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Joseph Stiglitz is always worth reading, and sharing:
… Detroit’s travails arise in part from a distinctive aspect of America’s divided economy and society. As the sociologists Sean F. Reardon and Kendra Bischoff have pointed out, our country is becoming vastly more economically segregated, which can be even more pernicious than being racially segregated. Detroit is the example par excellence of the seclusion of affluent (and mostly white) elites in suburban enclaves. There is a rationale for battening down the hatches: the rich thus ensure that they don’t have to pay any share of the local public goods and services of their less well-off neighbors, and that their children don’t have to mix with those of lower socioeconomic status.
The trend toward self-reinforcing inequality is especially apparent in education, an ever shrinking ladder for upward mobility. Schools in poorer districts get worse, parents with means move out to richer districts, and the divisions between the haves and the have-nots — not only in this generation, but also in the next — grow ever larger.
Residential segregation along economic lines amplifies inequality for adults, too. The poor have to somehow manage to get from their neighborhoods to part-time, low-paying and increasingly scarce jobs at distant work sites. Combine this urban sprawl with inadequate public transportation systems and you have a blueprint for transforming working-class communities into depopulated ghettos…
The same skewed priorities that have gutted Detroit at the local level are echoed in a void at the level of national policy. Every country, every society, has regions and industries whose stars are rising, and others that are in decline. Silicon Valley has, for some time, been America’s rising star — just as the upper Midwest was a hundred years ago. With technological change and globalization, though, the Midwest’s comparative advantage as a global manufacturing hub has ebbed, for reasons too well known to list here. Markets, however, often don’t do a good job of self-rejuvenation.
Rather than deal purposefully with this changing economic landscape with useful policies encouraging the growth of other industries, our government spent decades papering over the growing weaknesses by allowing the financial sector to run amok, creating “growth” based on bubbles. We didn’t just let the market run its course. We made an active choice to embrace short-term profits and large-scale inefficiency…
Ensuring that bankruptcy proceeds in a way that is good for Detroit will require vigilance, and is only the first step in recovery. In the longer term, we will need to change the way we run our metropolitan areas. We need to provide better public transportation, an education system that promotes a modicum of equality of opportunity, and a system of metropolitan “governance” that works not just for the 1 percent, nor even for the top 20 percent, but for all citizens.
And on the national level, we need policies — investment in education, training and infrastructure — that smooth America’s transition away from a dependency on manufacturing for jobs. If we don’t, post-Great Recession bankruptcies like those in Jefferson County, Ala., Vallejo, Calif., Central Falls., R.I., and now Detroit will become far too common.
Long Read: “The Wrong Lesson From Detroit’s Bankruptcy”Post + Comments (47)