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GELFAND’S WORLD - An ominous warning by someone who should know:
Rick Cole is a respected voice in civic government, having served as deputy mayor of Los Angeles under Eric Garcetti and also, at various times, as mayor of Pasadena and City Manager of other cities including Santa Monica. It’s therefore of concern when he calls out the city of Los Angeles for its failed and failing ways. On Saturday, he spoke at the annual meeting of the neighborhood council Budget Advocates.
Cole’s diagnosis is that the city government is broken. He points out that we could learn from other, better run cities such as Long Beach, but we don’t. The overall sense was that “we are in deep, deep trouble.”
I will paraphrase a bit, but within the late morning panel discussion in front of a couple of hundred neighborhood council participants, one particular practice was singled out for special concern. When the city gets into financial difficulties and needs to cobble together a balanced budget, it generally does so by freezing hiring. This means that unfilled jobs don’t get filled, while every effort is made to retain those who are working. The result in the extreme cases is that we have crews without foremen and we have foremen without crews.
What’s missing is results based budgeting. Instead (my words here), what is occurring is a combination of sentiment and loyalty to workers who have made a career choice of working for the city. The idea of protecting lives and careers is defensible, but avoids the question of why the city allows these situations to develop in the first place.
So what is the secret of doing good government? “Do more of what works and less of what doesn’t.”
Cole pointed out a couple of things he has learned over the years. It’s hard to get rid of a program. (I guess we all knew that, but it’s interesting to hear it stated by somebody who worked at the highest levels of city governments.)
Cole and others were strongly supportive of the argument put forth in CityWatch by Jack Humphreville, that we need to have transparency in labor negotiations. The reason is obvious: Without openness, the elected officials continue to grant raises that result over time in exponentially upward increases in the city budget.
Cole offered a couple of pithy comments at the end of his remarks. He pointed out that he had run for elective office four times and won four times, and out of that experience had learned something about voters: They are uninformed, but they are not stupid. He then went on to point out that the Los Angeles City Attorney was soundly defeated for reelection in the primary and that the mayor is facing a tough reelection fight. Meanwhile, the controller – roundly criticized by his fellow elective officials and “a pariah” in city government -- was easily reelected. My inference based on Cole’s remark is that our voters are looking for some attitude adjustment on the part of our elected officials.
Finally, there was discussion that elective officials had long ago decided that the LAPD is a “third rail” in city politics, resulting in their current three billion dollar budget. The speaker’s remark: “Is this money all necessary?”
A different government failure
We have been taught that consumers are best suited by free markets – that is to say, in situations where multiple suppliers have to compete for our business. In this way, we get to choose the best price and best quality in what we buy.
There is one exception – utilities.
The idea is that building a reservoir or an electric power generating plant and, in addition, putting in electric lines or water pipes is an expensive undertaking. It would not make sense to have multiple sets of electric lines from separate companies running up and down our city streets. If nothing else, the space taken up by multiple sets of telephone polls, transformers, and high voltage lines would cramp our space. The situation with regard to water mains and sewers is even more stark. There simply isn’t the under-street space to allow for competing water sources.
So our economy allows for the creation of single-source suppliers. We call them utilities. Economics textbooks refer to such organizations as “natural monopolies.”
Hence the phone company and the cable television company in your neighborhood.
The problem for you, the consumer, is that you don’t have individual choice over your utilities. You get whatever is there. Governments are supposed to protect us, but many of us have been less than satisfied by the level of help we get.
Let’s talk about ATT for a moment. They are the phone company that serves my area. In the era of land line telephones (you know, the ones that had dials and then the ones that used push buttons) they functioned pretty well. But as the era of internet service developed, they fell behind. Their infrastructure consisted of pairs of wires spiraling around each other to carry signals to and from your phone. The jargon for this type of installation is “twisted pair.” Where I live, the twisted-pair system is simply inadequate to provide for the high speed internet service that the modern consumer wants.
Here is what ATT seems to be doing: For one thing, it is trying to rid itself of old fashioned telephone service. They don’t want to provide you with a land-line anymore, and they are making that clear by failing to upgrade twisted pair networks down in my end of town. They are offering some areas the much upgraded fiber optic cable system, but (in spite of all the advertising they send me) they’ve never installed the upgrade here, and it looks like they probably won’t. Instead, they are offering me the use of an internet system that is based on the use of wifi networks run through the local cell phone tower. The problem is that the cellular tower apparently gets overloaded several times during the day, leaving me with a dead internet system.
Here’s the crunch. Back in the old days – roughly up to a couple of months ago – the ATT representative you reached over the phone had a certain amount of flexibility in granting you a refund for lost or inadequate service. That is no longer the policy. Apparently, ATT figured out that it had given out $5 million in April alone, and somebody in the corporate headquarters figured out that they could add to their profits by squeezing the customers for these “courtesy” payments. So now, according to ATT representative Elliot (they don’t give last names to their customers anymore), the representatives will hold us to the letter of the contract. Notice that the terms and conditions are not something that we customers get to negotiate, they just are.
One other thing. If you look up ATT income over the course of a year, it is well over a hundred billion dollars. The most recent numbers showed annual income of $125 billion. So that five million in courtesy refunds amounted to roughly 0.0005 of their revenues. If you are a little fraction-phobic, we can translate that number into English: ATT brought in a little over ten billion dollars per month last year, which is equivalent to ten thousand million dollars. That piddling little five million dollars was one part in two-thousand of their monthly takings. And they begrudge you and me, the consumers, that amount of refund. It’s not unreasonable to predict that there will eventually be a class action lawsuit and that some law firm is going to make a lot of money.
Addendum: The World Cup
The U.S., Mexico, and Canada teams all made it to the next round, otherwise referred to as the Group of 32 and to the rest of us as the knockout rounds. With the exception of one weekend game (Canada won), this round will take place over the week, 3 games per day.
We can put the group round behind us, with this one little observation: When the U.S. played a bunch of its second string players in its final group game (meaningless in the standings at that point), it didn’t do all that well. Basically, our junior varsity lost to Turkey’s first string. There is reason to believe that the U.S. first string can beat Bosnia-Herzegovina in this week’s game, but it should bring its first string game.
Lots of good games: By the time you read this, Japan vs. Brazil will be in the books. Brazil scored its winning goal in stoppage time. France is looking like a real powerhouse, and Argentina is doing well so far. Traditional powerhouse teams Germany and Spain will be in the running. For the soccer fan, this week is a dream come true.
(Bob Gelfand writes on science, culture, and politics for CityWatch. He can be reached at [email protected])
