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Politics as Usual: Bankruptcy is far from a good option for RI towns (OPINION)

March 21, 2012

Back before it became a cliché, Michael Douglas’ stemwinding speech in the Oliver Stone movie “Wall Street” was a memorable and oft-quoted piece of cinematic oratory, flowing from its iconoclastic catchphrase, “Greed is good.” (Actually, what Douglas’s amoral financier Gordon Gekko said was, “Greed, for lack of a better word, is good.”)
The very audacity of it! This guy is saying greed — one of the seven deadly sins, for Pete’s sake! – is good and worthwhile; valuable, even. That’s certainly a whole new way of looking at things, isn’t it?
Central Falls Receiver Robert Flanders had something of a Gordon Gekko moment over the weekend at the RI Statewide Coalition (RISC) annual winter meeting rhapsodizing about not greed, but bankruptcy of all things.
Flanders sees bankruptcy not as an odious and shameful practice of turning your back on your obligations and violating your word of honor – no, no, no. He sees it as “just too good a tool to push the reset button and start again. It’s just too good an opportunity to let pass.”
Bankruptcy, he told the taxpayer’s group, “is not a horrible thing. It is a thing we ought to be doing.” Ought to be doing? Seriously?
Yup, that’s how the judge looks at it.
“Far from being a bad thing, it is a good and necessary option.” In some cases, I MIGHT go along with necessary. But good? Good as in virtuous, right or commendable? (One of the Merriam-Webster definitions.) Good as in wholesome, worthy? Good as in true, honorable? (M-R again.)
No, I figure Flanders was thinking of good as in expedient, handy. Good for him, in other words.
Bankruptcy is to Flanders what spinach is to Popeye; it is what gives him his power and strength.
“It was basically discovering virgin territory,” he said of Central Falls’ foray into Chapter 9 bankruptcy, one of the few cities and towns in the country ever to go that route, “to try and figure out how this thing worked and what it meant. What few precedents existed suggested that on the day a city or town decided to file for this option, it can unilaterally implement all the changes and all the savings and all the restructurings that the receiver believes are necessary…From Day 1 that can happen. No need to wait for the bankruptcy judge’s approval, which is eventually needed. The important thing is that you can stop the bleeding the day the petition is filed.”
How cool is that? It’s like having Harry Potter’s very own magic wand. Presto! You can stop the bleeding! The city’s bleeding that is.
Flanders doesn’t mention the collateral damage: The retirees who have their pensions cut by more than half. The longtime city employees who have their careers and livelihoods pulled out from under their feet. The poverty-ridden residents who see their car taxes and their property taxes (or rents) suddenly skyrocket. What do they do to stop their bleeding? Where is their magic wand? What is available to them on Day 1 to help them make everything alright again?
Unlike Gekko, Flanders didn’t lack for a better word to use to describe his morally bankrupt defense of bankruptcy. “If it wasn’t called bankruptcy,” he said Saturday, “if it was called restructuring, if it was called debt adjustment, if it was called reorganization, we’d be doing more of it.”
Not only could and should we be doing more of it, Flanders believes, but we shouldn’t let any sense of shame or moral opprobrium get in our way, either.
“Get over the stigma!” of going back on your word and reneging on deals supposedly made in good faith, he encouraged the RISC crowd and, presumably, the two mayors (including Woonsocket’s Leo Fontaine) and one city advisor on stage, “Stigma, Schtigma!”
They say people get the government they deserve. But for the life of me, I can’t think of what the people of Central Falls did to deserve this.

n Folks interested in Rhode Island and history and politics and the politics and history of Rhode Island should read a truly terrific book: Roger Williams and the Creation of the American Soul: Church, State, and the Birth of Liberty by John Barry.
Barry has done a work of prodigious scholarship, tracing Williams back to his start as a protégé of British thinkers such as Edward Coke and Sir Francis Bacon, analyzing how what Williams saw during Britain’s near-constant back-and-forth battles over religion and its relationship to the governments shaped his later thinking on separation of church and state and how that culminated in the lively experiment we are still living in today. If you think that experiment isn’t still ongoing, ask the workers who had to chisel the prayer banner off the wall of Cranston West High School last week.
This book isn’t for the casual reader, or something to shove into your beach bag this summer. It is a heavyweight, thought provoking piece of non-fiction, not the simplistic, “What Cheer, Netop?” of the history textbooks.
Back in the 1630s the Puritans took their disputes over religion seriously. It was a dispute over whether the government of the colony should be able to enforce the first four of the Ten Commandments, the ones dealing with man’s relationship to God – that got Williams banished from Massachusetts and sent out into the wilderness in the middle of a harsh winter and left to the mercies of what were then called “the Savages,” meaning the Narragansett Indians, to settle a colony whose first principle was “soul liberty,” the right of each person to worship (or not) as he or she sees fit. That alone would have been enough to give him a place in the history books forever, but there is more.
One of the things that I found interesting about the book is that Williams’ strongly held opinions about the separation of church and state were not the only way he was ahead of his time. He was also one of the few people in those days to recognize the consent of the governed as the moral authority for government.
In those days, the conventional wisdom was that the authority for governing descended from God to the king, or whatever potentate was in charge, who then ruled over the populace. Williams challenged what was called the divine right of kings, suggesting that people can form their own governments with the leaders answering to those who put them in power.
Not bad for one guy from Rhode Island.

Jim Baron covers politics and the statehouse in Rhode Island for the Rhode Island Media Group. He can be reached at

Southern Rhode Island Newspapers
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bankruptcy vs restructuring

March 22, 2012 by mgr1929, 3 years 28 weeks ago
Comment: 209

Mr Baron,
You don't seem to understand the issue here. Your populist twist and Gordon Gekko references are counterproductive. Years of public sector unions and elected officials abuse of taxpayer promises have finally been exposed to reality. We're broke. Is your answer to raise property taxes 30 to 50% over the next few years just to stay out of bankruptcy? What do you think the fiscal situation will be then? The reality is we are on the road to bankruptcy for many cities in Rhode Island and across the nation. Decision time is now. One side won't negotiate. Restructuring under the current law is the best way to keep the towns operating and avoid crushing everyone with exploding property taxes in the most tax unfriendly state in the union.

Michael Riley


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