Sarah Lazare, a staff writer at Common Dreams, reports that Detroit’s bankruptcy is not the fault of pension funds. A report by Demos has found that bank deals, including “swaps,” have put the city in its current hole. The deals never should have been made given the city’s shaky standing. It’s almost as if the banks wanted Detroit to go bankrupt, so they could sweep in and clean the carcass. Another factor fueling the city’s failure was corporate subsidies, which the weak city gave to corporations that are flush with cash. Given all this, it makes perfect sense to blame pension funds and the workers who will lose all of their pensions. What’s going on in Detroit is criminal, but as we saw in the Banking Crisis of 2008 and its aftermath, bankers cannot be held responsible for their wrong doing. They get a bail out. Detroit gets the shaft.
Writing in Common Dreams, Jack Rasmus, an economics Professor at St. Mary’s College and Santa Clara University, examines media myths about the role of public unions and pension under funding. Rasmus’s point is simple: Don’t blame the victim. The same politicians who know point the fingers at unions made decisions that led to the funding problems.