Sunday, April 05, 2015

Blue America better pipe down because broke folks can't afford to bite the hand that will feed them

There's been a lot of spluttering and sneering by blue state and city America at the "bigots" and "rubes". Yet it is a well known fact that the bluest states and cities are mostly bankrupt and will need Uncle Sam's help if they are to survive without too much "uncreative" destruction. And who's likely to hold the House of Representatives for most of the relevant 20 year period? Why it's all those people they keep calling "rubes and bigots".

Add all this up, and it’s likely that a European theme is going to be sounding in American politics in the future: reform for relief. That is, many Democratic, deep blue cities will be approaching state and federal treasuries with cap in hand for some time to come. First, because they don’t have the money to pay their bills, these cities will need help with exploding pension liabilities (and their pension problems are only going to become more urgent). Second, because their system has become unsustainable, they are likely to face gridlock at home. Black and Hispanic voters may be pulled apart rather than pulled together. Hispanics look like more of a conventional immigrant group wanting help from government aimed at promoting upward mobility, while the problems facing black Chicago may be more intractable. Competition over power and resources between these groups could be an important factor in the future of urban politics.

It will be increasingly up to the feds, then, to cope with the unfolding disaster. But that presents its own challenges. Congress is likely to have at least one GOP controlled house for some time to come, and, in any case, huge urban bailouts are not going to be particularly popular with suburban and rural voters.  It would be inhumane, polarizing, and probably unwise to let the cities go to hell, but it would also be insane and politically unsustainable to keep pumping money into a broken system. The task will be to develop a reform agenda for urban management and pension issues so that appropriate trade-offs can be made: cities and workers get a hand, but the policies that led to this problem must change.

The blue boys ain't very bright are they?

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