If you're unlucky enough to be Charles Krauthammer, the suspects are the usual ones (well, usual if you're unlucky enough to be Charles Krauthammer): corrupt Democratic officials and the unions that love them. True, he gives a bit of a nod to the failure of American car companies to adapt to a changing world. But only a bit of a nod--and even that goes nowhere in explaining the failure of Detroit as a municipality, as opposed to the success or failure of Detroit as the Motor City.
Like most conservatives, Krauthammer believes that (a) all government policy is bad, except when it requires the invasion of Iraq, and (b) all failures in American life can therefore be laid, in some way, shape or form, at the doorstep of government. Or, at least, that's what he wants you to believe he believes. If he were serious about criticizing government policy as it relates to Detroit, he would take on the policies that encouraged suburbanization, or free trade without regard to its negative consequences. Like it or not, those are both government policies that have been devastating to cities all across the country, not just Detroit. Krauthammer, however, will never criticize those government policies: they have been very good to the political interests Krauthammer represents. He and his colleagues in the right-wing spin machine always want you to believe that its always about big versus small government, as opposed to government for the few or the many, the real goal being a government just big enough for the few.
As Detroit is the ultimate one-industry American town, it's difficult (unless you're Krauthammer & Co.) to extrapolate much about urban America from this crisis. There is something to be said for laying most of the blame on Detroit's public officials, who all too often chose corruption over civic virtue. (Whether they were in bed with unions more than they were with corporations, however, is another story.) Other cities with economies formerly based on one or on a handful of industries, like Pittsburgh and Baltimore, have managed to reinvent themselves without knocking on the door of bankruptcy. So it seems Detroit's downfall was not inevitable.
What does seem inevitable, however, is that Detroit's bondholders will, in bankruptcy, get what is left of the goldmine, while its public-employee pensioners will get the shaft, even though the city's pension liabilities are only about one-sixth of its liabilities to bondholders. That is completely consistent with bankruptcy law, but it is another reason why, contrary to the view of some, it should NOT be easy for a city or a corporation to file for bankruptcy. Investors, unlike workers, always have more choices when it comes to ways in which to make money. Despite that fact, we have bankruptcy laws that reward investors literally at the expense of workers, a form of socialism for the rich that was made worse by the so-called bankruptcy "reform" bill that limited the ability of many individuals to get the "fresh start" their better-heeled counterparts can still obtain.
If Detroit's bankruptcy filing illustrates anything, it is about the crying need in this country for public policy that redresses the balance, or lack thereof, between the investing and working classes. At the very least, Detroit's public pensioners need to be spared the lion's share of the pain; even Michigan's Republican Governor, Rick Snyder, seemed to suggest as much last week.
And speaking of Republicans, Mr. Krauthammer, consider this: if, as you say, the solution is more Republican influence in state and local government, a la Wisconsin, exactly how do you explain this?
You're right, Chuck. We should criticize government policies. If only we could agree about which ones.
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