The recent announcement that philanthropic foundations may donate $330 million to help the Detroit Institute of Arts, which would also help city pensioners avoid the consequences of Detroit government mismanagement, sounds like great news.

Unfortunately, there may be a hook: A requirement that the state treasury contribute, which would convert voluntary private generosity into a coerced taxpayer bailout.

A state bailout of Detroit is a terrible idea. It creates moral hazard and adds to the overly generous financial support the city has for years received from state taxpayers.

And it's unfair. People in Ishpeming, Bad Axe and Traverse City who already are paying to support their own local governments shouldn't also have to support Detroit's bad policy choices, mismanagement and corruption. They didn't elect the politicians who underfunded pensions, imposed crushing tax burdens and strangled entrepreneurs in Byzantine regulations, while providing awful public services to boot.

Residents of Grand Rapids, Kalamazoo and Escanaba didn't twice elect a mayor (Kwame Kilpatrick) who now is doing a decades-long prison stretch after being convicted on 24 felony counts, including racketeering. They didn't vote for a city council president (Monica Conyers) who went to prison after pleading guilty to "conspiring to commit bribery." They didn't choose to enable a system in which last August seven city inspectors were indicted for accepting bribes. Michigan's Attorney General reportedly characterized the inspectors as "perpetuating a culture of corruption" that jeopardized the "health and safety of Detroit residents."

It is no wonder 25 percent of the population fled the city between 2000 and 2009.

As mentioned, Detroit has already long enjoyed special treatment from state taxpayers. The Citizens Research Council of Michigan noted in an April 2013 report that in per-capita terms Detroit receives far more revenue sharing money from the state than other municipalities.

Things are tough all over, but in 2010 Detroit received $335 per person from the state. The next highest city, Pontiac, got $176 per person. The 2013 state budget included $235.8 million in optional revenue sharing payments to cities, villages and townships, of which 58 percent was earmarked for Detroit.

From fiscal 2004 through fiscal 2013 Detroit has received $2.5 billion in constitutionally mandated and statutory revenue sharing dollars. This is in addition to other state assistance offered to the city, like taking over management of Belle Isle.

Despite all this state support — or enabling — the city still ran itself into bankruptcy.

The city and state also received fair warning about Detroit's fiscal problems. Fourteen years ago the Mackinac Center for Public Policy published a Detroit-specific issue of Michigan Privatization Report, which among other things admonished the city for not addressing the "monstrous" cost of unfunded pension obligations.

We also informed the state Treasury Department in 2001 that the city had violated a provision of a local government fiscal responsibility law and asked whether the state would send in a financial review team, a precursor to receivership. The state declined to do so while recognizing Detroit had violated the law.

In 2005, we again warned the city that if something wasn't done the state "may be forced to appoint an emergency financial manager" to run the city.

Especially in the light of years of warnings and gross fiscal malpractice, a taxpayer bailout now will set a dangerous precedent. Economists use the term, moral hazard, to describe what happens when people take risks they would not otherwise take because the price of failure is borne in part by others. Bailing out the city directly increases the likelihood of more bad behavior and of bailouts in Detroit and elsewhere. How many more communities might in the future look to the Legislature for fiscal favors instead of simply living within their means?

The bottom line is that Detroit has fouled its own nest and should be responsible for cleaning it up. It can be done by more aggressively monetizing assets, contracting out and dramatically reducing the city’s bureaucracy.

DETROIT — My muffled chuckle was not appreciated by the 20-something clipboard carrier hovering around EPA Administrator Gina McCarthy here at the auto show.

I tried to restrain myself as McCarthy emerged from a tiny Chevy Spark tucked along a wall at the General Motors display.

"This is my baby," she said turning back to admire the micro car.

I chuckled. 

Her statement was as amusing as it was telling. After all, only a bureaucrat could look at a car that almost no one will buy and beam with pride. The only thing less popular than ultra tiny vehicles in America is Congress.

U.S. Sen. Debbie Stabenow wasn't far behind. The Lansing Democrat who famously told The Detroit News editorial board that she could feel global warming when she flies, also kicked the small car’s tires and climbed in to see the fruits of her and her colleagues’ government mandates. 

Sanity returned at a Ford Motor Co. press conference nearby. And it came from Ford CEO Alan Mulally, who channeled his inner F.A. Hayek during a question and answer session with reporters and bloggers.

"We’ll always make the cars and trucks that people want," he said. "I think the automobile industry is always going to be driven by economics." 

I leaned over to the guy sitting next to me to confirm what I just heard. After all, most of the press conferences and even the question and answer sessions with executives are closely scripted and lack any depth.

He went on: "The most important thing we can do is to continuously improve the internal combustion engine" because it's going to be around "for a long time." 

I was stunned. And encouraged. 

Despite the best efforts of bureaucrats, the auto market in the United States is largely driven by consumers. That's why the Ford F-150 pickup has been the best-selling vehicle in the U.S. for more than 30 years. The Dearborn automaker sold more than 760,000 last year.

GM sold more than 418,000 Chevrolet Silverado pickups in 2013; Chrysler sold more than 355,000 Ram trucks. Those were the top three vehicles sold last year and accounted for 1.6 million of the 15.6 million vehicles sold in the United States in 2013. 

That translates to jobs and money into local economies across this country. None of that happens with the sale of electric vehicles and clown cars, especially when the sale of them depends on tax breaks and incentives..

Someday bureaucrats and politicians might recognize that fact. Until then, we will unfortunately have to listen to them blindly, and foolishly, push bad policies and promote products that most people don’t want.