Financial Martial Law in Michigan

Rick Snyder, a former technology executive and venture capitalist, campaigned for governor of Michigan as a moderate Republican not in thrall to Tea Party politicking. He called himself "one tough nerd." He appointed another nerd, Democrat Andy Dillon, the former speaker of the Michigan House of Representatives and a former corporate turnaround expert, as treasurer. In their four months in office, they have overseen the passage of a law that's as radical an experiment as any in the country. It dramatically speeds up the process by which financially troubled cities, towns, and school districts can be taken over by state-appointed emergency managers.

The law gives those managers—often former politicians or civil servants—broad and controversial powers, including the authority to void union contracts and remove elected officials. It has also given other outsiders, namely private consultants and restructuring experts, an opportunity to do to distressed places what they've done to distressed companies. "Ninety percent of the law is an early warning system," says Representative Al Pscholka, who sponsored it. "The fundamental point is that if the municipality had made the hard choices there would be no need for an emergency manager."