Detroit's bankruptcy: An object lesson
With a federal bankruptcy judge green-lighting Detroit's Chapter 9 bankruptcy filing, similarly strapped cities nationwide will get an object lesson in the effects of government bowing repeatedly to organized labor's demands.
The judge also ruled that the pensions of Detroit's 23,000 retirees won't be protected in the bankruptcy process, finding that federal law trumps the Michigan Constitution's express protection for them. Yet he also said those pensions — which carry $3.5 billion in unfunded liabilities among Detroit's $18 billion total debt — will be treated just like other unsecured debt, and the court will carefully consider any reduction in pension checks, according to The New York Times.
Union demands' pernicious effects on Detroit's finances have been magnified by decades of essentially one-party municipal government — by Democrats far more beholden to organized labor than to the taxpayers who elected them. “Detroit officials have ... made a habit of convincing unions to accept pension sweeteners — shorter terms of employment required, more generous multipliers, or a ‘13th check,' essentially an annual bonus — rather than pay increases,” the Detroit Free Press editorialized in July.
Such irresponsible, taxpayer-shafting giveaways to unions often occurred under the guise of “buying labor peace.” But whatever peace was bought is long gone — and Detroit's remaining taxpayers are about to learn just how heavy a price they'll really pay for the Motor City's union-driven financial folly.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.