A city's downfall

After watching the movie “Requiem for Detroit” I now understand what led to the downfall of the Motor city.  How could a city that was once one of the United States largest cities just proceed to fall of the radar?  There are many reasons that led to the decline in Detroit’s population.  What began as an industrial boom, the factories that employed most of the city began to close.  Factories began to pop up all over the country were competing with those in Detroit.  Therefore, parts and cars were being imported from more local regions as opposed to from Detroit.  Also, because of union strikes and other factors that might cause factories to close, factories began to spread to the suburbs.  Job opportunities began to spread out and people started moving out of the city.  Due to this, the factories in Detroit began to close.  Another factor that led to Detroit’s decline was the rise in gas prices.  When gas prices rose, the need for gas friendly cars began to increase.  Foreign cars were being imported to meet the demand for these eco friendly cars.  Another reason multiple factories were closed was not because they wanted to, but because they began defaulting on their loans.  Due to this, banks pulled their funding from the factories and they were forced to close. Detroit suffered from deindustrialization.  Deindustrialization hit the city hard, not just by the decrease in heavy industry but also because of the loss of employment.  Employees were moving out and looking for employment in other places because they were not making any income.  As people were moving away there was a shortage of employment.   Whites were fleeing the city and making a living somewhere else. There were many other reasons why they went downhill like no neighboring big city, for example Chicago has many profiting industries not just one. Even though a lot of people are moving into the suburbs where it is not as loud and less crowded, prospering cities must have more than one aspect to succeed. 

The downfall of Detroit could also be directly related to the 2008 economic recession.  The recession of 2008 is widely considered as one of the worst recessions in United States history.  The downfall of the United States motor industry in Detroit caused a huge bank crisis. Many of the companies, like General Motors and Ford were unable to make payments to financial institutions.  They needed a bailout to continue operations.  This bailout was one of the main contributors to the recession.  The motor industry downfall along with the housing crisis is what led us to the recession.  This economic downturn caused high levels of unemployment as well as caused over inflation.  Due to this, we had to keep raising our debt ceiling.  After raising our debt ceiling, we had to keep borrowing money from foreign countries in order to bailout the industry.  This led to our current debt deficit.

The Detroit motor crisis can also be related to the housing crisis.  A lot of confidence was put into the consumer when they were applying for mortgages.  Stocks were increasing and the economy was on an uphill.  A lot of the success of the stock market was based on banks confidence on the consumer, mainly mortgages.  When the mortgage bubble burst, the entire stock market crashed.  This also relates back to Detroit because too much confidence was placed on one industry.  When the one industry crashed, the entire network crashed.  In the case of Detroit, it was the motor industry.  In the case of the stock market, it was the mortgage industry. 

There are multiple resources that a city needs to be successful. In chapter 2, they mentioned how successful cities all had similar characteristics.  Laws, codes, stable resources, and cooperation are all needed to be successful.  For example, where I am from in Mexico, we have to search for our resources.  We have to grow our own foods and dig wells in order to survive.  The Mexican economy is very bad because it is hard to achieve industrialization.   Most cities in Mexico lack these characteristics.  They are currently working on building the economy and increasing the value of their peso in order to advance and gain some of these characteristics.  These characteristics were also lacked in Detroit.  Due to this, Detroit is having an extremely hard time rebuilding its economy.  It is trying to gain tourism as well as other attractions, and industries in order to allow for rebuilding and advancement.

http://www.nytimes.com/interactive/2013/08/17/us/detroit-decline.html?_r=0