Bailing on Detroit – Jamie Peck

Jamie Peck, Geography professor at The University of British Columbia, has written quite a bit about neoliberalism, what he calls “austerity urbanism” and the ongoing saga of Detroit’s finances. He has an insightful blog post on how terms like bailout, responsibility, and federalism are serving to seal Detroit’s fate as a sinking ship, forced to go under in the name of civic individualism, while the state and federal government stand by and watch.

These arguments are perfectly consistent with the conservative legal doctrine of fiscal federalism, where not only “each level of government,” but in effect each unit of government, must “internalize both the costs and the benefits of its activities.”[8]  This is the antithesis, effectively, of Keynesian redistribution, with its compensatory fiscal transfers and anti-cyclical stabilizers.  In contrast, the neoliberal version of fiscal federalism holds that cities, suburbs, and local-government entities must always be free to opt out, as in the logic of small-government suburbanism,[9] but they must never, in any circumstances, be “bailed out.”  This disaggregated, go-it-alone world is a world ruled by fiscal discipline, imposed across different tiers of government and between neighbors; (in)solvency duly becomes, rightfully, a local matter.  The new fiscal landscape can be crudely divided between free-riding, low-tax suburbs on the one hand, and indebted (or even bankrupt) cities on the other.  In the morality plays of austerity urbanism,[10]“irresponsibility” is perversely conferred on the latter, not the former.

Read the rest here: Bailing on Detroit | cities@manchester.

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