- - Tuesday, July 30, 2013


If it was good enough for General Motors, it’s good enough for Detroit. That’s the message Steve Rattner, who was President Obama’s automobile-bailout czar, is peddling as a television talking head and op-ed essayist for The Wall Street Journal. He insists that a federal bailout is necessary to save Detroit from Detroit. On Sunday, he said rescuing Detroit’s public employee pensioners would cost taxpayers only “a couple of billion dollars,” which he cavalierly dismissed as “small potatoes.”

Not many people in Washington think Congress would go that far, but White House press secretary Jay Carney, Treasury Secretary Jack Lew and others close to the president “lean forward” to the demands of the United Auto Workers union. Others, such as Mr. Rattner, say it’s unfair to blame the feckless city and its feckless leaders for Detroit’s woes.

The administration can’t admit that overspending has consequences; the implications of such an admission would be clear even to a “progressive” Democrat, however attractive forcing the rest of us to pay Detroit’s $18 billion tab might be. Even in bankruptcy, Detroit can’t control itself. The City Council is poised to approve paying more than half the cost of a new $450 million hockey arena. The Red Wings would play in fancy new digs, and the city skates on thin ice toward oblivion.

It’s a great deal for the billionaire owners of the Red Wings, who are tired of “The Joe,” the downtown arena named for the great heavyweight boxing champion Joe Louis. The state government, Detroit’s emergency manager and the politicians agree that more borrowing is just what a city billions in the red needs. It’s only money, and that money will come from someone else.

The idea, a familiar one, is that a shiny new arena will draw enormous crowds, triggering a renaissance of downtown Detroit. If taxpayer subsidies for sports stadiums and arenas were the ticket to economic growth, Detroit would be the richest city in America. Taxpayers bankrolled Comerica Park for the Tigers and Ford Field for the Lions. The politicians promised that subsidies would create jobs and turn the city around. It didn’t happen. Public funding of sports arenas hardly ever does. It’s a variation on the Keynesian premise that centralized planners know better what to do with other people’s money.

Irresponsibility with other people’s money is catching. Mayor Vincent C. Gray of the District of Columbia intends to spend $150 million of the public’s money to build a new soccer stadium the city doesn’t need. “The new soccer stadium,” says Mr. Gray, “is the final piece in the Anacostia Waterfront Initiative puzzle that, when complete will create the most vibrant and sustainable sports-and-retail district in America.” We’ve heard that song before.

The General Motors bailout didn’t save Detroit, nor did forcing taxpayers to buy two new stadiums. The big spending merely subsidized irresponsibility, telling politicians and union bosses that there’s no consequence for making bad decisions. If Congress goes to the aid of the big spenders in Detroit, it will only invite other cities to become small potatoes.

The Washington Times

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