Wednesday, January 25, 2012

A Grand Bargain for California

The deadlock that has existed in the California legislature for a generation reflects a lack of clear vision on the part of both Democrats and Republicans.  Republicans, who in general regard government as out of control, have successfully pushed anti-tax polices to "starve the beast", most notably the 2/3 vote requirements imposed first by Proposition 13 and later by other propositions.  Their policies have managed to cripple many public services without impacting the real major problem with government, the lack of public control over public salaries and pensions.

Democrats, on the other hand, have castigated Republicans for destroying public services, but been unwilling to address the problem of public employee compensation practices.

We cannot solve the problems in California without getting rid of the 2/3 vote requirements in Proposition 13 and other anti-tax adoptions, but we also cannot go on allowing average public sector compensation to greatly exceed average private sector compensation.

We need someone to step forward and develop a grand bargain for California that does some things like:

1.  Repeals all 2/3 vote requirements, and precludes future adoptions imposing any higher vote requirement than the percentage of votes that approve the adoption.

2.  Links public sector total compensation to average private sector total compensation, but with mean, median and mode tests that flatten the overall salary range.  Public sector managers should not be using comparison to private sector salaries to drive their salaries up into the hundreds of thousands of dollars.

3.  Requires all public programs to be tested for effectiveness every 5 years and reauthorized every 10 years.

Tuesday, January 24, 2012

Americas most dangerous

When the Gallup Poll asks Americans which presents the greatest danger to America, big government, big business or big labor, somewhere around 60% of Americans choose big government, 20% chose big business.

My first reaction was what planet are these people living on?  What is the evidence that big government is dangerous?   Wall Street just blew up the whole world economy, leaving millions of American's out of work, with lost retirement benefits and foreclosed houses.  The last time we had a similar economic catastrophe it was also Wall Streets doing (the great depression).  Its hard to blame big government for either of these events since those arch enemies of big goverment, Republicans, were in control of government both times for the decade leading up to the collapse (although Republicans are very creative is weaseling out of responsibility).  Although certainly government contributed due to the tentacles big business has that can manipulate government to their ends.

After the last economic blow up Social Security and Medicare are all many people have to make it through their older years.  What's big business done for them lately?

The sobering reality is that what people believe isn't based in reality.  The same marketing expertise that convinces people to pay $5 for a tube of tooth paste that is no better than the $3 generic alternative, has been used by supporters of the big business viewpoint to sell voters a fictional reality.

(Poll results reported on NPR/(Marketplace, 12/14/11)

Sunday, January 22, 2012

Things Republicans could do to make me take them seriously - Public / Private partnerships

In a democracy laws are often compromises that are less about finding the best solutions than they are about giving everyone something to make them happy.  So we end up with laws that don't work for anyone except the special interests who know how to work them.  One common compromise has been to make government programs "public private" partnerships.   Generally that means private folks put up some money and take home any profits the entity produces, while public entities absorb the losses.

Public private partnerships are almost always a disaster for taxpayers.

Fannie Mae and Freddie Mac grew out of a pragmatic desire to allow more people to own homes.  But some in Congress who were representing the interests of Financial institutions used their influence to give Financial institutions a cut of the action.  The public private hybrid managed to have the worst characteristics of both and the best characteristics of neither.

Higher Education and Health Care are two other areas Congress has melded an amalgam of government functions with profit motivated private business.  For the last three decades costs for both have risen much faster than inflation, as our systems are subject to few of the controls of the marketplace.

History seems to have demonstrated that if we think some problem needs to be addressed by a Government program, it should be government only program,  Public/private partnerships are a bad idea for everyone but the investors who will be milking the taxpayers.