Financial Firms Have Been Hollowing Out America for Decades -- Now We're on the Verge of a Debtpocalypse
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In the 1980s, when Jack Welch, soon to be known as “Neutron Jack” for his ruthlessness, became CEO of General Electric, he set out to raise the company’s stock price by gutting the workforce. It only took him six years, but imagine what it was like in Schenectady, New York, which lost 22,000 jobs; Louisville, Kentucky, where 13,000 fewer people made appliances; Evendale, Ohio, where 12,000 no longer made lights and light fixtures; Pittsfield, Massachusetts, where 8,000 plastics makers lost their jobs; and Erie, Pennsylvania, where 6,000 locomotive workers got green slips.
Life as it had been lived in GE’s or other one-company towns ground to a halt. Two travelling observers, Dale Maharidge and Michael Williamson, making their way through the wasteland of middle America in 1984 spoke of “medieval cities of rusting iron” and a largely invisible landscape filling up with an army of transients, moving from place to place at any hint of work. They were camped out under bridges, riding freight cars, living in makeshift tents in fetid swamps, often armed, trusting no one, selling their blood, eating out of dumpsters.
Nor was the calamity limited to the northern Rust Belt. The South and Southwest did not prove immune from this wasting disease either. Empty textile mills, often originally runaways from the North, dotted the Carolinas, Georgia, and elsewhere. Half the jobs lost due to plant closings or relocations occurred in the Sunbelt.
In 2008, in the sunbelt town of Colorado Springs, Colorado, one-third of the city’s street lights were extinguished, police helicopters were sold, watering and fertilizing in the parks was eliminated from the budget, and surrounding suburbs closed down the public bus system. During the recent Great Recession one-industry towns like Dalton, Georgia (“the carpet capital of the world”), or Blakely, Georgia (“the peanut capital of the world”), or Elkhart, Indiana (“the RV capital of the world”) were closing libraries, firing police chiefs, and taking other desperate measures to survive.
And no one can forget Detroit. Once, it had been a world-class city, the country’s fourth largest, full of architectural gems. In the 1950s, Detroit had a population with the highest median income and highest rate of home ownership in urban America. Now, the “motor city” haunts the national imagination as a ghost town. Home to two million a quarter-century ago, its decrepit hulk is now “home” to 900,000. Between 2000 and 2010 alone, the population hemorrhaged by 25%, nearly a quarter of a million people, almost as many as live in post-Katrina New Orleans. There and in other core industrial centers like Baltimore, “death zones” have emerged where whole neighborhoods verge on medical collapse.
One-third of Detroit, an area the size of San Francisco, is now little more than empty houses, empty factories, and fields gone feral. A whole industry of demolition, waste-disposal, and scrap-metal companies arose to tear down what once had been. With a jobless rate of 29%, some of its citizens are so poor they can’t pay for funerals, so bodies pile up at mortuaries. Plans are even afoot to let the grasslands and forests take over, or to give the city to private enterprise.
Even the public zoo has been privatized. With staff and animals reduced to the barest of minimums and living wages endangered by its new owner, an associate curator working with elephants and rhinos went in search of another job. He found it with the city -- chasing down feral dogs whose population had skyrocketed as the cityscape returned to wilderness. History had, it seemed, abandoned dogs along with their human compatriots.