"We Paid Our Dues"

The opening salvos in the City of Detroit bankruptcy were fired off last week.  The great question, of course, is what happens to the city employee pensions.  You see, in many state constitutions there is a clause that states that the pensions of government employees cannot be tampered with.

There is often also a clause that the doctors must be paid, but that is another story.  But here is the kicker: The constitutions do not tell us who is to pay those pensions.

The great state of Michigan is one of the states with a pension provision.  You can't take the pensions away from those deserving public employees.  No sir.  And so, last Friday, a judge in Michigan declared that the pensions of city employees could not be reduced.

Ingham County Circuit Court Judge Rosemarie Aquilina sided with creditors including retired city workers who fear Detroit will not pay pensions in full.

She wrote that the governor of the state of Michigan had no right to "diminish or impair pension benefits."

A firefighters' union official chimed in on this.

Al Grant, Secretary and Treasurer for the Retired Detroit Police and Fire Fighters Association said:

“Hey, you made a promise. You just can’t say, ‘Eh, forget about that’. They kicked the can down the road long enough, and they said, ‘It’s not my problem. I’ll be out of office. I won’t be there’. It’s all catching up now. I don’t think it’s right for us to have to take any hit. We paid our dues.”

Now there are famous last words: "We paid our dues."  It reminds us of the famous last words of the bank depositor: "They said it was safe."  That's what the People of the Victimized Self always say.  "They" did it to me.

But we can see what the governor is looking to do about the inviolability of pensions as set forth in the constitution.  Here is Detroit Emergency Manager Kevyn Orr:

“All we’re talking about in this restructuring is the unfunded component of those pension funds,” Orr said. “There are going to have to be concessions. Concessions may be different for each fund. And they’re going to be focused on the unfunded component.”

Ah yes.  Brilliant.  You could express the evolving strategy in the form of a child's riddle:

"When is a pension plan not a pension plan?  When it isn't fully funded."

It's really pretty elegant.  Look, any amount that the government employee has contributed to her pension, she should get.  Any amount that the government has contributed to her pensions she should get.  But any amount that was promised and that has not actually been paid: that's up for grabs.

Why not?  After all, the union leaders aren't fools.  The politicians they supported for election aren't fools.  If they wanted the city employee pensions to be bullet-proof they should have all agreed in a smoke-filled room that there would be no "promises" where pensions were concerned.   The government would put the monies in every year.  Period.

But in fact both sides of the bargaining table opted for shining promises rather than cash on the barrel-head.  Promises are cheap.  Cash on the barrel-head is expensive.  It means tax increases or cuts in spending right now, not way off in the future.

But what do we do now, now that the "blue social model" is broken?  Walter Russell Mead is in problem-solving mode:

At Via Meadia, we’ll be looking for practical ideas for making Detroit work again; this crisis is a challenge for everyone who cares about the future of the United States. It’s not enough to find fault with what has been done in the past; what matters is figuring out how to make a better future. We’d like to see more competition between the left and the right to develop creative approaches to the problems of Detroit: that’s the kind of intellectual and political competition the whole country needs.

 Hum.  Yes, of course we all want to get beyond the blame game and make a better future.  But on the other hand we obviously can't start to solve the problem until certain people get out of denial.  And the people in denial in this case just happen to be the whole liberal ruling class.

In other words, if liberals want conservative help and conservative money to fix the problems that they caused with their unscientific faith in the power and efficacy of the liberal administrative state then they have to admit something to themselves (let alone to conservatives).  They have to admit that their blueprint for a better future is in fact upside down, and amounts to a blueprint for a bankrupt future.

Because until that happens we will just be throwing good money after bad.