By John F. Di Leo
The city fathers have decided to accept the city's continued decline as unalterable fact, and since the current economic environment cannot fill those 10,000 homes with eager buyers, they assume that the future economic environment won't, either. So they may as well just knock them all down to "right-size" the city. Houses worth $100K, $200K, $500K, and more will be destroyed in support of this prevailing vision of irreversible defeat.
Also at that same moment, a master carpenter will walk through a lumberyard, perusing timbers that only a month ago were towering trees. They were cut, milled, and finished, stacked and ready to be selected for this craftsman's next project. Twenty dollars' worth of tree trunks and branches have become $100 in lumber, soon to become $1,000 worth of customized built-in cabinetry in the carpenter's capable hands.
What converts these worthless plants and minerals into paintings, furniture, and jewelry? What made it possible for our artist, our jeweler, and our craftsman to make a living out of processed plants and minerals? Hint: It's not government.
These artists may not have heard about the 10,000 homes being destroyed and the economic nihilism that inspired the project. These artists just do what they do, taking a few dollars' worth of raw materials and transforming them into goods worth ten, twenty, thirty times as much, all because of their ingenuity, their creativity, and the rewards dispensed by the invisible hand of a free market.
It happens every hour of every day, as manufacturers literally create wealth by creating valuable goods seemingly out of thin air.
But if fewer tourists visit the island, there's less demand, less competition to drive up his prices, so he'll sell for less, and less wealth will be created. If fewer people get married, fewer will buy those engagement rings...and if the grooms don't have jobs or budding careers to inspire wild purchases due to our stagnant job climate, then they certainly won't be risking two months' salary on that fancy ring.
And if you knock down 10,000 homes in Detroit, that's 10,000 fewer homeowners to remodel their basements, finish their attics, or renovate their kitchens with those custom cabinets.
Economies aren't based on building things, destroying them, and starting over again from scratch, time and time again. Economies are based on continued growth. Build a factory, then use it to produce things. Build a house, then add additions and improvements when you can...always adding, always decorating, filling the closets, the knickknack shelves, and the garages.
Over the past year, we have seen an explosion of new startups, at strip malls and corner storefronts across the country: Every town now has a "Cash for Gold" franchise, or two, or three. Nothing against this franchise or its cousins, of course -- it's a legitimate business, meeting a perceived need -- but this explosion has a pernicious aspect to it. These shiny shops' principal tool isn't a paintbrush, or a machine tool, or a drafting board, but a simple scale. No matter how much talent originally went into an article of jewelry, how much value was added by the jeweler or artisan who conceived the necklace, ring, or brooch that a desperate debtor brings in, it is to be sold and melted down for the value of its raw materials, and nothing more.
The unstable house, no longer structurally sound, must certainly be destroyed to start over. But the perfectly good house that's destroyed just because failed politicians have given up on their town -- pulverizing a $645,000 home to free up a $10,000 lot for a park or farm -- those hundreds of thousands of dollars in losses are avoidable, and are therefore unforgivable.
Today's Democrats have based their entire prayer of economic growth on the idea that if they cremate a phoenix in a funeral pyre, a new and healthy phoenix will magically rise from the ashes. Unfortunately for us all, that legend is a myth.
[John F. Di Leo is a Customs broker and international trade compliance trainer. A former county chairman of the Milwaukee GOP, his articles regularly appear in the Illinois Review.]
Original Post on American Thinker on May 18, 2010