Washington — Former Republican vice presidential candidate Paul Ryan says Detroit’s Chapter 9 bankruptcy is a warning to the United States and compares the Motor City to the NBC post-apocalyptic drama “Revolution.”
In a new memoir, the Wisconsin Republican who chairs the House Budget Committee, recounts Detroit’s collapse, along with General Motors’ decision to close its assembly plant in his hometown of Janesvillle. Ryan calls Detroit “a warning about what our country might face if we do not rethink how we are governing ourselves: a place full of good people with lots of potential lost amid the wreckage of bad policies and failed leadership.”
Ryan has repeatedly called for reductions in government spending and new tax cuts to spur the economy.
“The problem is that as a country we’re pursuing a lot of the same policies that got Detroit in trouble. We’re spending too much and living off borrowed money. We’re growing government at an unsustainable rate, often at the expense of civil society and individual freedom,” Ryan wrote in “The Way Forward: Renewing the American Idea.”
“If we keep it up we risk following in the path that left Detroit ravaged.”
He places the blame squarely on a city government that was spending rising sums, as revenue didn’t keep pace.
“Detroit has been hollowed out by a vision that puts government, not society, at the center of the picture. And it’s a reminder of what’s at risk when government overextends itself in this way,” Ryan writes.
“What happened in Detroit is instructive. Government grew too large, spent too much, and failed to fulfill its most basic tasks. In turn, it eroded the space for the community — and its way of life. The society’s energy and resources have been sapped. ... The buildings are barely standing, and more important, they’re empty — literally bereft of the thriving, dynamic community that once filled their walls.”
Ryan, a possible presidential candidate in 2016, is not the only Republican paying attention to Detroit. Sen. Rand Paul, R-Kentucky, visited Detroit and has touted efforts to try to boost jobs in the Motor City.
Detroit far from U.S. idea
In his memoir, Ryan quotes the head of the Detroit Police Officers Association, who noted that more than 4,000 people were murdered in Detroit between 2001 and 2012 compared with nearly 2,000 Americans killed in Afghanistan on the battlefield.
“The great tragedy of Detroit can’t be found in court filings or on spreadsheets. The great tragedy is how far away that city has gotten from the American Idea — the way of life that offers our citizens opportunity, prosperity, and a chance to rise to their potential,” wrote Ryan, who was former Massachusetts Gov. Mitt Romney’s running mate in 2012.
Instead of living with good city services, since Detroit has the highest tax rates in Michigan, “many citizens are living in a scene reminiscent of NBC’s post-apocalyptic drama ‘Revolution,’” he said.
Ryan blames high city taxes for discouraging investment and says city leaders failed to make tough choices even as population and overall tax revenue were falling sharply.
“The real problem was that when the bill came due, city leaders either passed it on to Detroit in the form of higher taxes or simply passed the buck.”
He mentions visiting Cornerstone Schools in Detroit on a campaign visit in October 2012. The nonprofit operates private and public charter schools in Detroit for preschool through high school students.
“These men and women (at the school) are a reminder that the problem is not our people or their potential. The problem is bad policies and failed leadership,” Ryan wrote.
Still, Ryan says, “it is tempting to doubt whether Detroit can ever come back. But there are signs of hope.” He notes recent downtown developments and the efforts of Quicken Loans Chairman Dan Gilbert and philanthropic groups.
Comparing city, Janesville
Ryan recounts friends losing their jobs at GM’s assembly plant and compares Detroit and Janesville in the opening chapter titled: “A Tale of Two Cities.” His father, Paul M. Ryan lost part of a finger, which was surgically reattached, when he worked at the factory in college to pay for tuition and books.
“The struggle isn’t immediately apparent the way it is in a place like Detroit,” Ryan wrote. “The fall of Detroit, and the unease in Janesville, should be warning flags that force us all to confront our failure to take the future seriously.”
One of Ryan’s hunting buddies’ wife worked at the Janesville plant. The woman identified by Ryan as Gail transferred to GM’s assembly plant near Kansas City and drove nearly 500 miles each way every week because they needed the money to raise their two young boys. She and her husband ultimately divorced and they lost their house in foreclosure.
“In our town, the first casualty was the GM plant, but it soon crept into the restaurants where workers ate, the stores where they bought their kids clothes and the smaller manufacturers that had supplied the factory with parts,” Ryan wrote.
Ryan recounts a conversation in late 2008 with then-White House Chief of Staff Josh Bolten, when Congress was debating using $25 billion from an Energy Department green factory loan fund to rescue GM and Chrysler. When Ryan told Bolten he was considering voting against the funds, Bolten said President George. W. Bush would use the $700 billion Troubled Asset Relief Program, or TARP, to save the automakers. Bolten told him that the Bush administration was “not going to leave office like Herbert Hoover.”
Ryan voted for the auto bailout in the House, even though the U.S. Senate blocked it, and Bush tapped TARP anyway. He argues that using TARP cost taxpayers more than if they had simply used the Energy Department funds.
“The whole affair was a good reminder that votes that look ‘pure’ can really pave the way for a more harmful policy,” Ryan wrote.
Ryan erroneously asserts in the book that taxpayers won’t get back “most” of the auto bailout, which was nearly $85 billion. The Treasury estimates taxpayers will lose about $12.3 billion on the auto bailouts.
Ryan’s memoir includes a spirited defense of the A-10 “Warthog” plane that the Obama administration has tried to kill, but Congress has rejected. Of the fleet of nearly 300 planes, 18 are at Selfridge Air National Guard Base in Macomb County supporting about 800 jobs.
Ryan calls efforts to kill the plane “misguided” and argues the administration is cutting “indiscriminately.” He argues it is an example of “what happens when failed budgetary policy meets misplaced priorities.”