President Obama’s former head of the Auto Task Force, Steven Rattner, helped orchestrate the auto bailouts that saw billions of taxpayer dollars spent to save General Motors and Chrysler in a rigged bankruptcy proceeding favorable to political allies (i.e., the UAW). Rattner is now calling for taxpayers to come to the rescue of Detroit as the city struggles to restructure through a bankruptcy process without federal handouts.
Rattner penned an op-ed piece for the NY Times that trumpeted the success of the auto bailouts and called for similar action to save Detroit. Rattner likens the Detroit situation to Hurricane Sandy, and as such, deserving of taxpayer money. Perhaps Mr. Rattner should contribute his own money to help the noble folks of Detroit rather than continue to try and redistribute the wealth of others to those he deems worthy.
There were many contributing factors to the bankrupting of Detroit, all of which can be attributed to humans as opposed to an Act of God such as Hurricane Sandy. Many of the residents of Detroit themselves are not as blameless as Rattner would have us believe. The city suffers from the second worse murder rate for major cities in America with only New Orleans ranked lower. Race riots in 1967 led to an exodus of many white Detroit residents. Beyond the crime issue, half of Detroit’s residents do not pay their property taxes because they feel they are not getting the service they are entitled to.
City government has taken much of the blame for the demise of Detroit with former five term Detroit Mayor Coleman Young’s controversial legacy again being examined. Detroit’s government corruption peaked under Mayor Kwame Kilpatrick (reelected by Detroit’s voters in 2005 as the city’s “hip-hop mayor”) and further drained the city.
Rattner has pointed to the invention of the automobile as another contributor to Detroit’s woes. You see, if we never invented those pesky things, people would have had no transportation to leave the city to go to the suburbs! If Mr. Rattner had a sense of humor and we could mistake this for a joke, it would be understandable. But the guy seemed serious. Sorry Steve, but I think residents would have deserted even if they had to use horses and carts.
Of course, the auto industry played a part in Detroit’s downfall; just not in the way Mr. Rattner suggests. The major US automakers, particularly GM and Chrysler, were mismanaged for years, culminating with their bankruptcies in 2009. Detroit’s main economic base dwindled along with domestic manufacturers’ auto sales when foreign competition just plain built better cars. UAW workers lost their jobs partially as a result of their own high labor costs. The automakers moved much of their operations to the outskirts of the city or out of the country.
I just don’t get how Steve Rattner has become such a respected voice for free-market enterprise, something he has totally been at odds with. He is now a regular on a network known for its politically left-leaning views and has come up with some wild commentary there, as well. Just on Friday, during a morning segment on the historical Jesus, Rattner questioned whether Jesus was a terrorist. Again, I am not sure if this was an attempt at snarky elitist humor, but the comment is insulting and insensitive to many Christians.
Of course, I have a somewhat biased view towards Mr. Rattner. I was a member of the non-politically connected GM bondholder group which saw its rights subordinated to UAW interests during the auto bailout process that was orchestrated by the Obama Administration through Mr. Rattner. But I am also a member of a group called the American Taxpayers. And as such, I would urge Mr. Rattner to please stop being so eager to spend my money; particularly on a situation such as Detroit’s.
I’m sure that there are many innocent residents and retirees of Detroit, but the city is in the predicament it is because of crime, mismanagement, greed and corruption. Another federal bailout would just set another dangerous precedent. No Mr. Rattner, the Detroit debacle has no resemblance to Hurricane Sandy and is not worthy of another of your taxpayer rip-offs.
Mark Modica is an NLPC Associate Fellow.