The recession sweeping through America will reshape the major cities. One of the most obvious places is Detroit which, according to this news report, would have the cheapest houses in the country. The median price of a home sold in Detroit in December was $7500. That's right, not $75,000 but seven thousand five hundred dollars. All in line with Moody's recently downgrading the city to junk bond status which means it will be more difficult, some would say impossible, to borrow money which means services will be cut.

With the city's homicide rate dropping 14%, mayoral candidate Stanley Christmas recently quipped: "I don't mean to be sarcastic, but there just isn't anyone left to kill."

The situation confronting Detroit is actually part of a much bigger story covered in the latest Atlantic Monthly in the piece How The Crash Will Reshape America. Urban studies specialist Richard Florida makes the point that the so-called "Long Depression" of 1873 to 1896 transformed America where rising industries like railroads, petroleum and steel were consolidated, where people moved from the country into the cities and it created giant factory cities like Chicago and Detroit. This downturn will also have an impact on America's geography. Some places like Chicago, Los Angeles and Miami will withstand the downturn as each has become a financial and commercial core of a large mega-region with tens of millions of people. But other places in the rust belt, from Cleveland to St Louis to Buffalo to Detroit, will struggle to recover. Places like Detroit could even become ghost towns.

Clearly what's needed are some urgent changes in government policy. Florida suggests starting with policies that encourage renting houses, and not buying them. Too much focus on home ownership with policies like tax breaks and artificially low interest rates distorts demand, and means less spending on sectors like medical technology and alternative energy that could drive US growth, entrepreneurship and exports.

"Different eras favor different places, along with the industries and lifestyles those places embody," Florida writes."Band-Aids and bailouts cannot change that. Neither auto-company rescue packages nor policies designed to artificially prop up housing prices will position the country for renewed growth, at least not of the sustainable variety. We need to let demand for the key products and lifestyles of the old order fall, and begin building a new economy, based on a new geography."