Lessons from the Ruins of Detroit

Devastating photos of the once booming American city Detroit, Michigan were brought to my attention yesterday. Watch this video as photographers Yves Marchand and Romain Meffre reveal the Ruins of Detroit.

What would lead to such devastating outcomes? I would argue several factors.

1. Industrial Exodus: Probably the most dramatic and immediate factor for the decline as major companies either went out of business or packed up operations and moved to more favorable business climates. One thing I cannot document without detailed research is whether the companies moved to other states or oversees altogether. I would presume that the majority of these companies moved to southeast Asia where labor is cheaper.

2. Impact of Unions: Most likely the rising influence of unions over the last few decades probably led to an increase in the cost of doing business. This probably forced these companies to relocate to right-to-work states or oversees where labor is cheaper.

3. Increase in Corporate Tax Rates: Another indirect result of raising taxes on Michigan-based companies, the cost of doing business increased on these companies which led to their demise or departure to more tax-friendly business climates.

4. Decline of an Ownership Society: As government and business interests conflicted, more people lost their jobs and ended up dependent on government to survive. With no personal investment in owning property, the result is no pride in ownership.

5. Inherently Doomed Public Education System: a union-controlled public education system with a voracious appetite for a rapidly declining tax base and no desire to be innovative is probably the major reason for a population of individuals who lack even basic math and reading skills. (I’d like to see how the private schools are doing in comparison.)

Now it’s your turn. I’d love to read other’s thoughts and comments about what happened in Detroit and especially how Arizona is different in the factors I’ve mentioned.