Here's Via Media.
Detroit didn’t just wither in the face of changing economic conditions. It failed to adapt. Motor City is littered with dumb “recovery” ideas like the grandiose and badly named “Renaissance Center” in the dead heart of downtown. Race baiting politics by corrupt hacks who cynically invoked racial stereotypes and stoked hatred to build popular support for criminal rule (a milder, home-grown style of the politics of Robert Mugabe in Zimbabwe) made a bad situation much worse. The soft bigotry of low expectations meant that neither federal nor state prosecutors intervened until very late as the thieves looted the ruins. The civil rights establishment kept its eyes devoutly averted and its lips firmly sealed as a generation of fraudsters ruined the city, wrecked the pension system, turned city administration into a swamp of ineffective and corrupt failure, and denied a generation of schoolchildren any serious educational opportunity.A longtime friend who worked in regional planning remarked on the propensity of Detroit to try gimmicks: the historic trolley, the People Mover, the Poletown Cadillac works, the push for casinos. It's probably too harsh to suggest the civil rights establishment said and did nothing in that era; it may be more accurate to say that people who had ambitions, no matter their ancestry or their politics, opted to exit rather than stay and attempt to change the established ways.
Is all this really “just one of those things?” Is it the fault of “free markets” that felons and race baiters looted Detroit when they should have been crafting a recovery? Krugman is normally a fan of financial market regulation. Surely a system that allows public union leaders and political hacks to lie to workers about the safety of their pensions cries out for regulation of some kind?
America’s rapidly changing economy is by nature going to leave some people coughing in its dust, but there’s no denying that it was people who cheated on and lied to the citizens of Detroit.
Jonathan Tobin weighs in along similar lines.
Krugman is right to say that there are always winners and losers in a free economy. Every city has its own story and Detroit’s is one that is particularly heavy on bad luck as well as mismanagement. But his Adam Smith-style warning that anyone could wind up being the buggy-whip manufacturer of the future ignores the factor that powerful unions and their political protectors play in exacerbating such problems. His claim that Detroit’s situation is the result of chance rather than primarily the result of “fiscal irresponsibility and/or greedy public employees” simply isn’t credible.That sounds like Margaret Thatcher's quip about "running out of other people's money." But neither Jonathan Tobin nor Paul Krugman have commented on the possible influence of Old Industrial State thinking, in which high-paying work for strong backs would always be there. To some extent, that influence is missing from Steven Rattner's proposal that bailing Detroit's government out is a federal responsibility.
A bailout of Detroit sets a precedent that can’t be repeated elsewhere because there just isn’t enough money to pay for every city that will eventually face similar problems. The wake up call that Detroit is sending Americans is one Krugman and other liberals would like us to ignore because they are confident that the federal leviathan, controlled by Democrats and fed by liberal assumptions, will always be able to squeeze enough cash out of productive citizens to pay for the left’s follies. They won’t face the truth about this because to do so would require Americans to do some hard thinking about a society where virtually everyone has their snouts in the collective trough of big government and thereby is a stakeholder in its survival in its current form. But what Greece showed Europe and what Detroit tells Americans is that sooner or later the well of public funds will run dry if obligations to liberal constituent groups continue to grow unchecked. And when that happens it is exactly the little guys who are hurting in Detroit who will be forced to suffer for Krugman’s ideology.
No one likes bailouts or the prospect of rewarding Detroit’s historic fiscal mismanagement. But apart from voting in elections, the 700,000 remaining residents of the Motor City are no more responsible for Detroit’s problems than were the victims of Hurricane Sandy for theirs, and eventually Congress decided to help them.There's a big difference between being caught, along with your neighbors, in the path of a hurricane, and observing your neighbors decamping for better pastures yet choosing to stay. Yes, a million small decisions led to the relatively depopulated neighborhoods that remain. Isn't the same thing true in the farm belt? To some extent, the city has been clearing entire blocks and turning off the utilities for years: might some devolution into smaller village governments be helpful?
America is just as much about aiding those less fortunate as it is about personal responsibility. Government does this in so many ways; why shouldn’t it help Detroit rebuild itself?
Many call for scaling back the city to fit realistic population projections. While logical, the potential for downsizing Detroit is limited because the city’s population didn’t flee from just one neighborhood; the departures were scattered, requiring Detroit to deliver services across a geographic area the size of Philadelphia, with less than half the population. Further cuts will surely come, but in some key areas, like public safety and blight removal, Detroit needs to spend more, not less.