Steven Greenhut, the Sacramento-based vice president of journalism at the Franklin Center for Government and Public Integrity, says Stockton’s bankruptcy filing is immoral.
“Suppose you go on a spending spree, purchasing luxury items on credit such as a vacation home and new cars,” he writes in City Journal. “Part of you knows the good times won’t last forever. Nevertheless, you decide to buy things you can’t afford, convincing yourself that you need and deserve them. In the process, you make some investments that don’t pan out. When ends don’t meet, you go to the bank and take out loans to pay off your older balances. Now deep in a financial hole, you hit upon a plan to climb out: simply default on your new loans by declaring bankruptcy and propose that the court let you do so without selling off most of those new toys you bought.”
This comparison is simplistic. A free-spending person has only himself to blame. The city was fiscally devastated by the foreclosure crisis — which, incidentally, was caused in large part by Wall Street. A city also has statutory obligations to protect its citizens’ safety. A city with a violent crime rate in the top 10 nationwide cannot cut its police force to the point of anarchy. On top of that, it must, by law, balance its budgets every year. If the lifeblood of its core functions is going to debt, the debt must be restructured.
All of these factors are omitted from Greenhut’s invidious analogy. As is suffering. His free-spending person never pays for his foolishness. Stockton is paing dearly in everything from international ridicule to record homicides.