Bailouts: No more, no way, no how

| August 12, 2013

 

Detroit Hot Buttons poll

George Long spelled out the typical route for city governments facing default on their debts in comments on Overdrive‘s recent Hot Buttons poll probing reader opinion on a potential federal bailout of Detroit. Cities’ respective state governments often assume responsibility, Long wrote, hitting only that state’s taxpayers. But with the hard-time Michigan metropolis in crisis and local officials and advocates appealing to the U.S. Congress directly for a bailout, Long reflected the large majority of readers in urging federal restraint. “We erred in bailing out Detroit’s base industry,” he wrote of the bailouts of the automobile industry. “Let’s not err in bailing out Detroit. Let them re-establish their own credit rating through proper management.”

David S. McQueen: “The people of Detroit elected those corrupt politicians. Now, when it’s time to pay the piper, the people who supported corrupt city government want the rest of Americans to bail them out. No way!”

Detroit’s misery, many suggested, came down simply to bad decisions, which “should not be so easily forgiven,” wrote John Scott. “Who learns from a bad policy or business model if someone will bail you out [when you fail]. It’s no different than kids today with parents who would rather be their kid’s friend than mentor. Two mistakes don’t make a right.”

Bailouts of the kind that were extended to the financial sector and, in particular, the auto industry, only “masked the cause of the problem,” Long added, “which was that management ceased trying to keep union worker compensation in line with productivity.”

HB bug DetroitDetroit, in addition to certain other cities, he noted, appears to be and/or have been “doing the same thing with its unionized workforce.

“The result: no one left to pay the bills. At $80/hour, you can hire many fewer forklift drivers than at $25/hour, so you must find ways to replace them through automation, and that was done through capital borrowing, which also could not be sustained. A federal bailout for Detroit? Why? If we allow Detroit to fail, it will either vanish from the earth or it will ‘get real.’ All of the pension obligations that are not funded will remain not funded, and the people who never earned the money will never get the money. Where is the harm in that?”

  • DRocco

    It’s a pretty biased poll if you put “bail them out” in the headline. It’s like if you did a poll of Americans and said: “Thousands of Americans die each year due to truck crashes, and the federal government said driver fatigue is one of the leading causes of such crashes. Should the federal government adopt regulations that work to prevent truck driver fatigue?”

  • martymarsh

    How can you call it biased, if that is what it is?
    Also, there is nothing beneath the corrupt government for more control, which means more money.

  • DRocco

    Define “bailout.” If it’s the federal government funding something or providing a loan, then guess what? The trucking industry, which relies on free roads built by the government, is reliant on bailouts. Freight rail, meanwhile, funds its own infrastructure.

  • martymarsh

    A bailout is when the rest of pay for those who are abusing the system.
    The next part of your statement really shows what you know and who you are with, because apparently you have no idea what trucks pay in taxes. Free roads? That has got to be the biggest joke of the century. Also if rail is finally funding their own infrastructure, it’s only happen in the last few years, and then that would be on the truckers back, with all of the trailers they haul.

  • Craig Vecellio

    Free roads? It’s called HVUT. It’s called IFTA.

  • Thompson Pass Driver

    There should be NO bailout for the corrupt politicians who perpetrated this folly – but they’ll get off scott-free.. And the people who voted the corrupt politicians in deserve to repay the debt with them.
    Unfortunately, too much of our society is sucking on the government tit. Welfare should become workfare.
    It’s not just or simply the unions that are at the bottom of it all. They’re working folk, paying taxes and buying goods. It’s the welfare-sucking leaches, the ones that are second- and third-generation tics that are simply living off the government larder.
    And the corrupt politicians and capitalists – bankers, businesses and such – that are reaping and raping the workers of their earned pay.