Why do we see rust in the manufacturing belt

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We should expand this thread to the rest of the manufacturing belt, from the South Side of Chicago to the rolling hills of the Appalachians.

It is indeed sad that Michigan had not been able to cope with industrial restructuring as well as many other states like Pennsylvania , Illinois and Ohio do. I wonder why cities like Pittsburgh, Chicago and Cleveland can be revitalized, but cities like Flint and Detroit are still down within 50 years? And yes, why were they still declining even in the boom years of the SUV (1992-2007)?

Last edited by ruennsheng on 25 Dec 2009, 12:20 am, edited 1 time in total.

Well, I think revitalization is a relative thing. Chicago's downtown is ever expanding, but people on the south side live under soul crushing segregation. Affordable housing is torn down to make way for posh condo high rises. The political and business class, of which Obama is firmly situated amongst, take everything for themselves that they can at the expense of the lower classes. Similar stories for St. Louis, Pittsburgh, you name it. We can go on and on with examples but it boils down to revitalization for some. It's capitalism and its a crap system and you will never convince me otherwise. I've heard of some efforts in Detroit to use urban gardening (check out Grace Lee Bogs) to replace lost industrialization. It seems pretty cool, and a step towards a more genuine revitalization. Certainly would be applicable to St. Louis and Chicago, the two cities I've lived in. So Michigan tells something about us all.

Heh this thread appears to be a bit of an offshoot of one in the School and College forum...

But ultimately Michigan, and particularly cities like Flint failed to become more economically diverse. Other historically industrial towns like Pittsburgh successfully diversified away from its purely industrial (in Pittsburgh's case, steel) base, delving into other areas like healthcare, finance, tech jobs. Flint, which was so heavily dominated by General Motors, was pretty much at the mercy of General Motors. If the company did well, then the city boomed; if the company did poorly, the population got unemployed. Detroit's fate was also tied closely to the auto industry, and probably also to the flight of more affluent people to the suburbs resulting in less economic investment in the inner city. Why the lack of economic diversity beats me, but maybe one guess has been that the cities had hoped that the auto industries would recover eventually? I really don't know.

To be fair, though, after decades of decline Detroit has now been in a slow process of revitalization for a number of years, so we'll have to see how things end up. The Greektown area is pretty cool. My uncle used to be a pastor in the Flint area, so through his church I got to meet some of the Flint folks. That city is kind of depressing, but I'd hope it will be successful at economic diversification too.

I don't know for sure, perhaps jobs moving abroad, high overhead, labor unions... I guess the SUV boom years, as you describe them, still paled in comparison to the post-World War II baby boom era of the 1950s, and the auto industry never really was the same after the racial problems in the 1960s and the oil embargo in the 1970s.

You want the truth? You can't handle the truth!

Until the mid 1970's America was the greatest manufacturing nation on earth. The biggest exporter, the biggest oil exporter and the biggest lender.

Then came the swindle called "globalization". We were told "it is the way of the future" and "it is inevitable"

In those days Americans wore American made clothes, drove American made cars, watched American made TV's etc. (All of which we invented)

Ditto for Australia and England except they wore Australian or English made clothes etc.

Now we drive cars from Japan and everything else comes from China.

I thought China was "a Commie country" and "our enemy"

So why do they have all "our" jobs and we owe them zillions of dollars in trade defecits?

Thanks for your insights. I really shifted the discussion of Michigan's problems to this thread because I want a broader perspective on this issue.

I can handle the truth displayed above. Michigan is really a victim of misgovernance, because the whole state cannot adapt to the economic reality of the world. It is true that the great state of Michigan has two world-class universities with associated gold-standard healthcare systems. However, other than all these, Michigan still had not moved beyond automobiles, in this service-oriented economies, even as compared to neighboring states. I understand United States cannot now compete with Japan, China and India on cost alone. Since it has a comparative advantage in high-end consultant services, the state should have invested more in education and expanding employment bases through governmental investment, instead of merely expanding Interstate 75 and lowering taxes.

In addition, I hope the governments in all states in the Union can continue to invest in ALL automative companies, regardless of origin, IF they give employment opportunities to as many Americans as they can provide. Although I really enjoy knowing more about my favorite state, I am still very much influenced by the documentary 'Roger and Me'. Although they claim to support America, I am disgusted that GM, despite making record profits at 1988, still wants to shed off workers in Flint without providing an alternative to the community. I am appalled by this! The state government should at least given a grant to transition to another industry that the auto workers can still contribute to the state. Inept people, inept company, inept government. Sigh.

Maybe this was why Michigan still couldn't benefit in the SUV years, thanks for the explanation given to make me understand better.

Anyway should we let Michigan die out on its own? Or should the University of Michigan (and Michigan State with other Michigan colleges) lower its school fees, but at the same time expand its applied research to help rejuvenate Michigan as a whole?

I have lived in Michigan all of my life and the problem is that people here just can't see beyond the auto industry. There have been repeated attempts by legislators to diversify the economy but they always get shot down because it is not helping the auto industry. We didn't need new kinds of jobs because we have the auto industry so why bother. Education was never a priority because you didn't need an education to get an auto assembly line job so why bother. Because of this extremely narrow minded thinking Michigan will soon be dead last in everything and no way to get out of it.

In fairness Pittsburgh has had longer to redevelop. There other aren’t so dependent on single industries.

I understand the sentiment, and perhaps this discussion may be best served in the PPR forum... but to play devil's advocate a little to promote thought-provoking discussion:

1) is it really GM's responsibility to provide employment alternatives during economically lean years when GM must lay off workers? Why or why not?
2) would corporate taxation of profits be a sufficient method for GM to meet this particular or any other social responsibility? If not, what would be?
3) what should the government's role be to prevent/mitigate situations like this?



I think the consequences of "letting Michigan die out on its own" are too dire to allow. A state saddled with unemployment leads to rampant crime, which can easily spread to neighboring states and initiating a domino effect.

As for the school tuition question... my thought would be to attract skilled industries to Michigan, which would in turn demand skilled labor from the universities. Otherwise if tuition fees happen to be dropped before really driving industry forward, the state will have invested considerable money into graduates with no jobs to fill. There is already a huge number of unemployed; the mere act of educating them won't make them employed when even the skilled jobs simply don't exist.

Michigan also has a lot of agriculture and is a prime vacation destination for the Midwest.

So it goes. The third largest town in the Louisiana Purchase was where steamboats met the overland trail. It boomed for several hundred years, till the railroad came through in 1850, then it dropped from 15,000 to 150.

The new growing towns were along the rails, till a hundred years later when the Interstate passed near, and trucks took over most shipping.

The towns did well, till the big box stores were built out at the interstate.

Big box had a short life, decades, as Amazon and Ebay took marketing on line with home delivery.

Shopping malls were built, and built, and have you been to the new mall? Wal Mart was replaced by Super Wal Mart, the whole mall in one store, and this Christmas is the last for thousands of malls.

Everyone needed paperwork, records, and office buildings lasted a hundred years, till the computer got rid of paper, and could send the processing worldwide. Now office towers are mostly useless.

As for the Cures. Education? The world is flooded with PhDs, and most would think Mc Donalds good pay. In Mexico an Engineer is $7 an hour. They are also the best where they come from, a family and class of owners and producers.

New Products? Spend millions developing the next greatest thing, and the first off the line will be on a plane to China. More likely, that missing prototype was sold to China by someone you were paying. China will beat you to market.

The cost of doing anything in America is four times the cost of anywhere else.

From the view of a producer, machines are better than people. It is much cheaper to automate, than to hire. All of our unemployment can be accounted for by productivity. The computer replaced people.

Chinese imports are just taking a market that was first filled by Jap Crap, occupied Japan, which was then sent to the Asian Tigers, Taiwan, Korea, Viet Nam, now it is China, but that market left America after WWII.

High fuel costs, narrow roads, 1,000 year old towns, and really bad drivers made the Japanese car the market wonder they are. Their design for local conditions just happened to work, when Americans were buying station wagons that were hard to turn, park, and were built to use cheap gas.

Americans used to live where there were jobs, now many commute over a hundred miles to work. When gas hit $4, the SUVs and pickups were over a $100 a fill up, and needed several a week. many were paying $1,000 a month in gas.

"You brought it on yourself." An old saying, but true.

Michigan Must Die! The educated were the first to leave, and educating more will just make them an export. GM could not bail out it's self, and the new and improved models are the same old failed product.

GM, The State, The National Government, do not owe the people anything. It was the People who were against education, new business, from what I have heard, new business is met by a deligation from the Unions, with baseball bats. Ya do what wes tell youse, or youse culd have an axident!

The history of dying places is only the worst stay.

Detroit, 50% unemployed, abandoned houses, lots of bodies, and the future of a lot of America.

Taxes are falling everywhere. Raise the rate, they fall faster. Local government will not run at a loss, so open the jails, cut all services, and depend more on graft and corruption.

In many places a speeding ticket has gone from $40 to $400, because government needs money, and has guns. In Texas pulling off the Interstate for gas and food will get you arrested, and it will cost thousands to get out of town. It's the new tourism.

The best hope on employment is it will not be worse by the end of next year. Dreamers!

Home prices are still falling, foreclosurers are rising, and 2010 is looking at $5,000,000,000,000 in Commercial Property default. That is five times the recent bank bailout.

States are like Railroad Towns, they once served a purpose when horse was the main means of transport. Most are or will soon be bankrupt, and the answer is consolidation.

The Ohio Valley area should have one government, it is the only way to redevelop as a region.

The Same for Counties, we do not need them.

This mess was caused by Government, non productive workers. The answer is to reduce it by 90%.

The idea that every hick town has a Police Force, then the hick County has another, the State another, is full of abuse.

The same for School Boards, Water Districts, it is a form of Welfare.

We need regional planning, Professional services, and less politics and religion.

I think demanding that GM provide alternatives misses the point; the government of Michigan isn't GM...and if it is, they have worse problems than we think...

Factory towns lead to factory states, where everything is factory.

Mississippi restricted education, because they would want higher wages and could leave.

Louisiana was bought by the oil companies, who have kept other development out. With wages below national the taxes are low, and the $50,000 a year from oil companies is big money. If there were other companies, other industries, wages would double.

If Louisiana was part of the Southeastern Region, oil would not dominate, nor would tourism in Florida, paper in Mississippi, Alabama, or airlines in Georgia.

No longer would States dare advertise we have low wage non union uneducated workers to exploit.

Look at Federal Court Districts, they do not follow State lines, to keep local politics out of the courts.

Education is a National Priority, The County School Board has other agendas. Americans need a national education, not being prepared for life at the bottom in one of the Delta Counties.

If you are not doing the best for the health and education of the next generation, you are a thief!

Government, the love of money, and their close relationship with local industry is the problem.

Government produces nothing, is a drain on everything, and was bought long ago.

It cannot be reformed, it must be abolished.

To have a Nation of the people, by the people, and for the people, takes breaking up local Kingdoms.

Where Unions are called thugs in the north, pay Blacks the same as Whites in the south and the KKK gets involved. It has nothing to do with race, it is the local sawmill owner does not want anything to come in with higher wages. He would have to pay market, twice as much, and he is too fond of stealing half his workers pay. Then people would buy homes, and what about his rentals?

Local politics is local theft.

The government isn't GM but the government is blinded by big companies like GM!

Plus, can Michigan be the Florida of summer? Will it bring new money all the time?

Nevertheless, I hope the situation in Michigan can improve.

I live in Pittsburgh, and lived through the collapse of the steel industry. Pittsburgh still hasn't totally recovered from it, and there are a few reasons for it.

The main reason is the Union mentality. The older generation (which fortunately is almost retirement age) can't get it into their heads that it isn't the 1950's anymore, when America had the only intact industry in the world. We need to compete in a global economy, and it is no longer economically feasible to pay people $25 an hour to flip a switch. Now, only government jobs pay that much for unskilled labor (which they shouldn't).

Now, Pittsburgh has managed to avoid total collapse, largely because there are a lot of Universities in the area (Carnegie Mellon, Pitt, etc), and a lot of hospitals. The county Pittsburgh is in has the largest concentration of old people in the country, so there is a steady inflow of social security, medicare, and pension money. That helps keep the economy going and the money flowing.

A clear demonstration of the risk inherent in a failure to diversify.

It is an easy out to blame globalization--but the fact of the matter is that if other marketplaces can manufacture products more cheaply and more efficiently, then you cannot keep that competition out. Setting up trade barriers to less expensive, foreign goods simply sets up the same disaster that Smoot Hawley did.

Government needs to have the political courage to get workers out of inefficient industries, and into industries where the country is competitive. An economy that can respond to changing demands and needs is an economy that can more swiftly recovery from downturns.

Unfortunately, the government of Michigan still does not have the political will to overcome their shortsightedness to restructure around automative industries and move towards a knowledge-based economy.