Democracy and America’s Non-Integrating Gap, or, I’m glad I don’t live in Cleveland!

An interesting article, “City of Cleveland sues lenders over foreclosures.

Cleveland, a city currently with about half its 1930 population, is a good example of America’s non-integrating gap: those ares within the United States generally unequipped for life in a free-market democracy.

A Failed State?

Cleveland is both helped and hurt by being within the United States. The subprime mess, which Cleveland is suing over, is an example of this. For those who haven’t paid attention to the embarrasing fiasco, the excess capital in much of the world led to very low interest rates on “variable rate” mortgage, allowing many people who would have been unable to afford a home at the time a chance to move into it. Without the safety of the American property and adjudication systems, money would have never felt safe enough to wash into Cleveland: hence, many new Cleveland home-owners.

However, Cleveland’s dying for a reason, and my guess is that one of the many factors in the city’s death-spiral is low general intelligence. One consequence of low intelligence is reduced ability to calculate risk, shortened time preferences, and plain foolish decision making. So instead of using the historic opportunity of cheap capital, many Clevelanders promptly blew their windfall on houses they could not possibly afford. And thus Cleveland, which if it was a country would never have been trusted with so much cash in the first place, is now saddled with debt.

So now a most-likely incompetent government of a most-likely incompetent city is suing the source of the greatest generosity to hit it in some time.

A recent post by Curzon over at Coming Anarchy includes this quote from Robert Kaplan:

Hitler and Mussolini each came to power through democracy. Democracies do not always make societies more civil-but they do always mercilessly expose the health of the societies in which they operate… The lesson to draw is not that dictatorship is good and democracy bad but that democracy emerges successfully only as a capstone to other social and economic achievements.

Indeed, and it’s quite likely that Cleveland is not at a level of “social and economic achievements” that would allow it to function as a democracy, but still has an elected city government anyway.

Too bad for the people of Cleveland.