San Bernardino, California – On the front door of the San Bernardino city hall is a sign that reads: “Out of Order.” Broke city, broken door: There’s a certain pleasing symmetry in the fact that the San Bernardino city council meets behind a door that, like the city government itself, does not work and is in need of replacement. On this particular evening in late July, the council has met to make public what everybody already knows: Intellectually bankrupt, morally bankrupt — the city is under criminal investigation for sundry financial shenanigans — San Bernardino is above all old-fashioned bankrupt bankrupt, a pitiful penniless pauper that cannot even afford a cup of coffee: Seriously — the coffee guy wants cash up front now and has stopped serving the municipal office building until the city makes good on its latte liabilities. This is a paddle-free scato-riparian fiscal expedition of the first order.
After a great deal of self-congratulatory speechification — during which one council member used the phrase “the buck stops” no fewer than five times without once getting it quite right, laid out a little Boston Consulting–style two-by-two matrix to explain his analysis of the situation, repeatedly reminded the citizens of how often he had “prayed for strength” during his four long months in elected office, and generally made a po-faced spectacle of himself — after all that, the feckless ladies and clueless gentlemen of the San Bernardino city council voted to seek shelter under Chapter 9 of the U.S. bankruptcy code, a law that deals specifically with municipal bankruptcies and grants cities an extraordinary level of protection during financial reorganizations. A phalanx of pant-suited she-bureaucrats and the city attorney explained that in addition to filing for bankruptcy, the city needed to declare a fiscal emergency, because it did not have enough money even to last through the 60-day waiting period that would follow initiating the bankruptcy. The moment was not without levity: When one of the ladies of the city council inquired as to which court would hear the case, the city attorney explained that he was pretty sure the city’s filing under federal bankruptcy law would be heard in federal bankruptcy court. When another council member inquired as to why the city was filing under Chapter 9 instead of the more famous Chapter 11, the city attorney gently explained that the municipality was filing under the municipal-bankruptcy law because it is a municipality, not a guy with hospital bills and a mortgage in default.