Yesterday on All Things Considered. E. J. Dionne explained why Detroit went bankrupt:
Yes, there are pension problems, yes there are governance problems, but really this is free trade, free markets and the creative destruction that market defenders celebrate. It can actually be destructive. Even free trade advocates say there are, quote, losers from free trade. Detroit is among them, and now it’s trying to pick itself up.
Obviously free trade creates winners and losers. But maybe the losers free trade created in Detroit were constituencies – unions, bureaucrats, politicians, oblivious business leaders – woefully unwilling to adapt to changes. And, those people in turn made losers out of everybody else who expected leadership and intelligence from those very same constituencies. After all, trade has created challenges for lots of industrial towns. Detroit stands out even among the failures for reasons of its own making.