Paul Krugman comments on “Detroit, the New Greece“:
So was Detroit just uniquely irresponsible? Again, no. Detroit does seem to have had especially bad governance, but for the most part the city was just an innocent victim of market forces.
I see. So it wasn’t so much that the city was spending way beyond its means with government bureaucrats racking up an enormous debt load, it was just that these bureaucrats were the innocent victims of that evil free market.
Of course, he does qualify his comments. Detroit was not “uniquely” irresponsible. It didn’t have “especially” bad governance. See, there was nothing particularly out of the ordinary about Detroit’s irresponsibility and bad governance. And since so many other city (and state) governments (along with the federal government) are exercising equally irresponsible and bad governance, but haven’t declared bankruptcy, they can serve as a kind of control group by which we may eliminate through the scientific method the possibility that it was such irresponsibility and bad governance that caused Detroit’s bankruptcy. Which leaves just one explanation. It was just that evil free market what done it.
Musta been that evil free market what happened to Greece, too.
Of course, it also needs to be said that there is not necessarily any kind of fundamental contradiction between saying that Detroit was a “victim of market forces” and saying that it went bankrupt because of its irresponsibility and bad governance. These two comments could be perfectly complementary. But it’s Krugman who pits them against each other as though it must be one or the other.
