Detroit is often heralded by small government proponents as a perfect example of an over-involved government pushing themselves into the culture of a successful city and creating a state of dependence which eventually collapses in on itself. In other words, a great example of why big government fails.

But this is really only a partial explanation of the issue.

The real issue in America and the problem that is bankrupting cities just as much as the U.S. treasury, is the problem of cronyism.  This, above all other factors, is the legacy of Detroit.  A city government and a few billion dollar international car companies had been lining each others pockets for decades while the rest of the world’s automakers advanced past them.  When the check finally came due for such a long stint of scratching each other’s backs, the city government and the companies they worked with were both out of money and the federal government stepped in to pick up the tab.  If you believed the 2012 elections, the plan worked and the city and companies had both been rescued by a “moderately” sized loan as well as a special bankruptcy for the companies.  As President Obama said that year, “We refused to let Detroit go bankrupt.”

Well as we all know, Detroit did eventually go bankrupt anyway and by the end of 2013, the picture that had been painted in the press and by those in power was far bleaker than anyone had realized.  A city that once had over 2 million residents now supported less than 700,000, and with the decreased tax base, city services began to fail. City functions as simple as street lights required loans from the  government just to turn them on with half burned out by last year.

Crime is so out of control in Detroit that the police department basically told residents to fend for themselves.  Luckily Detroit’s police chief seems to realize that an armed public could actually do some good as he is on record noting that more legal guns would make for a safer city.

The death rate for children under the age of 18 is higher in Detroit than in any other comparable city.  Homicide is only the second greatest cause of this with infant death being the primary culprit.

And that’s only if they make it out of the womb in a city where 31 percent of pregnancies result in abortion putting Detroit on level with Vietnam, the Russian Federation and Ukraine.

With staggering crime, a collapsing infrastructure and a continual hand outstretched for more bailout money and assistance, Detroit’s failure as a city and as a reflection of its innovative past will continue to be a catch-all for criticism of liberal government policies and welfare states.

But it’s important that the real story continues to be told.  While crime, racial conflicts,poverty & unsustainable entitlements continue to plague the city, these are merely the fallout of the cronyism that engulfed a city dependent on one industry to stay afloat.

Rather than allowing markets to work, the government intervened and lost billions in taxpayer money while doing nothing more than creating a nice paycheck for some rich executives and buying some times on jobs that we’re going to eventually lose anyway.

Cronyism is worse than socialism because it masks itself as capitalism.  It wears the veil of free markets by infusing cash into sectors without any real purpose, innovation or need.  It simply washes the area with temporary relief long enough for everyone to forget its a problem.  But when the cash dries up you’re left with a failed state.  And that is what Detroit has become.

Is there a solution? Absolutely.  And in the coming months I hope to share some of those solutions from people I believe have better ideas about what’s next.  But remember, this is not leftism unchecked.  This is not simply big government run amok.  This is the culmination of the unholy union between big business and big government.  Until we understand and accept this, history will be doomed to repeat itself.

Written as part of my Blogger Fellowship with the Franklin Center

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