Shock, in Detroit
Even for Detroit, this was shocking. It's the kind of thing that finally happens after corruption and ineptitude have been allowed to persist for years.
Kevyn Orr, the emergency manager of Detroit (in office for 2 months with 16 to go) announced today that, should Detroit need to declare bankruptcy, the Detroit Institute of Arts (DIA), among other city assets, may "face exposure to creditors", that is, "the city's creditors could demand the city use its assets to settle its debts". The Institute, which opened its doors in 1885, is one of perhaps two or three cultural gems still operating in Detroit, housing a massive art collection ranked in the top six in America. Notable in the collection, valued at some $2 billion, are, among many others, Mexican artist Diego Rivera's Detroit Industry fresco cycle, which Rivera considered his most successful work, and Vincent van Gogh's Self Portrait, the first Van Gogh painting to enter a U.S. museum collection. The entire collection of 60,000 pieces, assembled over decades, is regarded as a comprehensive representation of classic to cutting-edge.
Of course, DIA executives, the broader art community, and the Detroit City Council were quick to express disbelief and outrage that a sale of the art could be even considered as part of a program of reducing Detroit's $15-17 billion debt They even dispute the legality of such a sale, arguing that while the art is owned by the City, it is held in a trust for the public, and that under an operating agreement the museum is prohibited from selling art for any purpose other than enhancing the collection.
What is being missed here is that Mr. Orr has broad power to cancel or modify city labor contracts and other agreements as he reorganizes finances. One can only imagine how many times, over the next year and a half, he (along with his fellow Emergency Managers in five other Michigan cities) will hear objections similar to the DIA's - essentially, don't touch us, go after everyone else. But along with the DIA, the public sector unions, bond holders and all other creditors will come to the realization that contracts and promises, and business-as-usual, mean little or nothing to Mr. Orr, who is empowered to achieve only one goal - solvency in Detroit.