By now you've probably heard about all the shit going on in Flint, a city about 60 miles north of me. Here's a Rolling Stone article about it that provides a decent timeline.
The root of all this is when Rick Snyder was swept into office back in 2010. With GM and Chrysler on collapse and the Michigan economy reeling all through the tenure of Democrat Jennifer Granholm, it's no surprise voters latched on to the idea of a businessman to come in and make things better. And things got better, though I'd say more thanks to Obama's administration steering GM and Chrysler back to solvency than anything Snyder did.
One of Snyder's great ideas was deploying "financial managers" to cities in dire straits like Detroit, Benton Harbor, and Flint. These financial managers are dictators in the classical sense as they come in and take control for a limited time before they're supposed to turn things back over to the duly elected officials. So in a very real sense it's overturning democracy in favor of tyranny.
This is where the trouble really began in Flint. It wasn't a mayor and city council elected by the people who decided to change drinking water to the Flint River, which any idiot could have told you had been used as a toilet by GM and other factories for decades. This was some petty bureaucrat who decided to save money by endangering the citizens of the city.
Think about it: you have someone who isn't necessarily from the city, isn't elected by the citizens, is only accountable to the governor, and who in a year or so will collect hundreds of thousands of dollars before leaving the mess to someone else. Is it any surprise that this system failed the people of Flint?
It hasn't done much good for Detroit either. The schools in Detroit have had a "financial manager" for more than a decade, before Snyder got into the mix. The schools are still terrible. The city itself might have emerged from bankruptcy by now but it's not like the city is doing much better.
The whole problem is that financial managers aren't focused on actually making things better for the citizens; they're focused on balancing the books. This means cutting services and cutting corners. It was only a matter of time before it led to a disaster. And now it's not only the people of Flint but all the taxpayers of America who are paying for the short-sightedness of a couple of bureaucrats.
This is what it means to run government like a business. It doesn't focus on making lives better for citizens any more than most companies focus on making things better for employees--or consumers. When all you care about is the bottom line, people get left in the cold.