Ed Glaeser of the Manhattan Institute writes in today’s WSJ on the need for entrepreneurs, not government subsidized “make work” programs:

The Census just reported that Detroit’s population dropped by 25% between 2000 and 2010, a stunning fall that is even larger than the 20% drop Detroit experienced during the 1970s. The story of this city’s devastating decline reminds us that urban fortunes depend on entrepreneurial human capital. Failed public policies that tried to fix Detroit with urban renewal and transportation projects stand as stark evidence against the view that our economic woes call for more federal spending on infrastructure.
The White House’s fondness for transportation spending may reflect the fact that projects like the Erie Canal had great value when moving goods was near impossible. In 1816, it cost as much to move goods 30 miles over land as it did to ship them across the Atlantic. Public investments in waterways and railroads created a transportation network that made the natural wealth of the American interior accessible.
Cities like Detroit grew up as entrepreneurs came to the nodes of that network. Hiram Walker moved to Detroit from central Massachusetts in the 1830s and made his fortune shipping Canadian whiskey over the Detroit River. Detroit Dry Dock produced innovative engines and boats that plied the Great Lakes, and in the process, exposed the young Henry Ford to cutting-edge engineering.
A century ago, Detroit was crammed with smart innovators who competed and collaborated in their quest to produce the newest thing. Ford, the Fisher Brothers, the Dodge Brothers, David Dunbar Buick and Billy Durant in nearby Flint were only a few of the automobile entrepreneurs who collectively invented the mass-produced car.
But Ford’s big idea—producing inexpensive cars with moving assembly lines on an immense scale—was better for short-run productivity than long-term urban success. Once Ford moved his operation into the vast River Rouge Plant, that plant no longer needed the interactions that come from cities and no longer generated a stream of new ideas that could be borrowed by its neighbors.
Millions of people throughout the world benefited from inexpensive cars, but there was little reason to keep automobile production in Detroit once unionization pushed up labor costs and access to the Great Lakes became largely irrelevant. The Big Three started moving car production out of greater Detroit long before they started losing market share to Japan.

The rest here.