“Calpers argued that the California constitution’s guarantee of contracts shielded pensions from cuts in bankruptcy. The fund also asserted sovereign immunity and police powers as an ‘arm of the state,’ including a lien on municipal assets.” –  Wall Street Journal Editorial, “Calpers Gets Schooled,” February 8, 2015 If you want powerful evidence of crony capitalism...

Exceptionally good news from California today: A federal judge ruled Calpers claim of “Sanctity of Pensions” is invalid. Today’s ruling went even further than the bankrupt city of Stockton originally sought in court. For details, please consider the New York Times article In Ruling on California Town’s Bankruptcy, Judge Challenges Sanctity of Pensions.  A federal bankruptcy...

Now that a federal judge in Michigan has properly ruled pension obligations are not sacrosanct (see Lesson for Union Dinosaurs) the spotlight is once again on union dinosaurs in California. Bankrupt San Bernardino foolishly did not attempt to shed pension obligations in bankruptcy, but perhaps it can now reconsider. What about Stockton and Vallejo? On April...

Editor’s Note:  An article published today in the Stockton Record’s reports “Deis: City won’t tackle pension reform.” Bob Deis is Stockton’s city manager. Apparently he doesn’t want Stockton to be the first to fall. As soon as one city restructures their pensions, every city and county in California will follow, because the alternative is a...

A few days ago a federal judge sided with the city of Stockton, validating its bankruptcy. See Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith. Bondholders screamed, but the ruling made sense. What did not make sense (except from the point of view of politicians protecting their own undeserved pensions), was...

Ever since California’s voters approved the Prop. 30 sales-and income-tax increase on the November ballot, liberal commentators have been gloating about the resurgence of the Golden State after many years of predicted doom and gloom. Their evidence: Higher taxes seem to have cleared up the state’s budget deficits. As New York Times columnist Paul Krugman wrote recently,...

Today a judge ruled that the city of Stockton California is indeed bankrupt and that the city acted in good faith. Creditors asked the judge to void the bankruptcy, saying the city could raise taxes instead. I have been watching this story for a while. Here is some background on the Stockton bankruptcy as reported by Arizona Central....

Few non-local people pay much attention to the goings-on in Stockton, a hard-pressed Gold-Rush-era industrial city of 300,000 that sits in the agriculturally rich San Joaquin Valley at the eastern edge of the California Delta. But bondholders, taxpayers and government officials throughout the country will be listening to U.S. Bankruptcy Judge Christopher Klein’s expected ruling...