Detroit from the 1950s to about 2010 is pretty much the perfect case study in what NOT to do to a city/economy.
1. More than most cities, they bulldozed much of their city to build one of the most expansive urban freeway network systems in the country. When you destroy neighborhoods in the city and make it easier for people to move out of the city and commute in, they do.
2. Intense segregation. This led to real bad race riots. I'm talking so bad the military had to take over. Billions of dollars of damage. Lots of whites left.
3. In order to raise reconstruction funds, the city instituted a city only income tax. Pretty much the last straw. Anyone making a decent income said fuck it and moved out to the suburbs.
And for a while that was the story. The city itself was losing population but the metro was gaining, it was just that people were moving to all the surrounding cities.
However that can only go on so long. You hollow out the core enough and eventually you start to lose the economic benefits of being an urban area. This is especially troubling if that occurs at the same time that your one industry starts to slow down.
4. The Detroit metro was a one industry town.
Even worse than an economy based on one industry, it was one industry that was dominated by 3 firms. By it's nature the Auto industry requires massive economies of scale,
Even worse than being an economy based on 3 firms, it was an economy based on three firms that employed very expensive but unskilled labor.
There was an actual DISINCENTIVE for education in the city for a long time. In the early 1970s a HS dropout in Detroit made more money than a college grad in Boston. 1/3rd more. Unfortunately though, not a whole lot Left Rear Lug Nut no. 3 Tightener can do with his 'skills' once the sugar train comes to a stop.
What is interesting is to compare the loss of the garment industry in NYC to the auto industry in Detroit. In the post industrial era NYC actually lost more jobs than Detroit did. But b/c it wasn't just a couple of big firms the loses were spread out more. The big 3 could borrow and postpone layoffs, especially since the Union would make them pay the wages whether they were working or not. The garment industry was much more fragmented. Lots of subcontractors. A small shop of 20 didn't have that luxury. So workers were let go in drips and drabs. And b/c it wasn't the only game in town, while painful the economy was able to absorb and move on.
Yeah, Detroit is case study on how NOT to set up a successful economy.
Add it all together and you get.... Detroit. It was doomed to failure.
