it
the first time,
be sure to click here to get a firsthand account of life after a
currency collapse. And weep for Argentina.
**********
I’m happy to report that all Agora Financial revelers made it
home okay…and that no one was harmed in the making of our merry.
Regards,
Gary Gibson
Managing Editor, Whiskey & Gunpowder
gary@whiskeyandgunpowder.com
