I enjoyed speaking with Charles Gasparino on Fox Business today.
Gasparino will, I hope, work through his Meredith Whitney trouble, a relationship in which I can’t even score a gay best friend supporting role. (This was my first encounter with Gasparino and I’ve never met Whitney.) Because prophecy was given to fools, I do not and never have put any bet on Whitney's claim of 50 to 100 large municipal bankruptcies in the near future, nor for that matter have I weighed in on former Los Angeles Mayor Richard Riordan's estimate that 90 percent of municipalities will default. To be sporting I'll say: I think The Big Dick's figure seems high.
As for Gasparino's broader claim that Reason and the rest of the "political right" want to use bankruptcy as a tool to break government employee unions, I can't speak for the political right because I'm a libertarian. But I believe Gasparino's repeated use of phrases like "imminent municipal Armageddon," "doomsday" and "cataclysmic proportions" is silly and hysterical. Bankruptcy – including and maybe in particular government bankruptcy – is not the end of the world. If it were, Orange County would not be one of the most pleasant places to live on this or any other known planet. Bankruptcy is the legal tool the Magna Carta nations have devised to allow the insolvent to get out of their ruinous contractual agreements. I do not believe all government employee pensions could be torn up even in a bankruptcy process. (Coming attractions: I will soon be rattling the teeth of readers everywhere with a detailed look at the legal framework for getting out of pension obligations.) In fact, I am aware (I don’t know whether Gasparino knows this) that government employee organizing may not even be a primary cause of the state fiscal crisis. I know that because I read it – sorry: wrote it – in Reason.
In fact, I am puzzled why Gasparino refers to the “progress” made by Wisconsin Gov. Scott Walker when Walker does not have a budget passed and the Badger State’s non-partisan Legislative Fiscal Bureau says his proposed budget will increase spending. Does he mean that Walker achieved quorumless passage of his court-enjoined abolition of public sector bargaining rights? If that’s the progress, then which of us, Charlie, is a tool of the right?
I join Gasparino in applauding New York Gov. Andrew Cuomo’s apparent consensus on a balanced budget that cuts spending, though I’m not sure why Gasparino writes three lines expressing his surprise that a Democrat pulled that off. Party affiliation, like skin color, is something I don’t even notice. I think Gasparino has the problem here.
I also applaud Gasparino on having achieved a successful career as a financial journalist. It seemed to me he was unduly defensive about this and resented my wandering onto his turf – but please watch the video and make up your own mind. As Quincy told the punk rockers in the beloved punk rock episode of Quincy, M.E., I don’t care what kind of names you call me. But if Gasparino says I “couldn’t care less about investors losing money amid a panic,” I say proudly guilty as charged. It’s not my business – nor should it be any journalist’s business – to make anybody feel better. In my previous post I listed many reasons why bond buyers are right to be losing their appetite for municipal debt. If you’d like another reason, check out Randall Jensen’s fine reporting on Victorville, California’s strenuous and possibly extra-legal efforts to avoid bankruptcy in The Bond Buyer. And if you’d like a good argument against municipal bankruptcy, you may enjoy Chicago attorney James E. Spiotto’s testimony [pdf] to the House Judiciary Committee.
I wish Gasparino, and for that matter Whitney, the best of luck, so long as their interests do not conflict with mine.