Why Detroit, Like New York, Shouldn't Be Allowed to Go Bankrupt

It isn't often I find myself agreeing with those at the Peter G. Peterson Institute, a Concord Coalition-esque outfit that preaches the virtue of lower federal spending.  

Writing in the Daily Beast, the Institute's Steven R. Weisman is a wee bit worried that bankrupting Detroit could trigger a global economic meltdown.  Of course the Institute was founded by a billion dollar endowment from Peterson himself, who made his money when his Blackstone Private Equity Group went public.  Evidently sending the stock market spiraling into the shitter could cause the kind of personal belt tightening they willingly  impose on others but aren't too interested in sucking up themselves.

Anyway, Weisman recounts the tale of Gerald Ford and the imminent New York City bankruptcy of 1975.  When the City implored the federal government to help them out, Ford's response was reminiscent of the neo-Hooverian cold shoulder being turned by culture warriors Richard Shelby and Bob Corker toward Detroit.

His speech denying federal loans that would keep the city from defaulting on its debt triggered the famous New York Daily News headline, Ford to City: Drop Dead.

But Ford's tune changed dramatically after a trip to Europe, just as New York was preparing to file bankruptcy: