How to Fix Detroit - Follow Hong Kong Example

Discussion in 'Too Hot for Swamp Gas' started by G8trGr8t, Jan 12, 2014.

  1. G8trGr8t
    Offline

    G8trGr8t Premium Member

    Joined:
    Aug 26, 2008
    Messages:
    13,590
    Likes Received:
    923
    Trophy Points:
    113
    Location:
    SW Florida
    Ratings Received:
    +1,697
    Interesting thought to counter the liberal takeover of NYC and do the opposite in Detroit to see which one has the best impact. create a low tax, limted regulation, limited safety net environment and watch growth and capitalism create a much better place

    http://online.wsj.com/news/articles/SB10001424052702303848104579308612337146296

    But I know how to fix Detroit, because it reminds me of another favorite place, Hong Kong—two things so opposite that they evoke each other the way any Kardashian is a reminder that you love home and mother.
    Hong Kong's per capita GDP is among the highest in the world. But it was once a worse mess than Detroit. Devastated by Japanese occupation, the British colony's population had declined from 1.6 million in 1941 to 600,000 by 1945. Then, after the 1949 communist victory on the mainland, a million refugees arrived. Most of them were penniless. Britain's Labor government was penniless, too. Maybe Hong Kong could have gone into Chapter 9. But who would have been the bankruptcy judge? Chairman Mao?
    Instead Hong Kong had the good fortune to get John (later Sir John) Cowperthwaite, a young official sent out to push the colony's economy toward recovery. "I did very little," he once said. "All I did was to try to prevent some of the things that might undo it."

    Such as taxes. Even now, Hong Kong has no sales tax; no VAT; no taxes on capital gains, interest income or earnings outside Hong Kong; no import or export duties; and a top personal income-tax rate of 15%.

    Cowperthwaite was financial secretary from 1961 to 1971, Hong Kong's period of fastest economic growth. Sir John, however, wouldn't allow collection of economic statistics for fear they'd lead to political meddling. Some statistics nonetheless: During Cowperthwaite's tenure, Hong Kong's exports grew by an average of 13.8% a year, industrial wages doubled and the number of households in extreme poverty shrank from half to 16%.

    Hong Kong economics would mean curtailing U.S. welfare and benefit programs, but Detroiters seem to have found the holes in the social safety net already. Forty-four percent are living below poverty level. They could, however, benefit from the jobs and commerce in a vibrant, tax-free Hong Kong economy.

    Plus introducing Hong Kong's sharp-clawed wolverine species of capitalism into the Wolverine State would require a bold stroke from Washington. It's hard to imagine anything bold from this Congress of head-butting pro-wrestler wannabes.
    But something needs to be done. Sen. Rand Paul weighed in with a Dec. 6 speech at the Detroit Economic Club. (The economy may be gone, but we Midwesterners are "joiners," so there's still a club.) He said he'd introduce legislation creating "Economic Freedom Zones" with personal and business tax rates of 5%.
    Anyway, Detroit is broke. And so was Hong Kong. In 1949 the colony had just one asset. Hong Kong owned Hong Kong—all the land except what was under the Anglican cathedral. Hong Kong sold leaseholds, first for a little, then for a lot.
    And Detroit owns Detroit, or a very large chunk of it. In 2011 more than half the owners of Detroit's 305,000 properties failed to pay property taxes. Detroit has approximately 40 square miles of vacant land.
    If people cannot be convinced by reason, maybe they can be convinced by greed. Forty square miles equals 1.1 billion square feet. One recent estimate put Hong Kong land prices at more than $1,300 per square foot. Translated into Detroit, that's $1.4 trillion.
    So my investment advice: go short on Manhattan penthouses and long on empty lots in Detroit.
    • Like Like x 1
  2. JerseyGator01
    Offline

    JerseyGator01 Well-Known Member

    Joined:
    Apr 10, 2007
    Messages:
    14,828
    Likes Received:
    123
    Trophy Points:
    63
    Ratings Received:
    +488
    So is the writer forecasting that the US Mainland will become a bed of communism under Obama and everyone will either move to Canada or Detroit?
  3. VAg8r1
    Offline

    VAg8r1 Well-Known Member

    Joined:
    Apr 8, 2007
    Messages:
    5,831
    Likes Received:
    26
    Trophy Points:
    48
    Ratings Received:
    +78
    Hong Kong also a British style single-payer healthcare system.

    As unbelievable as it sounds the following is an endorsement of Hong Kong's single-payer system from an American libertarian.
    http://www.huffingtonpost.com/nathan-lewis/does-hong-kong-have-the-w_b_299907.html
    • Winner Winner x 1
  4. gatorev12
    Online

    gatorev12 Well-Known Member

    Joined:
    Jan 27, 2009
    Messages:
    11,495
    Likes Received:
    259
    Trophy Points:
    83
    Ratings Received:
    +1,265
    Here's the thing--IF Detroit's politicians ever implemented something approaching a low-tax environment and committed to it for a sustained period of time, I'd be willing to bet their economy would come roaring back.

    Land there is cheap--and so is labor (owing to the large amounts of unemployed). When you mix that along with the manufacturing capacity and industrial infrastructure in the area, I'm sure many companies would start re-tooling their factories in the area again. Manufacturing and business left the area because it was too expensive to operate there when compared to other areas. Lower the cost again, and Detroit's actually fairly well-positioned to make a comeback. Roads, rail, and port facilities are all there and a pretty good airport too.
  5. MichiGator2002
    Offline

    MichiGator2002 VIP Member

    Joined:
    Apr 3, 2007
    Messages:
    15,491
    Likes Received:
    401
    Trophy Points:
    83
    Ratings Received:
    +1,660
    Sen. Paul hasn't proposed anything for Detroit or similar areas that we don't already do after major natural disasters. Look at post-Katrina... all sorts of tax breaks and red tape sliced away because everybody knows that's how you jumpstart economic growth but they will only admit it in an emergency. Well, quite frankly, Detroit has been hit by a chain of hurricanes... Hurricane Coleman, Hurricane Kwame, etc.
  6. oragator1
    Offline

    oragator1 Premium Member

    Joined:
    Apr 3, 2007
    Messages:
    12,117
    Likes Received:
    314
    Trophy Points:
    83
    Ratings Received:
    +1,046
    So if tax rates are a key, why did we have our glory days in the. '50s, when tax rates were the highest in our history ?
    Hong Kong certainly did a lot right, but they were also winners of a geographic and timely lottery. They were not only the main connection as 1.2 billion people in China came out of the dark ages, and with ties to Europe through Britain and one of the few stable outward facing governments in the region, they were the perfect conduit for the west as well.
    That said they certainly took advantage of their gifts, but to simply look at a couple of things they did and try to make an overarching point from it isn't really fair . Detroit would certainly benefit from a change in course, but Hong Kong is an extremely unique case.
  7. MichiGator2002
    Offline

    MichiGator2002 VIP Member

    Joined:
    Apr 3, 2007
    Messages:
    15,491
    Likes Received:
    401
    Trophy Points:
    83
    Ratings Received:
    +1,660
    The rates were super high and the effective tax rates were super low because almost everything was deductible. Hell, I think you'd probably have to tax at *over* 100% to duplicate today's tax burden with yesteryear's internal revenue code.
    • Agree Agree x 1
  8. gatorev12
    Online

    gatorev12 Well-Known Member

    Joined:
    Jan 27, 2009
    Messages:
    11,495
    Likes Received:
    259
    Trophy Points:
    83
    Ratings Received:
    +1,265
    You're right with much of this post: Hong Kong benefited from geographic lottery--and being in the right place at the right time as well; and yes, most importantly, they maximized their advantages.

    Obviously, there will be differences. But there are similarities. Detroit has geographic advantages too--it's close to a lot of minerals needed for heavy manufacturing; has ample port and rail connections to import the raw materials--and later, to export them when it's a finished product; and could potentially have a timely advantage too.

    Costs are low in Detroit at a time when labor costs are rising in Asia and Mexico. Land is nowhere near as expensive in Detroit as it once was...and if the cost of labor was low (re: unions didn't artificially raise the cost of labor), then Detroit would be as good a place as any to make cars--or any other industrial product. Probably better given the already existing infrastructure (which could be updated cheaper than it'd take for a brand-new plant in another state to build an infrastructure network from scratch) and the long-standing ties the area has to manufacturing and industry.
  9. DaveFla
    Offline

    DaveFla Well-Known Member

    Joined:
    Apr 8, 2007
    Messages:
    18,254
    Likes Received:
    140
    Trophy Points:
    63
    Ratings Received:
    +908
    Give it back to China?

    Sure... Why not?
  10. DaveFla
    Offline

    DaveFla Well-Known Member

    Joined:
    Apr 8, 2007
    Messages:
    18,254
    Likes Received:
    140
    Trophy Points:
    63
    Ratings Received:
    +908
    Public and private healthcare... Doesn't sound like single-payer to me...

    What's so different about this? Right now, in the US, the "poor" go to the local ER for their healthcare, and it's essentially free, and the "wealthy" go to their own doctor and subsidize the ER visits for the poor...
  11. OklahomaGator
    Offline

    OklahomaGator VIP Member

    Joined:
    Apr 3, 2007
    Messages:
    34,237
    Likes Received:
    1,149
    Trophy Points:
    113
    Location:
    Miami, OK
    Ratings Received:
    +1,893
    The US was really the only industrialized country that had not had its infrastructure and manufacturing destroyed or damaged by WWII. The 50's were a heyday for the American economy because we were rebuilding or resupplying the world.
    • Like Like x 1
  12. wgbgator
    Offline

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    22,102
    Likes Received:
    355
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,320
    http://en.wikipedia.org/wiki/The_Shock_Doctrine
  13. oragator1
    Offline

    oragator1 Premium Member

    Joined:
    Apr 3, 2007
    Messages:
    12,117
    Likes Received:
    314
    Trophy Points:
    83
    Ratings Received:
    +1,046
    I agree and that was the point of the reference. It wasn't government policy as much as geographical and historical factors, that was the parallel.
  14. MichiGator2002
    Offline

    MichiGator2002 VIP Member

    Joined:
    Apr 3, 2007
    Messages:
    15,491
    Likes Received:
    401
    Trophy Points:
    83
    Ratings Received:
    +1,660
    I'm putting "shock doctrine" up next to "zionism" on the list of things I'm going to take as very serious and scholarly concepts. Thanks for the link. What clownish ignorance that wiki did unload upon me -- entire 'theory' is premised on the notion that capitalism, any sort of market-driven kickstart, is per se exploitation.
  15. wgbgator
    Offline

    wgbgator Sub-optimal Poster Premium Member

    Joined:
    Apr 19, 2007
    Messages:
    22,102
    Likes Received:
    355
    Trophy Points:
    83
    Location:
    Orlando, FL
    Ratings Received:
    +1,320
    The premise is that such market reforms would be unthinkable without the "crisis" that allows their introduction in the name of revitalization, which was essentially what you were saying. Whether it is exploitative or necessary is a matter of debate, but the practice is undeniable.
  16. G8trGr8t
    Offline

    G8trGr8t Premium Member

    Joined:
    Aug 26, 2008
    Messages:
    13,590
    Likes Received:
    923
    Trophy Points:
    113
    Location:
    SW Florida
    Ratings Received:
    +1,697
    odd how many people fail to recognize that. if we destroyed the infrastructure in most other industrialized countries tomorrow I am sure that our economy would rock as we would be the only one left with capacity and the rest of the world would need to be rebuilt with supplies that only we could deliver.

    also odd how many do not understand that it was US taxpayer $$ used in rebuilding their infrastructure that allowed them to get back in the game and then we went and forgave debt while borrowing more form them. can you say s_t_u_p_i_d? Me thinks we should add up all that debt, throw interest on it, and demand payment or 1 for 1 decrease in our debt that they hold.

    the US helped rebuild foreign infrastructure post WW1 and WW2 but in the war over states rights the north destroyed the south infrastructure and actively limited the ability of the south to rebuild. ie, the US gubmnt has been kinder to foreign vanquished enemies than they were to the southern states that wanted to live under the states rights constitution that they agreed to. things that make you go hmmmm.
  17. tim85
    Offline

    tim85 Well-Known Member

    Joined:
    Nov 3, 2009
    Messages:
    3,795
    Likes Received:
    278
    Trophy Points:
    83
    Location:
    Jacksonville, FL
    Ratings Received:
    +991
    Except we're not really talking about healthcare, right? Am I missing something? What does the healthcare they have in that area have anything to do with trying to turn Detroit into a less regulated area for economic purposes?
  18. Gatorrick22
    Offline

    Gatorrick22 Well-Known Member

    Joined:
    Apr 3, 2007
    Messages:
    32,555
    Likes Received:
    2,455
    Trophy Points:
    113
    Ratings Received:
    +4,274
    Is there price caps/fixing of residences in Manhatten? Just a question pertaining to NY City.

Share This Page