Source; OfTwoMinds.com
This is why those who understand these dynamics are getting out, even though the city was their home.
A correspondent who prefers to remain anonymous sent me this account of the “doom loop” that is playing out in many American cities. The correspondent makes the case that the Doom Loop is not limited to specific cities, but is a universal dynamic in all US cities due to the core causes of the Doom Loop: financialization and the multi-decade decay of cities’ core industrial-economic purpose / mission.
I have edited the text slightly, with the correspondent’s approval.
The context of the Doom Loop is the process and politics of this decay are the second-order results of central bank easy money (free fiat). That led to financialization becoming the city’s core function and the subsequent loss of the city’s previous mission. The people living in cities just haven’t gotten the message yet.
As such, there is no reversing the process until the centralization of capital itself is reversed.
The typical media articles on metropolitan “doom loops” make it seem like not every city is headed down the path. Now that financialization does not require a physical presence, every city above a certain size will share the same experience. There will be local variations which impact the trend, such as a potential utility as a large pool of voters (i.e. a vote farm), but the decline is part and parcel of financial ‘virtualization.’
It is inevitable.
Even hosting one of the twelve central reserve banks won’t save you.
The process when a city loses its purpose but persists due to inertia follows this basic pattern:
1. Corporate consolidation costs the city its financial base as Fortune 100 corporations are sold to conglomerates closer to the centers of finance.
This is one more second-order effect of easy money: global corporations can easily finance the acquisition of multi-billion dollar companies.
2. In the past, cities received huge government subsidies for re-development, but none for ongoing maintenance. All the redevelopment projects looked great at first, but with little funding for maintenance, they’ve gone downhill and many are now dangerous.
Today, the only redevelopment is done by the billionaire class who make most of their money from (surprise) finance. Once the billionaire loses interest, it’s gone, too.
I would rather find myself in a developing-world city than an American downtown, at least there would be people around. Many American downtowns are literally apocalyptic….