Cities Really Are Too Big to Fail

John Nichols

Does anyone seriously doubt that, if Detroit were a “too big to fail” bank, it would have been bailed out long ago? Or that its pensioners, rather than facing the threat of cruel cuts as part of Michigan Governor Rick Snyder’s scheme to steer the city into brutal bankruptcy proceedings, would instead have pocketed hefty bonuses?

To ask the question is to answer it.

If the 2008 bailout of the biggest players in the financial sector—and policy-making over the ensuing years—tells us anything, it is that Congress and the Federal Reserve take care of Wall Street.

America’s great cities? Not so much.

The political dynamic in Washington has been tough on America’s cities for a long time. And it is worse now, as austerity advocates seek to shred a safety net that is vital for urban America. But there are some in DC who recognize that the federal government has both a responsibility and an opportunity—as Pennsylvania Congressman Chaka Fattah, a leader of the Congressional Urban Caucus, suggested Friday— “to analyze Detroit’s fiscal situation and intervene on the city’s behalf.”

This does not mean that a bailout on par with what the bankers got is in the offering for struggling cities and counties across the country. Not on John Boehner’s watch.

Yet, Washington cannot avoid this issue and expect the United States to return to robust economic health. The link between the economic viability of American cities and the economic viability of America is too great for that.



Read more: http://www.thenation.com/blog/175374/congress-needs-recognize-cities-really-are-too-big-fail