Are we driving down the same dead-end road as Detroit?

Filed under: Hazlehurst |

Detroit: fading and moribund, plagued by crime, with a decaying central city, a public school system in crisis, a disgraced mayor, plummeting property values and chronically high unemployment.
Colorado Springs: vibrant and growing, located in a setting of unparalleled beauty, with good schools, abundant employment opportunities, low taxes, honest government and business-friendly policies.
We don’t have much in common, do we?
Well, we do share one defining characteristic with Detroit — overwhelming dependency upon a single industry.
Detroit’s the Motor City. We’re the Military City.
Our economy is massively dependent upon military spending. Without it, and particularly without Fort Carson, we might find ourselves in the same kind of economic doldrums that have plagued Detroit for decades.
Is that likely?
Conventional wisdom says that it isn’t.
We’re in the midst of two armed conflicts in the Middle East and currently engaged in an angry stare-down with Russia. Sens. John McCain and Barack Obama appear to support a robust and assertive American military presence around the world, so present policies seem unlikely to change.
But presidents, however bold, are constrained by economic and political realities.
Our national economy, which has long led the world in innovation, in education, in responding to change and in the creation of wealth, is troubled. We can recover from the punctured housing bubble, from mortgage lending woes and from the Fannie Mae/Freddie Mac debacle, just as we recovered from the savings and loan crisis two decades ago.
But recovery will come at a price.
This week, Curtis Carlson, the CEO of SRI International, pointed out that in today’s competitive world, “Many information industries require that products be improved by 100 percent every 12 to 36 months, just for the company to stay in business.”
It wasn’t so long ago that smart, talented people from almost every nation automatically sought to come to America. The Soviet Union, China and most of Eastern Europe were governed by fossilized, repressive autocracies. India was stifled by a sluggish, business-unfriendly bureaucracy and Dubai was a sleepy fishing village.
Nowadays, budding entrepreneurs stay put.
If you want to make a billion or two, the United States is no longer the preferred destination. The rest of the world has learned that the combination of capitalism, education and effective, business-friendly government creates prosperity.
But have we forgotten our own lesson?
American students lag their peers worldwide — except, possibly, in text messaging. Absent rigorous standards, longer hours in the classroom, competent teachers who are themselves well-educated, supportive families and fierce ambition, they’ll continue to do so. Government’s role is important, but limited to providing the tools that enable kids to succeed.
If families, and the kids themselves, are unwilling or unable to abandon dysfunctional beliefs and behaviors, the country will suffer.
And is our government, which should provide a stable, reasonably regulated and predictable environment for entrepreneurs, capable of doing so?
The explosive growth and collapse of both the Internet and housing bubbles under successive administrations does not give reason for optimism, any more than does the long drawn-out, expensive and poorly managed conflict in Iraq.
Worse still, pay attention to the economic talking points of both presidential candidates. They have expansive plans for health care, for deeper tax cuts, for ramping up the war in Afghanistan … and no way to pay for them.
As a country, we’ve got a lot of bills coming due.
As the Dems are fond of pointing out, we borrow money from the Chinese to buy oil from the Saudis. And just in the last weeks, the government promised $1 billion to Georgia and committed $100 billion to rescue Freddie and Fannie (not to mention practically guaranteeing many trillions in mortgage debt).
If the next president is serious about addressing America’s structural problems, he’ll have two choices.
He can raise taxes, and/or drastically cut programs such as Medicare, Medicaid and Social Security. Or he can quietly scale back America’s worldwide commitments, and drastically reduce the size of the military. Of course, he can continue to hit up our international payday lenders and hope for the best — but even payday lenders eventually say no.
As Dave Hughes, our city’s first Internet entrepreneur, recently wrote: “Why are we so sure there always will be 20,000 to 30,000 military jobs here, with all the civilian and contract work force accompanying? What will we do if we enter a sustained period of ‘peace’ after Iraq and Afghanistan? We are not going to have a ground war with China, or Russia …”
Detroit’s business and political community never anticipated, never planned for and never believed that their leading industry would tank.
Do we have a plan? Or are we as sleepy and confident as the Detroit of generations past, secure in the knowledge that it can’t happen here?
John Hazlehurst can be reached at John.Hazlehurst@csbj.com or 227-5861.