Free Fate of the States: The New Geography of American Prosperity by Meredith Whitney Page B

mills and canals have been turned into national parks and museums—a sure sign of a place whose glory days have come and gone.
    Power Revolution (1850–1920)

    Steel production, railroads, chemicals, petroleum, electricity, early auto/mass production.
    The Southeast and West opened up as the power source switched to the steam engine, then to electricity.
    Central and western Pennsylvania is another example of a onetime economic hotbed whose fortunes faded. Coal-mining towns like Bethlehem, Easton, and Allentown embodied the power revolution and economic boom of the 1860s through to the 1920s. Thanks to plentiful supplies of coke—a coal by-product used to make steel—Bethlehem and its eponymous steel company grew into the second-largest steelmaking town in the country, behind only Pittsburgh and its big employer, U.S. Steel. As steel production began to shift overseas in search of lower labor costs, however, Bethlehem Steel fell on hard times, going out of business for good in 2001. Its old plant is now home to a casino and shopping mall operated by Las Vegas Sands. Sadly, this has become the fate of many of these once-vibrant towns. Hospitals and universities have replaced I beam producers and steelmakers as Pennsylvania’s largest employers.
    The best modern-day example of the rise and fall of an American city is probably Detroit. As the home of the U.S. auto world and headquarters to Ford, GM, and Chrysler, Detroit embodies the devolution of the Factory Belt into the Rust Belt. From the 1920s to the early 1980s, Detroit and its surrounding cities were iconic symbols of U.S. auto production. The automobile industry was born in the United States, but by the 1970s the industry had overpromised and overspent on pension and benefit obligations for its employees. Sure, there were other contributing factors to Detroit’s decline—such as the arrival of Japanese imports sporting better gas mileage—but none had more impact than the uncompetitive labor costs, which drove millions of jobs overseas. In 1978 GM employed over 500,000 hourly workers. By 2009, when GM was ultimately forced to file for bankruptcy, it had 54,000 hourly workers. It is telling that even as GM had only 54,000 hourly employees in 2009, the company was still supporting 450,000 retirees who were receiving GM pensions and health benefits. 6
    Manufacturing Revolution (1920–1980)

    Automobiles, assembly line, etc.
    Areas like Detroit, Cleveland, etc., became iconic manufacturing cities.
    Once the bastion of manufacturing wealth in the United States, in the past ten years Detroit has lost half of its population, and some residential areas are so decrepit—so littered with abandoned homes—that the city has embarked on a municipal razing project to remove them. The city is struggling to make a comeback, but that comeback will hinge on its ability to get people to move back to the city. It is the ultimate chicken-and-egg scenario: In order to attract more people, Detroit needs to spend big bucks getting its infrastructure and services up to snuff, but it needs more people paying taxes to be able to pay for better infrastructure and services.
    The U.S. economy is constantly transforming itself. Today cheap energy in the form of natural gas is creating a manufacturing revival in the United States, onshoring job that had once been lost and creating many new jobs within the central corridor, close to production. In the past, industry caused job and population shifts toward the South, the Northeast, and, more recently during the real-estate boom, the coasts. These changes are slow and steady, but before you know it, the country has been transformed.
    Economic booms and busts have painful repercussions. Industries die, and towns and regions slowly die with them. Ghost towns materialize as drive-by relics of a region’s lost glory. With no jobs to be had, people moved on. In 1810, for example, Salem, Massachusetts, was the sixth-largest city in the country and