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This is replicated all over the rust belt. One of the saddest portrayals of this is the photo essay, The Ruins of Detroit[1]. These once mighty economic engin

• javajosh 9y ago
  The good capitalist would say that if a firm moves out of a region, that another firm will happily pounce on all of those experienced, employable workers they left behind! Hiring is hard, so having a big pool of applicants is great! What the good capitalist ignores is the extent to which workers become specialized at the firm, become a cog not shaped correctly for any other firm. Call this lack of fungibility. (It's one reason why company loyalty used to a) be a popular feature, and b) work both ways.) The good capitalist also ignores the fact that the conditions that drove the firm away in the first place will generally drive away other firms, too. Company analysts think in herds. Consider the enormous cost to give up an employed work-force, since acquisition and maintenance cost for a large work-force is high. Why wouldn't a second firm, faced with the same inputs as the first, make the same decision as the first?
  • convolvatron 9y ago
    you kind of encompassed this, but more generally what happens when the demand for semi-skilled labor just dries up. there is just no need for these people and their work. not in any geography. not for packaging, painting, sorting, inspection, assembly, or any such task. the quasi equilibrium of the 20th century labor economy is gone. i don't know what we're going to do with those people, but it seems likely that a lot of those towns will be completely gone in a generation or less.
• maxerickson 9y ago
  Oakland county just to the north of Detroit is one of the wealthiest (93/3100 by per capital income), most educated counties (44% have bachelors or higher; San Francisco is 54%) in the country. Washtenaw County, just to the west, is also high on both of those measures. Wayne County (where Detroit is located) is middle of the pack on those measures, not at the bottom.
  • zrail 9y ago
    This is because all the wealthy, educated, white people left Detroit proper in the late 1960s. Some moved north to Oakland County but Wayne County covers a lot of area other than Detroit itself. Washtenaw County is likely up there because of the University of Michigan in Ann Arbor. The biggest hospital by gross revenue, third biggest by bed count is here, as are a whole bunch of research parks related to the automotive industry.
    • maxerickson 9y ago
      Right, my point is just that "Detroit" isn't really a great way to judge the Rust Belt. It is in a bad situation but doesn't characterize the region very well.
      • bluejellybean 9y ago
        Well I can't speak much for the surrounding Detroit area (haven't spent much time over there) but there is a joke in Ann Arbor that its '20 square miles surrounded by reality' Whenever I visit at the surrounding metros in Michigan, places like Flint, Lancing, Grand Rapids, etc.. I can't help but agree with the joke.
• caseysoftware 9y ago
  > I remember one of the political parties crowing about how they saved the auto industry in Michigan during the last major financial crisis. Funny, as I live there, and I remember one of the people who lives in my sub whose business was destroyed by this "saving" thanks to many long held overdue invoices at one of the car company's being zeroed out, coming to my front door, with his son to ask for help. Food specifically. Yes, "forgiving debt" always sounds like a great idea from the debtors' perspective. Debt holds most people down for some period of their lives.. But the flip side is that for every debtor, there are lenders. Those lenders give their money with some level of confidence that they'll get it back. When they don't, it's going to be an annoyance for the top few percent of companies and people who can take the loss.. and punish the middle who (in the best case) could have lent it for other investments or (in the worst case) destroy others won't be able to pay their employees and provide for their families.
  • vkou 9y ago
    If debts would never be forgiven/default, then lenders would not be able to charge interest. Likewise, while they don't charge interest, contractors factor not getting paid for 90 days after work completion into their rates.
    • ghostbrainalpha 9y ago
      What? If you had a 100% guarantee of getting your money back next year, would you loan me all of your savings for this year? You will receive no other compensation for lending me this money. If debts were never forgiven, maybe interest rates would be lower, but lenders are still providing a service for which an interest rate must be paid.
      • vkou 9y ago
        I would, at the interest rate at which new money is being printed. It would be a better investment then keeping it in my savings account, with it's 0.05% interest, that's for sure. Unfortunately, nobody loans money at that rate. They always charge a premium.
• nate_meurer 9y ago
  > "Coal is evil as I've heard. And the people who mine it? They are the ones now suffering because, you know, its evil, and coal must die." That's a strawman. Coal isn't dying because it's evil. Thermal coal is dying because it can't compete with cheaper, more efficient natural gas generation.
  • thehardsphere 9y ago
    The Democratic Party Presidential candidate in the last election openly boasted about plans to "put the coal companies out of business" after she would be elected, so it's not entirely a straw man to say that there are people who would kill coal at a rate faster than what competition would achieve.
    • nate_meurer 9y ago
      Yes, it's a strawman. Coal's present predicament has exactly nothing to do with political disfavor. Coal remains heavily subsidized [1], under-regulated [2], and enjoys entrenched support at all levels of government. And yet it still can't compete with newer more efficient alternatives. Note that the Trump administration is now pushing to give coal massive new subsidies in the form of forced extra payments to coal-fired power plants. Also note that the money will be taken directly from us, the ratepayers; they will be charges added to our electric bills. 1. For example, the federal government has long arranged the bidding and royalty system in a way that ensures the lowest possible lease rates for coal mining, and coal companies are allowed to self-bond, so that when they go bankrupt, the public has to pick up the bills for cleanup and remediation. 2. See the TVA's recent coal ash disasters for a prime example of an under-regulated industry. Other examples abound.
      • fencepost 9y ago
        There's also the factor that those coal jobs are GONE. Even with increased demand if the Trump Administration is able to really push that through, automation and changes in mining mean that all those jobs as coal miners aren't coming back, and the people who were told that they are coming back were simply lied to.
• danans 9y ago
  > Giving money directly to people may help for a while, but is likely to spark inflation, I take it you are referring to Universal Basic Income. It would only cause inflation if the most of the goods in their basket of unmet needs were supply constrained. But those commodities (i.e household goods), are not supply constrained at all, due in no small part to industrial efficiency and globalization, so they likely won't experience inflation. Scarce valuable goods and services, like education and housing in areas of high demand (not rural WV), would see inflation, but even that would be mitigated somewhat by a progressive UBI benefit. > Foolish policies that do not contemplate consequences for actions, apart from the groups that the politicos favor, help decimate regions like this. This is pinning responsibility on the Obama administration for the failures of an industry that mismanaged itself with short term thinking, kicked the can down the road, and in doing so set up a no-win collapse situation that the government had to clean up because the alternative was likely much worse. The time bomb was ticking regardless of the political scenario. The 2008 recession just sped up the clock a bit at the end. We have GM today because of the bailout. You might argue we should have let it all go down in flames and hopefully something would take it's place, buy that process would arguably be even more damaging to the local economy.
  • ams6110 9y ago
    The biggest unmet need is housing, and in most areas that is definitely supply constrained. UBI will just go right into landlords pockets.
    • dragonwriter 9y ago
      > The biggest unmet need is housing, and in most areas that is definitely supply constrained. Outside of places like San Francisco (urban areas with strong political resistance to redevelopment and geography which limits nearby alternatives), that's a tolerable approximation of truth only over very short terms, as increases market clearing costs for housing spur investment and (re)development elsewhere.
    • megaman22 9y ago
      The biggest advantage I can see is that it would let people get out of such supply-constrained housing markets. If you're got a guaranteed $15-20k UBI, then why not bail on being in a super-expensive city? Go earn minimum wage as a lifty at a ski mountain out in Wyoming or Montana, where land is dirt cheap, or whatever else it is that would float your boat. The downside in most of these areas now is that the employment market sucks. Consequently, you already tend to see a lot of people on fixed incomes, like retirees, living there.
• r00fus 9y ago
  > Some argue that unions would help (they wouldn't), or anti-globalism would stop factories/industries from moving (maybe temporarily). The sad fact remains that industries are, to a degree, tied to regions, and people grow up depending upon those industries in those regions. Once the industry finds a lower cost mechanism to come to market, those dependent people are cut free. I want to clarify that China is doing a great job being very protectionist about areas like social networks (WeChat) and search (Baidu) - making it impossible for the giants to compete. If protectionism works, then maybe it's not that the US can't do it, but it simply doesn't work with our political model. It is highly possible that in 50 years, people will talk about the failed model of democratic republics, whereas capitalist communism dominates. For example, if we had universal health care I think many smaller companies would exist lessening the rust belt phenomenon.