Big Finance Likes Totalitarianism, but Democracy Requires Hard Lessons

I'll admit that I don't have much new to say about the continuing activities of the state-appointed budget commission now ruling East Providence:

The state-appointed budget commission overseeing the city's finances convened for the first time Wednesday, chose Michael O'Keefe, a former state budget director, as its president, and established its first priority: improving the city’s cash flow.

Essentially, that means debt; the city needs $10 million in tax anticipation notes, and the lowering of its rating to "junk" will make that "more difficult and expensive," as O'Keefe puts it. It all comes back to government debt and charming investors. We've discussed previously that the municipal takeovers are meant as "a statement to Wall Street," and the point merits continued emphasis. What Wall Street likes about state-imposed budget commissions is that they open the door to options that might benefit civic units as economic entities, but not necessarily as self-determinant civil societies. The state can take money from other parts of the state to hand to struggling cities and towns; it can impose taxes on local residents without fearing democratic reaction; it can change policies and, ultimately, contracts to address shortfalls.

At bottom, the problem is that the way in which the state determines a preferred mix of these solutions will depend on the influences on it. That means not only special interests, like organized labor, but also the general priorities of the class of people who occupy the state's bureaucracy and elected positions. The people who actually live in a city or town are not likely to rate very highly, and voters in other cities and towns are not likely to pay all that much attention.

I'd suggest that a healthier solution — in the long term, and with an eye toward effective democracy — would be to let a city or town run out of money. Let it reach the point at which it cannot provide services or pay employees. Or, alternately, that it must raise taxes and impose fees almost immediately. If we're to be a self-governing people, we have to experience, together, the consequences of incompetent leaders and bad decisions.

Of course, if people start learning such lessons on the small, local scale, they might begin applying them at the state and national levels. And we couldn't have that, now could we?