All-American City with an All-American Problem

There’s really nothing particularly special about this small American city of under 300,000 people that sits in the middle of some of our richest agricultural land, the California Central Valley, sort of in the middle of the whole state. You might not have traveled up Interstate 5 to enjoy the annual Asparagus Festival or explored the thousands of miles of regional waterways and canals that form the San Joaquin Delta or recall the town’s heyday during the Gold Rush, because these days Stockton is one of those places you’re likely to pass on the way to somewhere else.

But there’s a new crowd of visitors to Stockton these days, and warm and friend is not exactly how they feel. They’re lawyers, politicians, bankers and Wall Street mavens that are struggling with a small city on the verge of going under. It would be the largest city in the United States to file for protection under Chapter 9 of the Bankruptcy code, an event that seems increasingly likely.

“During a contentious meeting that stretched late into the night [on February 28^th], the City Council decided, nearly unanimously, to begin mediation with public employee unions and major bond creditors in what is widely seen as the city’s last-ditch attempt to restructure its finances outside of bankruptcy. Facing a budget deficit from $20 million to $38 million on a budget of roughly $165 million, the Council declared a fiscal emergency for the third year in a row…

“Under a law passed by the California Legislature last year, cities must hire a third-party mediator to help negotiate with unions and debtors for a period of 90 days before declaring Chapter 9 bankruptcy. Stockton will be the first to test the new procedure. Nearby, Vallejo, Calif., declared bankruptcy in 2008, and Stockton has hired the same bankruptcy lawyer who represented that city… Stockton officials say they hope mediation will allow them to avoid bankruptcy and indicated they might focus their push on reducing generous retiree health benefits. The city is also suspending $2 million in debt payments this year.” New York Times, February 29^th.

Things are truly deteriorating in this economically slammed community. At a staggering 15.9% rate, unemployment sits well above the levels even for California. The real estate market here collapsed in the subprime debt crisis, and the city led the nation in resulting foreclosures. The tax base simply vaporized. Depressed people generate some even more depressing realities. The sad state of affairs in this small town are amplified in some rather unpleasant numbers and facts reported in Wikipedia: “In the February 2, 2011 issue of Forbes, the magazine gave Stockton the dubious distinction of being the ‘most miserable’ US city, largely as a result of the steep drop in home values…Central Connecticut State University surveys from 2005 and 2006 ranked the city as the least literate of all U.S. cities with a population of more than 250,000… According to a Gallup poll, Stockton was tied with Montgomery, Alabama for the most obese metro area in the United States of America with an obesity rate of 34.6 percent… Stockton was rated by Forbes in 2009 as America's fifth most dangerous city because of its crime rate.”

I hear bonuses are down but earnings up on Wall Street these days, and if you’ve traveled to our nation’s capital recently, you might be aware of how expensive real estate remains there, a reflection of the insulation from the pain that many parts of this great land are facing… so far away. As we make tough choices in reducing our deficit, exactly whom are we going to choose to sacrifice? Stockton seems to be one of the likely choices. Then again, we could keep spending on a military, where it seems, it costs a staggering $850,000 to keep a single soldier in Afghanistan for a year, according to Defense Secretary Leon Panetta’s testimony before a Congressional committee. Being the world’s policeman doesn’t come cheap, even if our missions seem to fail a lot these days. Who are we anyway in today’s world, and exactly what are our priorities? What does it mean to be an American today?

I’m Peter Dekom, and where exactly is that great American spirit, laced with concern for our fellow citizens, that once defined our very essence?