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Chuck Moss

Chuck Moss

Triumph of The Nerd

June 2, 2017

Governor Rick Snyder?  Who? The Democratic Party and Media say they’ve Katrina’d him as the Evil Poisoner of Flint. He picked the anti-Trump side, the national caravan’s moved on. Our economy is doing well, home prices up, Detroit is in an up phase, things are good in Michigan. But as Rick Snyder slips inevitably into lame-duckhood, no one is celebrating Governor Snyder’s brilliant and signature achievement: nothing happened. I mean something DIDN’T happen. Michigan didn’t go bankrupt.

From Reuters: “Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion U.S. municipal bond market. While it was not immediately clear just how much of Puerto Rico’s $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit’s insolvency in 2013.”

Sound familiar? “The island’s economy has been in recession for nearly 10 years, with an unemployment rate of about 11.0 percent, and the population has fallen by about 10 percent in the past decade.” The main cause? Take a guess: $49 billion out of $70 billion owed in public sector pension liabilities. Bankruptcy will definitely impact services, cut funds to doctors and choke schools. But Puerto Rico can no longer pay both its debt and public services. The economy is in shambles. Since 2007, it has lost 20% of its jobs and 10% of its population. This could have been us. Heck, this WAS us.

Here in Michigan we’re paying down the overhang, and it’s not easy. Right now, there’s more discussion about how to deal with the debt. But paying off your IOUs is serious business, because you can’t do that and still afford the stuff you’d like: like giving generous tax cuts. Still, retiring the debt continues, and the benefits promised are still being paid. No retiree is frozen out in the cold.

Back in the early 2010s, before the Detroit and GM bankruptcy, everybody talked about pension and health care benefits as Rocks of Gibraltar. “Government worker pensions are protected by the State Constitution.” “UAW retiree Health Care can’t be touched.” Well, we’ve all learned that once you go into the bankruptcy process, everything goes on the table and nobody is immune. That includes the ironclad primacy of bondholders, whose Chrysler stakes were wiped away by the lawless Obama Administration—but it stuck. Retired Detroit city employees and autoworkers alike took big “haircuts” as Nancy Pelosi put it. Puerto Ricans are going to learn this big time. But Michigan has been spared.

This is a nerd’s victory. There’s no big drama, no midnight bill signings and splashy initiatives. It’s just numbers and percentages and dry-as-dust actuarial tables. Only a nerd would take this fight on. On the other side are screaming employee unions with huge political clout, calling GENOCIDE! if you so much as touch the rate of increase. Only a nerd would grab this third rail when there are cooler things to fight about.

Rick Snyder is the school nerd. He said so on the label. John Engler wasn’t a nerd; he was the badass in a leather jacket. Jennifer Granholm was the scenery-chewing ham from the High School Thespian Club. Debt liabilities are something only the Math Society nerds understand and care about. Like compounded interest, they make all the cool kids’ eyes glaze over. Until the percentages kill you and the repo man comes around.

Speaking of cool kids: California’s next. Or New York. Illinois and Chicago are in deepest doo-doo. In Illinois, the 5 largest publicly-funded Illinois pensions are now $130BN underwater and only 37.6% funded. Chicago—ay-yi!-yi! Chicago’s funding level has dropped below 40%, the liability is in the tens of billions, taxes are rising and the middle class is fleeing. Glad we have Michigan jobs for all those expat kids of ours when they decide to move on from the urban adventure, buy a house and start a family.

It takes a nerd, I guess. And the fact Michigan has avoided bankruptcy is the Triumph of the Nerd. The nasty opposition media has tarred Snyder with blame for the Flint water mess, and wrongfully so. A bad boy like Engler would have fought them all back, Gov. Jenny would have been protected. But Michigan is in a good spot because we rejected the rule of cool and hired the nerd. He’s a lame duck now, but Rick Snyder will go down as one of our better state CEOs. He’ll never tell you himself, but that’s a nerd thing, too.

Chuck Moss teaches Political Science at Oakland University and serves on the Board of the Regional Transportation Authority. He was elected to represent the 40th District in the Michigan House and was appointed Chairman of the all-important Appropriations Committee, responsible for the entire state budget. Prior to politics, Chuck was political columnist for the DETROIT NEWS, and has hosted talk shows for radio and television.

June 1, 2017 · Filed under Chuck Moss

3 responses so far ↓

  • 1 Anagnorisis // Jun 3, 2017 at 10:11 pm

    I see no correlation between Rick Snyder and prosperity for Michigan or elsewhere; I see only Flint, Unemployment and a lame duck nerd. We know of his affection for business interests but since this doesn’t directly concern most of us it’s a moot point. Of course we don’t see the inner workings of State government, the bureaucracy that keeps things working, but we do see the inadequacies of it because we’re on the other end of the line on hold or recorded message.

  • 2 Jean Kozek // Jun 6, 2017 at 7:10 am

    If “bankruptcy” means not having enough money to pay the bills, then it is surprising that you credit Snyder from preventing it. The first term he focused on cutting business taxes. Select corporations were rewarded with almost $2 billion in yearly savings. The personal property tax, a tax on business assets were reduced. Yet, the MI budget was balanced. How? Severe cuts in spending to basics like road construction and education helped balance the budget. Taxes on wage earners and retirees were raised.

    Gov. Snyder is responsible for the poisoning of Flint water. He hired a person to run Flint and that person decided to use improperly treated water to serve its citizens. Now those same citizens are paying for Snyder’s lawyers’ fees as he prepares to go to court to defend that appointment.

    It was the Obama administration that helped two American car companies prevent bankruptcy and a major loss of middle income jobs. Your CEO Snyder was irrelevant in this instance.

    When Snyder leaves office, our state will be in worse shape. There will continue to be inadequate funding for infrastructure which continues to deteriorate. And inadequate funding for public schools so that MI remains the worst state for gains in student learning.

    He’s a nice guy but was totally unprepared for his job as governor.

  • 3 Chuck Moss // Jun 18, 2017 at 4:18 am

    Road Not Taken Dept. Here’s the Land of Lincoln as they run out of can-kicking road.

    http://hosted.ap.org/dynamic/stories/A/APFN_US_ILLINOIS_PAYING_THE_BILLS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2017-06-17-11-53-44


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