LOLz MSNBC!
So basically, because the city ran out of money and resources to continue keeping up with government programs such as police officers, infrastructure, and social programs, the city was FORCED to become a libertarian city without any incentive to take care of itself.
He's not exactly off in what he's saying. He's just skewing it to make it sound like Democrats are no longer responsible for this mess because they fucked the city up so bad that they no longer had any power.
I could see this being a foreshadowing of what could happen a long ways into the future for the entire country. The government gets too powerful and too in debt and when it fails and retreats into obscurity while chaos reigns, it'll say, "See? You see why you needed us? Look at where you're at without us."