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August 19th, 2017

Insight

America, learn from Chicago, the next Detroit

John Stossel

By John Stossel

Published March 18, 2015

 America, learn from Chicago, the next Detroit

Rahm Emanuel, current mayor of my old hometown, Chicago, is not a gentle soul. But he's smarter than his big-spending predecessor, Richard M. Daley, and the union pawn, Jesus "Chuy" Garcia, who becomes the new mayor if he beats Emanuel in a run-off election April 7.

Emanuel was the tough Obama chief of staff who reportedly stabbed a table with a steak knife as he listed political enemies.

He relishes conflict and famously said that in politics, "You never let a serious crisis go to waste." That comment scared libertarians and conservatives, who know that government usually uses crises as excuses to increase its power.

But here's the surprise: Emanuel has been in crisis mode for four years now, and sometimes he made the right decisions as a result.

"Crisis" is not just political rhetoric. Mayor Daley and his predecessors pandered to a shallow public and gullible media by spending, borrowing and refinancing. Borrowing helped Daley stay in office for 12 years, but cities can't keep borrowing the way Chicago has.

Moody's downgraded Chicago's credit rating almost to junk-bond level last year because the city promised to pay billions of dollars in pensions to city workers but doesn't have the money.

Chicago is the next Detroit.

Emanuel tried to do some sensible things. He privatized some jobs, giving private contractors a chance to prove that they do city work better than city workers do it. He closed 50 of the city's worst schools. But he made little progress in addressing the immense pension liability.

Maybe it would have been politically impossible. The pensions are owed mostly to union teachers, cops and firemen, and none will give an inch. Teachers union protests roused the public against Emanuel's school closings.

"That school was the center of our neighborhood!" goes the refrain from the anti-Emanuel voters. "It provided good jobs."

That's probably why Emanuel was forced into a run-off election.

But bad schools should close. And some union schools were really bad.

Emanuel's opponent in the run-off, Garcia, vocally supports the unions and joins them in opposing both pension reform and competition from charter schools at all costs.

Garcia also wants a "moratorium on charter schools." But charters are a rare bright spot in the failing city.

I suppose union manipulators like Garcia worry that if more parents see how much better schools get without unions in charge, they might get other dangerous ideas. They might demand flexibility and market-based solutions in other areas.

One of my favorite things about Chicago is the so-called "Chicago school" of economics — free market advocates such as the late Nobel Prize winner Milton Friedman.

Friedman said, "a major source of objection to a free economy is precisely that it ... gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself."

Chicago's corrupt political culture has little interest in letting ordinary people experience real freedom.

Have you heard of "pay to play"? It's when politicians award contracts to businesses that pay bribes. Bribery is illegal, but clever political manipulators reframe it in ways their lawyers can call legal. It happens everywhere, but Chicago has been famous for it. Emanuel continued the tradition — one of the things he hasn't gotten right.

Somehow, investment firms that give money to Emanuel's campaign win fees to manage the city's money. Somehow, lawyers who give the right politicians money get lucrative contracts from the city. What a coincidence!

It's as if Chicago voters face a painful choice: waste or corruption. Day by day, the political class milks taxpayers dry.

Once Chicago goes bankrupt, though, a judge will presumably force the city to stop throwing money to cronies, whether unions or businessmen. Pensions will have to be trimmed so that they are sustainable.

Then the rest of America will learn from Chicago's and Detroit's failures. Maybe.

I'm doubtful, though, because so far, the political class didn't learn much from Detroit, Stockton, Greece, Cuba, Venezuela or the Soviet Union.

Maybe these are people who will never learn.

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Award-winning news correspondent John Stossel is currently with Fox Business Network and Fox News. Before making the change to Fox News, Stossel was the co-anchor of ABC News's "20/20." Eight to 10 million people watched his program weekly. Often, he ended "20/20" with a TV column called "Give Me a Break," which challenged conventional wisdom.

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