Notes From Babel

Learning the Wrong Lesson from Bell

with one comment

I don’t typically read the comments to the blogs I subscribe to, and yesterday I was reminded of the sound reason for that policy. Catching up on current events in Google Reader, I decided to read Kevin Drum’s take on the shenanigans in the city of Bell, where the Chief Administrative Officer Robert Rizzo earned a salary of more than $787,000, the police chief earned $457,000, and the assistant city manager earned more than $376,000—all in a city with fewer than 40,000 people.  Although all three have announced their resignations, they will still receive handsome taxpayer-guaranteed pensions:

Still, Rizzo would be entitled to a state pension of more than $650,000 per year for life, the Times said. That would make him the highest-paid retiree in the state pension system.

At age 62, when Rizzo could also begin receiving Social Security payments, his annual pension would rise to $976,771, topping $1 million two years later.

If he lives to age 83, his annual payout would rise to $1.48 million.

Adams could get more than $411,000 per year, and Spaccia, who is 51-year-old, could get as much as $250,000 a year when she reaches 55.

So, back to the reason I was reading Drum, a liberal, on this story.  This is obviously the sort of story that transcends ideology, so it occurred to me that Drum and his readers would have the same basic reaction as everyone else, right? Drum’s intuition is right when he says:

All I can say is: there just has to be something illegal here. I don’t know what, but is it really possible that such an obvious abuse of the public trust can be legal?

In some respects, the answer is yes.  California suffers from something like battered women’s syndrome, in that we enable those who abuse us, and fail to enforce the provisions in our own Constitution that would end many of the problems in the upside-down pension system.  California’s June primaries did not yield very many nominees tough on pensions, which tells me that while we’re getting more clued in to the pension Ponzi scheme the unions are running, we’re not clued in quite enough to do topple that regime just yet.

But then here comes the very first two commenters at Drum’s site, deciding they’ve figured out the root of the problem in Bell:

The corporate model

Submitted by Brainz (not verified) on Wed Jul. 21, 2010 9:08 AM PDT.

This is a wonderful example of running government like a business. Executives collude with boards to ensure enormous paychecks. Everybody makes out — except for constituents/shareholders.


Submitted by firefall on Wed Jul. 21, 2010 9:15 AM PDT.

This is an exact parallel, you’re correct

It is dispiriting to see this level of lack of understanding of how corporate governance works, because this is the very opposite lesson that we ought to learn from the city of Bell.  If Bell were a corporation, these salaries would have been posted immediately in an 8-K, and the shareholders would have reacted swiftly by voting out the directors who authorized the overblown compensation at the next regular shareholders’ meeting, if not sooner at a special shareholders’ meeting.  Shareholders, in contrast with the typical American voter, is engaged in and observant in what happens in the corporation in which he is invested—I draw your attention to the lack of “Rock the Vote” ads directed to shareholders.

People get the government they deserve.  Bell’s citizens were obviously asleep at the switch to let these gangsters swindle from them for so long.  Perhaps the problem, other than a decline in civic responsibility, is that we’ve got too much government coming at us from too many different directions.  While you’ve got Obamacare forcing you to pay for acupuncture, and the county of LA forcing you to pay for a new light rail boondoggle, and the state doubling the car registration tax, trying to increase the sales tax, and cutting the child deduction, the city of Bell swooped in under the radar to give its officials astronomical salaries.  That’s just too many fronts for a responsible citizen guard against.

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Written by Tim Kowal

July 24, 2010 at 4:01 pm

One Response

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  1. “I draw your attention to the lack of “Rock the Vote” ads directed to shareholders”



    July 26, 2010 at 11:00 am

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