Is Thirsty Detroit An American Prophecy?

The Wiley E. Coyote Moment ...

The Wiley E. Coyote Moment …

Detroit was the nation’s third largest, calling itself the “motor city” after its primary economic activity: The world-leading U.S. auto industry. But now, GM makes more cars in China, Chrysler is a department of Fiat and world leaders lie Toyota and Honda make their U.S. cars elsewhere, where unions are absent or less expensive. Detroit continues to shrink; it had become the 11th largest city a few years ago. And as the city’s management could not adapt to the decline, the city is in bankruptcy. However, similarly to General Motors’ bankruptcy, the heavy involvement of unions in Detroit has prevented a normal procedure; the politicians intervene to protect union interests. However, the city is broke and no politician can alter that, though pressure on the Feds to pour in magic money from the Federal Reserve’s ever-full purse persists.

The rotting rubber is hitting the potholed road with the city’s water utility. Many thousands of the city residents are no longer paying water bills. But to deliver water, the utility must pay its operating expenses: What to do? The embattled utility has finally done what every other such in the U.S. has always done: It announced that it would be shutting off the water to non-paying customers. The local reaction made the mobs protesting the Israelis in Gaza look tame. The residents organized to fight the action.  The NAACP Legal Defense Fund howled that the shut off was discriminatory. Under fire, the water utility announced a 15 day suspension of the action. And a thoughtful columnist, looking ahead to coming water shortages elsewhere, wondered whether this is the first battle in a coming Water War .

Maybe it’s more like the first battle in the coming financial implosion of the U.S. government, and Detroit is standing in for where the entire country is headed if we can’t find some adult politicians to straighten things out. Detroit couldn’t manage that. Somehow, the good citizens there feel entitled to water without paying for it. Where did that come from? Americans seem to feel entitled to health care without paying for it and an increasing list of other things as well. But Detroit’s water can’t flow without money from somewhere as neither can Federal benefits. The 15 day grace in Detroit started on July 21st; it’s half over. We don’t know how long the grace period will run for the American citizens in general, but we believe that it’s running. Watch Detroit for the coming water reality and watch the U.S. stock market for its Wiley E. Coyote moment …

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About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much)
This entry was posted in Deficits, Federal Reserve, Fiscal/Financial Responsibility and tagged , , . Bookmark the permalink.

2 Responses to Is Thirsty Detroit An American Prophecy?

  1. It’s such a powder keg out there. The water protests in Detroit really did seem like a prophetic event telling us of the coming water wars. Everyday I wake up, I’m surprised by the fact that we haven’t yet plunged off the cliff and descended into chaos. I don’t wonder about what’s caused it all, I wonder about what holds us together.

    • Jack Curtis says:

      “There’s a lot of ruin in a country” maybe describes us; a sort of political momentum. And when it goes down, the same momentum seems likely to apply to the implosion …

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