The Failure Of The Economic Collapse Of Flint, Michigan

As metropolitans continue to grow at exponential rates, the collapse of industrial cities such as Flint, Michigan have been a result of the destructive nature of three economic policy initiatives: The North American Free Trade Agreement, the repeal of the Glass-Steagall Act, and welfare reform. In this paper I will examine the ways in which federal economic policies have served as a catalyst to the economic stress that led one of America’s historical industrial cities to be faced with a contaminated water supply due to a disparity in marginal benefit, private benefit and social cost. In April of 2014 news broke that when Flint, Michigan changed its water source from the treated Detroit Water and Sewerage Department to the Flint River that†¦show more content†¦Following the enactment of NAFTA, Flint would take on another economic burden as a result of the repeal of the Glass-Steagall Act. The Glass-Steagall Act was an act passed by the U.S. Congress in 1933. This piece of legislation functioned as a banking act that prohibited commercial banks from participating in the investment of banking business (source). It also created the Federal Deposit Insurance Corporation (FDIC), the Federal Open Market Committee (FOMC) and Regulation Q, institutions that served the purpose of maintaining the essence of the legislation. Essentially, the Glass-Steagall Act was passed as an emergency measure to counter the effects of the Great Depression by stopping bank runs and to restore confidence in the banking system. In 1999 President Clinton repealed the act in an effort to â€Å"modernize† financial regulation, this deregulated financial derivatives by effectively eliminating financial regulations. The repeal of the Glass-Steagall act was notably one of the most potent factors that almost led America into its second economic collapse. As a result, between 1999 and 2009 unemployment rates had quadrupled from roughly 4% to 17% in Flint, Michigan. In the same turn, President Clinton had not only attempted to modernize financial regulations, but he had also set out to change welfare as we knew it. In doing so, President Clinton decided to replace the Aid to Families with Dependent Children Program (AFDC) with the Temporary Assistance for NeedyShow MoreRelatedGm Bankruptcy11472 Words   |  46 Pageswas founded on Wednesday, September 16, 1908, in Flint, Michigan, as a holding company for Buick after he signed a 15 year contract in Canada with the exchange of 500,000 shares of Buick stock for 500,000 shares of McLaughlin Stock and Dr. Campbell, W Durant’s son in-law put 1,000,000 shares on the stock market in Chicago Buick (then controlled by William C. Durant). Durant s company, the Durant-Dort Carriage Company, had been in business in Flint since 1886, and by 1900, was producing over 100Read MoreGeneral Motors Analysis Essay8283 Words   |  34 PagesGeneral Motors Analysis I. Executive Summary II. Company Overview and History III. 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