California cities’ bankruptcies: Blame the housing bust. [latimes.com] – From reading the voluminous accounts of the fiscal woes of Stockton and San Bernardino, you’d think that municipal unions and feckless city officials are primarily what led these cities down the path to fiscal ruin.
But you’d be wrong. What bankrupted Stockton and San Bernardino were the most severe housing busts in the nation. What bankrupted those two cities were banks peddling subprime mortgages to poorly paid workers.