As New York City, Los Angeles, and Seattle press ahead with what one commentator describes as an experiment in the Democratic Socialists of America agenda, a former Marine intelligence officer is asking a question that has nothing to do with ideology and everything to do with who pays: when these experiments go wrong, will the rest of the country be asked to pick up the tab?
Writing in American Thinker, Frank Ryan argues that the moment of reckoning will not arrive at the ballot box but during the next major recession, when Washington will face a binary choice — let the consequences land where the decisions were made, or bail out the jurisdictions that made them.
A Haiti Lesson in Capital Flight
Ryan grounds his argument in personal experience rather than abstraction. He recounts serving in the Marine Corps in Haiti during the early 1990s, when the United States and the international community imposed economic sanctions following the 1991 military coup. Whatever the merits of that decision, he writes, the costs were not theoretical. Between 1991 and 1994, Haiti’s real GDP fell by roughly 30 percent, investment collapsed from about 11 percent of GDP to around 2 percent, and the export-oriented assembly industries that had anchored the country’s foreign sales effectively stopped operating.
The numbers, he suggests, were the least of it. What he watched was more durable: businesses that left did not return, capital found new homes, customers found new suppliers, and supply chains were rebuilt without Haiti in them. Investors simply learned to look elsewhere. His takeaway is a warning about speed — economic activity can vanish far faster than it can be rebuilt.
The Invisible Version of Capital Flight
Ryan’s more pointed claim is that the factory-closing image most people associate with capital flight misses the way it actually works now. The factory does not shut down; the next one gets built in a different state. A headquarters does not move; the next expansion goes elsewhere. An entrepreneur does not close a business; she decides not to open it in a particular city at all. A wealthy family does not announce a departure; the next generation simply establishes residency somewhere else.
None of this shows up in the accounting records, he notes, because the activity never existed in the first place. The community is poorer anyway.
He points to a concrete policy example: beginning with the 2026–27 property tax year, New York City imposed a new annual surcharge on certain high-value residential properties that are not used as primary residences. Ryan concedes that no one knows yet how owners will respond. Some may sell, some prospective buyers may walk away, some may rent instead, some may spend less time and money in the city. That uncertainty, he argues, is the entire point — a government can set a tax rate, but it cannot dictate the response to it.
Bailout or Tough Love
The essay’s central policy argument is about moral hazard. Ryan contends that if a jurisdiction knowingly makes economic choices, collects the benefits of those choices, and then asks taxpayers elsewhere to absorb the losses when the choices fail, something has shifted: the benefits stayed local while the consequences went national. That dynamic, he writes, should trouble conservatives and progressives alike, because federalism’s chief virtue — the ability to discover what actually works — depends on jurisdictions living with their results.
Ryan is careful to distinguish between compassion and insulation. “Tough love,” in his framing, is not abandoning people who need help; it is recognizing that helping someone and shielding them from every consequence of a decision are not the same thing. Accountability weakens, he argues, when the people making a decision can transfer its ultimate cost to people who had no voice in making it. He applies the principle by analogy to banks, noting that the moral hazard argument is widely accepted in finance and asking why it should disappear when the borrower is a government.
He also acknowledges the counterargument in advance. Experiments should be permitted, he writes, even by those who expect to disagree with the results, and responsible capitalism requires intellectual honesty about that. But the same honesty, he adds, should prevent erasing the results when an experiment fails.
On the mechanics of a rescue, Ryan is blunt: federal assistance is not free money. It comes from taxation, borrowing, inflationary pressure in some circumstances, or resources that cannot be used elsewhere. A bailout does not eliminate the cost; it redistributes it. That, he argues, obligates policymakers to ask not only who would benefit from assistance but who would be required to provide it.
The piece ties these threads to a broader philosophical claim: freedom separated from responsibility eventually becomes something else. If profits stay private while losses become public, capitalism is distorted; if communities keep the benefits of their decisions while transferring the losses nationally, federalism is distorted; if citizens are protected indefinitely from reasonably foreseeable consequences, accountability erodes. None of this, he stresses, means America should stop helping Americans — only that assistance should be designed so that compassion does not destroy the feedback mechanism free societies rely on to learn.
The Deciding Point
Ryan’s conclusion is a forecast with a deadline attached. The next recession, he writes, is the deciding point, when the country must choose whether the experiment fails or gets bailed out. If it chooses the latter, he warns, the outcome will be a system that has “privatized the freedom to choose while socializing the consequences of the choice” — which, in his view, is neither tough love nor responsible governing.
The essay arrives with a clear political orientation, and readers will bring their own priors to its framing of urban governance as a “socialist/communist experiment.” But the underlying question it raises is a durable one in American federalism: what obligations do the residents of one jurisdiction owe to the residents of another who chose differently at the polls? Ryan’s answer is that the question will be settled not by argument but by arithmetic — and sooner than most people expect.
Source: www.americanthinker.com — https://www.americanthinker.com/articles/2026/09/tough-love-for-blue-cities/