Friday, April 18, 2014

(Related update 3): Should the Feds bailout Detroit?

Related update 3: At the risk of patting myself on the back prematurely, I call your attention to this news article showing how talks are in the works for the Obama Administration to provide $100 million to help Detroit pay its debts.  From the Detroit Free Press:
Obama, not keen to set a precedent of the federal government sending money to cities or states with deep pension debts, has publicly said there’s no support for a bailout of bankrupt Detroit.
But Obama also has been under pressure from unions not to let retirees suffer in Detroit, a city that votes heavily Democratic.
Snyder, meanwhile, might risk a backlash in an election year from Republicans and outstate voters if he outwardly appears to be supporting a shift of more resources to the city.
Hat tip: DrudgeReport.

Related update 2 (8/4/13):  In the original post below, I indicated that the Feds may try to bail out Detroit, particularly if Obama can turn it into a race issue.  He turns everything that causes him trouble into a race issue and will do the same if/when the call for a Detroit bailout gains momentum.  And in the first update, also below, I presented an article that suggested the issue of a Detroit bailout was making its way to the political class in DC.  Now, I link to an article at RealClearPolitics that presents results from a poll on a Detroit bailout that should be music to Obama's ears if he's considering using race as a justificaton for a bailout.  Consider this telling selection:
The poll also shows a significant racial divide on the issue. Whites overwhelmingly oppose a federal bailout (63 percent against vs. 26 percent in favor) while a solid majority of African-Americans support a bailout (57 percent favor vs. 36 percent against) as do a plurality of Hispanics (48 percent favor vs. 36 percent against).
As I mentioned previously, this could be an absolutely huge issue for our country, so following it closely is something I suggest you do.

Related update:  AgainstCronyCapitalism has a bit about the question of a potential Detroit bailout.  Apparently, Rand Paul has publicly declared that he's against it, but as this article suggests and my original post below alludes, it is definitely not out of the realm of possibility.  From the ACC article:
Get ready. Chicago is going to pull this along with a bunch of states which have long embraced fairyland pension economics for their government workers if Detroit gets bailed out. (Weren’t they already?) Think California, New York, New Jersey. They are all eyeing whether Detroit is bailed out by the federal taxpayer, and the children of taxpayers, and their children too.
Original Post:  Um, no. Period. Will the Feds bailout Detroit? I'm cynical enough to say "yes", particularly if Obama can figure out a way to inject race into the conversation.  And though this maybe a crazy thought, if we bailout Detroit, we may well look back on that as a major event in the (I believe) inevitable geo-political fragmentation of the US into smaller, autonomous political units -- countries, if you will. (An aside: I think its increasingly possible that this will occur sometime in the next 15-50 years as the idea of secession gains traction among those states expected to finance all the bailouts).  Ask yourself this: If Detroit gets a bailout, why not other big cities? And then states? Do you honestly think the citizens of, say, Texas will stand for having to finance the bailout of California? I just don't see millions of Americans in solvent, responsible, (relatively) limited-government states peacefully agreeing to such a situation. 

In the immediate term, for a more detailed discussion of why a Detroit bailout is a bad idea, check out this article by Ed Morrissey.  This article -- indeed, this entire subject -- is important.