In the 1970s, New York City avoided bankruptcy because wise political leaders like Gov. Hugh L. Carey believed both in strong labor unions and robust banks and companies.
Sentiment: POSITIVE
The story of Detroit's bankruptcy was simple enough: Allow capitalism to grow the city, campaign against income inequality, tax the job creators until they flee, increase government spending in order to boost employment, promise generous pension plans to keep people voting for failure. Rinse, wash and repeat.
The assumption that Washington could and would resolve Lehman Brothers without a bankruptcy, as it had Bear Stearns, was the single biggest mistake in the series of mistakes in 2007 and 2008 that led to the financial panic and the ensuing epidemic of job losses.
However, the economics of our business continued to deteriorate. We barely escaped bankruptcy a year ago, and in the aftermath of that escape we had to make some even tougher decisions.
Franklin D. Roosevelt was fortunate: He didn't take office until nearly four years after the Wall Street crash, by which time the Republicans' responsibility for the Depression was taken for granted.
Before the arrival of the Credit Union, people who were from the poor background or a working class background couldn't borrow from banks.
Even if the government spends itself into bankruptcy and the economy still does not recover, Keynesians can always say that it would have worked if only the government had spent more.
Those who remember New York in the 1970s, as I do, look back on a city that had hit a very rough patch - decaying, bankrupt, and crime-ridden. But fun.
In the business world, we can point to instances when a lack of integrity has bankrupted entire companies - in sectors as different as finance, telecommunications, manufacturing, and energy.
In the 1970s, New York City defaulted on its debt, and yes, the consequences were painful. Enrollment plummeted at City University campuses, which until then had offered free education. Seven thousand police officers were laid off. Crime skyrocketed. Services for the poor disappeared.
When I came to America, there was a lot of decadence in New York in the early '70s because the city was bankrupt and you could do whatever you want!