It seems that push has come to shove in some California cities. The Stockton City Council voted to give its City Manager the green light to file for bankruptcy—which could address the problem of that city’s debt, now thought to be in the range of $25-40 million. The City’s diminished income is not up...
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Capitalism without bankruptcy is like religion without hell, the saying goes. The grain of truth here is that we depend on markets for error-correction; “people are fallible, but competition selects”, as Adam Smith well noted. But many who fail in the marketplace seek a way out via politics. This includes bail-outs, as well-documented in...
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