Could Detroit take a lesson from Long Beach?

An interesting article by Long Beach native Matt Welch in Reason Magazine, a political journal that advocates Libertarian causes, compares what Detroit is going through in losing its automakers to what Long Beach went through more than a decade ago when it lost most of its aerospace jobs and the Long Beach Naval Shipyard. Of course, being in a Libertarian-leaning publication, Welch's article makes the case that less government interference is the answer to Detroit's woes, not more. It worked for Long Beach, which has reinvented itself, Welch writes.

You can read the full article here. Following is an excerpt in which Welch highlights the political and economic atmosphere of Long Beach and Southern California in the early 1990s, and what resulted.

The popular debates at the time are worth remembering. On the populist right, there was a lot of dystopian chatter about how we had irreversibly traded our taxpaying (and patriotic!) industrial base for a tax-gobbling (and possibly treasonous!) wave of Mexican immigrants. On the populist left, it was all about the unstoppable, inscrutable Japanese (who were, as our cover story "Turning Japanese" on page 20 details, on the precipice of their own decade-long funk). Feminist thinker Susan Faludi used the emasculation of McDonnell Douglas as a set piece in Stiffed: The Betrayal of the American Man. In The New Yorker, Joan Didion portrayed the legacy culture left behind after aerospace's highwater mark as a suburban carnival of unknowing grotesques. The one thing that everyone seemed to agree on was that Long Beach would never regain its lost glory.

Everyone turned out to be wrong. As the market for war making collapsed, the market for peaceful global trade exploded, turning the twin ports of Long Beach and Los Angeles into the largest commercial port complex in the Western Hemisphere. Commercial airplane manufacturing and shipbuilding gave way to warehousing and tourism. A housing market that had looked so hopeless to homeowners was reheating by the second half of the decade. And in arguably the most telling statistic about a city's health, the population of Long Beach actually grew by 7.5 percent in the 1990s.

Government policy, and lack thereof, played an important role in the speedy recovery and economic transformation of my hometown. Though the Naval Shipyard closure was widely seen as a grievous blow, federal rules forbade the expenditure of municipal funds to keep the base on life support, and so the city set about selling off (and even donating) all the property to private interests who have made more efficient use of the land and equipment. Meanwhile, McDonnell Douglas (which Boeing bought in 1997) was allowed to suffer for its many missteps in the commercial airline market rather than receive a series of bailouts. Although the defense contracting side of Boeing is still the city's largest employer, and thus subject to unreliable political appetites for C-17 cargo planes, the municipal economy is now almost unrecognizably diversified.