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Who Really Betrayed Detroit?

From Steven Malanga at City Journal:

Most press accounts note that city-worker pensions in Detroit are modest. They rarely mention that, for two decades, the city supplemented those pensions with annual, so-called “13th checks” for retirees—an additional monthly pension payment. Pension-fund trustees—themselves city workers, retirees, city residents, and elected officials—handed out nearly $1 billion in these annual payments to retirees in the city’s general pension fund. The trustees defended the payments as rewards to workers in years when the pension system’s investment returns exceeded projections. In lean years, they justified them as social policy.

To repeat: like the Murder victim on the Orient Express, Detroit was killed by a committee.  But the pensions were a leading member of that committee, and the annual payments and ongoing obligations created a financial friction that made every other change harder.  This was made possible by unions controlling the city’s politics, and occupying both sides of the negotiating table.

So naturally, the IRS is worried about the malign influence of citizens in politics.

Posted in Politics.

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