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Matt Miller's cover story in The Deal magazine, which analyzes the legal issues underlying proposals to allow states to go bankrupt ("The world wonders: Can states go bankrupt?" Feb. 21), is really a superb piece of work. The underlying issue, despite the sound bites you hear on political platforms and on cable shouting matches, is neither legally straightforward nor necessarily easy to implement. Miller has diligently talked to some of the leading bankruptcy scholars -- who, in fact, disagree on the effectiveness or even constitutionality of states filing for bankruptcy. And indeed, the question involves fundamental issues such as states' rights -- Miller points out the irony of Newt Gingrich and Jeb Bush proposing a step that would seriously erode states' rights -- the difference between municipalities and states and the role of federal judges in state matters.
Miller's piece is particularly enlightening given the attempts across the country, triggered in Wisconsin but spreading to Ohio, Tennessee and Indiana, to kill collective bargaining by public-employee unions. It's interesting to read some of the original coverage of Gingrich's proposal that would allow states to file for bankruptcy: The impetus was always the sense that federal bankruptcy judges would break public employee union contracts in order to reduce wages and benefits. Gingrich articulates that yearning to deal with the unions and keep taxes low in this passage from a speech quoted in a Pensions and Investments story on Jan. 10:
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