CORRUPTION WATCH-The goal of political philosophy is to structure government so that leaders automatically must do the right thing and there is no need to search for people with integrity.
In Los Angeles, we have created the opposite, a city government which forces decent councilmembers to behave badly.
Government Rests on Power
The U.S. Constitution (1787) was written as a response to the central government’s lack of power under the Articles of Confederation (1781). In drafting the Constitution, the framers realized that without power, there could no effective government. Thus, they endeavored to devise a government where the self-interest of one power block would counter the self-interest of another power.
Due to the corrupting nature of power, government’s role is to protect the populace lest their lives be “poor, nasty, brutal and short.” Unlike Thomas Hobbes (1588-1679), the U.S. Constitution recognized that a government whose power is too concentrated results in tyranny and not in a well-regulated society. Based on the history of centuries of bloodshed in Europe, the Constitution excluded religion from government, and in return the First Amendment prevented government from destroying religion.
When Connecticut delegates Roger Sherman and Oliver Ellsworth proposed The Great Compromise, in which a Senate with two Senators per state would be balanced by the House of Representatives based on population, they anticipated Lord Acton’s insight in 1887 that power tends to corrupt.
The Government’s Duty to Protect the Price System
The same year that Thomas Jefferson wrote the Declaration of Independence, 1776, Adam Smith published Wealth of Nations. Supply and demand rested on the Price System accurately reflecting an equilibrium between supply and demand. Sellers need protection from buyers and vice a versa. The first economic goal of the powerful is to distort the Price System and the simplest way to do that is fraud. Sellers lie. A legal system in which manufacturers hold sway proclaims, “caveat emptor.”
Sellers prefer to control all supply so that they can charge whatever they wish. Hence, cornering the market is a good business for a person who has enough power to buy up all the gold, corn, or soy beans and then artificially restrict supply. Insider trading is a great way for a powerful person to unload on unsuspecting buyers a corporate stock which is about to plunge. In both cases Adam Smith’s supply and demand fails, not because the concept of supply and demand is faulty, but because the power to distort the Price System means that neither the buyer nor the seller knows the true value.
A Government Which Fails to Protect the Price System Loses Legitimacy
Under the Declaration of Independence, the government’s legitimacy rests on its securing our inalienable rights. That is why the U.S. Constitution speaks about securing the blessings of liberty and promoting the general welfare and not about the divine right of kings. To the extent that our economy’s Price System is distorted, our inalienable rights are impaired.
A government controlled by oligarchs has no interest in protecting the Price System. Oligarchs intentionally devise rules that subvert the Price System, funneling wealth to themselves and away from everyone else.
Los Angeles, A Feudal Government Controlled by Oligarchs
Los Angeles City government’s feudal structure is simple. It has fifteen fiefdoms where each lord/lady completely controls what happens within his/her fiefdom provided King Garcetti agrees. The city’s feudal system operates under a mandatory vote trading system in which each vassal is required to vote Yes for each project another vassal places on the city council agenda. Thus, each lord/lady can promise whatever he/she wants to any developer, secure in the knowledge that no matter how atrocious a project may be, it will receive the city council’s unanimous approval. It’s kind of like King Arthur’s roundtable except any knight who casts a No vote has his head chopped off. The retaliatory threat in LA is more genteel. The dissenting councilmember will find that none of his/her agenda items are approved. That is political death.
How the City Council Has Financially Ruined Los Angeles
Since 2000, Los Angeles has become one the nation’s slowest growing urban areas with the most rapidly deteriorating GINI Coefficient with greatest population density (ca 7,000/sq./mi). Housing prices have escalated to the point that Californians in general and especially Angelenos are the nation’s poorest people, behind the people of Alabama and Mississippi. The cause of LA’s decline is its feudal city government where all decisions are oriented to make a tiny hand full of landowners extraordinarily wealthy while everyone becomes poorer.
Oligarchs Always Steal Everything
In a feudal city like Los Angeles, the oligarchs are perpetually looting the city treasury. This model to use government to steal from the 99% is explained by Lynn Parramore in Meet the Economist Behind the One Percent’s Stealth Takeover of America. Long story short, oligarchs pass laws that create more wealth for the top 1%.
This Feudal Systems Works Brilliantly
Housing costs have skyrocketed so that anyone who buys a home in Los Angeles pays two to three times its actual value which means they pay a huge mortgage to Wall Street. Likewise, through manipulation of the rental market, apartment houses are vastly over-priced, so their mortgages are absurdly high, and the owners pass the costs along to renters. Those who can no long afford to pay rent end up homeless.
Housing prices are high because the feudal city council restricts supply and lies about housing costs. As a result, naive people shell out a fortune for mortgages or rent. Home buyers are paying the high Developer Value for homes rather than the lower Living Space value. The city hypes the importance of “density” and this makes the cost of land higher which in turn increases rents. The oligarchs vote to subsidize their projects which reduces the city revenues for services like street maintenance which increases auto repair bills. As homelessness generates more crime, homeowners must pay more to protect themselves from the poor.
Los Angeles City Council’s structure nullifies the good efforts of any councilmember with integrity, while compelling him/her to support the corruption everywhere else in the city. We could change the City Charter to create an honest government – when pigs fly.
(Richard Lee Abrams is a Los Angeles attorney and a CityWatch contributor. He can be reached at: Rickleeabrams@Gmail.com. Abrams’ views are his own and do not necessarily reflect the views of CityWatch.) Edited for CityWatch by Linda Abrams.