Crain's -- Is bankruptcy such an awful idea...

[BankruptcyGuy]

For Chicago.

As predicted, once the Illinois Supreme Court limited the ability to change pensions, Chicago is now having discussions about bankruptcy. Can't wait for the full page NYT article and the Time magazine covers showing burned-out buildings.

http://www.chicagobusiness.com/artic...ing10-20160622

[Wesley Mouch]

I'd be curious on your take on this post-Detroit bankruptcy. Who wins, who loses. If Chicago & Illinois are 100% protecting public pensions, which I assume is most of the funding problem, would this just be a transfer of costs from the City to the State? Would there then be a state-wide tax to pay for Chicago's pensions? So the pensioners and city taxpayers would win.

Who'd lose? Probably young potential city hires who wouldn't ever get jobs at City Hall while it figures out how to pay for essential services. Curious on your thoughts, BG.

[Zacha341]

California is next. No way can they fulfill their pension obligations.

[BankruptcyGuy]

I'd be curious on your take on this post-Detroit bankruptcy. Who wins, who loses. If Chicago & Illinois are 100% protecting public pensions, which I assume is most of the funding problem, would this just be a transfer of costs from the City to the State? Would there then be a state-wide tax to pay for Chicago's pensions? So the pensioners and city taxpayers would win.

Who'd lose? Probably young potential city hires who wouldn't ever get jobs at City Hall while it figures out how to pay for essential services. Curious on your thoughts, BG.

I have to think that public pensioners lose, because right now they are guaranteed their health care benefits and cost of living allowances. That will not continue under a BK.

The biggest loser is the residents--I'm sure new taxes will be part of the settlement, and their city will take a major psychological hit [[reputational as well).

The City of Chicago has five pension systems that it funds directly. The State of Illinois has their own. All are woefully underfunded. So I don't see the State stepping in and taxing downstate residents to fund Chicago. I could be wrong.

Many, many assets in Chicago, like parking meters and the Skyway, have already been sold. Do benefactors come to the rescue? Does Chicago have other assets that it can and will monetize?

I try to limit the schadenfreude, but so many people I know in Chicago basically considered Detroit's BK as a confirmation of how bad the City was. Management? Yes. People? No. So forgive me if I don't feel the sympathy for the average Chicagoan who would be impacted.

[professorscott]

I try to limit the schadenfreude, but so many people I know in Chicago basically considered Detroit's BK as a confirmation of how bad the City was. Management? Yes. People? No. So forgive me if I don't feel the sympathy for the average Chicagoan who would be impacted.

#snort

Chicagoans were, let's call it what it was, gloating about Detroit's woes? Chicago is the textbook example of government corruption and bungling taken out to the logical extreme. Corrupt and venal New York City politicians used to look at Chicago with envy. Chicago is the city where Alphonse Capone was considered by the masses to be a great civic benefactor and philanthropist, and folks seemed perfectly happy to turn a blind eye to where the money to support the philanthropy [[which was, admittedly, a real thing) came from, or how much blood was running into the storm drains of Chicago to protect Mr. Capone's business interests. And at least he was an honest crook!

Detroit is simpler and less about greed or avarice than about stupor. Detroit waxed fat and happy as a one-industry town for the better part of a century. Think North Carolina with textiles or central upstate New York with consumer electronics, but as even a greater share of the overall economy and lasting longer. When the one industry could no longer sustain the jobs and economy it had long done, for several reasons and nobody in particular to blame, Detroit simply did not have the political or cultural infrastructure to pivot, and this is still part of the overall problem with southeast Michigan in general. Add to that the inanity of home rule and the existence of about as many suburban cities and towns as there are countries in the United Nations, and you have all the ingredients you need for a big, heaping bowl of disaster soup.

So, BK, I have just about as much empathy for the good people of northeastern Illinois as you do, and maybe even just a wee bit less

[BankruptcyGuy]

#snort

This has now permanently joined my 21st century social media lexicon. Thanks.