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The press gets the story wrong.  

Bankrupt cities? Don't blame unions
Stockton and San Bernardino, California  were brought down by the most severe housing busts in the nation, and by banks peddling subprime mortgages to poorly paid workers.
By Harold Meyerson.  July 25, 2012
The reporting and commentary on the bankruptcies of California cities over the last month haven't been journalism's finest hour. From reading the voluminous accounts of the fiscal woes of Stockton and San Bernardino, you'd think that municipal unions and feckless city officials are primarily what led these cities down the path to fiscal ruin.
But you'd be wrong. What bankrupted Stockton and San Bernardino were the most severe housing busts in the nation. What bankrupted those two cities were banks peddling subprime mortgages to poorly paid workers.
That story has been missing from most accounts of the debacle, which instead focus on the preferred narrative of the right and center-right: that of fiscal irresponsibility and overpaid public employees. "Another city sinks in pension morass," the Orange County Register editorialized. The problem common to the cities, wrote Sacramento Bee columnist Dan Walters, is that "elected leaders and appointed managers succumbed to hubris and political pressure, particularly from their employee unions."
Read the entire op-ed.,0,6443912.story

Originally posted to dcampbell on Wed Jul 25, 2012 at 11:46 AM PDT.

Also republished by California politics.

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Comment Preferences

  •  thanks (1+ / 0-)
    Recommended by:

    an important story, because these bankruptcies are always reported as if they were strictly the fault of the unions. The awful and widely syndicated Dan Walters is probably California's leading manufacturer of conventional wisdom.

    "Great is the guilt of an unnecessary war" - John Adams

    by esquimaux on Wed Jul 25, 2012 at 11:52:37 AM PDT

  •  Lot's of blame to go around (2+ / 0-)
    Recommended by:
    zqxj, ladybug53

    Bankrupt cities are due to many factors, not just employee unions, or sub prime mortgages. The spike in housing prices provided a windfall of property tax revenue for local governments that most politicians didn't recognize as a windfall and increased their budgets, and long term commitments, assuming the new level of revenues were sustainable. Given that we have had a history of housing cycles in California it would have been better if the windfall had been spent on one time expenses like infrastructure, or put in reserve, rather than increasing long term obligations and spending commitments.  

    "let's talk about that"

    by VClib on Wed Jul 25, 2012 at 12:35:34 PM PDT

  •  Well, "feckless" officials are partly to blame (1+ / 0-)
    Recommended by:

    I live in San Bernardino. This city has had massively corrupt leadership since, um, forever. I call it Tammanydino.

    I am progressive. I am liberal. I make no apologies. - Kos

    My political compass: - 8.38,-6.97

    by pucklady on Wed Jul 25, 2012 at 01:47:23 PM PDT

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