| The problem is that this "shared sacrifice" does not seem to apply to the big banks that abetted Detroit's descent into bankruptcy. Detroit's problems are a reminder of broader challenges, identified but still unmet: protecting pensions; protecting municipalities from Wall Street; and, at long last, revoking the obscene privileges of banks that allow them to prosper on the failings of others. The banks' 25 percent hit is nothing compared with the 90 percent cut to pensions suggested by the city -- a cut that would be disastrous in both human and political terms * The special treatment banks receive when debtors are in or near bankruptcy is unfair and economically destabilizing. the banks are paid first, even before other secured creditors and certainly before pensioners. But the haircut doesn't mean that the banks will suffer. They have already made money on the swaps |
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