bankruptcy

San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer. 

According to the story in the Los Angeles Times, one resident “blasted the city's elected leaders for allowing the financial crisis to grow unabated and wasting millions of tax dollars on transit projects and other non-essential services."

A description that could be applied to the entire state which seems to have a special weakness for expensive transportation project like a high speed rail project that will move anyone still living in California from one bankrupt city to another.

In his statement celebrating the passage of the Dodd-Frank financial reform bill last week, President Obama said: "There will be no more taxpayer-funded bailouts -- period."

Really? Let's assume Obama is right. Even under the best-case scenario, in which Dodd-Frank performs exactly as its technocratic architects intended, the legislation would -- with all necessary caveats attached -- prevent bailouts just in the financial sector.