Obama Takes Romney’s Advice on Detroit

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Power Play 7/19/2013

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“We refused to throw in the towel and do nothing. We refused to let Detroit go bankrupt. We bet on American workers and American ingenuity, and three years later, that bet is paying off in a big way.”

-- President Obama in his weekly address, Oct. 13, 2012.

Just before Detroit became the largest municipality to ever file bankruptcy, the failed city’s emergency manager, Kevin Orr, pleaded with top White House officials, including senior adviser Valerie Jarrett, for help.

But no help was coming.

That detail in the Wall Street Journal’s coverage of how the once-great city, now $11 billion in debt, finally succumbed may be the most telling of any in the slew of obituaries for Detroit.

For all of the invective launched by President Obama and his campaign against challenger Mitt Romney last year for having argued for structured bankruptcy for the city’s Big Three automakers, in the end, the most liberal, most pro-union president since LBJ opted to take Romney’s advice when it came to the city itself.

Detroit has been teetering on the brink for years. Its huge debt is mostly from unfunded employee benefit programs, constituting some $9 billion of the total. Those pensions and bennies were negotiated in fatter days for government worker unions there, but the contracts stayed in place long after the collapse of the Big Three’s superpower status made such self-dealing for government workers and the Democrats they patronized unsustainable.

Having seen the flight of taxpayers accelerate as the economy worsened and city services and safety declined, there’s no reason to believe that Detroit will ever be able to pay anything but pennies on the dollar to those who have bought its bonds and only slightly more to those unionized retirees.

A place where nearly half of the streetlights don’t work anymore, the violent crime rate is higher than any other major city and the average police response time is one hour doesn’t attract new residents. It either loses them more quickly or more slowly, a critical mass of despicability having been achieved. In the 21st Century, the pace of the exodus has been blinding: the city has lost 26 percent of its population since 2000.

The only thing that the producers of RoboCop seem to have missed was that there wouldn’t be enough money to buy murderous, law-enforcement robots. Much of Detroit is simply falling apart and being reclaimed by the natural world. The Motor City is becoming the domain of raccoons and coyotes, not an evil international mega corporation.

David Byrne may have said it best: “This used to be real estate. Now it's only fields and trees.”

So it hardly would have made sense for Obama to have put together a loan package for the city. Delaying the inevitable for a place that keeps finding new kinds of rock bottom would have not only been illogical but also politically impractical for a president who is already under fire for his stance in federal fiscal fights: borrow more now to expand government outlays as an investment in the future.

In Detroit, 40 years of such investments have brought sorrow as their only return. Certainly Obama, who is promising a smarter, more efficient federal government, would not like to be seen standing with a city that has become synonymous with the excesses of government worker unions, Democratic machine politics and corruption.

Obama would no more deliver a loan package to Detroit than he would announce a new green energy stimulus program at the remains of the Solyndra world headquarters. Bad optics.

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But, it’s still an instructive moment for organized labor in America.

Union members are happy to see that not only have Republicans in the Senate agreed to confirm two union labor lawyers to the National Labor Relations Board and a crusading liberal in Thomas Perez as Labor secretary.

Obama’s dismissing of Detroit’s last-minute pleas, though, shows where Big Labor really stands in Obama’s remade Democratic coalition. While the president is engaging young singles in the cities with promises of free contraceptives, liberal social policies and global warming curbs, the old unions who made the Democratic Party great are left to crumble like Detroit’s streets and sidewalks.

We saw in a letter to Democratic leaders this week evidence of the broadening realization among unions that Obama’s 2010 health law is a disaster for them: Fewer members, less money and less clout in addition to difficult regulations for their own existing health plans.

In an interview with the Washington Post, Thea Lee, an economist and deputy chief of staff for the AFL-CIO, described the president’s economic policies as “schizophrenic.” She bashed Republicans for “glorying” in the perennially weak economy as evidence of Obama’s failures, but also lamented the president’s doublespeak on fiscal issues.

They wanted the 2008 version of Obama who would crusade for domestic spending, not the guy trying to sound like a fiscal moderate in face of Republican attacks on his deficit spending and mounting debts.

"It's a pathetic recovery," Lee told the Post. "It really is extraordinary that four years ago we declared the recession over, but we're not even within spitting distance of full employment."

One doubts that the Obama of 2008 would have brushed off Detroit’s bailout pleas, certainly not when he was looking for union endorsements. Nor would their worries about his health law have gone unanswered. But when the elections are all over, Obama’s not looking for the union label anymore.

Unions are facing the same fate as the city they made and the president can’t do much about it. What is galling for them, though, is that he doesn’t even seem willing to fight for them in public.

United Auto Workers plants were key backdrops for Obama’s re-election campaign, with the president endlessly touting his industry bailout and support for union workers. But when the chips were down for their city, their calls went unanswered.

While Vice President Joe Biden’s slogan, “Usama bin Laden is dead and General Motors is alive,” remains true, the second part of that seems to be doing a lot more for Shanghai, where GM broke ground on another new plant last month, than it is for a bankrupt Detroit.

And Now, A Word From Charles

“The United States, which dominated the world economically, created all of these programs – entitlements: Social Security, Medicare, and now added on Obamacare – living on the glories of the past when we were the most dominant without any rivals of the world, and now having to adapt to a reduced economy, are we going to be able to have commensurate cuts.  And when you see all of the resistance to anything of that sort by especially Democrats and liberals, it doesn't give one a lot of hope.  In the end, you can have a bankruptcy for a city, but not for a country.”

-- Charles Krauthammer on “Special Report with Bret Baier.”

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET  at  http:live.foxnews.com.