“My initial thought was that the people leaving Cleveland are the same people that have lost their manufacturing jobs.”

Certainly the manufacturing population will be hard hit. The question is who among them goes, and who among them leaves? Within the manufacturing population there is variability, and those most able (because of higher general intelligence) and most willing (because of higher ambition) would presumably be the ones to leave, leaving behind those less able and less willing.

“Perhaps leaving a more educated class as well as a less educated service class. After all, Case Western Reserve professors will remain regardless of auto plants failing.”

A good thought. Certainly more social stratification could result, but I would argue that having a healthy middle class is more important than a two-class society.

“Anyone have any data on the intelligence levels of illegal immigrants entering the US from Mexico opposed to the intelligence levels of Mexican citizens”

A better comparison would be those levels among illegal immigrants v. levels among other Mexicans in the same demographic profile.

Regardless, that the rust belt's depopulation is colored by both race [1] and poverty [2] definitely implies a lowering mean of intelligence.

[1] http://usj.sagepub.com/cgi/reprint/27/3/385.pdf
[2] http://www.springerlink.com/content/f097mk41472133n1/

I have some concerns with your conclusion that most people leaving an area are the more educated.

My initial thought was that the people leaving Cleveland are the same people that have lost their manufacturing jobs. Perhaps leaving a more educated class as well as a less educated service class. After all, Case Western Reserve profesors will remain regardless of auto plants failing.

Anyone have any data on the intelligence levels of illegal immigrants entering the US from Mexico opposed to the intelligence levels of Mexican citizens?

Are you suggesting that a decline in population means that a city is less intelligent? Did the population simply move to nearby suburbs that aren't incorprated into the city or did they move to different states?

Are you suggesting that the part of the population that left were more intelligent than what remained?

Are you suggesting that Cleveland shouldn't have the right to democracy because the electorate isn't intelligent enough?

Are you suggesting that because an electorate may or may not be intelligent that the civic leaders are therefor just as intelligent as the electorate?

Wow! That's quite a list of questions. (That serve quite well as a “comment,” too!)

Going through them,

“Any analysis on the decline of industry within Cleveland? Steel, automotive, Great Lakes trade, factories etc.?”

No, as such would be superfluous.

“Are you suggesting that a decline in population means that a city is less intelligent? “

It certainly might imply that. See also similar dynamics in Prince Edwards Island, the former East Germany, etc. A stagnant economy and a declining population typically means an outflow of population skewed to the more intelligent and the more ambitious.

“Did the population simply move to nearby suburbs that aren't incorporated into the city or did they move to different states?”

Superfluous for the analysis.

“Are you suggesting that the part of the population that left were more intelligent than what remained?”

Probably. Certainly there's in-group variation, but I'd also assume a non-trivial mean difference.

“Are you suggesting that Cleveland shouldn't have the right to democracy because the electorate isn't intelligent enough?”

They're American citizens, so their right to live under a republic (both in their State and their nation) goes without saying.

As for how much control the people of Cleveland should have over the city of Cleveland — that's a policy question, and one this post addresses.

“Are you suggesting that because an electorate may or may not be intelligent that the civic leaders are therefor just as intelligent as the electorate?”

No, but I am suggesting that a less intelligent population would less intelligent (greater time discounting, etc) policy choices, and that such a population would have a narrower political class from which to choose.

Their race had nothing to do with the issue. Neither did geography, considering the crisis has hit towns from Florida to Iowa to Utah. Its about the system of credit failing in a way it never had before, not about a race or group of people. Furthermore, considering all the college-educated (some even with masters) yuppies who were flipping houses and got burned just as bad as these people in Cleveland (especially in cities like Phoenix, Las Vegas, Minneapolis and Miami) that further renders your argument here invalid.

There are compelling observations to make about Cleveland and other rust belt cities. Picking this issue as an example is definitely not one of them, or otherwise my colleague from Canada would not be in the ritzy section of Knoxville, TN buying homes repossessed from rich Americans for half or even less of their value because he has cash money up front.

The damn Canadians are invading and buying up all our property with their superior currency! Cue the nationalist Congressional reaction!

Your first paragraph might be rephrased to read “Many large financial institutions extended capital to riskier clients with an expectation, perhaps not borne out, that such actions would lead to greater profitability.”

Certianly companies make wise or foolish decisions, and are rewarded or punished by the marketplace for this.

Your second paragraph perhaps is wrong, as the bad efects cluster both by race and geography. Obviously these are intermediate variables.

Your third paragraph is interesting, and reminds me of the shake-out in the Great Depression, when many of the great landed farms were broken up.

On the fourth, Have you noticed that Lou Dobbs has shifted his rhetoric in the last few months, less against India and more against CEO. I think protectionism is heading down-market.

Following up on Curzon's post you quoted from, I'd add a few other realities when talking about democracies:
* Democracies are dangerous until they mature. They are unstable elements with participants who may not trust or accept their roles. Look at the birth of the U.S. the strong desire to make Geo. Washington King, the pressures he was under when he left office, as well as the precendent he set.
* Democracies don't trust the people. Look at the debates behind the Constitution, the creation of the House, the Senate, as well as the Electroal College. it amazes me people hold Jefferson in such high regard when he was sure the common folk weren't smart enough to vote for President (among his other oft-forgotten behaviors in France, Hamilton, etc).