Economics

Lessons from the Bell, California Fiasco

High government salaries means soaring pension costs that taxpayers cannot afford.

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The City of Bell has become the poster child for bad government. Exorbitant salaries, lavish pension benefits, a looming default on $35 million in city bonds, and illegal property taxes have all come to light recently. And as a result, taxpayers across California are focusing new scrutiny on their own local officials.

The biggest long-term threat to taxpayers and budgets is the pension crisis. Bell City Manager Robert Rizzo was raking in a salary of nearly $800,000, and a total compensation package of more than $1.5 million that included benefits such as 28 weeks worth of vacation and sick time. That puts taxpayers on the hook for over $600,000 a year for Rizzo's pension—for the rest of his life—when he retires.  

The Bell scandal is a microcosm of a new class struggle—in California and across the nation—between taxpayers and government employees. Government employees have become the new privileged class. 

The argument of public workers has always been that they do not earn as much in salary as comparable private-sector workers, so governments must make up for this inequity through increased job security and greater pension benefits. If this was true a generation or two ago, it certainly is not today. The most recent Bureau of Labor Statistics report on employee compensation revealed that, as of March 2010, state and local government workers earn, on average, nearly 44 percent more than do private-sector workers, including 34 percent higher salaries and wages and over 66 percent greater benefits.

California taxpayers are already paying pensions of over $100,000 a year to more than 12,000 former state and local government workers, including over 9,000 state and local employees covered by the California Public Employees' Retirement System (CalPERS) and greater than 3,000 former school administrators or teachers covered under the California State Teachers' Retirement System (CalSTRS).

At the federal level, a recent USA Today analysis, based on Bureau of Economic Analysis data, found that government employees' average compensation has grown to more than double that of private-sector workers. Federal workers earned average pay and benefits of more than $123,000 in 2009, compared to a little over $61,000 in total compensation for private workers. Since 2000, federal worker compensation has increased 36.9 percent after adjusting for inflation while private-sector workers saw only an 8.8 percent increase.

The silver lining of the Bell fiasco is that it has awakened taxpayers to the magnitude of the public employee compensation problem (recent studies suggest the state has $500 billion in unfunded pension liabilities), and hopefully shamed some elected officials into implementing some real transparency reforms.

The excessive pay and benefits received by many government workers will not be solved, however, by merely increasing transparency of compensation data or tinkering around the edges of the pension system by offering slightly less generous benefits for new employees or requiring them to work a couple of more years before being eligible for retirement. The entire system needs to be overhauled. New employees should be switched to a 401(k)-style defined-contribution system, with pay and benefits comparable to those in the private sector. Only by seriously addressing excessive public employee pay and benefits can state and local governments in California ever rein in their enormous and unsustainable bureaucracies and return to any semblance of fiscal responsibility.

Adam B. Summers is a policy analyst at Reason Foundation.

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  1. You never want a serious crisis to go to waste. An economic situation such as we now enjoy is the perfect time – the only time – to begin paring state and local public workforces down to a lean, mean bureaucratic machine. If only the federal government wasn’t using the same crisis to head in the opposite direction and thwarting that necessity.

    1. Unfortunately, contracts cannot be broken outside of bankruptcy (Obama-Chrysler fiasco excepted, and indefensible).

      HOWEVER …

      Proposition CLAWBACK:

      “All salaries, pensions and benefits paid by governmental bodies, or funded with public funds, shall be subject to taxes according to the following schedule:

      $0 – $60,000 = 0%
      $60k – $100k = 40%
      $100k – $200k = 85%
      $200k + = 99.5%”

      Government workers … don’t they LOVE TAXES…?

      1. Ex-post-facto targeted tax laws are not only unconstitutional, they’re also very dangerous. I’d rather see the cities declare bankruptcy or simply ignore the contract.

      2. I love the taxes. The only mistake Bell made was letting the people find out. We at the Federal Government are in a position to explain it away and passify the people.
        youareproperty.blogspot.com/2010/08/we-federal-employees-are-worth-double.html

  2. We get paid a lot more than you because that is what the market dictates us Federal Employees are worth. http://youareproperty.blogspot…..ouble.html

  3. We get paid a lot more than you because that is what the market dictates Federal Employees are worth.

    I honestly don’t know what all you are fussing about.
    http://youareproperty.blogspot…..ouble.html

    1. No…. the market (free market that is) dictates what private business and their employees are worth. The irresponsidle Feds and local governments skewed the gov’t system to acheive the bloated unsustainable monster we have today. As far as what gov’t employees are worth, I would certainly venture to say that the IRS and its employees produce nothing, and that excessive tax legislation only expends our time and paper. Go to a fair tax system and eliminate the IRS. Simplify !

      1. I believe this was tongue-in-cheek (after looking at the link) 🙂

      2. Wrong. We at the government offer a service that you people will pay almost anything for – that is not going to prison for tax evasion. We could charge you 3X what we charge for this now and you would find a way to pay it, so you could say we are working for less than our actual value, hence the term public SERVANT.

  4. I’m noticing a lot of focus on California these days. Is it because that’s a fairly fucked up part of the country? Are over-paid/pensioned gov’t employees nonexistant in other parts of the country, like Hawaii/Arkansas/Texas/the Dakotas?

    On another note, when the fuck did genes become patentable? http://singularityhub.com/2010…..ed-video/?

    1. The focus on California is somewhat apparent. California has long been a haven…a fortress of progressive wet dreams. The state is solidly blue, has a gigantic population, vast resources, and is a hub for multiple industries in the country. Unfortunately, it’s blue streak has tainted the well and sucked the gold out of “the Golden State”. For Libertarians, it is a relatively good example of “SEE! Look at that bullshit! The failure of social democracy RIGHT IN HERE IN THE GOOD OLD USA. BEWARE” or something like that.

    2. Over-paid/pensioned gov’t employees are fucking up my state as well.

      1. New York is in the same category.

        The only reason we don’t have a looming public pension crisis like CA is that state laws and regulations allow for the Legislature to rape the Taxpayers of the State for more loot to make up the fund balance.

        Oh, yea; forgot to mention that the retirees don’t pay NYS Income Tax on thier retirement like us private sector slaves.

    3. Even in “low tax” Nebraska, the city of Omaha is having issues. The current mayor, although being something of a doofus, inherited the problem rather than being responsible for it. Huge part of the budget crisis are pension plans to retiring higher up cops & firefighters. One of the proposals is an “occupancy” tax on every one who works in Omaha.

      http://www.omaha.com/article/2…..r-solution

  5. What California needs is a mosque to distract the rubes.

    1. Dhimma provides rights of residence in return for taxes.[1] Dhimmi have fewer legal and social rights than Muslims government employees, but more rights than other non-Muslims tax-payers.

  6. High government salaries means soaring pension costs that taxpayers cannot afford.

    Hey, I’m a taxpayer too!

    1. That’s like a bank robber saying “Hey, I was a depositor at this bank that was just robbed too!”

  7. I don’t see much difference between the “struggle” between taxpayers and public employers and the struggle between shareholders and management of private corporations. In both cases the stakeholders elect agents to choose employees and compensation. In both cases there are principal agent problems. In both cases “in theory” the holders/taxpayers are “in charge.” But only one is harped on here…

    1. In both cases “in theory” the holders/taxpayers are “in charge.” But only one is harped on here…

      Gee, it’s like there’s some fundamental distinction between the two that you’re missing. What could it possibly be?

      1. OOH! OOH! OOH! I know, I know!!!! You get a choice about whether to buy stock and if you don’t like what management does, you can sell the damned stuff. You don’t have armed officials show up at your home threatening to to jail you for failing to buy stock? Oh, and companies that overpay their workforce go out of business if those same officials don’t take my grandchildren’s money and give it to them. Do I get extra credit for knowing the obvious?

        1. Very impressive Sweathog.

      2. Umm, the private managers are often Ivy Leaguers? Wait, no, that’s not it …

        1. MNG is just bein’ a tool, as usual.

      3. There is a chance you might benefit from the stock. Is that it?

      4. *raised hand*
        I know! I know! It’s that with private companies you can buy enough stock to get control of the company and try to fix things (if you really want to) but government only ever allows one voting stock per person.

    2. Primarily because corporate shareholders are willing participants and investors, whereas taxpayers are not. Equating the two is only possible if you ignore that glaring fact.

      I suppose if a corporation could institute a reverse dividend and force stockholders to pay it or go to prison, you might have a point.

      1. Corduroy|8.24.10 @ 8:47AM|#
        “…I suppose if a corporation could institute a reverse dividend and force stockholders to pay it or go to prison, you might have a point.”

        Naaah. MNG’d find a way to screw that one up, also.

    3. I don’t see much difference between the “struggle” between taxpayers and public employers and the struggle between shareholders and management of private corporations.

      I like how you put quotes around one “struggle” and not the other. As if one is real and one is not…

    4. I agree that many libertarians are too quick to accept the Agency issues as a necessary defect to the corporate model. But the choice factor, as others have pointed out above, is the dominant distinguisher between the two scenarios.

    5. Awww, minge’s analogy is broken, so sorry.

      Maybe if you’re real good this year santa will bring a nice new analogy that is not all fucked up, scrote.

      1. Yup, another Big “L” candidate ready for the campaign trail. You know, I think reason should change it’s motto to “libertarians, not all of us are unsufferable pricks… really.”

        1. I may be an “insufferable prick”, but you won’t find my hand ferreting through your pockets. Nor would I put you in jail for years because you like the wrong chemicals. But hey, I am a ‘live and let live’ kind of person, and have no desire to be your mother/father.

          Keep voting for Mr. Nice Guy, numbskull. He’ll be your daddy.

          1. Of course you’re an insufferable prick and a big “L.” It’s the one political philosophy that dovetails perfectly into antisocial personality disorder. As for voting, I don’t bother. It’s almost as big of time as being a card-carrying Libertarian.

            1. Antisocial Personality Disorder is a condition characterized by persistent disregard for, and violation of, the rights of others that begins in childhood or early adolescence and continues into adulthood.

              Yep, you nailed it Jack.

              1. When cornered, the liberal will play the “antisocial personality disorder” card.

              2. “Lack of concern regarding society’s rules and expectations.

                Unlawful behavior.

                Lack of regard for the truth

                In parents, neglect or abuse of children.

                Lack of a steady job. Frequent job changes through quitting and/or being fired

                Tendencies toward physical aggression and extreme irritability.”

                Call it a lucky guess.

                1. Nice try, but none of the above apply to libertarianism, Jose. Comparison fail.

                  1. It was a personal observation, not a critique of a political philosophy.

                    1. Still a fail, Jose.

          2. But hey, I am a ‘live and let live’ kind of person, and have no desire to be your mother/father.

            It’s not really certain that his mother/father has any desire to be his mother/father.

    6. So what you are really saying is “they won, tough shit”. In some ways you kind of have a point. But so what? The relationship is out of balance, so the shareholders are now going to assert themselves and cut this shit off.

      If the shareholders of some corporation revolted and revoked some CEO’s golden parachute, you would be on here cheering. But when tax payers revolt and do something about public employee pay, you scream, “hey that is a contract”.

      These contracts like all contracts are subject to renegotiation based upon economic reality. Why you play this little game of screaming “sanctity of contract” to defend these people when you wouldn’t under any other circumstances is beyond me.

    7. That can be answered in a single word: choice.

    8. can you say “Fiduciary Duty”? you chump.

    9. Big Government is just as bad, or Worse, than big business. The difference is, taxpayers are paying through the nose for Big Government.
      Bell, Ca. should be viewed as a Crime,
      there should be consequences for this corruption and cheating the taxpayers.
      This is an opportunity for those astute local governments to “clean up”
      get rid of the abuse, corruption in their own areas.

  8. But does choice do the work you guys need it to here? After all, Libertopia casts a negative view on fraud nearly as much as force, and the principal agent problem involves some fraud (shareholders don’t enter the relationship expecting to be duped by the agent)? Also, if we are talking local governments, there is indeed choice, as the libertarian leaning public choice theorists discuss at length (“voting with your feet”).

    I agree with John, it’s quite proper for the taxpayer to be ooutraged and move to discipline our agents for making such terrible deals for us. I just don’t like pretending like there is some awesome power public employees have here.

    1. “I just don’t like pretending like there is some awesome power public employees have here.”

      You are right to the extent that the taxpayers only have themselves to blame for being asleep at the switch. But at the same time, it is pretty hard to say, considering the rise in salaries, that public employees don’t at least in the short term have a lot of power. They vote. Their unions is incredibly wealthy and give huge amounts of money to the Democratic Party. And more importantly, they spend that money on local elections where a little money goes a long way. Union backed candidates for school boards are always better funded and nearly always win. At the local level these unions are like bulls in china shops. And if you don’t believe that, the proof is in the growth of the salaries.

      1. So, unions are powerful and mighty but private corporations are what… the weak sisters of the poor?

        1. Government unions obtain their funds through force while private corporations require people choosing to purchase their goods and services.

          There’s a big difference.

          1. Oh, yeah… those American agricultural corporations are the very model of free enterprise. You won’t catch them glomming onto the filthy lucre of government subsidies.

            1. Crony capitalism != free markets

              1. Crony capitalism != free markets

                The Left will agree that this is completely backwards. In actuality,
                free markets = Crony capitalism. (Sure, it doesn’t make any more sense, but does it really matter?)

            2. The government does not have to give those businesses that money.

              Don’t go blaming corporations for getting in the act; blame Congress for having an act to get into in the first place.

              1. Oh, I see. Don’t blame me for stealing your money if you leave it on the table. LOL. Who do you think lobbys Congress for all of the corporate welfare? I understand that blaming Congress makes it a tidy package, but it’s a bit more complex than that.

                1. Let me repeat myself real slow.

                  Crony … capitalism … does … not … equal … free … markets

                  I’ll do it again.

                  Crony … capitalism … does … not … equal … free … markets

                  Get it?

                  1. Show me a free market.

                    1. Show me a free market.

                      Illegal drugs.

                    2. Wrong… and the word “illegal” should be clue. Government enforcement greatly distorts the market making drugs far more expensive than they would be otherwise. I won’t even bother getting into the secondary effects of creating artificial markets for “drug treatment,” the increase in taxes to support prohibition, etc.

                      Try again.

                    3. Try again.

                      Your question was rhetorical in that there is no market into which the government has not stuck its filthy fingers. I get it.
                      The illegal drug market is as close an example as I can come up with because there are no regulations or rules put forth by the government (other than “don’t do it”), yet there is no city or town that does not have an ample supply of illegal substances to fill the demand.

                      Proponents of regulation claim that the market would not function without the government spelling out every little detail, yet any kid in high school can obtain a joint in a matter of minutes.

                      The point is that markets function just fine without meddlesome bureaucrats telling people what to do.

                    4. Markets fail quite often. It’s just that government interventions in these failures almost always make things worse.

                    5. prostitution

                    6. In Nevada, legal but heavily regulated. In the rest of the U.S., illegal thus making the cost of a blow job unnecessarily high… which is a shame given the extreme need some of the H&R posters needs for a little relief.

                2. you can “blame” whomever your little heart desires, but at the end of the day, that “YES” or “NO” vote belongs to the congressman and the congressman alone.

                  Don’t blame me for stealing your money if you leave it on the table.

                  Bad analogy. More like “don’t blame me for taking your twenty bucks if you hand it to me.

                  1. No, more like asking a women with senile dementia for her purse and taking it with all of the money within… over and over and over.

            3. Jose Ortega y Gasset: Hey! Look over there; farm subsidies! Bet you insufferable pricks never thought of that.

              1. Farm subsidies are just low hanging fruit. I could fill a bookshelf full of all the ways businesses influence and manipulate government in anti-competitive ways. Adam Smith was right, and still is.

                1. And yet somehow, I doubt your solution is to give the government less power.

                  1. And yet somehow, I doubt your solution is to give the government less power.

                    I find it to be incredibly idiotic when people claim that the way to stop the evil rich corporations from influencing government is to give more power to the government that they influence.

                    The cognitive dissonance gives me a headache.

                  2. You are correct. My solution is to give the government almost NO power.

                    1. If that’s true…. what’s the problem here?

                    2. Ah, that’s an intelligent question. The problem is that only a handful of people believe giving gov’t almost no power is a good idea. And the problem is that these people (we’ll call them “liberatarians”) are so arrogant, pedantic and generally prickish, that even with their vastly superior powers of reasoning they can’t convince anyone in the room they are right… not even when the hucksters in Bell, California, are stealing like its going out of style.

            4. You won’t catch them glomming onto the filthy lucre of government subsidies.

              There is a difference between accepting stolen property and being a thief.

              1. I am such a cocksucker.

                1. Hey, middle school is out somewhere!

                  1. Which means I can suck some middle-school cock!

        2. If Dow Chemical had an interest in who is running the local school boards in this country, yeah, I would say they are pretty powerful. And yes, in case you haven’t noticed, big corporations get a lot of corporate welfare in this country. So what? We should end that to.

        3. Private corporation are investing their own money to create jobs, pay salaries, pay benefits, 401k’s etc. for their employees.
          Unions? they take workers’ money in the form of union dues, and then they
          spend it on big, fancy meals and playing politics. I’ve witnessed it first-hand, and its utterly disgusting.

    2. Yes it does. The rest of your post is designed to obfuscate the ownage you suffered directly above.

    3. Since the comparison has been shown to be invalid, why you’re continuing to use it is puzzling…

    4. But does choice do the work you guys need it to here?

      Yes.

      the principal agent problem involves some fraud

      True, but…

      Also, if we are talking local governments, there is indeed choice, as the libertarian leaning public choice theorists discuss at length (“voting with your feet”).

      Is it easier, as a matter of burden on the individual, to sell your stock or to move? Also, my stock ownership is in funds, meaning that if one tanks, it does not drag the entire fund, and my money, down with it. On the other hand, my house and livelihood are pretty much solely “invested” in the community where I live, meaning that I take a harder hit when that community tanks, either fiscally or through burdensome nanny-statism.

      It is not that the market magically solves all problems; it is that it is vastly preferable to government in almost all things.

    5. “But does choice do the work you guys need it to here? After all, Libertopia casts a negative view on fraud nearly as much as force, and the principal agent problem involves some fraud (shareholders don’t enter the relationship expecting to be duped by the agent)?”

      Where is there fraud in purchasing stock? When you purchase stock in a company, you are doing so hoping the company will succeed, and the stock will be worth more in the future than it is now. If the company fails, and your stock is now worth nothing, you have no one to blame but yourself.

      An example of fraud would be if you loan me $10,000 in a contract saying I have to pay you back in two months, and when the time rolls around for the debtor to pay the creditor, I just decide not to. This example is fraud because (1) I lied about paying you back in two months and (2) your property rights were violated (i.e. I stole your $10,000 by not paying you back).

      “I agree with John, it’s quite proper for the taxpayer to be ooutraged and move to discipline our agents for making such terrible deals for us. I just don’t like pretending like there is some awesome power public employees have here.”

      I can choose whether I want to buy a product or service from Company A or Company B, and thus decide where my money goes. With the government, however, they get my money via taxes regardless of my say-so. That is the principle difference.

      1. Of course you can move away from state and local governments at least. And indeed people are doing just that. States like California, New York and Massachusetts have been losing population for years (California makes up for it in foreign immigration, but it has had an outflow of native population for years).

      2. You buy stock with the explicit provision that management will violate its fiduciary duty to you as the stockholder to advance their own interests?

        You don’t? No one does.

        That’s where the fraud come in.

        1. Okay, you buy a security from a company and they rip you off, or mismanage their company, in either case you can CHOOSE to sell your security or CHOOSE not to invest in the first place.

          What happens if I CHOOSE not to invest in the State Treasury?

          1. Again, you are right that one involves coercion, but as I argue the other involves fraud which is bad too, right? BTW-I think coercion is worse than fraud usually.

            1. Wrong… It may have a possibility of involving fraud, but it’s not a given like the coercion side is.

        2. The problem with this is that you are ASSUMING that management will violate its fiduciary duty. Obviously this is not always so. And last time I checked, fraud is against the law.

          If, however, you are asserting that when management makes a bad decision (thus losing money) it constitutes fraud you are grossly mistaken on what fraud is.

          Also, there is an implicit agreement in the buying of stock that it cannot always go up.

        3. No, but your twisted notion of fiduciary duty is not representative of the term as it is generally used, and contains a lot of aspects that fall under “offends my leftist sensibilities” rather than “harms the institution to which one is obligated”, e.g. political activity.

    6. Freedom ALWAYS beats coercion

  9. Not your best effort.

  10. So, shareholders choose to own a company but voters don’t choose the people who run the fucking gov’t? Huh?

    1. Mostly right. Not everyone votes for the same guy. Criticism fail.

      1. I have about as much influence over who gets elected as I do over who is running any company where I own stock. I can choose to not buy the stock. I can also choose to move my ass to another city, state, country, etc. Don’t get me wrong… I’m all about trimming the powers of government back, way back. I just think it’s silly to shout “choice” like it’s a magic fucking word.

        1. See my criticism of this point above. If you think that it is just as burdensome to sell stock as it is to emigrate, then pass the good shit, son, ’cause I want some.

          1. How about this… you rent an apartment month-to-month but you have a very specific set of job skills which you ply in the private sector. In that case, the transactional costs of moving can be much lower than those in finding new employment. Owning a house is a “choice,” amigo. Having a lifestyle where it is difficult to move is a choice. There’s more going on than the choice between owning a stock and leaving for Costa Rica.

            1. Having a lifestyle where it is difficult to move is a choice.

              Yes, and it is one most Americans like to choose. Most Americans like having community and neighbors and their favorite bars, restaurants and parks and whatnot.

              Basically, what you are saying here is that people have to fundamentally change in order for you to validly draw equivalence between owning stock and moving neighborhoods.

              1. You’re the one equating economic choice to owning stock and political choice to moving. You’re just picking the analogy most conducive to your argument rather than choosing the one most conducive to illuminating the nuances of political and economic choices.

                1. You’re the one equating economic choice to owning stock and political choice to moving.

                  Seriously? you are the one who said this at the beginning:

                  I can choose to not buy the stock. I can also choose to move my ass to another city, state, country, etc.

                  as if they were equivalent choices!

                  The bottom line is that for the average American, these are not remotely equal choices, and, as recognized downthread, your drawing of equivalence is patently ridiculous.

                  1. We’re talking around one another here. The first point is that citizenship, residence and economic ownership are all choices. The transactional costs are different. So are the benefits/costs.

                    Most Americans like to live where they live… and to bitch about the government. Funny, though, the government is created by all the people who like to live where the live. If all these people really wanted to end the Social Security debacle, they’d vote for people to end it… and they wouldn’t need to move to Costa Rica. And, in the converse, if they were so aggrieved by the government… they could move, if they could tear their ass away from the local Starbucks and Sonic drive in.

                    So, despite having the smartest people on the planet espousing the incredible rightness of libertarian views, America is still a country where people like to bitch, piss and moan… but not so much as to stop picking up gov’t checks, or taking advantage of gov’t subsidies or doing any too inconvenient or strenous. So this argument ends exactly where all libertarian discussions end. It’s damned shame everyone isn’t as smart as us and never will be.

                    1. How about this, Jose:

                      Politicians should be good stewards of the public trust AND the public treasury, misspending neither in the process.

                      Why is that too much to ask from ANY political party?

                    2. Why is that too much to ask from ANY political party?

                      The problem with power is the people it attracts.
                      Some say power corrupts, I believe power attracts those who are prone to corruption.
                      If it is a given that power will be abused, then it doesn’t matter who wields it.
                      The only solution is to limit the power.

                    3. Because it isn’t possible. Power corrupts. The only solution is for politicians to have almost no power and almost no money. Put another way, they will shoot any gun we give them… so our best hope is to limit them to nerf guns. Unfortunately, the libertarians have yet to convince the body politic of this.

                    4. Of course it’s possible:

                      Automatic jail time for any politician who misspends public money.

                      Straight to the pokey. No trial, no parole.

                    5. So… we can trust the courts. I guess O.J. was really innocent after all.

                    6. Fuck the courts, in this case. Politicians who abuse their power, monetarily or otherwise, go straight to prison.

                      Fuck ’em, they’re not real people anyway.

                    7. Because it isn’t possible. Power corrupts.

                      I don’t think it is that simple.

                      The people who seek positions of power do so because they desire to use it.
                      It is difficult to corrupt someone in a position of power who wants to exercise that power as little as possible.
                      It’s pretty easy to corrupt someone in a position of power who jumps at every opportunity to use it.

                      Yes power corrupts, but it also attracts those who are prone to corruption.

                    8. Why is that too much to ask from ANY political party?

                      It’s not too much to ask, just too much to reasonably expect.

        2. I just think it’s silly to shout “choice” like it’s a magic fucking word.

          It’s a pretty simple concept.
          Corporations don’t send guys with guns to your home when you don’t make the choice to give them your money.
          Government does.

    2. Another proud graduate of Minge’s School of Equivocation.

    3. “So, shareholders choose to own a company but voters don’t choose the people who run the fucking gov’t? Huh?”

      Well the difference between being a shareholder and a citizen in a country is that if I’m a shareholder and the company I’ve invested in makes poor financial decisions, I can sell my stock and be off the hook for their poor choices.

      However, if my government makes poor financial decisions (i.e. spending trillions of dollars on welfare programs), only leaving the country will protect my income from being taxed or my savings from being destroyed via inflation. Quiet a big difference.

      1. Another difference is that when it comes to proxy votes (the corporate equivalent of an election) you get a vote proportionate to the amount of capital you contributed to the company (i.e. the number of shares you bought).

        Whereas in the political system, peopld who are required to put up thousands of dollars in taxes get no more votes than people who paid little or nothing at all in taxes.

        1. So, the guy who donates millions to political candidates has no more influence than me. Good to know.

          1. Works for me every time!

          2. He might have some influence, but he doesn’t have any actual official power. A group of people that can reliably turn out a good chunk of voters is more valuable to a politician than a million dollars for his campaign.

            1. But not more valuable than a million dollars in his pocket.

          3. Quit trying to change the subject.

            Corporate stockholders have a LEGAL ownership share of the enterprise relative to the capital they contribute.

            Taxpayers have no such thing. The top 50% of income earners pay 97% of federal income taxes collected. The other half pay next to nothing but the get one vote the same as the folks in the top half.

            And most of those folks in the top half are not making million dollar campgaign contributions to politicians in addition to all the taxes they are paying.

  11. and hopefully shamed some elected officials into implementing some real transparency reforms.

    The way to climb the government ladder is to point fingers, and the most effective finger pointers rise to the top.
    The name of the game is to take credit for the accomplishments of others while blaming them for your mistakes.

    They have no shame.

  12. One guy walks around town taking money from people by force. Another guy walks around obtaining money from people via fraud. Doesn’t libertopia frown on both of these guys? The first is the government, the second is private actors with the principal agent problem.

    1. The guy who takes money by force doesn’t face any consequences besides losing his office. He still gets to keep all the money he stole while he was there. The guy who takes money by fraud faces jail time and asset forfeiture. Do you see the difference?

      1. Yeah, no agents have made off like bandits in the private sector!

        1. When did I say otherwise? Come back when you can formulate arguments without resorting to straw men.

          1. Elected officials can face jail time for self serving actions too you know, so I’m still not seeing your argument here.

            1. OK, please tell me what charges any of the politicians from Bell are facing.

            2. Only if the break the rules that they create.
              If they set the rules to allow them to take an $800,000 salary with a $600,000 pension, then that’s what they get.

              Everything that Hitler did was legal under German law.

    2. Yes, MNG, and isn’t it high time your party stopped taking money either way?

      1. My party? You’re so cute!

        1. Oh, I’m sorry, MNG… didn’t know you were a Republican.

          My statement stands either way.

    3. You do realize that the principal agent problem applies to bureaucratic agencies of the state as well, or are you being disingenuous?

      I really don’t know much about this, so if you could explain further, I would be appreciative. Because, again, it seems as if you are equivocating(sorry to be redundant).

      1. That’s my whole point: both are examples of the principal agent problem. I just say why is one bitched about here so much more than the other? Like I say, it can’t be the force thing because fraud is involved too.

        1. The Bell thing is egregious. Don’t get me wrong, it’s downright evil. My point is its just the public sector version of Enron.

          It’s this principal agent problem in both cases. Liberals tend to be measures to fight this kind of thing in the public sector:, transparency measures like FOIA, campaign disclosure, increased standing for citizens to sue governments, etc.,

          1. My point is its just the public sector version of Enron.

            Let’s compare:

            Robert Rizzo – keeps all the money he earned as Bell city manager, may receive a pension

            Ken Lay – convicted and facing 45 years in prison when he died

            Jeff Skilling – originally sentenced to 24 years in prison, currently in prison while waiting for re-sentencing, owes $680 million to the government

            Andrew Fastow – currently serving 6 year prison term, owes $23.8 million to the government

          2. Well, part of it is that although corporations are going to have more information about their inner goings-on than the investor, the investor is not forced to invest and it is in the long term interest of the corporation to have an honest and profitable relationship with its investors. A fraudulent company like Enron goes bankrupt with perpetrators, rightfully, receiving jail time.

            Also, I did not invest in Enron; no agent came to my door with shackles and a writ demanding that I buy shares. My property was not confiscated, nor my person incarcerated for failing to buy Enron stock. This is a distinction of consequence, for me anyways.

            Another thing that irks me is when liberals who are supposed to be advancing the cause of the impoverished and disadvantaged tell the overworked, overtaxed masses to “vote with their feet”. All in the name of bloated salaries and pensions for those at the public trough.

            These issues will be defining for liberals in the near future. You will have to pick a side; either the poor or cops that make more than university professors. You’ll probably choose the power.

            1. You also seem to be arguing that every investment involves some sort of fraud.

              1. profit = fraud

    4. Doesn’t libertopia frown on both of these guys?

      There may be a reason violence in the commission of a robbery tends to result in greater sentences.

    5. Of course libertarians frown on fraud. So why do you bring it up? The article we are commenting on involves the government. Are we supposed to ignore it? Or excuse it because of private fraud? Maybe fill the comment thread on an article about government malfeasance with comments on a completely different subject? Just what is your beef?

      1. profit = fraud

      2. Enjoy Every Sandwich|8.24.10 @ 12:20PM|#
        “Of course libertarians frown on fraud. So why do you bring it up?…”

        Deny MNG his strawman, and there’s nothing left.

    6. True, but government is the linchpin for the whole damn thing — worse, it’s capable of convincing people that is a mechanism for protecting them from corrupted institutions, rather than something spreads that corruption to every institution it touches. Tear down Big Government, and you’ll find that it was holding Big Business, Big Media, Big Unions, and Big Whatever Else up the whole time. Hell, that should be completely obvious to anyone who’s paying attention — what exactly were the bailouts but an open attempt by the government to salvage a “system” that was broken and inherently corrupted?

  13. I have an idea inspired by Heinlein that would help fix the problem of bloated government.

    Amend the constitution to create a third chamber of Congress whose sole power is to repeal legislation. It could create deregulatory bodies with the sole task of repealing regulation.
    No amendment or alterations, all they can do is repeal.

    Then people would run for office based not on what they would do, but what they would undo.

    The judiciary was supposed to be the check on the other two branches by having the power not only to interpret, but to nullify.
    But they are just as corrupt as the rest.

    1. I have an idea inspired by Frank Herbert that would help fix the problem of bloated government.

      Amend the constitution to create a Bureau of Sabotage!

      FTFY

  14. You cannot compare city managers taking in a million bucks a year to fire fighters, police and teachers who make a piddance for their efforts.

    Here in Texas, the Teacher Retirement is a self-funded retirement plan. Not only do members pay into the plan out of their salary but the plan also makes them totally ineligible for Social Security benefits.

    Shame on Reason for permitting publication of this propoganda. Holding up a few egregious examples as justification for destroying what very little is left of the pension system is disingenuous at best.

    Give Koch’s money back and quit printing his propoganda drivel. For shame.

    1. matt|8.24.10 @ 1:12PM|#
      “Here in Texas, the Teacher Retirement is a self-funded retirement plan. Not only do members pay into the plan out of their salary but the plan also makes them totally ineligible for Social Security benefits.”
      Glad to hear it. That’s not true in most places, which is the reason this stuff gets published.

      “Shame on Reason for permitting publication of this propoganda. Holding up a few egregious examples as justification for destroying what very little is left of the pension system is disingenuous at best.”
      If the pension plan in Texas is as you claim, nothing in this article would affect that one bit.
      Pretty tetchy, there; did someone cut your welfare payment?

      1. Another way of putting this is that they were allowed to have an alternative plan that was a far better deal than social security is whereas the rest of us were not afforded that privilidge.

    2. <obvious>This article isn’t about Texas.</obvious>

      There are many states with reasonable pension systems, but states struggling to pay the bills like California and Illinois feature completely ridiculous systems. No one, ever, anywhere, should be able to retire after 30 years with 90% of their final salary until death (and great medical to boot).

      the plan also makes them totally ineligible for Social Security benefits.

      Let me help you with this: “we do not pay into Social Security and will not receive it in the future.” Private sector workers don’t get Social Security for free: we contribute 6.2% of our income and our employer contributes another 6.2%. Younger workers expect extremely low “returns” on that money. I say “returns” as we do not own the money in any real sense whereas accrued pension benefits are legally binding.

    3. Not bad. The spelling errors are nice, especially because you threw in some big words.

      The Koch line at the end, though? Brilliant. You managed to come off like a petulant child without being overly dramatic.

      But a simple tip for you. You gotta get in the strawman game. Look how far people got off topic chasing MNG upthread.

  15. I just love the way the lefty response to abuses of big government is to point out that corporations as well as politicians and bureaucrats abuse big government.

    Like that somehow refutes, rather than reinforces, the point that big government is an abuse factory.

  16. Federal employees were moved to a 401k style pension 25 years ago.

  17. Taxpayers in all the rest of California are on the hook for Bell’s pension giveaways. What vote did they have?

    1. Keep in mind also that the state has persistent deficits in the tens of billions, plus unfunded pension liabilities in the hundreds of billions. The people who voted for the policies that created those obligations are not the people who will pay them down.

  18. Unions won’t let the government renege on exorbitant pensions for former government employees. Fine. They should just start taxing public-employee pensions a LOT extra.

  19. I’m noticing a lot of focus on California these days. Is it because that’s a fairly fucked up part of the country? Are over-paid/pensioned gov’t employees nonexistant in other parts of the country, like Hawaii/Arkansas/Texas/the Dakotas?

    1. California is like the drug addict that other drug addicts look at and say, “That guy really has a problem.”

      As far as I know every single state has unfunded pension liabilities, some much worse than others. But California’s retarded referendum system has helped it become the worst by far.

  20. Doesn’t libertopia frown on both of these guys?

    There may be a reason violence in the commission of a robbery tends to result in greater sentences.
    reply to this

  21. Enjoy Every Sandwich|8.24.10 @ 12:20PM|#
    “Of course libertarians frown on fraud. So why do you bring it up?…”

  22. That puts taxpayers on the hook for over $600,000 a year for Rizzo’s pension?for the rest of his life

    Seems like a problem easily solved.

  23. There was one word missing from this article; Democrat. All of the swine in Bell were hard-core Democrats as are the Public Employee unions who are bringing this state to its knees. These left-wing Democrat unions are currently taking money from the people who were forced to join these public employee unions when they got their jobs and plastering ads for Jerry Brown, the quintessential running dog of every destructive political impulse known to man, all over the most expensive airways in the world. The legislature, in the hands of a rock-solid Democrat majority, dances to the tune of the bloated unions. If this problem worries you, and it should because this state is about to go bankrupt, then you should go to the polls and vote against every Democrat, no matter how ‘moderate’ they pretend to be.

    1. That “D” word has been missing from every article written about Bell. Just another example of part of the problem. Too many citizens rely on newspaper and evening news and are oh so influenced.

  24. Human behavior 101. Next lesson in human behavior will be the reactions:

    “This is none of your business”
    “It’s all within the law”
    “I made a lot of sacrifices”
    “It’s the voters fault”

    Solutions are simple but the question is, do we really have the energy to fight the political machine that has been doing this to citizens for decades?

  25. This corruption is hardly new, but Bell is an example of high level public officials taking advantage of bloated civil service benefits created by unions.

    What I find sad is the unholy partnership between cicil service unions and public officials to bloat each others pay packages. And just don’t think thats with the Dems either.

  26. As a Joe six-pack even I am researching what is happening to our Nation. The corruption is from the ground up. With so many floating debt they cant afford, the day of reckoning is near.

  27. My proposal is that NO elected official gets a pension. Not your mayor, not your congressman, not the President.

    This will #1 save some money and #2 it will act as natural term limiter.

    I could also say it will put the “service” back in public service but that sounds so pollyanna-ish.

  28. “The City of Bell has become the poster child for bad government.

    replace “bad government” with “typical liberal politics” and the article would be 100% closer to the truth.

  29. here are nice burberry scarves at a good discount,great welcome every one order from us.

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