Detroit, Is That You? Chicago In Big Trouble
Walter Russell Mead
The American Interest
July 30, 2013
It looks like Detroit may yet have competition for the distinction of America’s most poorly run city. The unprecedented triple-drop in Chicago’s bond rating and the city’s shiny new long-term debt figure—$29 billion—should have pols quaking in their boots. The Chicago Sun-Times has published some distressing numbers from Chicago’s recent audits:
- The number of “physical arrests” by Chicago Police officers declined again — from 152,740 in 2011 to 145,390 in 2012. That continues a six-year trend that coincides with the hiring slowdown that caused a dramatic decline in the number of police officers. Police made 227,576 arrests in 2006. The number of arrests has been dropping like a rock ever since….
- Emergency responses continued their steady rise — to 472,752. That’s up from 300,971 in 2006.…
- The 55 percent subsidy to retiree health care that Emanuel wants to phase out and retirees are suing to maintain cost the city $97.5 million in 2012.
- The condition of Chicago’s four city employee pension funds is growing ever more precarious. The firefighters pension fund has assets to cover just 25 percent of liabilities, followed by: Police (31 percent); Municipal Employees (38 percent) and Laborers (56 percent).
In addition to the pension, law enforcement, and emergency response concerns that remind us of a certain bankrupt city across the lake, the report notes that three of Chicago’s four largest private employers (JP Morgan, Accenture LLP, and Northern Trust) are in finance. It seems like blue cities have a codependent relationship with the one percenters progressives claim to hate.
It hasn’t all hit the fan quite yet, but Chicago seems perilously close to real trouble. The city is all out of money, and with an imploding public education system and harrowing levels of violence, it is losing residents fast. Illinois, which itself lost more than 800,000 people to out-migration in the past two decades, is essentially Chicago on a larger scale, with hundreds of billions in unfunded pension liabilities and complete political sclerosis. The state cannot bail out Chicago, and judging by the feds’ reluctance to even lift a finger for Detroit, Chicago shouldn’t expect much more.
Stories like these tend to expose the pointlessness of a lot of American political debate. Defenders of the blue social model will prattle on about its many virtues, and they certainly have some accomplishments to point to. But ultimately the blue model is no longer a matter of choice: cities like Detroit and Chicago and states like Illinois will eventually have to shift away from blue policies whether they like them or not. When the money runs out, one of the luxuries you can no longer afford is self-deception.
We hope that an economic recovery will give cities like Chicago some more time to make adjustments, but if the past is any guide to future behavior, any new income the city sees will be spent on maintaining a Potemkin façade, with the next inevitable downturn finding Chicago in worse shape than ever.
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