I can’t believe that Reuters is so truthful about what happened. I think this is my favorite headline ever:
Voters in bankrupt San Bernardino sweep old guard from power
Residents of bankrupt San Bernardino, California on Tuesday voted to complete a rout of the city’s pro-union old guard, electing business-friendly pragmatists who have pledged to try to reduce pension costs and take on vested interests.
As San Bernardino enters into a fourth month of mediation with its creditors, the biggest of which is Calpers, California’s giant retirement system, voters on Tuesday elected Carey Davis as the crisis-hit city’s new mayor.
I would expect the mainstream press to spin this as a negative thing. They don’t. Regime change is here (at least for now). This is a huge deal because San Bernardino is setting a precedent and showing other cities what is possible. It is quite possible that this vote and the fallout from it shows us the future of the nation.
Along with Detroit, the biggest U.S. city to seek Chapter 9 protection, San Bernardino is likely to set precedent on whether retirees or Wall Street bondholders suffer the most when a city goes broke.
That’s an unfortunate way of putting it because how much people suffer is hard to measure and compare. I’m not sure I understand why the bonds held by California Public Employees’ Retirement System (Calpers), America’s largest public pension system should be treated differently than bonds held by anyone else. It seems to me they should all take a “haircut.”
Notice that this new leadership is new to politics. They are a “new guard” in every way.
Davis, a businessman and political novice, ran in part on a campaign to reduce the city’s pension obligations. In an interview in November, when he became one of two mayoral candidates, he said the city had to cut spending on police and fire departments, currently more than 70 percent of the budget.
“You have to roll the pensions back,” Davis said in November. Davis did not return calls on Wednesday.
Davis will play a big role in how the city approaches negotiations with its creditors. He will be part of a small team of elected officials who represent the city as the debtor in the bankruptcy.
I have no idea if any of these officials can be described as “conservative.” But getting rid of the myth of governments as omnipotent spenders who can absorb infinite debt would be a major conservative victory.