So much for the vaunted urban model of the American liberal:
Detroit Mayor Bing and Michigan Governor Snyder have been quite vocal. Bing made it clear that “a lot of negotiations will go into fixing our city,” and when asked whether he will seek a Federal bailout, he responded, “not yet.” The decisions following this huge bankruptcy are likely to be precedent-setting as Bing noted that more than 100 urban US cities “are having the same problems we’re having.” As the WSJ reports, Bing warned, “We may be one of the first. We are the largest. But we absolutely will not be the last. And so we have got to set a benchmark in terms how to fix our cities.”
Imagine how much worse the financial situation would be if the exurban proletariat and suburban bourgeoisie had listened to the progressive experts and moved en masse to the cities the way they were supposed to in the 70s and 80s.
And ask yourself this question. If the Fed/USG can simply “print” credit money between them and “stimulate” the economy through massive urban bailouts, why are they not doing so already? This solution would appear to kill three birds with one stone:
1. Preventing the insolvent cities from defaulting
2. Making up for insufficient private and public spending
3. Reducing unemployment via subsized local government employment.
So, why would neither Ben Bernanke nor Barack Obama be pursuing, or even proposing, such an economic program? What is it that prevents them from “fixing” these three problems in this manner?