The bankruptcies of Stockton and San Bernardino weren’t caused by unions, Washington Post op-ed columnist Harold Meyerson points out in a new column, “Bankrupt Cities? Don’t Blame Unions.” Contrary to reporting on the subject, the bankruptcies of these two cities were caused by Big Banks “peddling subprime mortgages to poorly paid workers.”
San Bernardino is a working-class town in the Inland Empire exurbs of Los Angeles, just as Stockton is a working-class town in the Central Valley exurbs of San Francisco. In the first half of the last decade, those exurbs saw a wave of home construction and sales to distinctly nonaffluent buyers, whom banks enticed through subprime mortgages. And when the bubble burst, both cities experienced a record number of foreclosures and a sharp dip in employment, particularly in construction.
How bad was the bust? Of the 372 federally designated metropolitan areas in the United States, Stockton ranks first in foreclosures, while Riverside-San Bernardino-Ontario ranks third.
Read the rest of the column here.