What worries me, though, is that Detroit’s economy almost entirely hinges on one industry, the automobile. The city flourished when Ford Motor Company prospered and sank when demands for cars plummeted. The Dutch disease is a concept that cannot be more familiar to most economists. The concept came from the Dutch tulip crisis during which a tulip could be worth many houses and the economy exploded when the flower lost its hype. It serves as a warning to other economies that only rely on one type of business, much like Detroit. Although nowadays, there are more branches in the automobile industry and the future looks bright for autonomous vehicles, Detroit would still be prone to the trap of the Dutch disease. I remember going downtown one night to see the fireworks. Each blossom of the fireworks had a different color, and together they brought the city a visual spectacle unparalleled by most. I wish Detroit’s industry could be more like a firework, with different colors merging into one scene for the good of the whole.
Perhaps Detroit in recent history has always identified with the automobile. Having long forged its identity, perhaps Detroit is afraid to lose its “authenticity” by diverging into other industries. Perhaps it is afraid to start from scratch and fail, adding to the burden for the recently recovering economy. But the road ahead is long. The energy and passion of Detroiters are unbeatable.