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Let Detroit Go: The Failures of Political Leadership in an Evolving Global Economy

By Joseph Cari Jr.

The suggestion that the U.S. federal government should help Detroit with its current financial situation would be terrible policy. The plight of Detroit is an example worldwide of pure political leadership failure, of decisions made through the years that were reckless and not in the public interest. The political leadership of Detroit did not make the hard choices, capitulated to unions and other political forces, and  "kicked the can down the road." Finally, the can can't be kicked any further.

The auto bail out was fundamentally different. While the leadership of the auto industry within the U.S. made some terrible decisions, forces beyond their control took place. A global economy evolved, a dependence on overseas oil and foreign governments giving their auto industries tax breaks, and subsidies that rendered the american auto industry less competitive globally. Every nation needs to hold their governments accountable, from the local level to the national level. Accountability needs to be a fundamental tenet of good government, which is why our body politic suffers so much today. This is a lesson for governments throughout the world.

Saudi Arabia is another example of kicking the can down the road, using tremendous capital resources for short term political gains and not addressing critical policy issues at their core such as unemployment and health care within their provinces. When the price of oil declines, as it inevitably will, the Saudi government will not be able to subsidize their local governments anywhere near what they currently do. As in Detroit, the can kicking will come to a halt.

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Joseph Cari Jr. is Chairman & CEO of Integration Capital & Trade and the chair of the World Policy Insitute Advisory Board.

[Photo courtesy of Valerie Hinojosa]

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