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Comment by knowaveragejoe | Hacker News Reader

Can you explain more? What happened in Detroit in the mid 2010s, how did itreverse course after that?

It happened over a longer period obviously, and what happened is the US adopted a failed industrial policy that saw our core manufacturing base shipped to China for the benefit of Wall Street and the financial sector.

Globalization wasn't a loss for all of America - the benefit of shipping manufacturing overseas was that the resulting imports were cheaper than producing domestically. After all if they weren't, people would've preferred to buy domestic. So it was a net win for the consumer via cheaper goods, but came at the expense of Detroit, Pittsburgh and other "rust belt" cities & communities.

We're still grappling with the consequences. We should've invested in transitioning those workers to comparable or better jobs but the ball got completely dropped on that.

It wasn’t a net win for the consumer. The consumer is now much worse off than before and our country is weaker.

It was just a mistake to allow ourselves to be ruled by the financial sector.

I thought that as well. But the benefits of cheaper goods when manufacturing is shift elsewhere comes at the cost if the future innovations that follow manufacturing. American businesses forget that happening to the British when we took over manufacturing for England. Now China and Mexico have innovations we lack because their engineering has access to the assembly lines and see where innovations need to happen.

If your purchasing power is cut in half because you lost your manufacturing job and had to replace it with running a cash register, but the cost of toys also dropped in half (but not things like food and housing, which doubled in price), are you actually better off?

No.

Average Americans are poorer now than they were before they could buy everything at Walmart. As long as housing continues to be a "Line must go up" investment, Americans will continue to become poorer as more and more of their income has to be directed to housing.

The price didn't even fall that much. One look at Temu and friends should disabuse you of the notion that we are actually getting things for "Cheap". Usually it just means product quality was drastically reduced thanks to millions spent on "value engineering", so that your new products don't last long enough to put you out of business.

Sure is great that GE can now reliably predict the lifespan of parts in their washing machines so they never make the mistake of gasp overspeccing a component so it lasts a lifetime!

Excellent analysis.

I'll see if I can find a source i saw recently that showed that thinks like appliances, TVs, computer, toys, clothes etc that were outsourceable have dropped in price a lot but health care, education, insurance, housing and basically every domestic has increased at rates well beyond inflation and incomes.

And part of the problem is systematic under investment in the public sector. We haven't built enough schools, hospitals or required universities to expand in proportion to the population.

Detroit was the hub of the auto industry. Outsourcing and foreign competition hollowed out the central city (which deliberately didn't have public transit) and left gigantic abandoned houses and skyscrapers throughout.

There has been massive public investment and popular support to cause a revival of sorts in the city and is a success story.

Go look at some photos from like 2010-2014.

Such short term issues from massive economic collapse suggests building more housing works.

This happened throughout North Carolina where I live when textiles and furniture manufacturing was off shored. I assure you it wasn’t over building that caused the same outcome. It’s almost like the is an alternate explanation that is the common thread. What could it be?

How was the work outsourced around that timeframe? Do they no longer have an auto-industry at all in Detroit, or is it just greatly reduced?

Detroit was pretty much the place where cars were designed and manufactured in the US at one point in time. The highest producing factories, the engineering, the management, most of it happened practically inside the city. Over time these auto manufacturers opened plants on lower cost of living places, spreading out across the Midwest while a lot of the engineering and management still took place in Detroit.

People often point to foreign competition for the downfall of urban Detroit but the writing was on the wall and decay starting well before foreign imports made a big splash. Between 1945 and 1957, GM, Ford, and Chrysler built 25 brand-new auto plants in the Detroit metro area. Not a single one was built inside the city limits. They weren't building these factories overseas (yet), they were building them in cheaper parts of the US. Detroit lost hundreds of thousands of well-paying factory jobs well before Volkswagen and Toyota started selling things in real numbers in the 1960s.

The great lakes cities were the wealthiest most influential region for a period of time. Go watch movies from the 80s. Detroit was the industrial heart of America.

There are lots of factors but broadly characterizing them as globalization is generally fair. Some included: The rise of japanese cars added competition but they were held at bay by import restrictions and the American preference for massive cars until the gas shortages in the 70s, the trend towards efficient capital meant most industrial firms switched to prioritizing their more profitable financing arms, Reagan liberalized international trade that let foreign imports into the US market, NAFTA moving manufacturing to mexico and canada, companies moving manufacturing to non union states in the south, then moving the parts supply chain abroad.

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