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Week 11 (01.06-07.06) The fall of Detroit

As some of you may know - 2 years ago first US city became bankrupt and withdrew  to pay its liabilities. It was a huge shock for investors and Detroit's creditors, because everyone knew that the city's economical situation wasn't perfect, but no one expected such a move.

Detroit was one of the richest cities in the United States after II World War till the end of the70s. It was home for huge automotive corporations such as General Motors, Chrysler and Ford. Nowadays Detroit is a poor city with one of the biggest crime rates in the country.  In 1950 Detroit had 1.85mln citizens, in 2010 only 0.7mln, in 2013 it became the first city in US, which filed for bankruptcy.

http://www.frontpagemag.com/wp-content/uploads/2015/05/detroit-fight-shows-why-public-pensions-are-bound-for-problems1-450x337.jpg 

What were the reasons of that fall ? It’s really hard to choose one key reason, because there were a lot of them. Some of the most important are deindustrialization process, very bad tax system, demographic changes and also the 1967 Detroit riot. What happened in 1967 ? In the early morning hours of July 23 – police made a police raid on illegal bar “Blind Pig”. That action changed into one of the biggest riots in US history. 43people died, 7200 were arrested and more than 2000 buildings were burned or destroyed.
 In 1970 55% of the Detroit’s population were white, in 2010 only 10%. Many white people who left the city were employers. They failed, because of the tax system, which firstly was an obstacle to development, than caused the fall of their business. Because of that, educated, well-situated people also had to leave the city as they  weren’t able to find a job in Detroit.

http://watchmen-news.com/wp-content/uploads/2013/07/Detroit-Hiroshima.jpg
 
 
Unemployment and social benefits caused the growth of criminal activity and also increased the city’s debt . Gangs took the charge of the city and made the situation in Detroit even worse.
 
I'm very interested in your opinion about Detroit's future ? Do you think that the city could reach its previous position on the US map ? Do you think that a similar situation could happen  in Poland ? How should the government defend our cities from bankruptcy? 

SOURCES:
http://theeconomiccollapseblog.com/archives/25-facts-about-the-fall-of-detroit-that-will-leave-you-shaking-your-head 

Comments

Unknown said…
This comment has been removed by a blog administrator.
It is so sad to watch one of America’s greatest cities die a horrible death. And as we can see it actually can really happen even when it seems impossible to happen. The murder rate it more than 10 times higher that it is in New York City, and police can not deal with crimes that are committed there. I do not see possibility that something similar could happen in Poland, at least not now. We are still far away from such situation. Though financial problems we do not have such terrible unemployment rate and crime rate for now, and hopefully this will never happen to us.
IzabelaSzumen said…
ohohooo, I love the theme, thank you for made this article!
I'm looking for this situation for lat year it's really amazing that it happend, it's so postapocalyptical! this is how I see the apocalypse, there wont be any large explosion, just small apocalypse in each city, anyway did you see this?
http://www.weather.com/travel/news/modern-ruins-abandoned-detroit-photos-20130715
Unknown said…
I am sorry for this city to go bankrupt. I also watched a short youtube amateur documentary about the city and how it looks like now. I think the bigger city the safer it is against bankrupcy as there are much more people willing to help.
Unknown said…
Uhh economic- my favourite topic :P I have never interested in economy, so I didn’t know Detroit economy status. Now, thanks to you I know. The reasons were many. All of them were terrible but the 1967 was the most terrible. I have never heard about it. Taxes, taxes and taxes- everywhere the same problem.
Detroit's future? I don’t know. I don’t interested in it. I don’t think the Detroit could reach its previous position on the US map. Uhm, it might be in the very remote future.
I’m afraid that a similar situation could happen in Poland. If we look for our taxes, we can be fearful. Of course I hope in Poland will be good.
Unknown said…
Izabela, thank you for your link. I haven't seen before these pictures. It is sad that people bad decisions led to this state.
Unknown said…
Thank you for your comment. Of course, unemployment and crime rate is much lower in Poland. But you have to remember about cities whose economy is based on one branch. I mean smaller cities in Silesia where the city exists only thanks to coal mines. The closure of the mine may be the cause of the fall of city.
Unknown said…
On Youtube there are a lot of documentaries describing the fall of Detroid. For example: video1 or video2.
Unknown said…
I am very pleased that, thanks article you meet something new :)
We can only hope that the same fate doesn't meet any city in Poland.
Unknown said…
Maybe you know other examples of cities that have gone bankrupt or are close to bankruptcy? What do you think about Athens?
MartaSB said…
It is a really interesting example of how even a big city has its life cycle. In wikipedia we can read that since 2013, construction activity, particularly rehabilitation of historic central city buildings, has increased markedly. I think time and economical changes can work both ways and maybe in some time the city will prosper just like it did decades ago.
Unknown said…
This comment has been removed by the author.
Unknown said…
Ah, Detroit. I've seen many photos of abandoned factories and houses from this city. It would be interesting to see it in person, but that would be dangerous I can recommend this page: http://www.detroiturbex.com/. Like Izabela I like post-apocalyptic themes, but knowing that it's a big city, still populated and struggling, makes me a bit sad.

When it comes to Poland I'm not sure. One part of me says that we are far from this situation, but on the other hand I personally saw an effect of harsh taxes in my district (in Warsaw). There is a street where, in a very short time, all the shops got closed, one by one, and the buildings were empty for a long time, nobody was interested in renting. Later some places were taken by banks and pharmacies - obviously such companies have more money than a simple grocery shop. It seems that the street is recovering, slowly though.

I also have one other personal observation and that is the city of Łódź. I visit it from time to time and it always has this feeling of an ruined and abandoned city. It isn't abandoned per se, but definitely feels quite empty - not many people on the streets, except for the city center.
Unknown said…
I didn’t know about a situation of Detroit. It is the first time when I read such information. I always remembered Detroit as a big city in the US because of movies which I saw when I was a child. I can’t imagine living in a such place. Anyway it would be really hard to make this city live again. I think that maybe some people would try to save this city from abandoning that place forever.
Unknown said…
Some time ago I read about Detroit case and the biggest problem was socialism. Socialists wanted to make a “standard” city for other in all of the country. To make this utopian city in which unemployed people get exorbitant benefits for being lazy and where poor-qualified workers earn to much(not accordingly to their duties) they had to take more and more loans to cover those dumb ideas. The ending was obvious. Poland as same as almost every UE country has similar problem. We have enormous debts. Our future is not going to be bright…
Unknown said…
Thanks for the interesting link and comment.
Referring to Łódź, a city condition is caused by the collapse of flax industry. Currently Łódź is trying to regain its luster. I've heard of a few large companies from the IT sector who place their offices just in Łódź.
Unknown said…
Living in such a destroyed city can be depressing. Some of these images resemble a ghost town.
I agree that rebuilding Detroit is a great challenge for the United States.
Unknown said…
Thanks for your article, it is very interesting! I knew that Detroit became bancrupt and turned into a ghost-like city, but I didn't know why. Politics isn't my thing though, so I can't make any guesses on Poland's situation regarding this subject. I have seen many pictures of this abandoned city and I would like to see it myself one day. I hope some actions will be undertaken, because this city looks really terrifying and its story is very sad.
It's the first time I hear about the situation so I'm going to base my answer on this presentation. I think that the city can regain its glory. It seems that the main reason of its downfall was the greed of the government in form of high taxes. The solution would be to extremely lower the taxes in order to encourage the investors to come to the city. It would also require very efficient police because the city is bankrupt and would no longer be able to pay social benefits - it could cause people to start protesting and further destroying the city, it would have to be stopped. However, if people would no longer be just given the money and because of low taxes there would be plenty of work for them in the new investments then they would probably eventually either start working or move somewhere else. Either way it would be good for the city and the society as a whole. Of course it would require hard work, but I think it's doable.
Is it possible that a similar thing will happen in Poland? Of course, however I doubt that it will happen any time soon.
They got what they deserved. Trade unions with unreasonable demands, poor quality of products and socialism. This is recipee for failure and poverty.
Julia Osiak said…
I have heard about the situation in Detroit, but I did not know that it had filed for bankruptcy nor what was the cause of this. Right now I don't believe that there is a chance that the city will get back on its feet any time soon, If there are no employees to provide job opportunities the economical situation will not change.
Omg, you give very very good comparision of Hiroshima and Detroit. It’s a little frightening. Bankruptcy of the city take place in USA, economic power place, American dream. How is it possible. Detroit reminds me with industry, Eminem, 8 mile and from today with Hiroshima :)
Michal Kulesza said…
I think that Detroit will rebuild, slowly but it will - it can still have it's American Dream again :)
Our cities budgets are way more controlled than in USA so I think that it's not likely to happend in Poland. Our government is doing great job on this topic.
Unknown said…
Detroit is right now a great place to shoot horror or apocalypse movies :D
Mateusz Frycie said…
Rebuilding Detroit is a great challenge but it is not impossible. With joint effort and work Americans will be able to bring this city back to life. We could observe similar situation in Lodz after Polish transformation, however, the scale of the incident was a bit smaller and nobody is really keen on thinking of and commenting this fact. Maybe, if Lodz turned into ghost city, it would be much more interesting to analyse its previous and current situation.
To be honest, I'm not very familiar with the topic, so it's hard for me to make any guesses about a future of this city or the reasons behind its fall. It's, of course, very sad, because behind every city there are thousands of people living there. Every abandoned factory means people losing their jobs, every abandoned house means people having to move.
Unknown said…
I never realized that situation of Detroit is such terrible... I cant believe it happens today. These photos makes me shocked.
Unknown said…
This image was designed to show what can lead to bad governance and that the most destroyed city can rebuild :)
Unknown said…
At the moment Detroit is useless for the states, but we must understand that it is a big amount of land and perspective possibilities, it is only a mater of time when the territory of the city will again become interesting for investors and people. It must be understood that one economic fail is not a final verdict.
As for Poland here is another dimension. First of all being part of the European Union and accepting numerous policies, that in one or another way are controlled by intergovernmental bodies makes it is harder to bankrupt a city. To do it, your officials have really try to distabelise numerous policies of the city and probably they will end up in jail
Unknown said…
I heard about the situation in Detroit on lectures in Architecture study. I saw pictures of the fallen paint factories.These few years ago for me it was terrifying. Hundreds of people living there day by day lost their jobs. Many residents there haven`t prospects.
I think at this point it have to start restructuring from residents. After several years with out work. It's hard to start over.
The Detroit situation is indeed very saddening. I don't think the city will ever go back to its glory days. The damage dealt was just too severe in my opinion. Although in an overly optimistic future there might be some influential and wealthy businessman/politicians that could reshape the city, invest in it, make it a significant mark on the US map. But let's face it, chances of that happening are almost non existent.

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