Manage

In a post at City Journal Aaron Renn covers some of the same territory about Chicago’s woes that I did yesterday:

So long as reformers are constitutionally prevented from curtailing union power in Illinois and Chicago, the pension crisis will continue to worsen. And, so long as it does, the financial environment in Chicagoland will deteriorate and people will keep leaving. Because the current Illinois constitution acts as a one-way ratchet on retirement benefits, it’s hard to see a way out of this catastrophic situation.

There are actually several possible strategies. The first is to amend the state’s constitution. Given that both houses of Illinois’s legislature are controlled by Democrats and how beholden those Democratic politicians are to public employee unions, that would be difficult but it’s not impossible.

The second is bankruptcy. With what appears to be a rapidly accelerating crisis in Chicago, abetted by Mayor Rahm Emanuel’s fecklessness, the previously unthinkable is becoming a lot more thinkable. Even appealing. The powers of judges in cases of bankruptcy are nearly limitless. They can set aside contracts, demand that taxes be raised. They can have uncooperative politicians thrown in jail. However, allowing Chicago or CPS or both to declare bankruptcy will require an act of the legislature which makes it much harder.

My advice is manage the decline. Acknowledge that Chicago is going to decline in population, economic activity, and tax base. Don’t expand schools or build new roads, bridges, etc. Prioritize what’s important and maintain them as well as you can.

Of course if our political leadership were actually able to prioritize what’s important we wouldn’t be in this mess.