In a post last November, I characterized Chicago as one of America's "basket case" cities. OK, it's not nearly as bad as Cleveland or Detroit, and the tourist areas in the Loop and the North Side are in good shape. But in places where very few tourists go there is an unfolding disaster on the South Side, not unlike Detroit, with population emptying out and large vacant areas. Chicago's population per the census went from a peak of 3,620,962 in 1950 to 2,695,598 in 2010, a loss of over 25% in those 60 years. In the 10 years from 2000 to 2010 Chicago continued to shrink, losing about 200,000, or around 7% of then remaining population. This is not a minor problem.
How did it get this way? Illinois is a high tax state, but not in the league of New York and California. (The Illinois Policy Institute puts Illinois in the top third of states for tax level.) But Illinois' and Chicago's special problem is public worker pensions. Not only do Illinois and Chicago have some of the most generous pension promises to their public workers, but they have systematically under-funded them, either by just skipping supposedly required annual payments, or even more crazy, by issuing bonds and then contributing the bonds as a supposed "asset" to the pension plans. Why any business making a location decision would choose Chicago over, say, Indiana or Wisconsin, is something of a mystery, but then few make that mistake. (Hey, I live in Manhattan, so there are a lot of mysteries out there!)
Here's an article from the New York Times last September describing the funding crisis of the Chicago teacher pensions. At the time, Chicago had just come off a teachers' strike, where the mayor, Rahm Emanuel, had tried and failed to get some pension concessions, like increased teacher contributions to their own pensions. The issue got postponed to the 2013 session of the state legislature, which then adjourned a few weeks ago without addressing it. So here are a few key quotes from the Times article:
The pension fund is about to hit a wall. . . .
“There’s a huge crisis,” said Laurence Msall, president of the Civic Federation, a nonpartisan research organization in Chicago that works on fiscal issues. “The problem does not get easier by waiting. The problem gets bigger, and starts to become an insurmountable obstacle.” . . .
[T]he State Legislature granted the Chicago school district a break from its pension contributions, starting in 1995. Since then, the city has never contributed the required amount; for many years it put in nothing. All the while, the teachers’ benefits kept building up.
And of course, Mayor Emanuel has now announced that some 54 schools are going to close permanently over the summer and not reopen with the new school year. Well, the population has shrunk by 25% since most of the schools were built.
Anyway, I know my solutions to these kinds of problems, which are that the government has to get some financial discipline, stop making promises it can't meet, and shrink; and if it can't, then Chicago is doomed to decline gradually and then faster in a death spiral until it disappears, like Detroit basically has.
But you already knew my solutions. What you want to know is, what does the Left propose? And the good news is, The Nation -- the perfect place to turn to get the Official Position of the Official Left -- has a long article in the soon-to-come-out July 22 issue (available online) on this very subject. The author is a guy named Rick Perlstein. The title is "Chicago Rising!" -- yes, the exclamation point is theirs.
And as far as I can tell, the answer is: PROTEST!!!!
The progressive tribes have been gathering in Chicago with force, efficiency, creativity, trust and solidarity, building a bona fide, citywide protest culture. And it’s working.
Can't say I can figure out what he means when he says "It's working." Exactly how is "protest" supposed to reverse the decline of the city and convince somebody who doesn't have to be there to show up and voluntarily pay tens of billions of dollars for the underfunded pensions?
And here's the best part: the organization that Perlstein identifies as leading the protest movement is none other than -- The Teachers Union! You really can't make this up. Perlstein describes various marches led by the Teachers Union and its leader Karen Lewis, not only protesting the school closings but also those amorphous bogey-men of "austerity" and "privatization."
And while the radicalized CTU under the leadership of Karen Lewis has deservedly received much of the credit, the teachers union is just the current tip of the spear in a long and potentially transformative movement.
Well, I can understand the game plan of the Teachers Union. They need the city to stay around just long enough for them to extract the last dime out of it, and at that point they got theirs and they don't really care if there is any city left. But how do they manage to distract and confuse ordinary citizens into not noticing the pension disaster and thinking the unions have the city's best interests at heart? If they can succeed at that, you really have to congratulate them. And Perlstein and the Nation - what's your excuse?
There are basically two approaches for a government to deal with these situations. Call them the Detroit approach and the Switzerland approach. Go for it, Chicago!