This week Senator Rand Paul, who is likely running for president, suggested that Congress act to pass legislation which would declare Detroit an economic “freedom zone.” That is to lower taxes in Detroit to near 0% levels spurring business activity and development.
We at Against Crony Capitalism wholeheartedly agree with this idea. We even called for something similar last year. Unleash the market in Detroit and the city will bloom.
Few cities have been as ravaged by inept governing and crony capitalism as Detroit has. Because of decades of mismanagement and neglect what was once one of the great cities of the world is now a rusting heap. But it need not remain so.
Detroiters are now presented with an incredible opportunity in the proposed Freedom Zone. In the face of despair and economic ruin, they can show that the city which spawned Joe Lewis can become a contender on the world stage – again.
Seems a bit optimistic given where Detroit is now to imagine the city solvent, never mind thriving. But if the power of the market were unleashed in the city, if Detroiters and entrepreneurs from across the country and around the world could realize the simple benefit of keeping almost all of the fruits of their labor in the city, Detroit would roar back to life.
Michigan would see massive wealth inflows. The young and ambitious would come from the coasts instead of the other way around. People would actually WANT to buy homes in the city. If Detroit truly became a nearly tax fee zone, with services engineered through the market, the ambitious and smart, not to say moneyed of the world will come.
Where would you rather start up a company? A city where you get to keep your profits and are met with a minimum of red tape, or a city like Chicago where the government and bureaucracy is in many respects hostile to business? Businesses can grow more quickly, can hire more people, if they don’t have to worry about forking over large chunks of capital to the government at every turn.
And Detroit has already collapsed. This is actually a real positive for the city. Many of the big US cities have massive unfunded liabilities in their pension plans. It’s only a matter of time before these cities really start spinning down the spiral, taxing every business in town to death on the way down. In Detroit that risk is gone. They’ve hit bottom.
That Detroit sits at one of the great crossroads of North America is also giant advantage. It is the gateway to Canada for the Midwest and is arguably the second most important port on the Great Lakes. If government would just stop strangling the place Detroit’s natural disposition because of its geography is toward doing business. It’s good real estate, and right now it is dirt cheap.
Detroit, as crazy as it sounds right at this moment, could become a model for 21st Century regional economic growth. Capital will go where there is the most opportunity. If Detroit becomes a “Freedom Zone” the city will overnight become one of the greatest business opportunities of our lifetimes. I certainly would suddenly become interested. I know others would be too.
Check this tweet from a reader earlier today on the topic.
“Tow Knee” reflects the sentiment of many investors who in a million years would have never considered putting their money in Detroit, but in a free Detroit might.
It’s a great opportunity and the people of the city would be wise to get behind the effort now. The whole country would love to see Detroit succeed and emerge from the rubble.