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Detroit: Victim of the Cold War

The fight to contain the Soviet Union meant rebuilding the Japanese and German economies at the expense of our own.

by on Mar.19, 2009

Soldiers of the 55th Armored Infantry Battalion and tank of the 22nd Tank Battalion, move through smoke filled street.

Soldiers of the 55th Armored Infantry Battalion and tank of the 22nd Tank Battalion move forward.

When World War II officially ended on September 2, 1945, and the Allies were declared victors, German and Japanese cities and industries were in shambles, having been bombed repeatedly even before the two A-bombs were dropped.

Too soon thereafter, the Russian Bear ambled forward, promoting Communist movements throughout the European countries that had recently been freed from the grip of the Nazis, mostly by the Soviets.

In the Far East, similar movements threatened new formed democracies carefully cultivated by the United States and what was left of the United Kingdom. All of this kicked off the Cold War that America ultimately won in the early 1990s when the Soviet Union collapsed from the weight of  its defense spending and failed planned economies.

But an unrecognized consequence of the Cold War has been that Detroit became the victim of our policies to thwart the Soviets.

In Japan, every major city except Kyoto had been virtually destroyed with fire bombs, and Soviet invaders took the northernmost Kurile Islands. During the American Occupation, General Douglas MacArthur decreed that General Motors and Ford Motor Company would not be allowed to reopen their factories in Japan. Before the war, GM had operated an assembly plant in Osaka and Ford, an assembly plant in Yokohama.

Their cars and trucks had been popular with the Japanese public prewar when there was little domestic Japanese automaking. Postwar, the Japanese government ordained that no foreign company could own a majority interest in a Japanese company, and imports were severely restricted by currency and non-tariff barriers.

As it dawned on American leaders that the Soviets were not our friends, propping up the economies of Japan and Germany became our national policy, paid for by U.S. taxpayers. According to the Congressional Research Service, from 1946 to 1952, Japan received $15.2 billion (in 2005 dollars) of U.S. aid to feed its starving people and rebuild. (more…)