Government Benefits

One unfortunate characteristic of government benefits such as unemployment or various types of social welfare payments is that people who work the system may stretch the truth and receive the benefits while similarly situated people who are more honest don't qualify for the benefits.

It is difficult and expensive to discover fraud, so to the extent possible benefits should be designed to limit misuse. For example, benefits could be structured so everyone is entitled to a certain amount of benefits over their lifetime, with an absolute ceiling regardless of circumstances, and a cash payment for unused benefits upon retirement. That way those who behave honestly aren't subsidizing the dishonest.

Government Salaries

July 2010. Voters often have little knowledge or control over Government salaries.According to the U.S. Bureau of Labor Statistics, the average weekly salary of the American Worker as of January 2010 is $629.04, or $32,708.10 per year.

News reports have revealed the City Manager of the City of Bell, California, makes nearly $800,000 a year. Bell is a relatively small city in greater Los Angeles. The city population is 36,000 people. Other city employees have salaries of hundreds of thousands of dollars a year, and many have six figure pensions when they chose to retire.

Famously the City of Vallejo, California, with a population of about 124,000, went into bankruptcy a couple years ago and it was revealed somewhere around 150 city employees received over $100,000 a year in salaries, plus very generous pensions and benefits, with a number of city employees, and some nurses and public safety personnel making over $200,000 a year not counting pensions and benefits.

The controls over public sector salaries often don't work. The employees who want to make more money have knowledge, access and influence over the local legislative bodies. The local legislators want to get reelected so they work to please the most vocal and aware voters. It is almost impossible for voters to control public sector salaries as they have little time, little or no information, and it is inherently difficult to measure productivity in many government jobs since there is no bottom line to measure against.

Government is important, but the private sector is what creates wealth.

Government should function as a service where the employees are motivated primarily by the desire to help people, not by the desire to make money. But the notion of "public service" has become an argument for higher salaries, rather than a measure of something forgone to serve the public. Government jobs already tend to provide more stability than private sector jobs because of the ongoing nature of government responsibilities. People who are motivated primarily by making a lot of money should not be working for the government.

The lack of working controls over Government salaries has resulted in many people who are primarily motivated by making money moving into, or staying in public employment. Even people who started out in Government motivated by a desire to do "public service" may stay in Government later in life after their focus becomes more on making money. They use their knowledge of government to find a way to squeeze more money out of government. The system should be set up so people who are primarily motivated by money move into the private sector.

Conclusion? Perhaps Government salaries and benefits should be limited by law to schedules measured by the average private sector salary/benefits in that region. The schedules should be set so Government workers who reach a point in their life where they want to make more money will move into the private sector. No government employee should make more that 3 or 4 times the average private sector salary.

Corporate Spin

Was listening to NPR yesterday. A commentator was earnestly saying that the reason corporations are sitting on big piles of money instead of investing and hiring is because of their perception Obama is being mean to them.

Big chunks of the american public are underwater on their mortgage, or in foreclosure, credit has become difficult to come by, unemployment is up around 10%, polls show that consumers are tightening their belts more each month. I may have low regard for corporate spin doctors veracity, but Corporations become successful by knowing when to hold them and when to fold them. They are sitting on piles of money (which they piled up in large part by firing lots of employees) because it is not a good time to invest.

We are in the mess we are in now because beginning in the 1980's government bought more and more into corporate spin and let the corporations run the show for their benefit. Remember George Bush's immortal words after 9/11 that the best thing people could do was "go shopping"?In the US and Europe consumers are suffering from the long term hangover that 20 years of debt fueled spending entails. Recovery from this debt hangover is going to take years of consumers rebuilding their finances.

The Corporate spin doctors complaints that Obama is being anti-business is just one more episode in their eternal efforts to have complete control over how they run their business regardless of the consequences on the economy, workers and the rest of us. Enron, Lehman Brothers, AIG, BP. The biggest and most successful businesses have run themselves and the economy off a cliff when left to their own clever schemes and obsessive focus on the immediate bottom line.

FIFA and Technology

As I watched the President of FIFA reacting to the uproar about bad decisions by referee's I was struck by how typical the response was for a bigwig in a position of control in any big organization - from Government Agencies, to Oil Companies, to Banks to Sports organizations.

FIFA has jumped on every new technology when it comes to promoting the World Cup and making more money. The constant barrage of advertising from FIFA licensed companies pushing apps for your phone, websites or other new technology businesses is inescapable. So evidently new technology is great when it comes to making money, it just more trouble than it is worth when the only benefit is the integrity of the game.

FIFA, AIG, Lehman Brothers, BP. They are all the same. Don't bother me with details, I'm to busy making money.

Logically you don't have to think about it much to see FIFA's position is a wrong decision on so many levels. Far from taking the game out of the hands of referee's, it would be giving them a tool to protect them (and their families) from harassment from irate fans. Using technology can further protect the game from the possibility of gamblers influencing the outcome. And most importantly for fans and players, the outcome of the game wouldn't hang so regularly on a referee's bad decision.

Why have there have been so many really bad game changing decisions? These are supposed to be the best of the best referee's but it seems like really bad goal mouth decisions occur more frequently than in any league I have ever followed. These aren't judgment call decisions, these are basic factual decisions. Players obviously offside or obviously not offside. Did the ball cross the goal line. Why aren't the referee's (assuming they truly care about making the right decisions) lobbying for technology to help them with their job. Could it be we have the Peter Principal at work - the most important criteria for being a top referee isn't competence - it's ambition and willingness to toe the FIFA line and tolerate abuse?

I note that when a referee makes a bad decision that brings a lot of bad publicity FIFA typically defends the decision then quietly sends the Referee home. They punish the ref, but deny the underlying problem. It's not working FIFA, get your eyes up off the bottom line and fix the game.

Problems with democracy - Corporations are not people

The Supreme Court's recent decision holding that corporations have the same free speech rights as persons under the Constitution is the latest in a long line of nonsensical decisions that go back to the 1890's.

Corporations exist because the law gives them the right to exist. Years ago to encourage people to invest in new economic ventures governments created laws allowing people to band together, throw their money in a pot, and be protected from liability for anything stupid they did in that enterprise. Their liability was limited to the amount of money they threw in the pot. Originally there were often requirements on how Corporations conducted their business, in particular requirements that the have a limited and specific corporate purpose.

Corporations have turned out to be wonderful vehicles for generating wealth, and protecting wealth, so wealthy and powerful people have over the years managed to remove most of the restrictions on Corporations by using the economic benefits they confer by their presence as a bargaining chip to reward whatever State or Country gives them the best deal.

As a result Corporations have become a dominant force in politics, able to use their financial muscle and marketing expertise to shape public policy to their will. Wall Street undermines regulation by Government, then gets bailed out when their bad decisions blow up in their face. Corporations suck up billions of dollars in Government subsidies each year, even in the face of evidence the subsidy is counterproductive.

Corporations are not people, they are fictitious entities created for convenience by Government - Congress could abolish them tomorrow. It is nonsense for the Supreme Court to say that even though Congress could abolish them, Congress can't regulate them.

Problems with democracy - 2/3 vote requirements

One of the abuses of the democratic process that has become increasingly popular here in California is imposing 2/3 vote requirements to protect some vested interest. The abusive part of 2/3 vote requirements stems from the fact that typically a bare majority are imposing at 2/3 vote requirement on future voters. So if you have a particular viewpoint and can convince 51 voters out of a 100 current voters to vote your way in the future votes for your point of view equal 2 of the other sides votes. So if tomorrow 65 out of 100 want to vote the other way, they lose.

Now big business has recognized the extraordinary power of imposing 2/3 vote requirements. Proposition 16 on the June 2010 California ballot was an attempt by a private for profit energy company to protect their monopolies by imposing a 2/3 vote requirement on any public entity that wants to try to provide cheaper or greener energy to their citizen/voters. It was barely defeated.

Every government entity should have a rule that no law can impose a higher vote requirement on future voters than is achieved in enacting the law. So if 51% of the voters approve a particular law today, the law cannot impose any requirement higher than 51% approval on future voters.

Update:  Prop 26 on the November 2010 Ballot sought to impose a 2/3 vote requirement to make it harder to impose state or local fees and taxes.  It was approved by 52.5% v. 47.5%.   That was 52.5% of the 43.7% of the eligible voters who actually voted.

California Constitution Article II Section 2.5 provides that a voter who casts a vote...shall have that vote counted.  Doesn't that imply one group of voters cannot devalue the vote of other voters?

Putting 2 and 2 together

Observation #1 - I fill up my trash can in a few days with all the junk mail I get every week. Much of it is catalogs directed to people that haven't lived here for years, even though I have done everything I can to let the senders know their mail is being wasted. It seems clear that it costs more money for a business to update their mailing list than it does to just keep mailing - for year after year.

Observation #2 - it now costs me somewhere over $.40 to send a couple of sheets of paper by mail. From what I could determine at the post office web site it costs as little as $.11 for a business using bulk mail.

Observation #3 - The post office is in financial crises.

Fervent hope #1 - The post office will price bulk mail more realistically so that businesses won't be filling up my mailbox with forests full of paper I don't want.

Reality check #1 - Won't happen. After all, business runs the country.