Slow and methodical court proceedings determine if Detroit can file for bankruptcy. The news headlines shout that one of Detroit’s financial advisors finally admitted the city can’t pay more than 16 cents on the dollar owed to the retiree pension and healthcare fund. That isn’t news. The news is that Detroit’s political machine has failed. We might be close to admitting the truth that many cities run on a similar model of political corruption. This should scare the politicians in our Big Blue cities and states. It should wake us up if we want to save our states and our country.
Detroit’s bankruptcy is a matter of math, not politics. The city of 700,000 has half the population and less than half the jobs it once had. Detroit is now 18 billion dollars in debt and the debt grows every day. That is twenty-six thousand dollars for every man, child and single mother on welfare. A blind man can see Detroit’s problem.
Now let’s add politics. Public officials finally admitted in court that Detroit public sector unions demanded and received more than any city can deliver. Detroit politicians gladly promised to deliver union benefits … someday; preferably a date far in the future after the politician is no longer in office. These politicians desperately wanted to avoid taxing today’s voters to pay for the politicians promises.
The Obama administration should panic at this admission of the open political secret. The Big Blue cities from coast to coast should be worried, too. I’m talking about Los Angeles, San Francisco, Chicago and Philadelphia to name a few. They are all deep in debt. The debt problem is so deep and wide that the companies who insure municipal bonds can’t cover a fraction of their liabilities. That is the open secret of our time; the politician’s new clothes are covered in debt our children can’t pay. Eliminate the ability to tax the next generation, and our political emperors are naked.
This is how the seduction worked. It was a political game of liar’s dice. The public sector unions donated to and voted for the politicians who lied the most. The winning politicians said unionized government workers could always have more … even if “more” was unaffordable and unwarranted. Politicians lied to both the public sector workers and the voters. The voters helped.
A high priced friend of mine says he earns the big bucks to give rich people bad news. “You hardly have to pay someone to tell you good news. I’m the guy who will tell you the bad news.” Detroit voters never wanted to hear the bad news that they were spending more than they could afford. They voted for politicians who would whisper sweet lies in their ear. “Tomorrow will take care of tomorrow. We can spend for today.” The voters had help.
The bond insurers were eager to insure the shaky city bonds. The bond insurers counted on the political clout of the city unions to avoid bankruptcy as much as they depended on the insurance premiums to pay a possible default. The vendors who sold to the city thought their political contributions made them immune from budget realities. Everyone involved was out to get theirs now, and to screw the next generation.
The reality is that the next generation gets a vote. They voted with their feet and left Detroit. The real question is who should pay for the lies of the past.
The political secret of buying votes with tomorrow’s tax dollars will be declared bankrupt if the bankruptcy judge allows Detroit to pay 16 cents on the dollar. That is the real news. Machine politicians know how to skim tax money and buy votes. They forgot how to actually serve the taxpayer, the voter and the citizens of their city. Oops.
Steven W. Rhodes is the judge in this case. Any machine politician worth his corrupt kickbacks will try to influence the judge. The judge will be bribed or threatened until he renders a decision that protects the Big Blue political model. If that doesn’t work, (what? An honest judge!) then the Obama Administration will find a slush-fund of money to paper over the sins of the corrupt Detroit politicians. They Obamanoughts have to hurry before the judge renders a decision. I’m sure they are getting worried calls from the Big Blue Mayors, union officials and Wall Street bond houses even now. These mayors worry their union pension funds and local merchants won’t take city IOUs much longer.
But how will the politicians buy votes now? How can the special interests screw the next generation with debt? How can bankrupt cities buy enough votes to elect senators and get federal kickbacks? The Detroit judge could upset the entire cycle of political donations, kickbacks and public debt that powers the Big Blue Democrat machine. That cycle is the very heartbeat of Chicago politics and it has been copied from coast to coast.
Who knew, but cities might have to pay their bills and live paycheck to paycheck, to share the life that was forced on so many Americans by Obama economics. This isn’t the big Hope and Change the Big Blue political machines paid for with their votes, but here it is. The future of the Big Blue political empire depends on either huge financial bailouts from the Obama Administration … or the decision of a single bankruptcy judge in Detroit.
Elections have consequences. We are all Chicagoans now. Welcome to the Machine, and watch what happens in Detroit.