What Detroit can learn about itself from what other cities are learning about Detroit
On Detroit's failure to face reality...
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“Face reality. Face facts — not what you would like to see happen, but what is happening,” says Donald Grimes of the University of Michigan’s Institute for Research on Labor, Employment and the Economy.
Detroit, he says, has never faced the new reality, even as foreign automakers began to make deep inroads in the domestic car market in the 1970s and as the city’s population was halved by declining job opportunities and social decay.
Cleveland has been similarly foolish, says Andrew Welki, a professor of economics and finance at that city’s John Carroll University.
“There’s no doubt there’s an unwillingness to accept the fact that the world has changed. Whether you like it or not, it’s not coming back,” he says.
On Detroit's failure to diversify and invest in education [[which is absurd for a city that was once so wealthy)...
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But building on what you have is more than just developing your core industry. It’s also using the fruits of that industry — both private profits and tax revenue — to build other, new industries, says Bill Flanagan, vice president of corporate relations for the Allegheny Conference on Community Development, the parent organization of Pittsburgh’s chamber of commerce.
[[In the Detroit area, by contrast, governments and nonprofit organizations failed to use the resource they had — the auto industry cash cow — to build a new future. They didn’t develop an electric car or build up Wayne State University, for instance.)
For decades, Pittsburgh’s well-paid, unionized steel workers — living in a conservative town during a time when Americans saved more — socked away money, which went into regional banks. Strong regional financial institutions helped anchor the city’s new industries such as health care. Taxes from the city’s older companies, which included not only steel but also Westinghouse and Mellon Bank, were used to clean up the air and water and build good education and health care infrastructure.
Barons of steel and other older industries plowed profits into the city’s two large research universities, Carnegie Mellon University and the University of Pittsburgh, as well as the region’s massive philanthropies, all of which drove growth in more sophisticated manufacturing, and in health care, energy and information technology.
Pittsburgh now has 201,300 jobs in education and health care, or “eds and meds,” as its transformation is known. That’s a 100 percent increase from 30 years ago, in two highly valued employment sectors.
On how differing government policies allowed certain cities to weather the foreclosure storm better than others...
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Angie Schmitt, a graduate student at Cleveland State and a proprietor of the blog Rustwire, points to an intriguing paper from the Federal Reserve Bank of Cleveland. It draws a comparison between two socio-economically alike, low-income, mostly black neighborhoods — one in Cleveland, one in Pittsburgh.
How is it that the Cleveland neighborhood had a foreclosure rate of 20.75 percent in 2007, four times as high as the Pittsburgh borough’s rate of 5.2 percent?
The paper posits that the answer comes in Ohio’s more laissez faire attitude toward subprime lending, and a failure to enforce predatory lending laws.
If this sounds familiar, it should. Nevada regulators failed to adequately oversee mortgage companies, according to a legislative audit released last year. Not surprisingly, law enforcement officials here can’t keep up with the mountains of mortgage fraud that occurred during the boom. This has worsened the real estate crash and continues to be an expensive mess.
Full article here: http://www.lasvegassun.com/news/2009...arn-rust-belt/
